4 December 2017

STANDARD LIFE PRIVATE EQUITY TRUST PLC

ANNUAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2017

INVESTMENT OBJECTIVE

The investment objective is to achieve long-term total returns through holding a diversified portfolio of private equity funds, a majority of which will have a European focus.

HIGHLIGHTS

At 30 September 2017:

For the year ended 30 September 2017:

*              58.9% represents the percentage of the Company's NAV invested with the 10 largest private equity fund managers in the portfolio.

CHAIRMAN'S STATEMENT

During the year to the end of September 2017, Standard Life Private Equity Trust's net asset value ("NAV") produced a total return of 14.9% and its share price delivered a total return of 31.9%. The MSCI Europe Index returned 19.1% over the same period.

The returns generated by the Company have been strong in recent years and, although for much of that time its shares traded at a sizable discount to net asset value, I am pleased to report that as at the end of September this discount had narrowed to 12.3% from 22.8% twelve months earlier, reflecting the ongoing strong performance of the Company, the revised investment and dividend policies, combined with a tightening of discounts across the private equity investment trust sector.

At 30 September 2017, the Company's net assets were £599.0 million (30 September 2016: £532.6 million). The NAV per ordinary share rose 12.5% over the year to 389.6 pence (30 September 2016: 346.4 pence). This increase in NAV during the period comprised 12.4% of net realised gains and income from the Company's portfolio of 51 private equity fund interests, 3.1% of unrealised gains on a constant exchange rate basis and 1.2% of positive exchange rate movements on the portfolio. This is partially offset by 1.4% of other items, fees and costs as well as by 2.8% of dividends paid during the year.

The Company's performance has been boosted by strong trading in the underlying investee companies, as well as a positive flow of realisations as businesses are sold by the managers of the funds that make up the portfolio. In the year to 30 September 2017, these realisations totalled £130.7 million compared to £126.9 million in the previous year. Against this, £114.2 million was drawn down from the Company's resources to fund investee companies and secondary investments. This compares to £85.3 million for the prior year.

The net effect of these cash flows was that, as at the end of September, the Company had net liquid resources of £93.6 million (30 September 2016: £105.9 million). In support of the investment strategy, the Manager made four new fund commitments during the period, comprising €34.0 million to IK VIII, £22.0 million to HgCapital 8, €35.0 million to CVC Capital Partners VII and €30.0 million to Nordic Capital Fund IX. Furthermore, the Manager undertook three secondary fund purchases, acquiring original commitments of €20.0 million to Nordic Capital VII, as well as $3.1 million to TowerBrook Investors III and $1.6 million to TowerBrook Investors IV. As a result of these investment activities, at 30 September 2017 the Company had total outstanding commitments of £325.6 million, compared to £305.9 million a year earlier, while the portfolio of 51 private equity fund interests was valued at £505.1 million (30 September 2016: 49 funds valued at £433.4 million).

In line with the Company's new policy of paying a minimum annual dividend of 12.0 pence per share, the Board has proposed a final dividend for the year ended 30 September 2017 of 6.0 pence per share (2016: 3.6 pence per share). The final dividend, together with the interim dividend of 6.0 pence per share, totals 12.0 pence per share (2016: 5.4 pence per share) for the year, to be paid on 31 January 2018 to shareholders on the Company's share register at 5 January 2018. The Board is committed to maintaining the real value of this enhanced dividend, in the absence of unforeseen circumstances. Additionally, I am pleased to announce that the Company will be moving to quarterly dividend payments, with the final dividend continuing to be subject to shareholder approval.

The Standard Life Private Equity Trust portfolio remains predominantly focused on buy-out managers who have been able historically to generate value through operational improvements and strategic repositioning, and who the Manager believes are well placed to do so going forward. Consistent with the Company's investment strategy, and with Europe continuing to be an attractive region for private equity investment, the majority of the Company's portfolio has a European focus. Nonetheless, the broadening of the Company's investment policy agreed at the last Annual General Meeting has allowed the Manager to consider a number of opportunities further afield.

Overall, the global private equity market remains competitive, with significant amounts of funds having been raised. The managers of many funds the Company is invested in continue to report positive earnings growth across their investee companies. In addition, the Company continues to benefit from strong levels of exit activity across the portfolio and, absent any major shocks, the Manager expects this to continue over the course of the next year. Such exit activity should result in further realised and unrealised gains being generated, helping the Company to build on the robust performance of recent years.

