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Annual Report and Financial StatementsYear ended 31 January 2016

Annual ReportStandard Life Investment Company IV

Contents

1 Company Information*

3 Authorised Corporate Director’s Report*

4 Statement of Authorised Corporate Director’s Responsibilities

5 Statement of Depositary’s Responsibilities in relation to the Financial Statements

6 Independent Auditors’ Report to the Shareholders of Standard Life Investment Company IV

8 The Registrar of the Fund

9 Investment Report*

11 Comparative Tables

22 Financial Statements

25 Portfolio Statement*

28 Notes to the financial statements

42 Distribution Tables

58 Alternative Investment Fund Disclosures

* These items comprise the Manager’s Report for the purposes of the rules contained in the Collective Investment Schemes sourcebook (“the Sourcebook”).

Standard Life Investment Company IVAnnual Report & Financial Statements

1 Standard Life Investment Company IV Annual Report & Financial Statements

General

Standard Life Investment Company IV (the “Company”) is an investment company with variable capital, having its head office in Scotland and with registered number IC969 and authorised by the Financial Conduct Authority with effect from 12 June 2013.

The Company has one Fund, the Standard Life Investments UK Property Fund (the “PAIF Fund”).

The Company is classed as a non-UCITS retail scheme (NURS).

Investment objective

It is intended that the Fund will be a PAIF at all times, and, as such, its investment objective is to carry on Property Investment Business and to manage cash raised from investors for investment in the Property Investment Business as further described below. The objective of the Fund is to provide a return from capital appreciation and income over the longer term.

Investment policy

The current policy of the Fund is to invest primarily in a diversified portfolio of UK commercial property, selected from across the retail, office, industrial and other sectors.

Investment may also be made in European properties and property development opportunities, property-related equities, property investment companies, other property collective investment schemes, money-market instruments, property-related fixed income securities, deposits, cash and near cash. The Fund may use derivatives only for the purposes of efficient portfolio management.

Reporting dates

Interim 31 July

Annual 31 January

Record dates

Interim 30 April, 31 July, 31 October

Annual 31 January

Interim Payment dates

Accumulation 30 April, 31 July, 31 October

Income 30 June, 30 September, 31 December

Annual Payment dates

Accumulation 31 January

Income 31 March

Company Information


2Standard Life Investment Company IV Annual Report & Financial Statements

Standard Life Investment Company IV

Authorised Corporate Director (ACD)

Directors of the ACD* Secretary of the ACD* Depositary

Standard Life Investments(Mutual Funds) Limited1 George StreetEdinburghEH2 2LL0131-245-2676

A. S. AchesonL. ScottJ. LoweS. A. FitzgeraldD. E. ThomasS. R. WemyssR. J. McKillop

S.E. Crewes(resigned 26 May 2015)

H.S. Kidd(appointed 26 May 2015)

Citibank Europe plc**Citigroup CentreCanada SquareCanary WharfLondonE14 5LB

**Citibank International Limited merged into Citibank Europe plc on 4 January 2016

Standard Life Investment Company IV

Independent Auditors Registrar and Transfer Agency Investment Adviser Standing Independent Valuer*

Pricewaterhouse Coopers LLPAtria One144 Morrison StreetEdinburghEH3 8EX

Standard Life Investments (Mutual Funds) Limited delegated to International Financial Data Services Limited and International Financial Data Services (UK) Limited,***IFDS House, St. Nicholas Lane,Basildon, Essex, SS15 5FS

***Prior to 13 July 2015 the Registrar was The Bank of New York Mellon (International) Limited

Investment AdviserStandard Life Investments Limited1 George StreetEdinburghEH2 2LL

Jones Lang LaSalle22 Hanover SquareLondonW1S 1JA

* for the property investment held within the master fund Standard Life Investments UK Property PAIF

Company Information(continued)



The Authorised Corporate Director (ACD) is Standard Life Investments (Mutual Funds) Limited which is the sole director, authorised and regulated by the Financial Conduct Authority, for investment business.

Standard Life Investment Company IV (“the Company”) is an Open-Ended Investment Company with variable capital under Regulation 12 (Authorisation) of the Open-Ended Investment Companies Regulations 2001 (“the Regulations”) and the shareholders are not liable for the debts of the Company.

Standard Life Investment Company IV is structured as an umbrella company. The Company is a non-UCITS retail scheme (“NURS”) and is also a ‘AIF’.

The Company has one Fund, the Standard Life Investments UK Property Fund (the “PAIF Fund”). Further Funds may be established from time to time.

The following items within the sub-fund report form part of the Authorised Corporate Director’s report: Investment Report, Portfolio Statement, Ongoing Charges Figure, Comparative Tables and Treatment by Corporate Shareholders.

Distributions are made from positive net revenue where gross revenue exceeds expenses and tax. The total return consists of investment and currency gains and losses in addition to net revenue. In situations where Funds have a negative total return but a positive net revenue position, there will be a distribution.

Material differences may arise between a Fund’s net revenue after tax and its distribution if the ACD’s periodic charge and transaction costs are borne by the capital property of the Fund for distribution purposes. The expenses in the Statement of Total Return includes these expenses even if they are met from the capital property of the Fund. In such cases, the amount a Fund has to distribute will exceed its net revenue and this is detailed in the notes to the financial statements where it occurs.

Copies of the most recent Prospectus are available, on request, from the ACD.

The ACD has elected to dispense with the holding of an Annual General Meeting for the Company for this period and all future years.

I hereby certify the Annual Report and Financial Statements on behalf of the Directors of Standard Life Investments (Mutual Funds)Limited.

DirectorStandard Life Investments (Mutual Funds) Limited10 June 2016

Authorised Corporate Director’s Report



The Open-Ended Investment Companies Regulations 2001 and the rules contained in the Collective Investment Schemes sourcebook require the ACD to prepare financial statements for each annual and half-yearly accounting period which give a true and fair view of the financial position of the Company and of its net revenue/expenses and net gains/losses on the property of the Company for the period.

In preparing the financial statements the ACD is required to:

▸ select suitable accounting policies and then apply them consistently;

▸ comply with the disclosure requirements of the Statement of Recommended Practice for Financial Statements of Authorised Funds issued by the Investment Association (IMA) in May 2014;

▸ follow generally accepted accounting principles and applicable accounting standards;

▸ make judgements and estimates which are prudent;

▸ keep proper accounting records which enable it to demonstrate that the financial statements as prepared comply with the above requirements; and

▸ prepare the financial statements on the going concern basis unless it is inappropriate to presume that the scheme will continue in operation.

The ACD is responsible for the management of the Company in accordance with the Instrument of Incorporation, Prospectus, Sourcebook and the Regulations and for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors of Standard Life Investments Limited are responsible for the maintenance of Standard Life Investments Limited website.

The ACD confirms that suitable accounting policies have been used and applied consistently and reasonable and prudent judgements and estimates have been made in the preparation of the financial statements for the year ended 31 January 2016. The ACD also confirms that the financial statements of the Fund have been prepared on a basis other than going concern as the intention is to terminate the Fund following the merger into Standard Life Investments Ignis UK Property Fund. The Fund will formally wind up pending settlement of all residual assets and liabilities.

Statement of Authorised Corporate Director’s Responsibilities



The Depositary is responsible for the safekeeping of all of the property of the Company (other than tangible moveable property) which is entrusted to it and for the collection of income that arises from that property.

It is the duty of the Depositary to take reasonable care to ensure that the Company is managed in accordance with the Financial Conduct Authority’s Collective Investment Scheme Sourcebook(“the COLL Sourcebook”), the Open-ended Investment Companies Regulations 2001 (SI 2001/1228) (“the OEIC Regulations”) and the Company’s Instrument of Incorporation and Prospectus, as appropriate, in relation to the pricing of, and dealings in, the shares of the Company, the application of the income of the Company, and the investment and borrowing powers of the Company.

Depositary’s Report to Shareholders

Having carried out such procedures as we consider necessary to discharge our responsibilities and duties as Depositary of the Company, it is our opinion, based on the information available to us and the explanations provided that in all material respects the Company, acting through the ACD:

i. has carried out the issue, sale, redemption and cancellation of shares in the Company, the calculation of the price of the Company’s shares and the application of the Company’s income in accordance with the COLL Sourcebook and where applicable, the OEIC Regulations and the Instrument of Incorporation of the Company:

and

ii. has observed the investment and borrowing powers and restrictions applicable to the Company.

Citibank Europe plcLondon9 June 2016

Statement of Depositary’s Responsibilities in relation to the Financial Statements



Independent Auditors’ Report to the Shareholders of Standard Life Investment Company IV

Report on the financial statements

Our opinion

In our opinion, Standard Life Investments Company IV financial statements, (the “financial statements of the Company”):

▸ give a true and fair view of the financial position of the Company and each of the sub-funds as at 31 January 2016 and on the net revenue and the net capital gains and cash flows of the scheme property of the Company and each of the sub-funds for the year then ended; and

▸ have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, the Statement of Recommended Practice for UK Authorised Funds, the Collective Investment Schemes sourcebook

Emphasis of Matter – Basis of Preparation

In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosures made in note (a) to the financial statements concerning the going concern basis of preparation. On 20 May 2016, Standard Life Investments Ignis Real Estate Fund acquired all the shares in the sub-fund of the Company. Subsequent to this transaction it is the intention of the ACD to wind up the fund as soon as is practicable. Accordingly, the going concern basis of preparation is no longer appropriate for the Company and its sub-fund and the financial statements have been prepared on a basis other than going concern. No adjustments were required in the financial statements to reduce assets to their realisable values or to provide for liabilities arising from the decision. It is intended that the ACD will bear any costs in relation to this termination.

What we have audited

Standard Life Investment Company IV (the “Company”) is an umbrella fund with a single sub fund. The financial statements of the Company, included within the Annual Report (the “Annual Report”) comprise the financial statements of the sub-fund, which are prepared by Standard Life (Mutual Funds) Ltd. (the “Authorised Corporate Director”), and comprise for the sub-fund:

▸ the balance sheet as at 31 January 2016;

▸ the statement of total return for the year then ended;

▸ the statement of change in net assets attributable to shareholders for the year then ended;

▸ the cashflow statement for the year then ended;

▸ the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information

▸ the distribution tables.

The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), the Statement of Recommended Practice ‘Financial Statements of UK Authorised Funds’ issued by the Investment Management Association (the “Statement of Recommended Practice for UK Authorised Funds”), the Collective Investment Schemes sourcebook and the Instrument of Incorporation.

In applying the financial reporting framework, the Authorised Corporate Director has made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.

