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*Middlefield Canadian Income PCC **(the "Company")*

*Including Middlefield Canadian Income - GBP PC (the "Fund"), a cell of the Company*

Registered No: 93546

**ANNUAL FINANCIAL REPORT **

The information set out in this announcement is the Company's full unedited annual financial report (audited) for the year ended 31 December, 2017 (the "*AFR*"). The AFR is expected to be printed and posted to all shareholders within April, 2018 and the Company will make a further announcement once the AFR has been uploaded to the Company's website and to the National Storage Mechanism, www.morningstar.co.uk/uk/nsm.

*Annual General Meetings*

This year's annual general meetings will be held on 14 June, 2018 at 12:00 p.m., onwards at the offices of CBPE Capital LLP, 2 George Yard, London EC3V 9DH.

For further information about this announcement contact:

Assistant Secretary
*JTC Fund Solutions (Guernsey) Limited*
Tel.: 01481 702400

Dean Orrico
President
*Middlefield International Limited*
Tel.: 01203 7094016

*MIDDLEFIELD CANADIAN INCOME PCC (the "Company")*

*Including MIDDLEFIELD CANADIAN INCOME - GBP PC*

*(the "Fund"), a cell of the Company*

** **

*ANNUAL FINANCIAL REPORT*

*For the year ended 31 December 2017*

** **

**Table of Contents**

Chairman's Report                                                                                                                                                  3

Investment Manager's Report                                                                                                                              7

Directors' Report                                                                                                                                                   10

Directors' Responsibilities                                                                                                                                    23

Report of the Audit Committee                                                                                                                          24

Independent Auditor's Report on the Fund                                                                                                     27

Statement of Financial Position of the Fund                                                                                                   34

Statement of Comprehensive Income of the Fund                                                                                        35

Statement of Changes in Redeemable Participating Preference Shareholders'
Equity of the Fund                                                                                                                                                36

Statement of Cash Flow of the Fund                                                                                                                37

Notes to the Financial Statements of the Fund                                                                                               38

Alternative Investment Fund Managers Directive                                                                                          55

Independent Auditor's Report on the Company                                                                                            56

Statement of Financial Position of the Company                                                                                          58

Notes to the Financial Statements of the Company                                                                                      59

Notices of the Company and Cell                                                                                                                      60

Management and Administration                                                                                                                      66

**Chairman's Report**

It is my pleasure to introduce the 2017 Annual Financial Report for Middlefield Canadian Income PCC ("MCI" or the "Company"). MCI has established one closed-end cell known as Middlefield Canadian Income - GBP PC (the "Fund"). The Fund invests in a broadly diversified portfolio comprised primarily of Canadian and U.S. equity income securities with the objective of providing shareholders with high dividends as well as capital growth over the longer term.

Since inception in 2006, the Fund has generated a cumulative return of 129.4% in GBP, outperforming its benchmark, the S&P TSX Composite High Dividend Index, as well as the broader S&P/TSX Composite Index, which have generated cumulative period returns of 100.2% and 85.3%, respectively. The Fund remains focused on investing in income-oriented issuers with proven management teams, good balance sheets and growing dividends that are well positioned to benefit from the strength of the North American economy.

*Performance to 31 December 2017*
Source: Bloomberg, as at 31 December 2017, returns are expressed in GBP.

*Notes:*

1. Total net asset value returns (net of fees and including the reinvestment of dividends).
2. The Fund's benchmark, the S&P/TSX High Dividend Index, has been currency adjusted to reflect CAD$ returns from inception to October 2011 (while the Fund was CAD$ hedged) and GBP returns thereafter.

The Fund is primarily weighted to Canadian companies but also has exposure to U.S. markets, focusing on sectors that are underrepresented in Canada. For the year, an average of 14.5% of the portfolio was invested in U.S. listed securities.

**Chairman's Report (continued)**

*Fund Sector Weights Compared to Benchmark*

*Sector* *Fund* *Benchmark* *Over/Under
Weight*

Real Estate 24.0% 11.7% 12.3%
Financials 18.6% 30.4% -11.8%
Pipelines 16.5% 20.7% -4.2%
Industrials 11.8% 1.4% 10.4%
Energy 11.0% 7.8% 3.2%
Power and
Utilities 5.3% 13.4% -8.1%
Materials 3.3% 1.2% 2.0%
Consumer
Discretionary 2.8% 3.5% -0.7%
Health Care 2.7% 0% 2.7%
Telecommunications 1.9% 9.5% -7.6%
Other 1.3% 0% 1.7%
Bonds and Convertible Debentures 0.8% 0% 0.8%
Consumer Staples 0% 0.3% -0.3%
Technology 0% 0.2% -0.2%

Source: Bloomberg, as at 31 December 2017

In 2017, the Fund's share price appreciated more than its net asset value, but remained at a discount to NAV. As a result, MCI repurchased a total of 450,000 redeemable participating preference shares in 6 separate transactions, at a weighted average price of 104.4 pence. As of 31 December 2017, the number of shares with voting rights in issue is approximately 106.5 million. The share price total return for the year ended 31 December 2017, was 3.84% (in GBP terms).