The Company's underlying portfolio has broad geographic diversification with UK-based underlying portfolio companies making up 13% of the Company's portfolio. In general, the UK-based businesses continue to perform well despite the recent major political events, such as Brexit. It is not possible to predict the ultimate impact of Brexit with certainty. However, your Board and the Manager continues to monitor ongoing developments and their potential effects on the Company and its portfolio.

The Board remains committed to maintaining capital discipline. Cash inflows will be invested in a mix of new fund commitments, secondary fund purchases and, when appropriate, share buy-backs.

The Board is also pleased to note that the Company won the award for the Private Equity Investment Trust of The Year, awarded by Investment Week in November 2017. The Investment Week awards aim to recognise and award excellence in closed-ended fund management. The award affirms your Board's belief that the best private equity managers will generate strong positive returns over the long term and that the Company is well positioned to capture these returns for its shareholders.

Edmond Warner, OBE

Chairman

30 November 2017

DIRECTORATE CHANGES

Retirement of Directors

The Board of the Company announced the retirement of David Warnock as Director from 7 June 2017 after almost nine years. David retired as part of the Board's ongoing succession plans. Additionally, Alastair Barbour has decided to step down from the Board on 29 December 2017, after nearly seven years as a Director. Alastair has also served as the Chair of the Audit Committee since 2012. The Directors would like to record their thanks to David and Alastair for the valuable contributions they have made to the deliberations of the Board during their time in office.

Appointment of Directors

The Board was pleased to announce the appointment of Diane Seymour-Williams as an independent non-executive Director with effect from 7 June 2017.

The Board is also pleased to announce the appointment of Calum Thomson as an independent non-executive Director, with effect from 30 November 2017. Calum will assume the role of Audit Committee Chair on Alastair Barbour's departure.

Short descriptions of Diane's and Calum's backgrounds are shown in the "Board of Directors'" section of the Annual Report and Financial Statements.

MANAGER'S REVIEW

Investment objective

The investment objective is to achieve long-term total returns through holding a diversified portfolio of private equity funds, a majority of which will have a European focus.

Investment policy

The principal focus of the Company is to invest in leading private equity funds and to manage exposure through the primary and secondary funds markets. The Company's policy is to maintain a broadly diversified portfolio by country, industry sector, maturity and number of underlying investments. In terms of geographic exposure, a majority of the Company's portfolio will have a European focus. The objective is for the portfolio to comprise around 35 to 40 ''active'' private equity fund investments; this excludes funds that have recently been raised, but have not yet started investing, and funds that are close to or being wound up.

The Company invests only in private equity funds, but occasionally may hold direct private equity investments or quoted securities as a result of distributions in specie from its portfolio of fund investments. The Company's policy is normally to dispose of such assets where they are held on an unrestricted basis.

To maximise the proportion of invested assets it is the Company's policy to follow an over-commitment strategy by making fund commitments which exceed its uninvested capital. In making such commitments, the Manager, together with the Board, will take into account the uninvested capital, the quantum and timing of expected and projected cash flows to and from the portfolio of fund investments and, from time to time, may use borrowings to meet drawdowns.

The Company's non-sterling currency exposure is principally to the euro and US dollar. The Company does not seek to hedge this exposure into sterling, although any borrowings in euros and other currencies in which the Company is invested would have such a hedging effect.

Cash held pending investment in private equity funds is invested in short dated government bonds, money market instruments, bank deposits or other similar investments. Cash held pending investment in private equity funds may also be invested in funds whose principal investment focus is listed equities or in listed direct private equity investment companies or trusts. These investments may be in sterling or such other currencies to which the Company has exposure.

The Company will not invest more than 15% of its total assets in other listed investment companies or trusts.

Performance to 30 September 2017

Net asset value of £599.0 million

The portfolio value together with its current assets less liabilities, resulted in net assets of £599.0 million, representing a NAV of 389.6 pence per ordinary share.

Fund investment portfolio valued at £505.1 million

The value of the Company's portfolio of 51 private equity fund interests increased from £433.4 million at 30 September 2016 to £505.1 million at 30 September 2017. The increase in value was a result of new private company investments funded through drawdowns of £94.0 million from the Company's private equity funds, three secondary purchases of £20.2 million and realised gains of £50.1 million from full and partial exits, unrealised gains of £22.4 million (net of foreign exchange), offset by realised proceeds of £115.0 million.