Opinions on matters prescribed by the Collective Investment Schemes sourcebook

In our opinion:

▸ we have obtained all the information and explanations we consider necessary for the purposes of the audit; and

▸ the information given in the Authorised Corporate Director’s Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Other matters on which we are required to report by exception

Propriety of accounting records and information and explanations received

Under the Collective Investment Schemes sourcebook we are required to report to you if, in our opinion:

▸ proper accounting records have not been kept; or

▸ the financial statements are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Responsibilities for the financial statements and the audit

Our responsibilities and those of the Authorised Corporate Director

As explained more fully in the Authorised Corporate Director’s Responsibilities Statement set out on page 4, the Authorised Corporate Director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland) (“ISAs (UK & Ireland)”). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.



Independent Auditors’ Report to the Shareholders of Standard Life Investment Company IV (Continued)

This report, including the opinions, has been prepared for and only for the Company’s shareholders as a body in accordance with paragraph 4.5.12 of the Collective Investment Schemes sourcebook as required by paragraph 67(2) of the Open-Ended Investment Companies Regulations 2001 and for no other purpose.

We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing

What an audit of financial statements involves

We conducted our audit in accordance with ISAs (UK & Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:

▸ whether the accounting policies are appropriate to the Company’s and the Company’s sub-fund’s circumstances and have been consistently applied and adequately disclosed;

▸ the reasonableness of significant accounting estimates made by the Authorised Corporate Director; and

▸ the overall presentation of the financial statements.

We primarily focus our work in these areas by assessing the directors’ judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial statements.

We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both.

In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

PricewaterhouseCoopers LLPChartered Accountants and Statutory AuditorsEdinburgh10 June 2016



The ACD is the Registrar of the Standard Life UK Property Fund. From 13 July 2015 the Manager has delegated certain aspects of the registrar’s operational duties to International Financial Data Services Limited (“IFDS Limited”).

The Registrar is responsible to the Trustee for the maintenance of a register of shareholders in the Trust. The register can be inspected free of charge at the offices of IFDS Limited at IFDS House, St Nicholas Lane, Basildon, Essex, SS15 5FS.

The Registrar is also responsible for the distribution of the Interim and Annual Report and Financial Statements and tax vouchers to shareholders at the addresses recorded on the register.

Prior to 13 July 2015 the Registrar was The Bank of New York Mellon (International) Limited.

The Registrar of the Fund



Investment background

UK commercial real estate recorded positive returns during the 12 months under review. Gains in capital values and a more competitive investment market for real estate buyers were key factors. That said, returns started to moderate, with capital value growth slowing and rental growth emerging as a key driver of future returns.

The improving domestic economic backdrop continued to support the ongoing recovery in commercial real estate. A clear result in the 2015 general election was also positive, providing a fillip for occupier and investor confidence. Interest in the asset class was robust throughout most of the review period, with a broad range of investors active in the market. This included overseas investors, UK institutions and private companies. As a result, bidding for individual properties became increasingly competitive and capital values subsequently increased.

Rents also grew in most sectors, with London offices initially leading the way. However, as robust demand and dwindling supply pushed rents higher, tenants increasingly looked outside the capital and towards the regions. Meanwhile, the ongoing UK economic recovery led to increased demand for industrial units and distribution warehouses. Coupled with a lack of stock, this resulted in strengthening rents for the industrials sector. The retail sector continued to lag behind although there was some evidence that rents were beginning to stabilise as consumers’ finances improved.

Performance

Over the period under review, the Fund returned 6.75% against the IMA Property Sector UK Direct return of 6.46%.*

The Fund’s office assets performed well against the IPD (APUT) benchmark, partly through asset management initiatives. Strong performance from our Central London office assets reflected the quality of assets and their location. Our industrial assets also delivered robust performance during the period, particularly those located in the South East. We continued to invest in this sub-sector, moving to an overweight position. This diluted short-term performance somewhat through associated acquisition costs. The Fund’s retail holdings broadly lagged the IPD benchmark, reflecting acquisition costs as well as challenging market conditions.

The Fund’s void rate was approximately 3.6% (versus 7.3% for the IPD index) at the end of the period. We expect this to remain stable in the near term, as we look to acquire assets with strategic vacancies that we can then re-let into a strengthening occupational market. This would allow us to capitalise on rental growth.

*Source: Standard Life Investments (Fund) and Morningstar (benchmark), retail accumulation share class.

Investment activity

We remained active throughout the period. For example, towards the end of 2015 we made a number of significant purchases.

▸ We bought 1 Marsden Street, Manchester, which is a prime office block located in the city’s central business district, for £34.5 million. The building offers some of the most attractive grade A space in the CBD, which is reflected by the quality/security of the tenant profile.

▸ We acquired iO Centre & Tradeway, Sutton, for £34 million. This is a prime, multi-let industrial estate within the Greater London conurbation, which comprises 13 units at an average unexpired lease term of 12.1 years.

▸ At Heathrow, we acquired Saxon Way, an industrial estate close to the airport, for £23.7 million. As the supply of well-located southeast estates continues to reduce, we expect strong rental growth, with demand already reflecting this.

▸ In Birmingham, we bought the WH Smith national distribution hub in Deykin Avenue for £18.2 million. The lease term is 19 years at a low rent of £4.75 per square foot, which provides a blend of long income and rental growth potential.

▸ Finally, we acquired Monument Mall in Newcastle-Upon-Tyne, a prime retail block, for £75 million. It offers an attractive combination of strong retail and leisure operators, with robust rental growth prospects and asset management opportunities.

Turning to sales, we continued our strategy of disposing of smaller assets to enhance portfolio efficiency. With this in mind, we recently sold a portfolio of 10 office and industrial assets for £33 million. The average lot size was around £3 million, with an average weighted unexpired lease term of 3.7 years. Other sales included a small four-acre development site at Yarrow Road in Poole for £2.3 million and Stoneferry Road Retail Park in Kingston upon Hull for £2.2 million.

Investment ReportFund Manager: Nigel Chapman



Investment Report(Continued)

Outlook and future strategy

We expect reasonable positive total returns for UK real estate investors over a three-year period. Rental growth is taking over from inward yield movement as the main driver of growth. With improving economic drivers and a constrained but growing pipeline of new developments, real estate therefore remains attractive. Rising interest rates are an emerging risk but there is a reasonable buffer in the pricing of UK commercial real estate to compensate if investors price in any further acceleration of rate rises.

On 20 May 2016, Standard Life Investments Ignis UK Property Fund, a sub-fund of Standard Life Investments Ignis Real Estate Funds ICVC, acquired all the shares in Standard Life Investments UK Property Fund, a sub-fund of Standard Life Investments Company IV.

The following table highlights the material (greater than 5% of opening Net Asset Value) purchases made to the portfolio in the year to 31 January 2016.

During the year the Fund had total sales proceeds of £46,224,000.

PurchasesCost

£’000

Monument Mall, Newcastle 78,599

Other purchases 221,715

Total purchases 300,314

Risk Profile

Investors should be aware of the following risk factors:

(a) Investment property is less liquid than other asset classes such as bonds or equities. Selling property can be a lengthy process so investors in the Fund should be aware that they may not be able to sell their investment when they want to.

(b) Investment property transaction charges are higher than those which apply in other asset classes. Investors should be aware that a high volume of transactions would have a material impact on Fund returns.

(c) Property valuation is a matter of judgment by an independent valuer and is therefore a matter of the valuer’s opinion rather than fact.

Cautionary note

It should be remembered that past performance is not a guide to future performance. The value of investments may go down as well as up and, therefore, investors may not get back the amount originally invested.

Composition of Portfolio %

as at 31 January 2016

Car Park (1.44%) 1.24

Commercial (3.22%) 2.73

Industrial (8.90%) 14.95

Office (33.23%) 30.83

Retail (28.69%) 32.48

Money Market (0.00%) 9.98

Net other assets (24.52%) 7.79

The percentage figures in brackets show the comparative holding as at 31 January 2015.

Ten Largest Holdings (by market value) %

as at 31 January 2016

Palace Exchange, Enfield 5.40

Monument Mall, Newcastle 5.18

45 Church Street, Birmingham 4.36

Slough Retail Park, Slough 4.31

Gateway Retail Park, London 3.31

Isis Reach, Belvedere 2.89

33 Charlotte Street, London 2.67

St Paul's House, London 2.59

One Eton Street, Richmond 2.48

Kimpton Industrial Estate, Sutton 2.36



Comparative Tables

2016 2015 2014++

pence per share pence per share pence per share

Retail accumulationChange in net assets per share

Opening net asset value per share 123.85 110.78 103.84Return before operating charges* 10.21 15.16 8.84Operating charges** (2.26) (2.09) (1.90)Return after operating charges* 7.94 13.07 6.94Closing net asset value per share 131.80 123.85 110.78Retained distributions on accumulation share 2.02 1.81 0.95* after direct transaction costs of:*** 0.99 0.00 0.00

Performance+

Return after charges 6.41% 11.80% 6.68%

Other informationClosing net asset value (£’000) 6,713 109,411 64,670Closing number of shares 5,093,192 88,338,378 58,375,976Operating charges**** 1.69% 1.70% 1.69%Direct transaction costs*** 0.74% 0.00% 0.00%

PricesHighest share price 137.60 128.90 115.80Lowest share price 129.40 116.40 103.84

** The operating charges include all costs borne by the fund, except for direct transaction costs.*** The direct transaction costs are made up of; fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. In line with the requirements of the 2014 SORP for authorised funds, direct transaction costs are stated after deducting the proportion of amounts collected from dilution adjustments. Given the potential significant time lag between net investment inflows or outflows to or from the fund and any consequential purchase or sale of investment property, it is possible that transaction costs in a given year could be exceeded by the amount available to be offset from dilution charges. In this circumstance we have limited the dilution charge offset to the amount of the transaction costs in that given year.**** The operating charges percentage is the equivalent of the ongoing charges figure per the prior year accounts. It shows the annualised operating expenses of the share class as a percentage of the average net asset value of the class over the same period.+ The performance figures are calculated by taking the value of the shareclass per the financial statements compared to the value per the financial statements in the prior year. This figure may differ from the performance figure quoted in the Investment Report. The Investment Report performance figure is calculated using the last available published price for a given shareclass in the period compared to the equivalent for the prior period. The published price may contain an adjustment for dilution in accordance with the fund pricing policy, while the price per the financial statements uses the underlying fair value of the assets but has no adjustment for dilution. The financial statements shareclass valuation is based on close of business market prices on the last day of the period, again this may differ from the intra-day pricing point of the fund which is used in the published shareclass price.++ From launch of the Fund on 23 August 2013.



