Date:     6 October 2017

From:     CQS New City High Yield Fund Limited

LEI:        549300KMGN75B0PTWT07

Results for the year ended 30 June 2017

·      Net asset value total return of 16.13 per cent.

·      Ordinary share price total return of 18.36 per cent.

·      Dividend yield of 6.99 per cent, based on dividends at an annualised rate of 4.39 pence and a share price of 62.75 pence at 30 June 2017.

·      Ordinary share price at a premium of 6.77 per cent at 30 June 2017.

·      £5.3m of equity raised during the year to 30 June 2017.

Chairman's Statement

Investment and Share Price Performance

The Company's net asset value total return was 16.13% for the year ended 30 June 2017. The share price total return for the same period was stronger at 18.36%, the premium to net asset value at which the Company's shares trade increasing to 6.77%. The average premium over the year to 30 June 2017 was 4.6%, and over three years 3.9%.

When I wrote to you last year, I reflected on a period of muted investment returns occasioned primarily by fears as to the robustness of the Chinese economy set alongside Eurozone and Brexit concerns. The last year has seen the markets more sanguine as to these issues, while they have responded positively to the election of President Trump and investment returns have accordingly been much stronger.

Earnings and Dividends

The Company's earnings per share were 4.66 pence for the year, 3.6% ahead of last year.

The Company declared three interim dividends of 0.98 pence in respect of the period, and one of 1.45 pence. The aggregate payment of 4.39 pence per share represents a 0.7% increase on the 4.36 pence paid last year. Based on an annualised rate of 4.39 pence and a share price of 61.00 pence at the time of writing, this represents a yield of 7.2%. Since its launch in 2007, the level of dividends paid by the Company has increased every year.

Gearing

The Company renewed its existing £30m loan facility with Scotiabank in December 2016. The new all-in rate of 1.27% represented a slight decrease on the previous 1.42%. £25m was drawn down at 30 June 2017 and the Company had effective gearing of 8%.

Rating and Fund Raising

The market attached a premium rating to the shares of your Company throughout the period. Taking advantage of this, the Company raised £5.3m from new and existing shareholders during the year, selling the shares out of treasury. A further £4.3m has been raised since the year end and a balance of 20.6m shares remain in treasury. In order to ensure maximum flexibility, a resolution will be proposed at the Annual General Meeting to renew the Directors' authority to issue shares equivalent to 10% of the Company's share capital. As well as a modest increase in net asset value from any issue of shares, existing shareholders can look to benefit from a lower on-going charges ratio and greater liquidity in the Company's shares.

Board

I am delighted to welcome Ian Cadby, who joined us on 18 January 2017, to the Board. Ian, a Jersey resident, has over 27 years' experience within the financial services industry in London, New York and Jersey with a strong emphasis on risk management, corporate governance and board strategy. These are skills that further strengthen the Board's ability to steer your Company through the ever changing financial environment.

Adrian Collins has announced that he will not be standing for re-election at the Annual General Meeting this year. Adrian has been on the Board since the launch of the Company in 2007, and the Board has benefited from his wisdom and advice during a period attended by considerable growth and success. I would like to thank him for his contribution on behalf of all shareholders.

The process of Board refreshment continues, and I am delighted to announce that John Newlands has today been appointed as an independent non-executive Director at the conclusion of an externally facilitated recruitment process.  John has had a more than twenty year career in the City, the last ten years of it with Brewin Dolphin Limited as Head of Investment Companies Research.  The depth of his experience and expertise in the investment trust sector is universally recognised and I look forward to all that he will bring to the Board's deliberations as the Company looks to build upon the successes of recent years.

Outlook

Markets may appear sanguine, but in a world characterised by greater geo-political uncertainty than for many years, diversity remains perhaps the portfolio's greatest strength. That said, the prospect of further gradual rate rises in the United States and a Eurozone economy strong enough to promise a decline in Quantitative Easing underpin a benign environment which your Company is well positioned to take advantage of as opportunities arise.

James G West

5 October 2017

Investment Manager's Review

In the first half of the year the ingredients for political uncertainty and volatile markets were in place, we had just voted for Brexit causing an immediate devaluation of Sterling which would be pivotal in the year ahead for the UK economic and political landscape.