The largest 10 fund investments, representing 47.7% of the net asset value are highlighted in the "Largest 10 Funds" section of the Annual Report and Financial Statements.

The valuation of the private equity fund interests at 30 September 2017 was carried out by the Manager and has been approved by the Board in accordance with the accounting policies. In undertaking the valuation, the most recent valuation of each fund prepared by the relevant fund manager has been used, adjusted where necessary for subsequent cash flows. The fund valuations are prepared in accordance with the International Private Equity and Venture Capital Valuation guidelines. These guidelines require investments to be valued at ''fair value''.

Of the 51 private equity funds, 40 of the funds, or 98.6% of the portfolio by value, were valued by their fund managers at 30 September 2017. The Manager continues to believe that the use of such timely valuation information is important.

The Company invested £94.0 million in new private companies

New investment pace was ahead of prior year in terms of quantum invested as our private equity fund managers deployed capital, purchasing businesses in an active private equity market.

£20.2 million was invested to acquire secondary purchases in three funds

During the year, three private equity fund interests were acquired: a €20.0 million original commitment to Nordic Capital VII, $3.1 million to TowerBrook Investors III and $1.6 million to TowerBrook Investors IV. Combined, these interests had outstanding commitments of £2.1 million at 30 September 2017. The Manager continues to be disciplined and highly selective in a competitively priced secondary market.

The Company received £130.7 million (including net income of £15.7 million) through the exit of private company investments and other partial realisations

Exit activity from the funds was driven by the continued strong appetite for high quality private equity companies and the majority of realisations were at a premium to the last relevant valuation.

Average multiple on realised investments was 2.0 times invested cost

In the year to 30 September 2017, the private equity funds generated strong returns from their portfolio of private companies, consistent with prior years. This long term performance is underpinned by the quality of the assets and the value-add delivered by our private equity managers.

Net unrealised gains from the portfolio was £22.4 million

The movement over the year represented an unrealised valuation gain on constant currency basis of £16.2 million and a foreign exchange gain of £6.2 million.

Total outstanding commitments of £325.6 million to 51 private equity funds at 30 September 2017

The total new commitments of £114.0 million comprise new primary fund commitments of £110.1 million and commitments of £3.9 million acquired in secondary transactions, offset by fund drawdowns of £94.0 million during the period.

Four new primary commitments of £110.1 million were made in the year to 30 September 2017. A £30.3 (€34.0) million commitment was made to IK VIII in October 2016. Managed by IK Investment Partners, the €1.9 billion fund will invest in buyouts in Northern Continental Europe. £22.0 million was committed to HgCapital 8 in February 2017. Managed by HgCapital, the £2.5 billion fund targets resilient companies with robust and protected business models primarily in the UK and Germany. A £30.1 (€35.0) million commitment was made to CVC Capital Partners VII in May 2017. Managed by CVC Capital Partners, the €16 billion fund focuses on Western Europe, with capped exposure to the US (25%) and the rest of the world (12.5%). £27.7 (€30.0) million was committed to Nordic Capital Fund IX in August 2017. The €4.0 billion fund focuses on businesses in Northern Europe, primarily in the Nordic, German, Austrian and Swiss regions. In addition, secondary investments in Nordic Capital Fund VII, TowerBrook Investors III and IV added £3.9 million to the total outstanding commitments during the period.

The manager continues to estimate that around £60.0 million of outstanding commitments, predominately relating to funds outwith their investment period, will not be drawn.

The outstanding commitments in excess of available liquid resources, including cash and the undrawn debt facility, as a percentage of the net asset value was 25.4%, below the long-term target range of 30%-75%, highlighting the prudent approach to over-commitments adopted by the Manager in the current market environment.

Liquid resources

Over the period the portfolio generated cash inflows of £130.7 million from realised investments, partially offset by new investment activity of £94.0 million and secondary purchases of £20.2 million resulting in net investment inflows of £16.5 million. Including dividends paid and FX movements, net liquid resources were £93.6 million at 30 September 2017, down from £105.9 million at 30 September 2016.

Analysis of the underlying private company investments

At 30 September 2017, the 51 private equity fund interests were collectively invested in a total of 374 separate companies and 107 other private equity funds. The diversification of the underlying investments is set out in the "Portfolio Review" section of the Annual Report and Financial Statements. Further information on the ten largest underlying private company investments, representing 17.6% of the net asset value is shown in the "Largest 10 Underlying Private Companies" section of the Annual Report and Financial Statements.