Comparative Tables (Continued)

2016 2015 2014++


Institutional accumulationChange in net assets per share


Performance+


Other informationClosing net asset value (£’000) 174,408 28,954 929Closing number of shares 122,910,553 21,854,343 789,823Operating charges**** 0.89% 0.90% 0.89%Direct transaction costs*** 0.75% 0.00% 0.00%






2016 2015 2014++


Retail incomeChange in net assets per share

Opening net asset value per share 64.01 58.11 54.95Return before operating charges* 5.26 7.93 4.66Operating charges** (1.16) (1.09) (1.00)Return after operating charges* 4.10 6.84 3.66Distributions on income share (1.04) (0.94) (0.50)Closing net asset value per share 67.07 64.01 58.11* after direct transaction costs of:*** 0.51 0.00 0.00

Performance+


Other informationClosing net asset value (£’000) 725 6,474 3,420Closing number of shares 1,081,359 10,113,432 5,886,117Operating charges**** 1.69% 1.70% 1.69%Direct transaction costs*** 0.74% 0.00% 0.00%






2016 2015 2014++


Institutional incomeChange in net assets per share


Performance+








2016 2015 2014++


Standard Life incomeChange in net assets per share


Performance+








2016 2015 2014++


Standard Life accumulationChange in net assets per share


Performance+


Other informationClosing net asset value (£’000) 11 21 19Closing number of shares 7,530 15,118 15,047Operating charges**** 0.09% 0.10% 0.09%Direct transaction costs*** 0.75% 0.00% 0.00%






2016 2015 2014++


Platform 1 accumulationChange in net assets per share


Performance+








2016 2015 2014++


Platform 1 incomeChange in net assets per share


Performance+








2016 2015 2014++


Feeder accumulationChange in net assets per share


Performance+


Other informationClosing net asset value (£’000) 1,041,273 840,077 459,545Closing number of shares 1,597,827,027 1,381,696,516 856,497,539Operating charges**** 0.01% 0.02% 0.01%Direct transaction costs*** 0.75% 0.00% 0.00%






2016 2015 2014++


Feeder incomeChange in net assets per share


Performance+








2016++

pence per share

Institutional A accumulationChange in net assets per share

Opening net asset value per share 50.00Return before operating charges* 0.07Operating charges** (0.00)Return after operating charges* 0.07Closing net asset value per share 50.07Retained distributions on accumulation share 0.00* after direct transaction costs of:*** 0.00

Performance+

Return after charges 0.14%

Other informationClosing net asset value (£’000) 1Closing number of shares 2,200Operating charges**** 1.69%Direct transaction costs*** 0.00%

PricesHighest share price 50.07Lowest share price 50.00

** The operating charges include all costs borne by the fund, except for direct transaction costs.*** The direct transaction costs are made up of; fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. In line with the requirements of the 2014 SORP for authorised funds, direct transaction costs are stated after deducting the proportion of amounts collected from dilution adjustments. Given the potential significant time lag between net investment inflows or outflows to or from the fund and any consequential purchase or sale of investment property, it is possible that transaction costs in a given year could be exceeded by the amount available to be offset from dilution charges. In this circumstance we have limited the dilution charge offset to the amount of the transaction costs in that given year.**** The operating charges percentage is the equivalent of the ongoing charges figure per the prior year accounts. It shows the annualised operating expenses of the share class as a percentage of the average net asset value of the class over the same period.+ The performance figures are calculated by taking the value of the shareclass per the financial statements compared to the value per the financial statements in the prior year. This figure may differ from the performance figure quoted in the Investment Report. The Investment Report performance figure is calculated using the last available published price for a given shareclass in the period compared to the equivalent for the prior period. The published price may contain an adjustment for dilution in accordance with the fund pricing policy, while the price per the financial statements uses the underlying fair value of the assets but has no adjustment for dilution. The financial statements shareclass valuation is based on close of business market prices on the last day of the period, again this may differ from the intra-day pricing point of the fund which is used in the published shareclass price.++ Share class launched on 29th January 2016.



Financial Statements

Statement of Total Returnfor the year ended 31 January 2016

2016 2015

Notes £’000 £’000 £’000 £’000

Income:Net capital gains 3 53,770 63,338 Revenue 5 51,120 35,405

Expenses 6 (6,837) (5,582)Interest and similar charges 8 (53) 0 Net revenue before taxation 44,230 29,823 Taxation 7 0 0 Net revenue after taxation 44,230 29,823 Total return before distributions 98,000 93,161 Distributions 8 (44,229) (29,823)Change in net assets attributable to shareholders from investment activities 53,771 63,338

Statement of Change in Net Assets Attributable to Shareholdersfor the year ended 31 January 2016

2016 Restated 2015* £’000 £’000 £’000 £’000

Opening net assets attributable to shareholders 1,172,474 585,644 Amounts receivable on issue of shares* 445,446 505,397 Less: Amounts payable on cancellation of shares* (262,562) (25,423)

182,884 479,974 Dilution adjustment* 7,630 21,312 Stamp duty reserve tax 0 (40)Change in net assets attributable to shareholders from investment activities (see above) 53,771 63,338 Retained distribution on accumulation shares 32,354 22,246 Closing net assets attributable to shareholders 1,449,113 1,172,474

* Note 1 and note 19 to the financial statements describes the effect and rationale of the prior period restatements.



Financial Statements (Continued)

Balance Sheetas at 31 January 2016

2016 Restated 2015*

Notes £’000 £’000 £’000 £’000

AssetsFixed assets:

Tangible assets:Land and buildings 1,184,181 884,929 Development Properties 7,300 0

Current assets:Debtors 9 16,047 15,813 Cash and bank balances 3,446 3,574 Cash equivalents 10 261,852 290,041

281,345 309,428 Total assets 1,472,826 1,194,357

LiabilitiesCreditors * 11 (19,434) (19,054)Bank overdrafts (1,035) 0 Distribution payable * (3,244) (2,829)

(23,713) (21,883)Total liabilities (23,713) (21,883)Net assets attributable to shareholders 1,449,113 1,172,474

* Note 1 and note 19 to the financial statements describes the effect and rationale of the prior period restatements.



Financial Statements(Continued)

Cash Flow Statementfor the year ending 31 January 2016

2016 2015

Notes £’000 £’000 £’000 £’000

Operating activities

Net cash inflow from operating activities 13 44,375 35,664

Servicing of financeIncome distributions paid (12,100) (8,572)

Net cash outflow from servicing of finance (12,100) (8,572)

Taxation 0 0

Financial investmentPurchases of investments (299,011) (322,819)Disposals of investments 46,229 0

Net cash outflow from financial investment (252,782) (322,819)

FinancingDilution levy charged 7,630 (39)Net equalisation received 641 1,544Amounts received on issue of shares 445,446 527,830Amounts paid on cancellation of shares (262,562) (26,545)

Net cash inflow from financing 191,155 502,790Net increase in cash for the year (29,352) 207,063

Reconciliation to net cash increaseCash, bank balances and cash equivalents at the start of the year 293,615 86,552Net (decrease) / increase in cash for the year (29,352) 207,063Cash, bank balances and cash equivalents at the end of year 264,263 293,615



Portfolio Statement as at 31 January 2016

Market Percentage

value of total

Holding £’000 net assets

Direct Properties (75.48%) 1,191,481 82.23 Car Park (1.44%) 17,968 1.24

Rockingham Street Car Park, Sheffield 17,968 1.24

Commercial (3.22%) 39,500 2.73

BMW Dealership, Stockport * 8,900 0.62 Braid Hills Nursing Home, Edinburgh 15,700 1.08 Esporta, Wimbledon * 6,650 0.46 Mercedes Benz , Southampton 8,250 0.57

Industrial (8.90%) 216,730 14.95

187 - 195 Church Way, Doncaster 330 0.02 Ascent Park, Harlow 12,220 0.84 Brooklands Close, Sunbury 7,025 0.48 Brunel Park, Chippenham * 3,975 0.28 Chessington, Cox Lane, Chessington 25,370 1.75 Deykin Avenue, Birmingham 18,250 1.26

Ferry Lane, Rainham 4,820 0.33

Irlam Business Park, Irlam, Manchester 4,459 0.31 Isis Reach, Belvedere 41,917 2.89 Kimpton Industrial Estate, Sutton * 34,250 2.36 Plot H Kingsway BP, Rochdale + 7,300 0.50 Saxon Way Trading Estate, Heathrow 23,550 1.63 Tetron Point, Swadlincote 7,700 0.53 Unit B1, First Point, Doncaster 16,013 1.11 Units 1-5 Purley Way, Croydon 4,938 0.34 West Quay Road, Sunderland 4,613 0.32



Portfolio Statement (Continued)

Market Percentage

value of total


Office (33.23%) 446,619 30.83

1 Marsden Street, Manchester 33,750 2.33 30/31 Queen Street, Edinburgh 8,969 0.62 33 Charlotte Street, London 38,681 2.67 45 Church Street, Birmingham 63,217 4.36 85/89 Southwark Street, London 32,400 2.24 Building One, Aberdeen 17,050 1.18 Central South Square, Newcastle 21,688 1.50 Chelmsford Plot C, Chelmsford 9,900 0.68 Direct Line House, Manchester 26,200 1.81 Furnival Street, London 9,241 0.64 Geoffrey House, Maidenhead 13,500 0.93 Hollywood House, Woking 16,500 1.14 Link House, London 8,309 0.57 Oce House, Brentwood 10,650 0.74 One Eton Street, Richmond 35,883 2.48 Osprey House, Maidenhead 18,750 1.29 St Paul's House, London 37,488 2.59 Stockley Park, Heathrow 23,668 1.63 The Delta Building, Reading * 20,775 1.43

Retail (28.69%) 470,664 32.48

107/119 Rose Street, Edinburgh 2,825 0.20 118/136 Rose Street, Edinburgh 4,700 0.32 16-46 Calverley Road, Tunbridge Wells 29,900 2.06 46-48 High Street, Guildford 19,525 1.35 89/93 Rose Street, Edinburgh 1,075 0.07 Barn Road, Congleton * 23,150 1.60 Bishop Auckland Shopping Park, Bishop Auckland 23,431 1.62 Chartist Tower, Newport * 6,500 0.45 Church Road, Tiptree * 14,375 0.99 Church Way, Doncaster 3,250 0.23 East Kildbride Retail Park, East Kilbride 16,894 1.17 Gateway Retail Park, London 48,037 3.31 Hollywood Retail Park, Barrow in Furness 15,832 1.09



Portfolio Statement (Continued)

Market Percentage

value of total


Retail (continued)Monument Mall, Newcastle 75,000 5.18 Palace Exchange, Enfield * 78,267 5.40 Slough Retail Park, Slough 62,464 4.31 Somerfield Supermarket, Somerset 7,300 0.50 The Gateway Shopping, Trowbridge 17,825 1.23 The Link, Thanet 20,314 1.40

Collective Investment Scheme (9.96%) 144,676 9.98

144,675,457 SLI Seabury GBP VNAV Liquidity Fund** 144,676 9.98

Total investment assets 1,336,157 92.21 Net other assets 112,956 7.79 Total Net Assets 1,449,113 100.00

All non-direct property investments are “regulated collective investment schemes” within the meaning of the FCA rules unless otherwise stated.*Denotes leasehold and mixed properties, those properties not highlighted are freehold properties.+ Denotes property under development.The percentage figures in brackets show the comparative holding as at 31 January 2015.