In the UK the Conservative party surprised all by choosing Theresa May as leader, removing from the media an opportunity to over hype any mudslinging which would have inevitably occurred during a prolonged leadership campaign. For UK equity and bond markets this removed uncertainty in the short-term, but not for Sterling. Weakness of the currency would have a positive effect on the economy for the whole of the period covered by this report. In August the Bank of England cut rates by 25bp to 0.25%, added a further £60bn to the Quantitative Easing pot, made £10bn of corporate bond purchases and set up a £100m Funding for Lending scheme, all of which had the desired effects on markets with high yield bonds reacting particularly well.

The United States economy continued in the strength and consistency of its recovery, evidenced by the continued strengthening employment data with the August figure showing growth of 151,000 new jobs, and new home sales for the month rising 12.4%. This added to pressure on the Federal Reserve to raise rates. At the same time Europe's economy seemed to be stalling as second quarter GDP data showed mediocre 0.3% growth, with growth in France and Italy decelerating and Germany static. At this time Europe was still some way from a sustained recovery.

The United States election was the main reason the Federal Reserve didn't act sooner. In a very close and acrimonious battle, what seemed unthinkable to most outside of the United States happened, Donald Trump won by the electoral college system, despite receiving three million less votes than Hillary Clinton. We noted at the time that the incoming method of governing was different to say the least, with the use of dictates by Twitter! In the early days this "encouraged" two major US Auto manufacturers to cancel plans for expansion in Mexico and relocate the plants in the US. Notwithstanding the future benefit of such corporate shifts, the fully fledged US economic recovery was confirmed when the Federal Reserve raised rates by 25bp in early December a move backed-up

by continuing strength in regional employment data. This, along with the promise of growth offered by the Trump Presidency were well received by US equity markets and helped push the Dow Jones Industrial Index to a new all-time high of 19,983.26 on the 20^th December.

The UK economy too was in a good place entering 2017. The key driver was the continued boost to industrial competitiveness from Sterling's weakness, evidenced by the 0.7% rise in Q4 GDP on the prior quarter. Although the retail sector had a poor start to the year, the 0.3% drop in January, was not a surprise given the changing pattern of discounting, starting on Black Friday in November and continuing through to the end of December. Construction sector PMI data was very strong at the turn of the year only to falter in February, as investors started to focus on the triggering of article 50 at the end of March. Inflation was also in focus and first quarter inflation rose to 1.6% in January up from 1.2% in December and has continued to rise, reaching 2.3% in March and as expected this figure increased even faster in the second quarter peaking in May at 2.9% before dropping back to 2.6% in June all due to the weakness in Sterling and the impact on imported energy and products. Although this was above the target of 2% the weakness in wage inflation at 1.2% for the first quarter would have been one of the factors restraining a Bank of England rate increase.

Above all other factors in the last quarter of the company's year the opportunistically timed General Election on the 8th June has had the most effect on UK market sentiment. The idea of taking advantage of a Labour party in disarray and UKIP without a cause was logical and could have potentially given a very comfortable majority with which to negotiate the Brexit deal. Unfortunately the flawed campaign resulted in a minority which had to negotiate a deal with the DUP to stay in power. This has left a very vulnerable Theresa May as Prime Minister, for now. Unfortunately resultant uncertainty has increased market volatility while nervousness in the wider economy has induced general negative sentiment. At the time of writing, the first of the negative indicators was a 1.2% sequential decline in retail sales in the month of June, up 0.9% year on year. Subsequent publication of the £2bn deterioration in the UK's total trade deficit in goods and services to £4.6bn is also unhelpful.

In calendar Q2 of 2017 the underlying strength in the US economy was clear to see, with wage inflation holding at a steady 2.5% and unemployment falling to 4.3%, manufacturing output increasing for eleven months in a row, and house prices increasing by 4% since the beginning of the calendar year. All of these positive data points encouraged the Federal Reserve to raise rates by 0.25% for the second time this year in June.

On the other side of the Channel France voted for a Centrist technocrat in Emanuel Macron as President, defeating right wing candidate Marine Le Pen which was met by a palpable sigh of relief all over Europe probably excepting the UK given his very pro-EU stance. Europe as a whole has latterly seen the most growth in manufacturing since 2011 with demand coming from both domestic and export markets.