We tactically manage the amount of gearing employed in the Fund. As the market climbed somewhat steadily throughout the year, we maintained a consistent level of net gearing within a range of 15 to 20%, with an average of 18% for the full year. As in previous years, we monitor market conditions to determine the appropriate level of gearing for the Fund, effectively increasing gearing to invest in securities that are attractively valued, and reducing gearing with proceeds from positions that are overvalued.

**Chairman's Report (continued)**

*Gearing as a Percentage of Net Assets (Yearly Average)*

Source: Middlefield Capital Corporation
*Dividends*
Commencing with the quarterly dividend payable in July 2017, the Board implemented a small increase from 1.25p per share to 1.275p per share, equating to 5.1 pence per annum. The Fund continues to generate a healthy level of income. While the Company does not currently intend to make adjustments to the dividend, we note that the dividend cover for the year is a robust 106.7%.

*Board Composition*
The Board has been considering the merits of refreshing its composition, as well as planning for future succession. The Board has identified a shortlist of suitable candidates and anticipates that an additional director will be appointed in the coming months. As required by the FCA's Listing Rules, full biographical details of any additional director appointed will be announced and he or she will stand for re-election at the next subsequent company and cell general meeting convened after their appointment, in order that shareholders will be given the opportunity to vote on the new director's continued appointment.

*Annual General Meetings*
This year's Annual General Meetings will be held on 14 June 2018 at 12:00 p.m. onwards at the offices of CBPE Capital LLP, 2 George Yard, London EC3V 9DH.

**Chairman's Report (continued)**

*Outlook*
Looking forward, we are positive on Canadian equities due to the broad selection of quality companies paying high and growing dividends. We believe the Canadian economy will benefit from strengthening labour markets, a stable political environment and a recovering energy sector.  In the near term, the primary risk to economic growth is the uncertainty surrounding the ongoing renegotiation of the North American Free Trade Agreement ("NAFTA") between Canada, the U.S. and Mexico. While the Trump Administration is taking a hard line on trade related issues on several fronts, we remain confident in a favourable outcome due to the strong political and commercial relationship between Canada and the U.S. For U.S. equities, the positive outlook is supported by corporate earnings that have exceeded expectations and the highly anticipated boost from tax reforms. In light of the discount to NAV and the favourable outlook for North American equities, we believe the Fund currently represents good value for investors.

We thank you for your continued support.

Nicholas Villiers
Chairman
19 April 2018*
*

**Investment Manager's Report**

Financial markets ended 2017 with a broad-based rally that saw global equities surge into record territory, supported by the highest rate of global growth since 2010. The rally was accompanied by an increase in government bond yields, with the U.S. 10-year Treasury bill reaching a high of 2.4% by year-end. Both the S&P 500 and MSCI World indices generated total returns exceeding 20% in 2017. Canadian equities lagged other developed markets with a total return of 9.1%, partly due to Canada's under-representation in sectors such as technology and healthcare, which, in aggregate, account for less than 5% of the S&P/TSX Composite compared to nearly 40% of the S&P 500 Index. In 2017, the S&P 500 Information Technology and Healthcare sub-indices returned 38% and 22%, respectively, in U.S. dollars.

In early February 2018, however, volatility returned to equity markets triggered by concerns over inflation and higher interest rates. Market gyrations were also exacerbated by the growth in passive investment strategies and complex algorithmic trading products. While we believe markets are underpinned by positive economic momentum and corporate earnings growth, the recent volatility supports the argument for active management to deliver superior risk-adjusted returns during periods of market corrections.

The Canadian economy grew by 3% in 2017, the fastest rate of all G7 members. The pace of growth resulted in the Bank of Canada raising interest rates twice during the year, pushing long-term bond yields above 2.2%. While we expect Canadian economic growth to moderate to approximately 2% in 2018, challenges posed by the ongoing NAFTA renegotiations should be offset by the broad diversification of the Canadian economy, federal and provincial fiscal stimulus programs and the strength of the Canadian labour market.