Market

value

£'000

Reconciliation of assets and liabilities to the balance sheetInvestment assets as per the Balance Sheet 1,191,481 **Collective Investment Schemes classified as Cash Equivalents 144,676 Net investment assets as per the Portfolio Statement 1,336,157 Net other assets 112,956 Total Net Assets 1,449,113



1. Accounting Policies

a. Basis of Preparation

This is the first of annual financial statements to be prepared for this fund under the Financial Reporting Standard 102 (FRS 102) and the Statement of Recommended Practice for Authorised Funds (SORP) issued by the Investment Management Association (IMA) in May 2014, the impact of this to the Statement of Change Attributable to Shareholders and the Balance Sheet is limited to minor line item reallocations as per note 19 to the financial statements. These presentational amendments have no impact on the total return or the net assets attributable to the shareholders in either the current or the preceding year. The financial statements have been prepared under the historical cost basis, as modified by the revaluation of investments, and in accordance with the SORP issued by the IMA in May 2014 and UK Generally Accepted Accounting Practice (UK GAAP). On 20 May 2016, Standard Life Investments Ignis UK Property Fund, a sub-fund of Standard Life Investments Ignis Real Estate Funds ICVC, acquired all the shares in Standard Life Investments UK Property Fund, a sub-fund of Standard Life Investments Company IV. Subsequent to this transaction it is the intention of the ACD to wind up the fund as soon as is practicable. The ACD will bear any costs of the merger and the wind up. Accordingly, the financial statements have been prepared on a basis other than going concern. No adjustments were required in these financial statements to adjust assets to their realisable values or to provide for liabilities arising from the decision. The comparative information has not been restated for anything other than the new SORP as discussed above. The principal accounting policies, which have been applied consistently throughout the year, are set out below and, where necessary, have been updated to include any policies which are now considered significant given the presentation of the financial statements as at 31 January 2016 on a basis other than going concern.In certain circumstances the ACD may apply a dilution adjustment on subscriptions and redemptions of shares. If applied, the dilution adjustment is paid to the fund. See Prospectus for further details. For the year ended 31 January 2016 and 31 January 2015 the Dilution adjustments have been shown separately in the Statement of Changes in Net Assets Attributable to Shareholders, previously they were included with Amounts receivable on issue of shares and Amounts payable on cancellation of shares in the Statement of Change in Net Assets Attributable to Shareholders. This is a change in presentation, there have been no changes to the financial position or financial performance of the fund as a result of the above. The prior year figures in the Financial Statements have been restated as a result of these new regulations. Please see note 19 for details.

b. Valuation of Investments

Property investments are valued monthly on a market value basis, as defined in the RICS Valuation Standards (6th Edition) published by the Royal Institute of Chartered Surveyors, and in accordance with the Prospectus. These property investments were valued on 31 January 2016 by Jones Lang LaSalle Limited.

The Manager ensures that the valuer is aware of all relevant information and any change in the investments. The Manager then reviews and discusses draft valuations with the valuer to ensure correct factual assumptions are made prior to the valuer issuing a final valuation report.

The fair value of completed investment property is determined using the income capitalisation method. The income capitalisation method is based on capitalising the net income stream at an appropriate yield. In establishing the net income stream the valuer has reflected the current rent payable to lease expiry, at which point the valuer has assumed that each unit will be re-let at their opinion of Expected Rental Value (ERV). The valuer has made allowances for the estimated reasonable costs of acquisition, but no allowance has been made for any expenses of realisation or liability for taxation which may arise on an actual or notional disposal. The appropriate yield is selected on the basis of the location of the building, its quality, tenant credit quality and lease terms amongst other factors.

The fair value of property under development is determined using the development appraisal method. In the case of the development appraisal method, estimates of capital outlays and construction costs, development costs and anticipated sales income are estimated to arrive at a series of net cash flows. Specific development risks such as planning, zoning, licences and building permits are separately valued. Allowances for developers profit and finance costs during the construction and marketing periods are also reflected.

Unobservable inputs used in fair value measurement of investment properties include; Initial yield, Revisionary yield, Equivalent yield and estimated rental value per square metre.

The fair value hierarchy has been prepared in line with FRS 102. The fund has early adopted the March 2016 amendments to FRS 102 in relation to fair value hierarchy disclosure.

Notes to the financial statements31 January 2016



1. Accounting Policies (continued)

c. Foreign Exchange

I. Assets and liabilities in foreign currencies are translated into Sterling at the exchange rates ruling on the reporting date.II. Revenue in foreign currencies is translated into Sterling at the exchange rates ruling when the income is received.

d. Revenue

I. Rental income is accounted for on an accruals basis. Benefits to the leases in the form of rent free periods are treated as a reduction in the overall return on the leases and in accordance with SORP 2014, Operating Lease Incentives are recognised on a straight line basis over the lease term. Operating Lease Incentives that were earlier spread over the period up to the next rent review are currently being accounted on the same basis as they were accounted before.

II. Interest from short-term deposits is recognised on a daily accruals basis.

e. Expenses

I. All expenses (other than those relating to the purchase and sale of investments and stamp duty reserve tax arising on the sale of shares in the Fund) are charged against income.

II. The Manager’s periodic charge is charged to the income property of the Fund. Handling charges are borne by the capital property of the Fund for distribution purposes.

III. Expenditure on properties, which is not deemed to be of a capital nature, is charged against the revenue of the Fund.IV. Direct acquisition costs are capitalised as they are incurred. Significant capital enhancements and refurbishment

expenditure will also be capitalised.V. The valuation fee is based on a percentage of the valuation of the property investments.

f. Taxation

I. Tax is calculated using the marginal basis i.e. the tax effect of revenue and expenditure is allocated between capital and revenue on the same basis as the particular item to which it relates.

II. The Fund qualifies as a Property Authorised Investment Fund (PAIF) for tax purposes. Accordingly, the income generated by its property investment business will be exempt from tax. Any dividend income it receives from UK companies will also be exempt from tax.

III. The Fund undertakes property investment. Property expenses of a capital nature are still an allowable deduction for the purposes of tax. Capital allowances are accrued in line with the other policies in these statements.

IV. Deferred tax is provided for on all timing differences that have originated but not reversed by the balance sheet date. Deferred tax is not recognised on permanent differences. Deferred tax assets are only recognised where it is more likely than not that there will be suitable taxable profits against which the future reversal of underlying timing differences can be deducted.

g. Bad debt provision

I. It is the Fund’s policy to provide for the potential non-recovery of tenants’ debts by way of a bad debt provision. Where there is a potential for bad debt to occur during the following financial period, this debt will be provided for within the current period’s financial statements.

II. Potential bad debts will generally be provided for when the tenant is in legal administration or liquidation, is bankrupt, unable to be traced, or it is not cost effective to recover the debt.

Notes to the financial statements(continued)



1. Accounting Policies (continued)

h. Cash and Cash equivalents

Cash and cash equivalents are retained to the extent that, where this may reasonably be regarded as necessary in order to enable: - the pursuit of the Fund’s investment objective; or- the redemption of Shares; or- efficient management of the Fund in accordance with its investment objective; or- other purposes which may reasonably be regarded as ancillary to the investment objective of the Fund.

In accordance with the Alternative Investment Fund Managers Directive (AIFMD) requirements, the Fund has treated the investment in the SLI Seabury GBP VNAV Liquidity Fund disclosed within the Portfolio Statement as cash equivalents for the purposes of the Balance Sheet disclosure. Investments are regarded as cash equivalents if they meet all of the following criteria:

- highly liquid investments held in sterling that are readily convertible to a known amount of cash;- are subject to an insignificant risk of change in value; and- provide a return no greater than the rate of a three month high quality government bond.

2. Distribution Policies

a. Basis of distribution

All of the net revenue available for distribution at the end of the year will be distributed or reinvested in the Fund.

Where the Manager has discretion about the extent to which revenue and expenses are recognised within the distributable income property of the Fund, the approach adopted, at all times, will be governed by the aim of maximising the total return to shareholders through limiting avoidable taxation costs.

b. Equalisation

In order that each shareholder in the same share class shall receive the same rate of distribution per share the buying price of each share contains an amount called equalisation. This is equivalent to the net of distributable income less expenses accrued in the Fund at the time of purchase. As part of the distribution payment the average amount of this equalisation is returned to Group 2 shareholders. The equalisation element of the distribution to Group 2 shareholders is treated as a repayment of capital and is therefore not liable to income tax. This amount should, however, be deducted from the cost of the shares for capital gains tax purposes.





3 Net Capital Gains 2016 2015

£’000 £’000

Direct property investments* 53,776 63,339 Handling charges taken from the capital account (6) (1)Net capital gains 53,770 63,338

the above includes*Realised losses (16,989) 0 Unrealised gains 70,765 63,339

53,776 63,339

*where realised gains include gains/losses arising in previous periods, a corresponding loss/gain is included in unrealised gains.

4 Transaction Costs 2016 2015

£’000 £’000

Property Purchases, Sales and Transaction CostsPurchases in year before transaction costs 283,122 309,214 Legal costs 459 561 Agents introductory fees 1,878 2,008 Survey Fees 195 122 Stamp Duty 9,679 11,709 Other acquisition costs 4,982 107 Total purchase transaction costs 17,193 14,507 Purchases including transaction costs 300,315 323,721

Gross sales before transaction costs 47,032 0 CommissionsLegal costs (187) 0 Other disposal costs (621)Total sale transaction costs (808) 0 Total sales net of transaction costs 46,224 0

During the year all purchases and Sales were for direct property investments.




4 Transaction Costs (continued) 2016 2015

Property Transaction Cost as a % of total Purchases & SalesPurchases % Transaction % Transaction

Legal costs 0.16% 0.18%Agents introductory fees 0.66% 0.65%Survey Fees 0.07% 0.04%Stamp Duty 3.42% 3.79%Other acquisition costs 1.76% 0.03%

SalesCommissions 0.00% 0.00%Legal costs 0.40% 0.00%Other disposal costs 1.32% 0.00%

Property Purchases, Sales Analysis to Average NAV

Purchases % Average NAV % Average NAV

Legal costs 0.03% 0.06%Agents introductory fees 0.14% 0.22%Survey Fees 0.01% 0.01%Stamp Duty 0.72% 1.30%Other acquisition costs 0.37% 0.01%

SalesCommissions 0.00% 0.00%Legal costs 0.01% 0.00%Other disposal costs 0.05% 0.00%

There are no transaction costs associated with the purchases or sales of collective investments during the year, or in the prior year. Collective investments operate within the terms of the offer document or prospectus. Typically we do not invest into funds that require an initial charge to be made. The underlying price contains an estimation of cost known as a dilution levy which is applied from time to time.The Fund suffers a number of explicit costs which are disclosed in the notes and fund history. The Fund also suffers implicit costs, for example market spread; the spread represents the costs of providing liquidity in a market. It therefore is subject to change based on volume. Active markets have a lower spread the difference between bid, the price you receive, and offer, the price you pay.There is no portfolio spread at the year end.