It is likely that we will continue to see rate rises in the United States in the forthcoming 12 months and we would expect QE to cease in Europe, where inflation looks to be under control and is being matched or bettered by wage rises in real terms. Whilst we have mentioned some of the politics as they have affected the economies in which the Fund is invested, we feel the greatest risks to global markets going forward are from the potential impact of Brexit in our economy and the unpredictable effects of Donald Trump's dictate by Twitter.

During the year we saw a number of bonds in the portfolio being "called" by the underlying corporate entity - on occasions we were able to anticipate this ahead of the event and sell the stock at a premium to the call price.  We also took advantage of market rallies to sell some of our top holdings such as Matalan at good prices.  We saw a number of quality new issues over the year and participated where we saw value. An example would be One Savings Bank 9.125% Perpetual.  The market background leads us to continue to keep the portfolio as diversified as possible while focussing on producing the required yield. We continue to look at situations which provide the opportunity for both income and capital much as we have in the past. We would expect these to be in sectors where we see an improving credit environment.

Looking back on the last twelve months the total return for the Fund in net asset value terms was 16.13%, and the Fund yielded 6.99% on the closing price on the 30th June of 62.75p.

Ian Francis

New City Investment Managers

5 October 2017

Strategic Review

Introduction

This review is part of a Strategic Report being presented by the Company under guidelines for UK listed companies' Annual Reports in accordance with the Companies Act 2006, and is designed to provide information primarily about the Company's business and results for the year ended 30 June 2017. It should be read in conjunction with the Chairman's statement and the Investment Manager's Review, which give a detailed review of the investment activities for the year and look to the future.

Investment Policy

The Company invests predominantly in fixed income securities, including, but not limited to, preference shares, loan stocks, corporate bonds (convertible and/or redeemable) and government stocks. The Company also invests in equities and other income yielding securities.

Exposure to higher yielding securities may also be obtained by investing in other closed-end investment companies and open ended collective investment schemes.

There are no defined limits on securities and accordingly the Company may invest up to 100 per cent of total assets in any particular type of security.

There are no defined limits on countries, size or sectors, therefore the Company may invest in companies regardless of country, size or sector and, accordingly, the Company's portfolio is constructed without reference to the composition of any Stock Market index or benchmark.

The Company may, but is not obliged to, invest in derivatives, financial instruments, money market instruments and currencies for the purpose of efficient portfolio management.

The Company may acquire securities that are unlisted or unquoted at the time of investment but which are about to be convertible, at the option of the Company, into securities which are listed or traded on a stock exchange. The Company may continue to hold securities that cease to be listed or traded if the Investment Manager considers this appropriate. The Board has established a maximum investment limit in this regard of 10 per cent (calculated at the time of any relevant investment) of the Company's total assets. In addition, the Company may invest up to 10 per cent (calculated at the time of any relevant investment) of its total assets in other securities that are neither listed or traded at the time of investment.

The Company will not invest more than 10 per cent (calculated at the time of any relevant investment) of its total assets in other collective investment undertakings (open-ended or closed-end).

The Board has established a maximum investment limit whereby, at the time of investment, the Company may not invest more than 5 per cent of its total investments in the same investee company.

The Company uses gearing and the Board has set a current limit that gearing will not exceed 25 per cent of shareholders' funds at the time of borrowing. This limit is reviewed from time to time by the Board.

The Investment Manager expects that the Company's assets will normally be fully invested. However, during periods in which changes in economic circumstances, market conditions or other factors so warrant, the Company may reduce its exposure to securities and increase its positions in cash, money market instruments and derivative instruments in order to seek protection from Stock Market falls or volatility.

Investment Approach

Investments are typically made in securities which the Investment Manager has identified as undervalued by the market and which it believes will generate above average income returns relative to their risk, thereby also generating the scope for capital appreciation. In particular, the Investment Manager seeks to generate capital growth by exploiting the opportunities presented by the fluctuating yield base of the market and from redemptions, conversions, reconstructions and take-overs.

Principal Risks and Uncertainties and Risk Mitigation

Risks are inherent in the investment process, but it is important that their nature and magnitude are understood so that risks, particularly those which the Company does not wish to take, can be identified and either avoided or controlled. The Board has established a detailed framework of the key risks that the business is exposed to, with associated policies and processes devised to mitigate or manage those risks. The principal risks and mitigating factors faced by Company are set out below.