Oil prices recovered in 2017, with WTI finishing the year above $60, an increase of 12.5%. These gains came in the second half of the year after OPEC agreed to extend production cuts through the end of 2018. Unfortunately, Canadian oil and natural gas prices continued to trade at a discount as a result of strained infrastructure and few available options for export. While this has tempered enthusiasm for Canadian energy companies, there are several projects with the potential to resolve the transportation issues, such as the expansion of the Trans Mountain Pipeline, the approval of Keystone XL Pipeline and the proposed LNG Canada joint venture. While we enter 2018 with a more balanced demand/supply backdrop, geopolitical risks have become elevated due to the ongoing unrest and supply curtailments in Venezuela as well as the conflicts in the Middle East. The Fund's energy exposure favours the more stable pipeline issuers but also includes companies involved in oil and natural gas production.

The U.S. Federal Reserve hiked interest rates three times over the course of the year, with an additional increase implemented at its March 2018 meeting, pushing short term yields higher. Long-term bond yields, on the other hand, have increased since year end with the U.S. 10-year treasury bond exceeding 2.8%. The positive slope of the yield curve supports our bullish outlook on financials, both in the U.S. and Canada. While the U.S. banks trade at a slightly lower valuation versus their Canadian counterparts, they also offer lower yields. However, banks in both countries are very well capitalized and possess significant earnings momentum. As at December 31, 2017, financials were the second largest sector weight in the Fund.

Canadian real estate investment trusts offer stable, tax efficient income and more favourable supply/demand dynamics when compared to their U.S. counterparts. Canadian capitalization rates are near all-time lows as financial capital continues to pursue stable income producing assets. Although interest rates are nudging higher, current valuations remain attractive with global REITs trading at close to a 10% discount to net asset value. Industrial REITs have benefitted from the growth of online shopping, as e-commerce retailers require three times more warehouse space than traditional retail. This led to Pure Industrial REIT, a leading real estate company in Canada leveraged to the e-commerce sector, receiving an acquisition offer from Blackstone Property Partners at a 20% premium early in 2018.   At the time of the announcement, Pure Industrial REIT represented 3.5% of the Fund's net asset value and had been a holding of the Fund since 2010.

**Investment Manager's Report (continued)**

*Top Holdings*

The table below shows the largest ten positions held within the Fund's portfolio as at 31 December 2017:

*Company* *Sector* *% of Portfolio*
*Parkland Fuel Corporation*
Parkland Fuel Corporation is one of North America's fastest growing independent marketers of petroleum products and delivers gasoline, diesel, propane, lubricants, heating oil and other high-quality petroleum products to motorists, businesses, households and wholesale customers in Canada and the United States. Industrials 4.25%
*The Blackstone Group*
Blackstone is one of the world's leading investment firms, with over $430 billion in assets under management, including investment vehicles focused on private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds, all on a global basis. Financials 3.99%
*National Bank of Canada*
National Bank is a Montreal-based, fully integrated financial services company, and is the smallest of the Big Six Canadian banks. Revenues are approximately split as follows: personal and commercial (85%), payment solutions (10%), and insurance (5%). Financials 3.74%
*Vermilion Energy*
Vermilion is an international energy company with production from western Canada, France, Australia, Germany and the Netherlands. Vermilion's strategy is focused on the execution of full cycle growth via acquisition, exploration, development and optimization of producing properties and is the only high yield Canadian producer that has never cut its dividend since its inception in 2003. Energy 3.62%
*Chemtrade Logistics Income Fund*
Chemtrade operates a diversified business providing industrial chemicals and services to customers in North America and around the world. Chemtrade has significant market share and competitive advantages in niche specialty chemicals. Materials 3.26%
*Pembina Pipeline Corporation*
Pembina Pipeline is a pipeline and midstream company that operates oil and NGL pipelines, gas gathering and processing facilities and oil and NGL infrastructure and logistics business. Pipelines 3.26%
*Chorus Aviation Inc.*
Chorus' vision is to deliver regional aviation to the world. Chorus has been leasing its owned regional aircraft into Jazz's Air Canada Express operation since 2009, and established Chorus Aviation Capital to become a leading, global provider of regional aircraft leases and support services. Industrials 3.25%
*Bank of Nova Scotia*
The Bank of Nova Scotia is Canada's third largest bank, with assets of $915 billion, and a leading financial services provider in North America, Latin America, the Caribbean and Central America, and Asia-Pacific. Financials 3.22%
*JPMorgan Chase & Co.*
JPMorgan Chase & Co. is a leading global financial services firm headquartered in New York and is the largest banking institution in the U.S. with $2.6 trillion in assets, over 5,000 branches nationwide, and operations in more than 60 countries. Financials 3.2%
*Dream Global REIT*
Dream Global REIT is a real estate investment trust that owns, invests and manages a portfolio of assets located in Europe's top markets. Real Estate 3.1%
*Top Ten Investments* *34.89%*