Portfolio construction: investments in buyout funds through primary commitments and buyout funds acquired via secondary transactions represent 100% of the portfolio and demonstrates the core focus on buyouts as the prime investment strategy for investing in private companies. 15% of the portfolio was acquired through secondary purchases and it is expected that this will increase over time.

Geographic exposure: 81% of the portfolio at 30 September 2017 is invested in Europe and this will likely continue to be the majority of exposure over the short to medium term, with 16% invested in North America. Investments in Europe are weighted towards Northern Europe, with a focus on the Scandinavian, French, Benelux, German and UK markets. The portfolio is deliberately underweight Southern Europe as these private equity markets have historically underperformed. The North American exposure relates primarily to investments in companies made by the European-based managers through their allocation to global deals. However, following the broadening of the investment policy, the Manager will also consider making commitments to domestic US managers where attractive.

Sector exposure: The Company's sector diversification is a product of the underlying investment strategy of the private equity funds, built around their specific sector expertise. The portfolio is invested in fast growth sub-sectors within the broad sector strategies. In recent years, healthcare, financials and technology (mature software businesses) have increased in significance with consumer-focused and industrial companies retaining their importance. The portfolio is light in the cyclical sectors of oil and gas, utilities and mining.

Maturity exposure and portfolio value growth: The typical hold period prior to the exit of a private equity backed company is four to six years. With 36% of the portfolio in the five years or older category, cash generation is therefore expected to remain positive. Portfolio maturity is managed through both primary commitments and secondary transactions with the objective of achieving balanced exposures over vintage years. 0.9% of the portfolio is exposed to the pre-2007 period and 7% of the portfolio is valued below cost.

Portfolio valuation and leverage multiple analysis: The top 50 private companies that represent 41.9% of the net asset value at 30 June 2017 (being the most recent data) had a median valuation multiple, based on the Enterprise Value (EV) / Earnings Before Interest Tax Depreciation and Amortisation (EBITDA), of 11-12x. Those valued at a multiple greater than 15x generally are highly rated private companies that command strategic premiums. Median Net Debt / EBITDA in the portfolio at 4-5x was consistent with the prior period. The private equity fund managers are prudent in the levels of leverage applied to their portfolio companies and debt markets remain open for both new transactions and refinancing on attractive terms.

Both metrics are in line with the private equity market for similar sized deals and vintages. However, the portfolio of private companies typically does have higher levels of leverage compared to public markets. Offsetting this, the loss ratio as a percentage of total cost over the past 5 years was 5.0%, indicating that the private equity fund managers are managing this risk appropriately.

Primary investment market

On the back of increasing allocations to private equity, the fundraising environment in Europe and North America for leading private equity fund managers is strong. The amount of capital raised for private equity has reached record levels, approaching approximately $900 billion in Q3 2017. 2016 was a record year for global private equity fund raising, with 2017 on track to be another record year. The majority of this (c$600 million) is held by buyout funds of which $353 billion is held in the US, which is circa. 90% above the post-crisis low point, and 30% above its previous peak in 2008/09. At $182 billion, the capital raised for European buyouts is approximately 50% above the post-crisis low point in 2012 and nearly 10% above its previous peak in 2008/09. The capital raised for North American and European private equity now represents around 3.6 years and 3.4 years of investment capacity respectively, up from 2.9 years and 3.3 years respectively at December 2015.

Average purchase price multiples for new investment activity have continued to rise as a result of the available equity capital and high levels of competition for quality companies. Average multiples have increased by 1.0-1.5x EBITDA over the last five years to around 9.0-9.5x in Europe which remains around 1.0x lower than the US market. While debt markets continue to be highly liquid and supportive of private equity transactions, funding structures remain relatively conservative, with equity tending to represent 45-50% of the average purchase price.

Overall, the Company has seen a steady pace of activity over the past few years and it is expected that the levels of new investment and realisation activity will remain robust over the coming year. This is driven, in part by Europe and North America having a large population of privately owned small- and medium-sized enterprises, providing significant opportunity for private equity managers. European and North American private equity firms also account for the significant majority of all private equity firms globally and, given the attractive dynamics in these markets, they will continue to be the focus of the Company.