Investment and strategy risk The Board is responsible for deciding the investment strategy to fulfil the Company's objectives and monitoring the performance of the Investment Manager.
Inappropriate strategy, including country and sector allocation, stock selection and the use of gearing could all lead to poor returns for shareholders. To manage this risk the Board requires the Investment Manager to provide an explanation of significant stock selection decisions and the rationale for the composition of the investment portfolio at each Board meeting, when gearing levels are also reviewed. The Board monitors the spread of investments to ensure that it is adequate to minimise the risk associated with particular countries or factors specific to particular sectors. The Investment Manager also provides the Board and shareholders with monthly factsheets which include an investment commentary.

Market risk The Company's assets consist principally of listed fixed interest securities and its greatest risks are in consequence market related, with exposure to ordinary movements in the prices of the Company's investments and the loss that the Company might suffer through holding investments in the face of negative market movements. The Board seeks to mitigate this risk through the processes described in the paragraph above, monitoring the implementation and results of the Investment process with the Investment Manager.

Financial risk The Company's investment activities expose it to a variety of financial risks that include market price risk, foreign currency risk, interest rate risk, liquidity risk and credit risk.

Earnings and dividend risk The earnings that underpin the amount of dividends declared and future dividend growth are generated by the Company's underlying portfolio. Fluctuations in earnings resulting from changes to the underlying portfolio or changes in the tax treatment of the dividends or interest received by the Company could reduce the level of dividends received by shareholders. The Board monitors and manages this risk by considering detailed income forecasts prepared by the Investment Manager and Company Secretary at each Board meeting and when the quarterly dividends are declared.

Operational risk The Company relies upon the services provided by third parties and is reliant on the control systems of the Investment Manager and the Company's other service providers. The security and/or maintenance of, inter alia, the Company's assets, dealing and settlement procedures, and accounting records depend on the effective operation of these systems. These are regularly tested and monitored and are reported on at each Board meeting. An internal control report, which includes an assessment of risks, together with the procedures to mitigate such risks, is prepared by the Investment Manager and the UK Administrator and reviewed by the Audit Committee, as a minimum, once a year. The Depository and Custodian, HSBC Bank plc, produces an internal control report each year which is reviewed by its auditors and gives assurance regarding the effective operation of controls. This is reviewed by the Audit Committee.

Gearing risk A fall in the value of the Company's investment portfolio could be adversely affected by the impact of gearing. It could also result in a breach of loan covenants. The Board sets the gearing limits. Gearing levels and compliance with loan covenants are monitored monthly by the Investment Manager and by the Board at regular Board meetings. Gearing will not exceed 25 per cent of shareholders' funds at the time of borrowing.

Key man dependency Performance of the Company may be negatively affected by a change in fund management team within the Investment Manager. The Company delegates the management of the fund management team to New City Investment Managers. Whilst the lead fund manager is responsible for day to day portfolio management, an Investment Committee within New City Investment Managers also decides key stock selection. The Management Engagement Committee of the Company reviews the performance of the Investment Manager annually.

Regulatory risk The breach of regulatory rules could lead to a suspension of the Company's stock exchange listing or financial penalties. The Company Secretary and UK Administrator monitor the Company's compliance with the Listing Rules of the UK Listing Authority. Compliance with the principal rules is reviewed by the Directors at each Board meeting.

Political risk Political developments are closely monitored and considered by the Board. The Board has noted the results of the UK referendum on continuing membership of the European Union. Whilst there is considerable uncertainty at present, the Board will continue to monitor developments as they occur and assess the potential consequences for the Company's future activities.

Viability Statement

In accordance with the 2014 revision of the UK Corporate Governance Code, the Directors have assessed the viability of the Company over a period longer than the 12 months required by the 'Going Concern' provision. The Board conducted this viability review for a period of three years. The Board continues to consider that this period reflects the long term objectives of the Company, being a Company with no fixed life, whilst taking into account the impact of uncertainties in the markets.

The Directors do not expect there to be any significant change to the current principal risks facing the Company nor to the adequacy of the controls in place to mitigate those risks. Furthermore, the Directors do not envisage any change in strategy which would prevent the Company from operating over the three year period. This is based on the assumption that there are no significant changes in market conditions or the tax and regulatory environment that could not reasonably have been forseen.