5 Revenue 2016 2015

£’000 £’000

Bank interest 1,673 1,026 Rental Income 49,447 34,379 Total revenue 51,120 35,405

6 Expenses 2016 2015

£’000 £’000

Payable to the Authorised Corporate Director, associates of the Authorised Corporate Director and agents of either of them:Authorised Corporate Director's periodic charge 3,218 2,121 Dealing charge 19 8 Registration fees 224 137

3,461 2,266 Payable to the Depositary, associates of the Depositary and agents of either of them:Depositary’s fees 99 95

99 95 Other expenses:Audit fee 50 53 Service Charges 336 642 Professional fees 261 218 Property Repairs and Expenses 2,630 2,308

3,277 3,221 Total expenses 6,837 5,582





7 Taxation 2015 2014

£’000 £’000

(a) Analysis of charge in the yearTotal taxation 0 0

(b) Factors affecting current tax charge for yearThe tax assessed for the year is different from the standard rate of corporation tax in the UK for Funds of authorised Open-Ended Investment Companies (20%). The differences are explained below:

Net revenue before taxation 44,230 29,823 Corporation tax at 20% (2015: 20%) 8,846 5,965 Effects of:Capital allowances (1,031) (389)Interest distributions (256) (191)Property income distributions (7,559) (5,385)Current tax charge (Note 5(a)) 0 0

8 Finance Costs 2016 2015

(a) Distributions and interest £’000 £’000

The distributions take account of income received on the issue of shares and income deducted on the cancellation of shares and comprise:

First interim distribution 10,370 5,906 Second interim distribution 10,374 6,820 Third interim distribution 11,364 8,398 Final distribution 12,762 10,243

44,870 31,367 Add: Income deducted on cancellation of shares 939 133 Deduct: Income received on issue of shares (1,580) (1,677)Net distribution for the year 44,229 29,823

Interest 53 0 Total finance costs 44,282 29,823

Details of the distribution per share are set out in this Fund’s distribution tables.



9 Debtors 2016 2015

£’000 £’000

Amounts receivable from the ACD for issue of shares 2,924 6,969Accrued revenue 77 56 Operating lease incentives 1,237 787 Dilution levy receivable 87 306Accrued rental income 2,088 1,710 VAT recoverable 0 225 Other property debtors* 9,634 5,760 Total debtors 16,047 15,813

* This includes direct property related receivables such as; property advances to management agents, property rent outlay refund and rent free debtor balance.

10 Cash Equivalents 2016 2015 £’000 £’000

Term Deposits with original maturity of less than 3 months 117,176 173,291 Collective Investment Schemes 144,676 116,750 Total cash equivalents 261,852 290,041

11 Creditors 2016 2015 £’000 £’000

Amounts payable to the ACD for cancellation of shares 1,245 4,404 Purchases awaiting settlement 109 0 Accrued expenses payable to the ACD 249 255 Accrued expenses payable to the Depositary 9 16 Dilution levy payable 57 192Other accrued expenses 49 52 Property deposits refundable 2,373 1,796 Rental income received in advance 7,810 6,125 Other property creditors* 5,544 4,371 VAT 1,989 1,843 Total creditors 19,434 19,054

* This includes direct property related payable such as; management agents outlay and retention control account balance.




12 Related Parties Transactions

Standard Life Investments (Mutual Funds) Limited, as Authorised Corporate Director (ACD), is a related party and acts as principal in respect of all transactions of shares in the Fund. The aggregate monies received through issue and paid on cancellation of shares are disclosed in the statement of change in net assets attributable to shareholders. Any amounts due from or due to Standard Life Investments (Mutual Funds) Limited at the end of the accounting period are disclosed in notes 9 and 11.Amounts payable to Standard Life Investments (Mutual Funds) Limited, in respect of periodic charge and registration services, are disclosed in note 4 and any amounts due at the period end in note 11.The Fund holds 144,675,475 (2015: 116,750,050) shares in SLI Seabury GBP VNAV Liquidity Fund as detailed in the portfolio statement. The total purchase cost of these investments during the year was £36,018,000 (2015: £94,976,000) the total sales proceeds was £8,093,000 (2015: £61,220,000) and the total distribution reinvestments recognised during the year was £725,000 (2015: £606,000).The two sub-funds within the Standard Life Investments UK Property Feeder Trust which holds shares of Standard Life Investments UK Property PAIF is a related party and as such the value for these related party transactions are included in the below table.

2016 2015 £’000 £’000

Transactions during the year with Standard Life group companies and Standard Life Investments UK Property Feeder Trust are as follows:

Sale of shares by the Fund 398,962 400,727 Purchase of shares by Fund 226,938 17,908 Distributions made by Fund 33,686 23,685

The percentage value of the Fund held by Standard Life group companies is: 88.9% 88.9%

13 Cash Flow 2016 2015

£’000 £’000 Net Revenue before taxation 44,230 29,823Increase in debtors (235) (3,597)Increase in Creditors 380 9,438

44375 34,799

14 Post Balance Sheet Events

On 20 May 2016, Standard Life Investments Ignis UK Property Fund, a sub-fund of Standard Life Investments Ignis Real Estate Funds ICVC, acquired all the shares in Standard Life Investments UK Property Fund, a sub-fund of Standard Life Investments Company IV. The value of the shares acquired was £1,349 million. Subsequent to this transaction it is the intention of the ACD to wind up the fund as soon as is practicable.Detailed communication regarding this transaction has been issued to all the shareholders of Standard Life Investments UK Property Fund.




15 Fair value hierarchy

2016 2016 2016 2015 2015 2015

£000 £000 £000 £000 £000 £000Fair value of investment assets Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

Collective Investment Scheme* 0 144,676 0 0 116,750 0

Total investment assets 0 144,676 0 0 116,750 0

The three levels of the fair value hierarchy under FRS 102 are described below:Level 1: Unadjusted quoted market prices in active markets that are accessible at the measurement date for the identical unrestricted assets or liabilities.Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).Level 3: Inputs for asset or liability that are not based on observable market data (unobservable inputs).* Investment in SLI Seabury GBP VNAV Liquidity Fund is included in the above table within ‘Collective Investment Scheme’ in line with disclosure within the portfolio statement. In accordance with the AIFMD requirements, the fund has treated the investment in the SLI Seabury GBP VNAV Liquidity Fund disclosed within the Portfolio Statement as cash equivalents for the purposes of the Balance Sheet disclosure.

16 Historic cost reconciliation of investment property2016 2015

£’000 £’000 Direct property investments opening carrying value 884,929 498,772Additions to property portfolio 301,729 325,135Disposals from property portfolio (63,218) 0Fair value adjustments in the year 68,041 61,022Direct property investments closing carrying value 1,191,481 884,929


17 Shares in issue reconciliationOpening Creations Cancellations Conversions Closing

shares during during during shares2015 the year the year the year 2016

Retail accumulation 88,338,378 28,042,868 (111,286,056) (1,998) 5,093,192Institutional accumulation 21,854,343 104,086,546 (3,030,336) 0 122,910,553Retail income 10,113,432 4,138,974 (13,171,047) 0 1,081,359Institutional income 111,021,651 41,060,871 (51,213,954) 0 100,868,568Standard Life income 39,824,468 5,199,851 (2,000) 0 45,022,318Standard Life accumulation 15,118 2,822 (11,418) 1,008 7,530Platform 1 accumulation 33,282,523 30,467,742 (5,062,478) (57,568) 58,630,219Platform 1 income 8,443,333 4,681,587 (439,964) 64,978 12,749,935Feeder accumulation 1,381,696,516 304,735,862 (88,605,352) 0 1,597,827,027Feeder income 87,925,054 23,131,066 (16,334,042) 0 94,722,079Institutional A accumulation 0 2,200 0 0 2,200




18 Risk DisclosuresDirect Property Risk

A significant portion of the Fund’s assets are invested in tangible properties. These are exposed to specific risks including:- reduced liquidity- market price movements- sector exposure risk

Reduced Liquidity

By their very nature direct properties are less liquid and the investments are not readily realisable. Sales may take a number of months.The Fund plans for business activity and operates a detailed budgeting and cash forecasting model that is regularly reviewed.

Market price movements

Whilst direct property is independently valued on a monthly basis, such valuations, are a matter of the valuer’s opinion and such values may or may not be achieved on a sale. Market price risk is managed through diversifying the portfolio in different property sectors including office, industrial and retail. The properties of the Fund are valued on a monthly basis by the Standing Independent Valuer.

Sector exposure risk

The Fund’s assets are invested mainly in direct properties. As such the Fund is exposed to the sector specific risk as a result of its concentration to the market sector. The fund primarily invests into; Car Park, Commercial, Industrial, Office and Retail sectors as disclosed within the portfolio statement. The Fund is also exposed to specific sector risk through the tenants of the direct properties invested in.All potential tenants are assessed by reviewing their Company Accounts and by using the Dun & Bradstreet (D&B) company credit check report; based on this research a rental deposit may be requested from the tenant. The largest tenants of the Fund and all annual rent in excess of £1,000,000 is also monitored using D&B. Information relating to the concentration of tenants based on sectors is available to the fund manager. The fund manager also monitors the D&B failure score risk which indicates the likelihood of a business failing within the next 12 months, used for identifying high risk tenants.

Investment risk

In accordance with the investment objectives, the Fund may hold certain financial instruments. These comprise:- securities held in accordance with the investment objective and policies;- cash and short-term debtors and creditors arising directly from operations; and- derivatives.The main risks arising from the Fund’s financial instruments are market price, foreign currency, interest rate, credit and liquidity risk. The policies for managing these risks are summarised below and have been applied consistently throughout the year, and prior year.

Foreign currency risk

A proportion of the net assets of the Fund may be denominated in currencies other than Sterling, therefore the balance sheet and total returns can be affected by currency movements. In certain circumstances, the Fund Manager may seek to manage exposure to currency movements by using forward currency contracts.The Fund does not hedge or otherwise seek to avoid currency movement risk on accrued revenue.Income received in foreign currencies is converted into Sterling at the exchange rates ruling when the income is received.The net foreign currency monetary exposure comprises:

Net foreign currency monetary assets 2016 2015

2016 £'000 £'000 CurrencyEuro 4 4




18 Risk Disclosures (continued)Interest rate risk

Interest receivable on bank deposits or payable on bank overdrafts will be affected by fluctuations in interest rates. The Fund Manager continuously reviews interest rates and inflation expectations. The assessment of this may result in a change in investment strategy.

Interest rate risk profile of financial assets

The interest rate risk profile of the Fund’s financial assets is: Financial assets

Floating rate not carrying

financial assets interest Total

2016 £'000 £'000 £’000

CurrencySterling 264,259 1,191,481 1,455,740Euro 4 0 4

2015CurrencySterling 293,611 884,929 1,178,540Euro 4 0 4

Floating rate interest was earned at rates based on LIBOR, with the exception of the SLI Seabury Liquidity Funds which earn interest from investment in an underlying portfolio of money market instruments.