Secondary transaction market

Secondary market activity has picked up since 2016, with the volume of deals transacted in the first half of 2017 ("H1 2017") estimated at $22.0 billion*, up from the $12.0 billion transacted in the first half of 2016. This has been driven by a more favourable macro environment, which has provided both buyers and sellers with more confidence to transact in the secondary market. Notably, there was a significant increase in the number of larger transactions (greater than $1 billion in size), of which there were seven brought to market in H1 2017 compared to only five that were completed in the whole of 2016. With transaction volumes typically weighted more heavily toward the second half of the year, most commentators expect deal volumes for the whole of 2017 to be back up at or above the historic record levels of 2014 and 2015.

Average pricing for secondaries, in general, has increased. This is likely to be a result of a combination of factors, with secondary buyers anticipating further positive value accretion in private equity portfolios, a better quality mix of assets being transacted, and increasing pressure on secondary buyers to deploy capital in a buoyant fund-raising market. It is worth noting that average pricing for buyout interests, that are the Company's core focus, moved up to 98% of NAV, the highest level in ten years. Furthermore, the more recent-vintage funds (2010 and onwards), are often now trading at prices of 105% of NAV or higher.

While the Company has continued to acquire high quality private equity funds in the secondary market during the period, a number of transactions were declined due to high price levels. The Manager continues to originate and analyse a variety of secondary opportunities that could fit with the Company's portfolio, but remains highly selective given the current macro and secondary pricing environment.

*Source: Greenhill (July 2017).

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks faced by the Company relate to the Company's investment activities and these are set out below:

·     market risk

·     currency risk

·     over-commitment risk

·     liquidity risk

·     credit risk

·     interest rate risk

·     operating and control environment risk

The financial risk management objectives and policies of the Company are contained in note 18 to the Financial Statements of the Annual Report and Financial Statements.

In addition to this, the Board has in place a robust process to assess and monitor the operating and control environment risks of the Company. A core element of this is the Company's Financial Systems and Controls Report which provides details of the operational procedures and compliance controls implemented and maintained by the Manager to safeguard the assets of the Company and to manage its affairs properly.

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS

The directors are responsible for preparing the Annual Report and Financial Statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law they are required to prepare the financial statements in accordance with UK accounting standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of its profit or loss for that period. 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 UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

·     assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

·     use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and 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 Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and 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.

Under applicable law and regulations, the directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility statement of the directors in respect of the annual financial report

We confirm that to the best of our knowledge:

·     the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company; and

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

We consider the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

Edmond Warner, OBE

Chairman

30 November 2017

FINANCIAL HIGHLIGHTS

(1) The Company has no defined benchmark; the indices above are solely for comparative purposes.

(2) Includes dividends reinvested.

(3) The Company was listed on the London Stock Exchange in May 2001.

STATEMENT OF COMPREHENSIVE INCOME

The Total column of this statement represents the profit and loss account of the Company.

There are no items of other comprehensive income, therefore this statement is the single statement of comprehensive income of the Company.

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

No operations were acquired or discontinued in the year.

The dividend which has been recommended based on this Statement of Comprehensive Income is 12.00p (2016: 5.40p) per ordinary share.

STATEMENT OF FINANCIAL POSITION

STATEMENT OF CHANGES IN EQUITY

For the year ended 30 September 2017

For the year ended 30 September 2016

STATEMENT OF CASH FLOWS

NOTES TO THE ACCOUNTS

1              About the Company

Standard Life Private Equity Trust plc is an investment company managed by SL Capital Partners LLP, the ordinary shares of which are admitted to listing by the UK Listing Authority and to trading on the London Stock Exchange. It seeks to conduct its affairs so as to continue to qualify as an investment trust under section 1158-1165 of the Corporation Taxes Act 2010. The Board is wholly independent of the Manager and Standard Life Aberdeen plc.

2              Financial information

The financial information set out in this announcement does not constitute statutory financial statements within the meaning of sections 434-436 of the Companies Act 2006 in respect of the financial statements for the year ended 30 September 2017.

The financial information in this announcement is consistent with that in the audited statutory financial statements for the year ended 30 September 2017. The contents of the announcement have been extracted from the audited financial statements that have been approved and signed by the directors and upon which the auditor has signed an unqualified auditor's report and which did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The audited financial statements for the year ended 30 September 2017 will be delivered to the Registrar of Companies following the Company's Annual General Meeting, which will be held at The Balmoral Hotel, 1 Princes Street, Edinburgh EH2 2EQ on 25 January 2018 at 12.30pm.