In making this statement the Board carried out a robust assessment of the principal risks facing the Company. The principal risks identified as most relevant to the assessment of the viability of the Company were those relating to potential underperformance of the portfolio and its effect on the ability to pay dividends. When assessing these risks the Directors have considered the risks and uncertainties facing the Company in severe but reasonable scenarios, taking into account the controls in place and mitigating actions that could be taken.

When considering the risk of under-performance, the Board carried out a series of stress tests including in particular the effects of any substantial future falls in investment value on the ability to re-pay and re-negotiate borrowings, potential breaches of loan covenants and the maintenance of dividend payments.

The Board considered the Company's portfolio and concluded that the diverse nature of investments held give stability and liquidity along with flexibility to be able to react positively to market and political forces outwith the Board's control.

The Board also considered the impact of potential regulatory change and the controls in place surrounding significant third party providers, including the fund manager.

The Board also noted the low liquidity risk in the portfolio.

The Scotiabank loan facility is due to expire on 19 December 2017. It is anticipated a new facility on comparable terms will be negotiated prior to this date.

Based on the Company's processes for monitoring revenue and costs and the Manager's compliance with the investment objective and policies, the Directors have concluded that there is a reasonable expectation that the Company will be able to continue in operation and meets its liabilities as they fall due for a period of three years from the date of approval of this Report.

Going Concern

The Company does not have a fixed winding-up date and, therefore, unless shareholders vote to wind-up the Company, shareholders will only be able to realise their investment through the market.

At each Annual General Meeting of the Company, shareholders are given the opportunity to vote on an ordinary resolution to continue the Company as an investment company. If any such resolution is not passed, the Board will put forward proposals at an extraordinary general meeting to liquidate or otherwise reconstruct or reorganise the Company.

After making enquiries, and having considered the Company's investment objective, nature of the investment portfolio, loan facility and expenditure projections, the Directors consider that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, and in light of the Company's strong investment record, the Directors continue to adopt the going concern basis in preparing the accounts, notwithstanding that the Company is subject to an annual continuation vote as described above.

Performance Measurement and Key Performance Indicators

The Board uses a number of performance measures to assess the Company's success in meeting its objectives. The key performance indicators are as follows:

·      Dividend Yield and Dividend Cover
The Board reviews the Company's dividend yield and dividend cover on a quarterly basis.

·      Total Return
The Board reviews the Company's Net Asset Value ("NAV") total return and Share Price total return on a quarterly basis.

·      Discount/premium to NAV
At each Board meeting, the Board monitors the level of the Company's discount/premium to NAV. The Company publishes a NAV per share figure on a daily basis through the official newswire of the London Stock Exchange.

·      Revenue Earnings and Dividends per share
The Board reviews a revenue forecast on a quarterly basis to determine the quarterly dividend.

·      Ongoing Charges

The ongoing charges are a measure of the total expenses incurred by the Company expressed as a percentage of the average shareholders' funds over the year. The Board regularly reviews the ongoing charges and monitors all Company expenses.

Social, Community, Employee Responsibilities and Environmental Policy

The Directors recognise that their first duty is to act in the best financial interests of the Company's shareholders and to achieve good financial returns against acceptable levels of risk, in accordance with the objectives of the Company.

In asking the Company's Investment Manager to deliver against these objectives, they have also requested that the Investment Manager take into account the broader social, ethical and environmental issues of companies within the Company's portfolio, acknowledging that companies failing to manage these issues adequately run a long term risk to the sustainability of their businesses.

More specifically, they expect companies to demonstrate ethical conduct, effective management of their stakeholder relationships, responsible management and mitigation of social and environmental impacts, as well as due regard for wider societal issues.

As an investment company with its current structure the Company has no direct social, community, employee or environmental responsibilities of its own.

The Company has no greenhouse gas emissions to report from its operations for the year ended 30 June 2017 and prior year, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013 (including those within the underlying investment portfolio).

At 30 June 2017 there were four male and one female Directors. The Company has no employees so does not require to report further on gender diversity.

By Order of the Board

J G West
5 October 2017

Audited Income Statement

For the year ended 30 June 2017

The total column of this statement represents the Company's Statement of Comprehensive Income, prepared in accordance with IFRS.  The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies.

There is no other comprehensive income as all income is recorded in the Income Statement above.

All revenue and capital items in the above statement are derived from continuing operations.