18 Risk Disclosures (continued)Credit risk

All cash exposures are carefully managed to ensure that money is placed on deposit with counterparties that meet the minimum credit rating deemed appropriate for this Fund.This Fund holds term deposits. This type of transaction gives rise to counterparty risk whereby the other party to the transaction may fail to fulfil their contractual obligations. Effective monitoring of counterparty credit risk is an important element of the management of the Fund, using the experience of the ACD’s Credit Committee to carefully review counterparties transacted with.Collateral requirements are actively managed, ensuring cash or securities are pledged against the performance of a contract where necessary. This mitigates any potential negative impact on the Fund in the unlikely event of a counterparty default. Whether or not each position is collateralised depends on whether a net liability is held with each counterparty, the specific agreements with individual counterparties and de minimis thresholds. As such there will be instances where the Fund is not required to hold collateral.Any counterparties to term deposits are listed in the table below. No collateral was required to be held by the Fund as at 31 January 2016.

Counterparty Collateral classification Value £’000

Bank of Tokyo - -Mizuho Bank - -Rabo Bank - -Sumitomo Mitsui Bank - -Total - -

Liquidity risk

With the exception of direct property the Fund’s assets comprise mainly readily realisable cash deposits. The main liability of the Fund is the redemption of any shares that investors wish to sell. Investments in immovable property are relatively illiquid and more difficult to realise than most equities or bonds. If an asset cannot be liquidated in a timely manner then it may be harder to attain a reasonable price. As a result, at times, the ACD may have to delay acting on instructions to sell investments which may have a materially adverse impact on the value of the shares in the Fund.

Sensitivity analysis

Property values in the case of commercial properties are driven to some extent by the expected yield. The manager reviews the sensitivity of the valuation to fluctuations in yield with a view to ensuring the yield can be maintained by managing lease agreements appropriately. At the period end, based on the portfolio effective yield of 5.27%, were every property to see an increase of 0.50% to the yield the estimated effect would be a reduction of 7.65% to the net asset value. Were yields to decrease by 0.50% the net asset value would rise by an estimated 9.25%. These estimates were subject to the prevailing conditions at the time.



19 Prior year restatementsUnder the IMA SORP 2014 there is now a requirement to show the Dilution adjustments separately.This is a change in presentation, there have been no changes to the financial position or financial performance of the fund as a result. The effect of these restatements is shown below:

Statement of Change in Net Assets Attributable to Shareholders 2015 Effect of

2015 (restated) restatement

£’000 £’000 £’000

Amounts receivable on issue of shares 527,830 505,397 (22,433)Amounts payable on cancellation of shares (26,544) (25,423) 1,121 Dilution adjustment 0 21,312 21,312

2015 2015 Effect of

Balance Sheet 2015 (restated) restatement

£’000 £’000 £’000

Debtors (note 9) 15,813 15,813 0 Creditors (note 11) (20,665) (19,054) 1,611 Distribution payable on income shares (1,218) (2,829) (1,611)

2015 2015 Effect of

Debtors (note 9) 2015 (restated) restatement

£’000 £’000 £’000

Amounts receivable from the ACD for the issue of shares 7,275 6,969 (306)

Dilution levy receivable 0 306 306

2015 2015 Effect of

Creditors (note 11) 2015 (restated) restatement

£’000 £’000 £’000

Amounts payable to the ACD for the cancellation of shares 4,596 4,404 (192)

Dilution levy payable 0 192 192 Income tax payable 1,611 0 (1,611)




Distribution Tables

for the three months ended 30 April 2015

Group 1 - shares purchased prior to 1 February 2015Group 2 - shares purchased between 1 February 2015 and 30 April 2015

Gross income Income tax Net income Equalisation Distribution paid Distribution paid

2015 2015 2015 2015 2015 2014

pence pence pence pence pence pence

per share per share per share per share per share per share

Retail accumulation - Property incomeGroup 1 0.5513 0.1102 0.4411 - 0.4411* 0.4285Group 2 0.2256 0.0451 0.1805 0.2606 0.4411* 0.4285

Retail accumulation - Interest incomeGroup 1 0.0213 0.0042 0.0171 - 0.0171* 0.0118Group 2 0.0087 0.0017 0.0070 0.0101 0.0171* 0.0118

Retail accumulation - Dividend incomeGroup 1 0.0362 - 0.0362 - 0.0362* -Group 2 0.0189 - 0.0189 0.0173 0.0362* -

Institutional accumulation - Property incomeGroup 1 0.8417 0.1683 0.6734 - 0.6734* 0.6697Group 2 0.2495 0.0499 0.1996 0.4738 0.6734* 0.6697

Institutional accumulation - Interest incomeGroup 1 0.0313 0.0062 0.0251 - 0.0251* 0.0126Group 2 0.0092 0.0018 0.0074 0.0177 0.0251* 0.0126

Institutional accumulation - Dividend incomeGroup 1 0.0393 - 0.0393 - 0.0393* - Group 2 0.0168 - 0.0168 0.0225 0.0393* -

Retail income - Property incomeGroup 1 0.2850 0.0570 0.2280 - 0.2280** 0.2270Group 2 0.2092 0.0418 0.1674 0.0606 0.2280** 0.2270



Distribution Tables(Continued)


2015 2015 2015 2015 2015 2014



Retail income - Interest incomeGroup 1 0.0111 0.0022 0.0089 - 0.0089** 0.0062Group 2 0.0082 0.0016 0.0066 0.0023 0.0089** 0.0062

Retail income - Dividend incomeGroup 1 0.0188 - 0.0188 - 0.0188** - Group 2 0.0148 - 0.0148 0.0040 0.0188** -

Institutional income - Property incomeGroup 1 0.4078 0.0815 0.3263 - 0.3263** 0.3287Group 2 0.1585 0.0317 0.1268 0.1995 0.3263** 0.3287

Institutional income - Interest incomeGroup 1 0.0151 0.0030 0.0121 - 0.0121** 0.0073Group 2 0.0058 0.0011 0.0047 0.0074 0.0121** 0.0073

Institutional income - Dividend incomeGroup 1 0.0190 - 0.0190 - 0.0190** - Group 2 0.0096 - 0.0096 0.0094 0.0190** -

Standard Life income - Property incomeGroup 1 0.8317 0.1663 0.6654 - 0.6654** 0.6369Group 2 - - - - - 0.6369

Standard Life income - Interest incomeGroup 1 0.0301 0.0060 0.0241 - 0.0241** 0.0161Group 2 - - - - - 0.0161

Standard Life income - Dividend incomeGroup 1 0.0287 - 0.0287 - 0.0287** - Group 2 - - - - - -

Standard Life accumulation - Property incomeGroup 1 1.1502 0.2300 0.9202 - 0.9202* 0.8554Group 2 0.3523 0.0704 0.2819 0.6383 0.9202* 0.8554





2015 2015 2015 2015 2015 2014



Standard Life accumulation - Interest incomeGroup 1 0.0426 0.0085 0.0341 - 0.0341* 0.0220Group 2 0.0131 0.0026 0.0105 0.0236 0.0341* 0.0220

Standard Life accumulation - Dividend incomeGroup 1 0.0427 - 0.0427 - 0.0427* - Group 2 0.0185 - 0.0185 0.0242 0.0427* -

Platform 1 accumulation - Property incomeGroup 1 0.3870 0.0774 0.3096 - 0.3096* 0.3031Group 2 0.1927 0.0385 0.1542 0.1554 0.3096* 0.3031

Platform 1 accumulation - Interest incomeGroup 1 0.0135 0.0027 0.0108 - 0.0108* 0.0075Group 2 0.0067 0.0013 0.0054 0.0054 0.0108* 0.0075

Platform 1 accumulation - Dividend incomeGroup 1 0.0187 - 0.0187 - 0.0187* -Group 2 0.0111 - 0.0111 0.0076 0.0187* -

Platform 1 Income - Property incomeGroup 1 0.3567 0.0713 0.2854 - 0.2854** 0.2802Group 2 0.1341 0.0268 0.1073 0.1781 0.2854** 0.2802

Platform 1 Income - Interest incomeGroup 1 0.0132 0.0026 0.0106 - 0.0106** 0.0071Group 2 0.0050 0.0010 0.0040 0.0066 0.0106** 0.0071

Platform 1 Income - Dividend incomeGroup 1 0.0171 - 0.0171 - 0.0171** -Group 2 0.0085 - 0.0085 0.0086 0.0171** -

Feeder accumulation - Property incomeGroup 1 0.5142 0.1028 0.4114 - 0.4114* 0.3830Group 2 0.2291 0.0458 0.1833 0.2281 0.4114* 0.3830





2015 2015 2015 2015 2015 2014



Feeder accumulation - Interest incomeGroup 1 0.0186 0.0037 0.0149 - 0.0149* 0.0096Group 2 0.0083 0.0016 0.0067 0.0082 0.0149* 0.0096

Feeder accumulation - Dividend incomeGroup 1 0.0178 - 0.0178 - 0.0178* - Group 2 0.0099 - 0.0099 0.0079 0.0178* -

Feeder income - Property incomeGroup 1 0.4931 0.0986 0.3945 - 0.3945*** 0.3786Group 2 0.2488 0.0497 0.1991 0.1954 0.3945*** 0.3786

Feeder income - Interest incomeGroup 1 0.0178 0.0035 0.0143 - 0.0143*** 0.0094Group 2 0.0090 0.0018 0.0072 0.0071 0.0143*** 0.0094

Feeder income - Dividend incomeGroup 1 0.0172 - 0.0172 - 0.0172*** -Group 2 0.0103 - 0.0103 0.0069 0.0172*** -

* Distribution accumulated on 30 April 2015** Distribution paid on 30 June 2015*** Distribution paid on 27 June 2015




for the three months ended 31 July 2015

Group 1 - shares purchased prior to 1 May 2015Group 2 - shares purchased between 1 May 2015 and 31 July 2015


2015 2015 2015 2015 2015 2014





Retail accumulation - Dividend incomeGroup 1 0.0340 - 0.0340 - 0.0340* - Group 2 0.0234 - 0.0234 0.0106 0.0340* -



Institutional accumulation - Dividend incomeGroup 1 0.0366 - 0.0366 - 0.0366* - Group 2 0.0299 - 0.0299 0.0067 0.0366* -





2015 2015 2015 2015 2015 2014




Retail income - Dividend incomeGroup 1 0.0175 - 0.0175 - 0.0175** - Group 2 0.0131 - 0.0131 0.0044 0.0175** -



Institutional income - Dividend incomeGroup 1 0.0176 - 0.0176 - 0.0176** -Group 2 0.0162 - 0.0162 0.0014 0.0176** -