**Investment Manager's Report (continued)**

*Outlook*

Looking forward, we are positive on equities in light of strong underlying corporate fundamentals and synchronized global economic activity. Although the Canadian economy is not likely to match the 3% growth registered in 2017, we still expect GDP to post a healthy 2% increase in 2018, causing the Bank of Canada to remain relatively dovish with only one or two potential rate hikes this year. In the U.S., while the corporate sector remains attractive due to deregulation, tax reform and the highest level of consumer confidence in over a decade, headwinds such as the outcome of NAFTA negotiations and the impact of import tariffs could impact market sentiment.

We believe a focus on dividend paying stocks is an effective method to reduce the varying levels of economic, trade and political risk. As demonstrated by our longstanding track record, Middlefield is focused on constructing portfolios comprised of high quality issuers with strong management teams, good balance sheets and a history of growing dividends. We believe the Fund is well positioned to provide attractive long-term returns on both a relative and absolute basis.

*Middlefield Limited*

Date: 19 April 2018

**Directors' Report**

The directors present their annual financial report for the year ended 31 December 2017 with comparatives for the year ended 31 December 2016.

***Status and Activities***
Middlefield Canadian Income - GBP PC is a closed-ended protected cell of Middlefield Canadian Income PCC, a Jersey-incorporated protected cell company.

The Fund is a closed-ended fund which has been admitted to the premium segment of the Official List of the UK Listing Authority and to trading on the London Stock Exchange's Main Market for listed securities.

JTC Fund Solutions (Jersey) Limited acts as the Company's secretary and administrator. JTC Fund Solutions (Guernsey) Limited was appointed as assistant secretary with effect from 1 December 2016. The Fund's net asset value ("NAV") is calculated using the closing prices of the securities held within its portfolio. The Company publishes the NAV of a share in the Fund on a daily basis.

*Investment Objective and Dividend Policy*
The Fund seeks to provide shareholders with a high level of dividends as well as capital growth over the longer term. The Fund intends to pay dividends on a quarterly basis each year. Subject to unforeseen circumstances, the Fund intends to maintain its current dividend rate of at least 5.1 pence per share per annum payable on a quarterly basis in equal instalments. The current dividend rate is expected to be supported by an increase in dividend and interest income earned by the Fund as well as the expected increase in the value of the Canadian dollar versus GBP over time. We believe that Canada will benefit from the increased economic diversification, recovery in energy markets and the relative strength in the U.S. economy.

Investment Portfolio
The Fund seeks to achieve its investment objective by investing predominantly in the securities of companies and REITs domiciled in Canada as well as the U.S. that the Investment Manager believes will provide an attractive level of distributions, together with the prospect for capital growth. It is expected that the Fund's portfolio will generally comprise between 40-60 investments.

The Fund may also hold cash or cash equivalents.

The Fund may utilise derivative instruments including index-linked notes, contracts for differences, covered options and other equity-related derivative instruments for the purposes of efficient portfolio management.

The Fund will at all times invest and manage its assets in a manner which is consistent with the objective of spreading investment risk.

Investment restrictions
The Fund will not at the time of making an investment:

(a) have more than 10 per cent. of the value of its portfolio assets invested in the securities of any single issuer; or
(b) have more than 50 per cent. of the value of its portfolio assets comprised of its ten largest security investments by value; or
(c) have more than 40 per cent. of the value of its portfolio assets invested in securities listed on a recognised stock exchange outside Canada; or
(d) have more than 10 per cent. of the value of its portfolio assets invested in securities listed on a recognised stock exchange outside Canada and the United States; or
(e) have more than 10 per cent. of the value of its portfolio assets invested in unquoted securities; or
(f) purchase securities on margin or make short sales of securities or maintain short positions in excess of 10 per cent. of the Fund's net asset value.

**Directors' Report (continued)**

*Investment Objective and Dividend Policy (continued)*

Hedging
The Board reserves the right to employ currency hedging but, other than in exceptional circumstances, does not intend to hedge.

Gearing
The Fund has the power to borrow up to 25 per cent. of the value of its total assets at the time of drawdown. In the normal course of events, and subject to Board oversight, the Fund is expected to employ gearing in the range of 0 to 20 per cent. of the value of its total assets in order to enhance returns. At year end, the Fund's gross borrowings were equal to 19 per cent. of its total assets.