The auditors have reviewed the financial information for the year ended 30 September 2017 in accordance with the applicable standards issued by the Auditing Practices Board for use in the United Kingdom. The independent auditor's report is included in the Annual Report and Financial Statements.

3              Accounting policies

(a)          Basis of accounting                                        

The financial statements have been prepared in accordance with the Companies Act 2006, Financial Reporting Standard 102 and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts'. They have also been prepared on the assumption that approval as an investment trust will continue to be granted. The financial statements have been prepared on a going concern basis. The Directors believe that this is appropriate for the reasons outlined in the Directors' Report section of the Annual Report and Financial Statements. The principal accounting policies adopted are set out below. These policies have been applied consistently throughout the current and prior year.

Rounding is applied to disclosures, where considered relevant.

(b)          Revenue, expenses and finance costs

Dividends from quoted investments are included in revenue by reference to the date on which the price is marked ex-dividend. Income on quoted investments and other interest receivable are dealt with on an accruals basis. Dividends and income from unquoted investments are included when the right to receipt is established. Dividends are accounted for as Income from investments in the Statement of Comprehensive Income.

All expenses are accounted for on an accruals basis. Expenses are charged through the revenue account of the Statement of Comprehensive Income except as follows:

·     transaction costs incurred on the purchase and disposal of investments are recognised as a capital item in the Statement of Comprehensive Income

·     the Company charges 90% of investment management fees and finance costs to capital, in accordance with the Board's expected long-term split of returns between capital gains and income from the Company's investment portfolio. Bank interest paid has arisen as a consequence of negative interest rates on Euro cash balances and has been charged wholly to revenue;

·     any incentive fees payable were allocated wholly to capital, as they are expected to be attributable largely, if not wholly, to capital performance.

(c)           Investments

Investments have been designated upon initial recognition as fair value through profit or loss. On the date of making a legal commitment to invest in a fund, such commitment is recorded and disclosed. When funds are drawn in respect of such fund commitment, the resulting investment is recognised in the financial statements. The investment is removed when it is realised or when the fund is wound up. Subsequent to initial recognition, investments are valued at fair value as detailed below. Gains and losses arising from changes in fair value are included in net profit or loss for the period as a capital item in the Statement of Comprehensive Income and are ultimately recognised in the capital reserves.

Unquoted investments are stated at the directors' estimate of fair value and follow the recommendations of the EVCA and the BVCA (European Private Equity & Venture Capital Association and British Private Equity & Venture Capital Association). The estimate of fair value is normally the latest valuation placed on a fund by its manager as at the Statement of Financial Position date. The valuation policies used by the manager in undertaking that valuation will generally be in line with the joint publication from the EVCA and the BVCA, 'International Private Equity and Venture Capital Valuation guidelines'. Where formal valuations are not completed as at the Statement of Financial Position date, the last available valuation from the fund manager is adjusted for any subsequent cash flows occurring between the valuation date and the Statement of Financial Position date. The Company's Manager may further adjust such valuations to reflect any changes in circumstances from the last manager's formal valuation date to arrive at the estimate of fair value.

For listed investments, fair value is deemed to be bid market prices or closing prices for SETS stocks sourced from the London Stock Exchange. SETS is the London Stock Exchange electronic trading service.

(d)          Dividends payable

Interim and final dividends are recognised in the period in which they are paid. Scrip dividends are recognised in the period in which shares are issued.

(e)          Capital and reserves

Share premium - The share premium account represents the premium above nominal value received by the Company on issuing shares net of issue costs.

Special reserve - Court approval was given on 27 September 2001 for 50% of the initial premium arising on the issue of the ordinary share capital to be cancelled and transferred to a special reserve. The reserve is a distributable reserve and may be applied in any manner as a distribution, other than by way of a dividend.

Capital redemption reserve - this reserve is used to record the amount equivalent to the nominal value of any of the Company's own shares purchased and cancelled in order to maintain the Company's capital.           