Standard Life income - Property incomeGroup 1 0.7937 0.1587 0.6350 - 0.6350** 0.5866Group 2 0.6766 0.1353 0.5413 0.0937 0.6350** 0.5866

Standard Life income - Interest incomeGroup 1 0.0313 0.0062 0.0251 - 0.0251** 0.0212Group 2 0.0267 0.0053 0.0214 0.0037 0.0251** 0.0212

Standard Life income - Dividend incomeGroup 1 0.0269 - 0.0269 - 0.0269** -Group 2 0.0238 - 0.0238 0.0031 0.0269** -






2015 2015 2015 2015 2015 2014




Standard Life accumulation - Dividend incomeGroup 1 0.0383 - 0.0383 - 0.0383* -Group 2 0.0172 - 0.0172 0.0211 0.0383* -



Platform 1 accumulation - Dividend incomeGroup 1 0.0174 - 0.0174 - 0.0174* -Group 2 0.0134 - 0.0134 0.0040 0.0174* -



Platform 1 Income - Dividend incomeGroup 1 0.0159 - 0.0159 - 0.0159** -Group 2 0.0119 - 0.0119 0.0040 0.0159** -






2015 2015 2015 2015 2015 2014




Feeder accumulation - Dividend incomeGroup 1 0.0168 - 0.0168 - 0.0168* -Group 2 0.0126 - 0.0126 0.0042 0.0168* -



Feeder income - Dividend incomeGroup 1 0.0159 - 0.0159 - 0.0159*** -Group 2 0.0130 - 0.0130 0.0029 0.0159*** -

* Distribution accumulated on 31 July 2015** Distribution paid on 30 September 2015*** Distribution paid on 27 September 2015





for the three months ended 31 October 2015

Group 1 - shares purchased prior to 1 August 2015Group 2 - shares purchased between 1 August 2015 and 31 October 2015


2015 2015 2015 2015 2015 2014





Retail accumulation - Dividend incomeGroup 1 0.1330 0.1330 - 0.1330* -Group 2 0.0382 0.0382 0.0948 0.1330* -



Institutional accumulation - Dividend incomeGroup 1 0.1407 0.1407 - 0.1407* -Group 2 0.0808 0.0808 0.0599 0.1407* -






2015 2015 2015 2015 2015 2014




Retail income - Dividend incomeGroup 1 0.0730 0.0730 - 0.0730** -Group 2 0.0293 0.0293 0.0437 0.0730** -



Institutional income - Dividend incomeGroup 1 0.0873 0.0873 - 0.0873** -Group 2 0.0523 0.0523 0.0350 0.0873** -



Standard Life income - Dividend incomeGroup 1 0.1084 0.1084 - 0.1084** -Group 2 0.0521 0.0521 0.0563 0.1084** -






2015 2015 2015 2015 2015 2014




Standard Life accumulation - Dividend incomeGroup 1 0.1689 0.1689 - 0.1689* -Group 2 0.0723 0.0723 0.0966 0.1689* -



Platform 1 accumulation - Dividend incomeGroup 1 0.0645 0.0645 - 0.0645* -Group 2 0.0387 0.0387 0.0258 0.0645* -



Platform 1 Income - Dividend incomeGroup 1 0.0604 0.0604 - 0.0604** -Group 2 0.0372 0.0372 0.0232 0.0604** -






2015 2015 2015 2015 2015 2014




Feeder accumulation - Dividend incomeGroup 1 0.0683 0.0683 - 0.0683* -Group 2 0.0466 0.0466 0.0217 0.0683* -



Feeder income - Dividend incomeGroup 1 0.0680 0.0680 - 0.0680*** -Group 2 0.0475 0.0475 0.0205 0.0680*** -

* Distribution accumulated on 31 October 2015** Distribution paid on 30 December 2015*** Distribution paid on 27 December 2015




Interim distributionfor the three months ended 31 January 2016

Group 1 - shares purchased prior to 1 November 2015Group 2 - shares purchased between 1 November 2015 and 31 January 2016

Gross income Income tax Net income Equalisation Distribution Distribution paid

2016 2016 2016 2016 payable 2016 2015





Retail accumulation - Dividend incomeGroup 1 0.3103 0.0000 0.3103 - 0.3103* 0.2057Group 2 0.0000 0.0000 0.0000 0.3103 0.3103* 0.2057



Institutional accumulation - Dividend incomeGroup 1 0.3019 0.0000 0.3019 - 0.3019* 0.2190Group 2 0.1277 0.0000 0.1277 0.1742 0.3019* 0.2190






2016 2016 2016 2016 payable 2016 2015




Retail income - Dividend incomeGroup 1 0.0861 0.0000 0.0861 - 0.0861** 0.1098Group 2 0.0099 0.0000 0.0099 0.0762 0.0861** 0.1098



Institutional income - Dividend incomeGroup 1 0.1166 0.0000 0.1166 - 0.1166** 0.1078Group 2 0.0580 0.0000 0.0580 0.0586 0.1166** 0.1078



Standard Life income - Dividend incomeGroup 1 0.2116 0.0000 0.2116 - 0.2116** 0.1625Group 2 0.1413 0.0000 0.1413 0.0703 0.2116** 0.1625






2016 2016 2016 2016 payable 2016 2015




Standard Life accumulation - Dividend incomeGroup 1 0.2753 0.0000 0.2753 - 0.2753* 0.2394Group 2 0.0000 0.0000 0.0000 0.2753 0.2753* 0.2394



Platform 1 accumulation - Dividend incomeGroup 1 0.1483 0.0000 0.1483 - 0.1483* 0.1033Group 2 0.0911 0.0000 0.0911 0.0572 0.1483* 0.1033



Platform 1 Income - Dividend incomeGroup 1 0.1331 0.0000 0.1331 - 0.1331** 0.0934Group 2 0.0863 0.0000 0.0863 0.0468 0.1331** 0.0934





2016 2016 2016 2016 payable 2016 2015




Feeder accumulation - Dividend incomeGroup 1 0.1346 0.0000 0.1346 - 0.1346* 0.1021Group 2 0.0843 0.0000 0.0843 0.0503 0.1346* 0.1021



Feeder income - Dividend incomeGroup 1 0.1207 0.0000 0.1207 - 0.1207*** 0.0983Group 2 0.0786 0.0000 0.0786 0.0421 0.1207*** 0.0983

Institutional A accumulation - Property incomeGroup 1 0.0000 0.0000 0.0000 - 0.0000* -Group 2 - - - - - -

Institutional A accumulation - Interest incomeGroup 1 0.0000 0.0000 0.0000 - 0.0000* -Group 2 - - - - - -

Institutional A accumulation - Dividend incomeGroup 1 0.0000 0.0000 0.0000 - 0.0000* -Group 2 - - - - - -

* Distribution accumulated on 31 January 2016** Distribution payable on 31 March 2016*** Distribution payable on 27 March 2016




Alternative Investment Fund Disclosures

On 7th July 2014, the FCA approved an application from the Manager, Standard Life Investments (Mutual Funds) Limited, to operate as an Alternative Investment Fund Manager (AIFM) under the new European Union Alternative Investment Fund Managers Directive (AIFMD).

The AIFMD introduces additional requirements on both the Manager and on other parties, such as the Trustee. It also creates a clear and harmonised regulated framework for AIFMs and the fund ranges they manage. The key benefits of AIFMD are greater investor protection and the creation of a more efficient and transparent market through enhanced Trustee supervisory practices that will help promote market stability and safekeeping of investments.

Risk profile

In conjunction with the other risk narratives in this report and the policies laid out in the prospectus there has been no significant change to the risk profile of the Fund. For ease of reference the profile of the typical investor is included.

This Fund is intended for investors who wish to participate in the opportunity to achieve a return from capital appreciation and income over the longer term by investing in an actively managed portfolio of primarily commercial property and property-related equities, property investment companies, other property collective investment schemes, property-related fixed income securities and cash. The diversified nature of the portfolio makes it suitable for investors wishing to achieve a broad spread of exposure to property and property related instruments together with fixed income securities and cash. While the level of income provision is likely to be relatively stable, the investor must be able to accept significant temporary losses to capital and the possibility of fluctuations in the income level due to the volatile nature of markets, and should therefore have an investment time horizon of at least 5 years.

Risk Governance Framework

To protect the interests of its clients, Standard Life Investments operates a strong control environment throughout the Company. This is achieved through its Enterprise Risk Management (‘ERM’) Framework, which provides integrated, robust processes to allow the Company’s risk to be identified, assessed, monitored and controlled.

All employees are responsible for assessing and managing risk within the business. This is achieved through investing in robust and sustainable processes and the recruitment and training of our people. Management confirm the operation of their controls on a quarterly basis through the control self assessment (‘CSA’) process.

The key components of the ERM Framework are described here:

Board of Directors

The Board of Directors has overall responsibility for the ERM framework and system of internal control and for the ongoing review of its effectiveness. The framework is designed to manage, rather than eliminate risk and can only provide reasonable, not absolute, assurance against material misstatement or loss.

The Board Charter also identifies matters that are specifically reserved for decision by the Board.

Chief Executive

The role of the Chief Executive Officer (‘CEO’) is to implement the Board’s strategies and manage the day-to-day business within the parameters laid down by the Board, and to assist the Board in carrying out its role by providing advice and recommendations consistent with the agreed strategic direction and operational financial and regulatory best practice.

The CEO is responsible for the management of the ERM framework, including approving management and control policies. This includes regularly reporting to the Board with appropriate, timely and quality information so that the Board can discharge its responsibilities effectively.

▸ Enterprise Risk Management Committee (‘ERMC’) The purpose of the ERMC is to ensure that risk is effectively identified, assessed, monitored and controlled on an enterprise wide basis. This committee meets monthly and is chaired by the Chief Executive.

▸ Risk and Exposures Committee (‘REC’) The REC is responsible for monitoring investment risk across the portfolios, where investment management services are provided under an investment management agreement or equivalent documents. The REC meets monthly and is chaired by the Head of Investment Process.

▸ Operational Risk Committee (‘ORC’) The ORC ensures that operational risk is effectively identified, quantified and mitigated where appropriate based on fundamental understanding of existing risk exposure. This committee meets monthly and is chaired by the Chief Operating Officer.

▸ Global Product Committee (‘GPC’) The GPC is responsible for ratifying the Global Product Strategy, product prioritisation and ensuring appropriate governance/ approval in line with the Product Supervision Policy. This committee meets monthly and is chaired by the Global Head of Product and Investment Specialists.



Alternative Investment Fund Disclosures(Continued)

Investment Governance

The objective of the Investment Governance Team at Standard Life Investments is to ensure that its investment portfolios are being managed in accordance with agreed client mandates and within Standard Life Investments’ own tolerance for investment risk. This objective is achieved through:

▸ Ensuring that investment activity is consistent with both regulatory requirements and investment restrictions (internal and client specified).