No operations were acquired or discontinued in the year.

Audited Income Statement

For the year ended 30 June 2016

Audited Balance Sheet

Audited Statement of Changes in Equity

For the year ended 30 June 2017

Audited Statement of Changes in Equity

For the year ended 30 June 2016

* Following a change in Jersey Company Law effective 27 June 2008 dividends can be paid out of any capital account of the Company subject to certain solvency restrictions.  It is the Company's policy however to account for revenue items and pay dividends through a separate revenue reserve.

+ The balance on the special distributable reserve of £50,385,000 (2016: £50,385,000) is treated as distributable profits available to be used for all purposes permitted by Jersey Company Law including the buying back of ordinary shares, the payment of dividends and the payment of preliminary expenses.

# The balance on the revenue reserve of £16,400,000 (2016: £15,370,000) is available for paying dividends.

Audited Cash Flow Statement

Statement of Directors' Responsibilities in respect of the Annual Report and the Financial Statements

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable Jersey law and International Financial Reporting Standards ("IFRS") as adopted by the International Accounting Standards Board ("IASB").

Jersey law requires the Directors to prepare, in accordance with generally accepted accounting principles, financial statements for each financial year which give a true and fair view of the state of affairs of the Company and of the profit and loss of the Company for that year. Under Jersey law they have elected to prepare the financial statements in accordance with IFRS as adopted by the IASB.

In preparing these financial statements, the Directors are required to:

·      select suitable accounting policies and then apply them consistently;

·      make judgements and estimates that are reasonable and prudent;

·      state whether applicable International Financial Reporting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

·      prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies (Jersey) Law 1991. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. The financial statements are published on the www.ncim.co.uk website, which is a website maintained by the Company's Investment Manager. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors confirm that to the best of their knowledge:

·      the financial statements, prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company;

·      that in the opinion of the Directors, the Annual Report and Accounts taken as a whole, is fair, balanced and understandable and it provides the information necessary to assess the Company's performance, business model and strategy; and

·      the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that the Company faces.

On behalf of the Board

J G West

Chairman

5 October 2017

Notes (audited)

1.   Earnings per ordinary share

       The revenue earnings per ordinary share is based on the net profit after taxation of £16,970,000 (2016: £16,156,000) and on 364,129,724 (2016: 359,441,578) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

The capital earnings per ordinary share is based on a net capital gain of £13,568,000 (2016: net capital loss of £14,808,000) and on 364,129,724 (2016: 359,441,578) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

2.   Net asset value per ordinary share

       The net asset value per ordinary share is based on net assets of £217,675,000 (2016: £197,827,000) and on 370,374,417 (2016: 361,774,417) ordinary shares, being the number of ordinary shares in issue at the year end.

3.   Dividends

       A fourth interim dividend in respect of the year ended 30 June 2017 of 1.45p per ordinary share was paid on 31 August 2017 to shareholders on the register on 28 July 2017.  In accordance with IFRS this dividend has not been included as a liability in these accounts and will be recognised in the period in which it is paid.

4.   Related parties

The following are considered related parties: the Board of Directors ("the Board") and CQS/New City Investment Managers ("the Investment Manager").

All transactions with related parties are carried out at an arms length basis.

There are no other transactions with the Board other than aggregated remuneration for services as Directors and there are no outstanding balances to the Board at the year end.

5.   Bank loan facility

The Company has a short term loan facility with Scotiabank. The facility is due to expire on 19 December 2017 after which it is anticipated the Company will take out a new facility on comparable terms.

As at the year end the unsecured loan facility had a limit of £30 million of which £25 million was drawn down at the year end.

6.   Financial information

These are not full statutory accounts for the year ended 30 June 2017.  The full audited annual report and accounts for the year ended 30 June 2017 will be sent to shareholders in October 2017 and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The full audited accounts for the year ended 30 June 2016, which were unqualified, have been lodged with the Registrar of Companies.

     7. The report and accounts for the year ended 30 June 2017 will be made available on the website www.ncim.co.uk.  Copies may also be obtained from the Company's registered office, Ordnance House, 31 Pier Road, St. Helier, Jersey, JE4 8PW, Channel Islands

Enquiries:

Ian Francis, New City Investment Managers:                    020 7201 5366

Martin Cassels, UK Administrator                                    0131 550 3765