Capital reserves - Gains or losses on investments realised in the year that have been recognised in the Statement of Comprehensive Income are transferred to the "Capital reserve - gains/(losses) on disposal". In addition, any prior unrealised gains or losses on such investments are transferred from the "Capital reserve - revaluation" to the "Capital reserve - gains/(losses) on disposal" on the disposal of the investment. Increases and decreases in the fair value of investments are recognised in the Statement of Comprehensive Income and are then transferred to the "Capital reserve - revaluation".

Revenue reserve - The revenue reserve represents accumulated revenue profits retained by the Company that have not currently been distributed to shareholders as a dividend.

The revenue and capital realised reserves represent the amount of the Company's reserves distributable by way of dividend.

(f)           Taxation

i)             Current taxation - Provision for corporation tax is made at the current rate on the excess of taxable income net of any allowable deductions.

ii)            Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the Statement of Financial Position date, where transactions or events that result in an obligation to pay more or a right to pay less tax in future have occurred at the Statement of Financial Position date, measured on an undiscounted basis and based on enacted tax rates. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the financial statements which are capable of reversal in one or more subsequent periods.

Due to the Company's status as an investment trust company, and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.

(g)          Foreign currency translation, functional and presentation currency

Foreign currency translation - Overseas assets and liabilities are translated at the exchange rate prevailing at the Company's Statement of Financial Position date. Gains or losses on translation of investments held at the year-end are accounted for through the Statement of Comprehensive Income and transferred to capital reserves. Gains or losses on the translation of overseas currency balances held at the year-end are also accounted for through the Statement of Comprehensive Income and transferred to capital reserves.

Functional and presentation currency - For the purposes of the financial statements, the results and financial position of the Company is expressed in sterling, which is the functional currency of the Company and the presentation currency of the Company.

Rates of exchange to sterling at 30 September were:

(h)          Judgements and key sources of estimation uncertainty

The preparation of financial statements requires the Company to make estimates and assumptions and exercise judgements in applying the accounting policies that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses arising during the year. Estimates and judgements are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The area where estimates and assumptions have the most significant effect on the amounts recognised in the financial statements is the determination of fair value of unquoted investments, as disclosed in note 3(c).                         

The Company's investments are made in a number of currencies. However, the Board considers the Company's functional currency to be sterling. In arriving at this conclusion, the Board considers that the shares of the Company are listed on the London Stock Exchange. The Company is regulated in the United Kingdom, principally has its shareholder base in the United Kingdom and pays dividends as well as expenses in sterling. Consequently, the Board also considers the Company's presentational currency to be sterling.

(i)           Cash and cash equivalents

Cash comprises bank balances and cash held by the Company. Cash equivalents comprise money market funds which are used by the Company to provide additional short-term liquidity. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.                                    

4              Income

5              Investment management and incentive fees

The investment management fee payable to the Manager is 0.95% per annum with effect from 1 October 2016 (prior to 1 October 2016: 0.8% per annum) of the NAV of the Company. The investment management fee is allocated 90% to the realised capital reserve and 10% to the revenue account. The management agreement between the Company and the Manager is terminable by either party on twelve months written notice.

The incentive fee arrangement ended on 30 September 2016. This amounted to 10% of the growth in the diluted net asset value total return in excess of an annualised 8% hurdle rate, measured over the five year period ending 30 September 2016. Following the end of the incentive fee period, a single management fee of 0.95% per annum of the NAV of the Company replaced the previous management and incentive fees.

6              Investments

7              The return per ordinary share figure is based on the net profit for the year ended 30 September 2017 of £81,120,000 (year ended 30 September 2016: net profit of £106,651,000) and on 153,746,294 (year ended 30 September 2016: 155,155,447) ordinary shares, being the weighted average number of ordinary shares in issue during the respective periods.

8            The number of ordinary shares in issue as at 30 September 2017 was 153,746,294 (30 September 2016: 153,746,294).

9              An interim dividend of 6.0p (2015: 1.8p) per ordinary share was paid on 21 July 2017. The Directors recommend that a final dividend of 6.0p (2016: 3.6p) per ordinary share be paid on 31 January 2018 to shareholders on the Company's share register as at the close of business on 5 January 2018.

10           The report and financial statements for the year ended 30 September 2017 will be posted to shareholders in mid-December 2017 and copies will be available from the Company Secretary - Maven Capital Partners UK LLP, Kintyre House, 205 West George Street, Glasgow, G2 2LW.

for Standard Life Private Equity Trust PLC,

Maven Capital Partners UK LLP, Company Secretary

END