▸ Ensuring that an appropriate level of risk is being taken to meet a fund’s performance target.

▸ Ensuring that Standard Life Investments’ agreed investment process is being consistently applied across all asset classes.

▸ Assessing aggregate exposures across all portfolios.

▸ Assessing new investment risks that arise as a result of the introduction of new products, instruments or markets.

The investment governance platform comprises a number of core processes that are the responsibility of the Investment Governance Team, combined with broader oversight of investment risk from the Risk and Exposures Committee.

A key part of the investment governance function is to ensure that other key stakeholders in the governance process, such as Investment Managers, the Global Client Group, Client Directors and Risk and Compliance, are kept fully informed of issues and involved in governance processes, where required.

A key principle of the Investment Risk Management Policy is the tripartite approach. This requires all matters relating to a client mandate to be agreed by three core stakeholders; the Client Director (or Fund Governor), the Investment Manager and the Investment Governance Team. The Client Directors and the Fund Governors (for pooled vehicles) are the internal representation of the client, who ensures a client’s expectations are fully understood.

Escalation

There are escalation procedures for every asset class for breaches of both external and internal limits.

If a breach occurs, the Investment Governance Team formally notifies the Investment Manager. In the case of a breach of a client restriction, the Client Director is also immediately notified.

In the event that breaches remain unresolved, they are escalated to the Risk and Exposures Committee and Chief Investment Officer.

Investment Risk

For the purpose of managing risk, Standard Life Investments groups investment risk into market risk, liquidity risk and counterparty credit risk. In reality, the risks are interrelated. As previously described, the Investment Governance Team is responsible for oversight of investment risk.

Market Risk

Market risk represents the risk of adverse movements in markets (including asset prices, volatility, changes in interest rates, or foreign exchange rates). The Investment Risk Team is primarily responsible for the measurement and monitoring of market risk. A range of risk measurement techniques are used. All risk methodologies are subject to formal review and material changes are reported to the Risk and Exposures Committee.

The Investment Risk Management Team (IRMT) sets and measures different limits for different funds, including volatility and tracking error, VaR and cash cover ratios. The IRMT operates an appropriate level of oversight across SLI’s portfolios, depending on client and regulatory expectations.

Risk tolerances are agreed through a tripartite governance process. The tripartite governance process consists of the Fund Governance Team, Portfolio Manager and Investment Risk Manager working together to agree and set out the appropriate risk budget and restrictions that satisfy the needs of clients and regulators. The tripartite group reviews the restrictions of each portfolio on an annual basis or as the result of a change to the fund objectives.

In addition to internally developed models, IRMT employ a range of industry-leading third party risk models within Standard Life Investments’s risk framework. Distinct models are applied for market risk, liquidity risk and leverage risk, providing the core calculation engines for the risk measurement processes. The Risk team also performs backtesting of the models in line with the regulations. The Investment Risk Team performs stress tests on a regular and on an ad-hoc basis. The type of stress test used will vary according to market conditions.

Risk numbers are analysed by the Investment Risk Team and reasons for large changes are established. This results in a discussion with the relevant Investment Manager. Breaches are immediately notified to the Investment Manager and Client Director, where appropriate. All risk numbers are formally reviewed with the Heads of Desks at the quarterly portfolio reviews.

For the direct Real Estate asset class, core risk measurement is performed by the Real Estate Research team with oversight provided by IRMT. Investment Restrictions Control complete an independent monthly review of all real estate fund activity against fund restrictions and guidelines. Breaches of limits are recorded and escalated in accordance with procedures outlined previously.




Counterparty Credit Risk

Counterparty credit risk is the risk of exposure to potential loss should a counterparty fail to perform its financial obligations, including failure to perform them in a timely manner.

The approach to managing counterparty credit risk is documented in the Standard Life Investments Credit Risk Policy.

The Standard Life Investments Credit Committee is responsible for monitoring counterparties and reviewing an internal score on each counterparty. The score, combined with the qualitative judgements of the Standard Life Investments Credit Committee, will determine whether a counterparty is approved and for what type of transactions.

Exposures within each client portfolio are then controlled by using counterparty concentration limits. For certain counterparties, the Standard Life Investments Credit Committee will also set maturity limits.

The Risk and Exposures Committee reviews the monthly minutes of the Standard Life Investments Credit Committee and reviews aggregate exposures to the top counterparties. Any significant changes in scoring methodologies recommended by the Standard Life Investments Credit Committee are also reported to the Risk and Exposures Committee.

Methodologies for calculating counterparty exposures are documented in the Credit Risk Policy. Any material changes are reported to the Risk and Exposures Committee.

Other Risks

Regulatory Risk

Regulatory risk is the risk that changes in laws and regulations will cause a loss in portfolio values. A change in laws or regulations made by a government, local authority or regulatory body can dramatically increase the cost of operating a business, reduce the attractiveness of investment and/or change the competitive landscape.

Operational Risk

Operational risk can be defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. While it is not the primary focus of the investment risk framework, there is a need to be aware of the operational implications of all investment activity.

Both operational and regulatory risk issues are managed through the Operational Risk Committee.

Liquidity profile

The Manager may, with the prior agreement of the Trustee, and must, if the Trustee so requires, suspend the issue, sale, cancellation and redemption of shares in the Fund if it, or the Trustee in the case of any requirement by the Trustee, is of the opinion that due to exceptional circumstances it is in the interests of holders in the Fund. Trustee must formally review the suspension at least every 28 days and inform the FCA of the results of this review.

When the Manager buys or sells underlying investments in response to a request for the issue, sale, cancellation or redemption of units, it will generally incur a cost, made up of dealing costs and any spread between the bid and offer prices of the investments concerned, which is not reflected in the price paid by or to the holder. This effect is known as “dilution”. With a view to reducing this cost which may have an adverse effect on continuing holders’ interests in the Fund the Manager may make a dilution adjustment on the issue, sale, cancellation and/or redemption of shares. Where the Fund is, in the opinion of the Manager, experiencing a period of continual decline. In this case, the dilution adjustment would be made on all redemptions.

Investment property is less liquid than other asset classes such as bonds or equities. Selling property can be a lengthy process so investors in the Fund should be aware that they may not be able to sell their investment when they want to. The amount of property held at the period end was 82.23% as shown in the composition of portfolio. It could take more than a year to liquidate the majority of these assets.

The Manager has a robust valuation and pricing policy in place to ensure the valuation of assets is undertaken independently to ensure no conflicts arise. From time to time the Manger may afford preferential terms of investment to certain groups of investors. In assessing whether such terms are afforded to an investor, the Manager will ensure that any such concession is not inconsistent with its obligation to act in the overall best interests of the relevant Fund and its investors. In particular, the Manager may typically exercise its discretion to waive a proportion of the initial charge or investment minima for investment in a Class for investors that are investing sufficiently large amounts, either initially or are anticipated to do so over time. The Manager may also have agreements in place with such groups of investors which result in them paying a reduced annual management charge. The Management charge accrues daily based on the mid valuation of the assets in line with the terms set out in the prospectus. There are no performance fees charged to investors in the fund.




Leverage of the AIF

There have been no changes to the maximum leverage allowed in the period.

Leverage calculated on Maximum % Current %

Gross basis 300 86.77

Commitment basis 200 86.77

Under the Depositary Agreement the Trustee has agreed that it, and any person to whom it delegates custody functions, may not re use any of the Fund’s assets with which it has been entrusted.

The Investment Adviser may use one or more separate counterparties to undertake derivative transactions on behalf of the Fund and may be required to pledge collateral, paid from within the assets of the Fund, to secure such contracts. There may be a risk that a counterparty will wholly or partially fail to honour their contractual obligations under the arrangement. The Investment Adviser assesses the creditworthiness of counterparties as part of the risk management process and will ordinarily hold collateral to mitigate this. The Trustee may, at the request of the manager, enter into repo contracts and certain stock lending transactions.

Remuneration for the AIF

The Company’s Alternative Investment Fund Manager (AIFM), Standard Life Investments (Mutual Funds) Limited “SLI (MF)”, is subject to the Alternative Investment Fund Manager Directive “AIFMD” and the Remuneration Requirements under SYSC 19B on a proportionate basis in respect of its activities as AIFM for a range of Alternative Investment Funds (AIFs). Total assets under management at SLI (MF) were £75.959 billion at 31 December 2015, of which £10.482 billion of assets are AIFs subject to AIFMD. The Net Asset Value (NAV) of the SLI UK Property Fund and Feeder Fund amounts to £1.459 billion as at December 2015.

SLI (MF) does not employ any direct staff. The board of the AIFM are employees of Standard Life Investments Limited “SLI” and are subject to the SLI and Standard Life Group policies as regulated by the Financial Conduct Authority (FCA). SLI is subject to the FCA’s Prudential Sourcebook for Banks, Building Societies and Investment Firms “BIPRU”, Remuneration Requirements under SYSC 19C on a proportionate basis. The board have responsibility for the Risk Management arrangements as they relate to the AIFM fund range. The investment processes are subject to the governance structure of SLI and the board of SLI (MF) monitors the effectiveness in meeting strict criteria at an AIF level. The board of SLI (MF) discharges its duties via regular reporting and review at board meetings and via allocation of executive responsibilities, in relation to SLI (MF), within the SLI management team. The Investment Management Agreement between the two parties is reviewed with regards to maintaining remuneration practices in line with AIFMD.

The AIFM has no identified staff out with the board. The board has seven individuals who are AIFM Remuneration Code Staff “AIFM Code Staff”, i.e. individuals whose activities have a material impact on the risk profile of the AIFM, or the funds that it manages. The aggregate remuneration for these seven individuals, apportioned for the AIFM duties they have performed, for the year 2015 is £206,094.

AIFM Code Staff are monitored in respect of their performance in line with the SLI Remuneration Policy which is designed to meet the regulatory requirements of BIPRU and AIFMD. The Remuneration Committees of SLI and Standard Life plc reviews and approves remuneration for AIFM Code Staff. More information on the remuneration policies of Standard Life plc are disclosed on the following web page:

http://www.standardlife.com/about/ governance-remuneration-code.html

As market or regulatory practice develops, Standard Life Investment Fund Managers may consider it appropriate to make changes to the way in which quantitative remuneration disclosures are calculated. This may result in disclosures in relation to an AIF not being comparable to disclosures made in the prior year, or in relation to other Standard Life Investment fund disclosures in that same year.

Standard Life Investments Limited is registered in Scotland (SC123321) at 1 George Street, Edinburgh EH2 2LL. Standard Life Investments Limited is authorised and regulated by the Financial Conduct Authority. Calls may be monitored and/or recorded to protect both you and us and help with our training.www.standardlifeinvestments.com © 2016 Standard Life, images reproduced under licenceINVRT637 UDIF 0516

Annual Report - Home - Standard Life Investments25 Portfolio Statement* 28 Notes to the financial...

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