Key Performance Indicators
The Board reviews performance by reference to a number of key performance indicators, which include the following:

· portfolio performance;
· net asset value (NAV);
· share price;
· premium/discount;
· dividends; and
· ongoing charges.

**Authorised and Issued Share Capital as at 31 December 2017**

The Fund has the power to issue an unlimited number of shares of no par value which may be issued as redeemable participating preference shares or otherwise and which may be denominated in Sterling or any other currency.

There are currently 2 Management Shares of no par value in the Company (issued on incorporation) and 2 Management Shares and 124,682,250 redeemable participating preference shares of no par value ("Fund Shares") in the Fund in issue. As at 31 December 2017, 18,195,000 Fund Shares were held in treasury. Since the financial year end and up to the date of this report, the Fund has not sold any Fund Shares from treasury and has not repurchased any Fund Shares and there remain 18,195,000 Fund Shares held in treasury, which may in future be sold out of treasury to satisfy market demand. Accordingly, the number of Fund Shares in issue and with voting rights attached is currently 106,487,250 and this figure may be used by shareholders as the denominator for calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under FCA's Disclosure Guidance and Transparency Rules.

*Further issues of Fund Shares*
The Fund's Articles of Association provide the Board of directors with authority to issue further Fund Shares without seeking shareholders' approval although, unless otherwise authorised by shareholders, such Fund Shares must be issued on a pre-emptive basis. However, at the Cell Annual General Meeting (the "Cell AGM") held on 25 May 2017, the Fund's shareholders authorised the issue or sale out of treasury of Fund Shares representing up to 10 per cent. of the Fund's issued share capital as at the date of the Cell AGM. Such issues or sales will only be effected in the event of investor demand which cannot be met through the market and will only be conducted at a price equal to or above the prevailing NAV.

The aforementioned authority expires on the earlier of 30 September 2018 or the conclusion of the next Cell AGM. At the next Cell AGM, the notice of which is included at the end of this annual financial report, the Board will be seeking renewal of their authority to issue or sell out of treasury additional Fund Shares and to make market acquisitions of Fund Shares. If the proposed special resolutions are approved, such authorities will remain valid until the earlier of 30 September 2019 or the conclusion of the following Cell AGM.

The full text of the proposed special resolutions is included in the notice of the Cell AGM. The Board considers that each of the proposed special resolutions is in the interests of the Company, the Fund and its shareholders as a whole. The authority to issue additional shares or sell shares out of treasury will permit the directors to grow the Company, thereby reducing the total expense ratio, as costs will be spread across a larger number of issued shares, and will also enable further diversification of the Company's portfolio. Accordingly, the directors unanimously recommend that you vote in favour of the proposed special resolutions, as they intend to do in respect of their own beneficial holdings.

*Future Trends*
Details of the main trends and factors likely to affect the future development, performance and position of the Company's business can be found in the Investment Managers' Report on pages 7 to 9. Further details as to the risks affecting the Company are set out on pages 15 to 16.

**Directors' Report (continued)**

** **

**Substantial shareholding in the Fund**

As at the year end and as at 31 March 2018, being the most recent practicable date prior to the publication of this annual financial report, the above shareholders were recorded on the Company's share register as holding 5 per cent. or more of the Fund's issued share capital with voting rights attached or had otherwise notified the Company of such notifiable interests.

*Name* *Redeemable Participating Preference Shares*
*31 December 2017* *Redeemable Participating Preference Shares*
*31 December 2017* *Redeemable Participating Preference Shares*
*31 March 2018*
*Number of Shares* *% of Shares in issue* *Number of Shares*
Brewin Nominees Limited 12,064,536 11.33% 11,044,961
State Street Nominees Limited 11,955,859 11.23% 13,677,206
Rock (Nominees) Limited 10,548,078 9.91% 9,967,444
Nortrust Nominees 9,942,870 9.34% 11,615,640
The Bank of New York Nominees 5,929,280 5.57% 7,288,098

*Shareholder Relations*
Shareholder relations are given a high priority by the Board, Investment Manager and Secretary. The primary medium through which the Company communicates with its shareholders is through the annual and half-yearly financial reports, which aim to provide shareholders with a full understanding of the Company's activities and results. The information is supplemented by the daily publication of the NAV of the Fund Shares, monthly factsheets and information on the Company's website operated by the Investment Manager. Shareholders have the opportunity to address questions to the Chairman and the Committees of the Board at the AGMs and all shareholders are encouraged to attend the AGMs.

There is regular dialogue between the Investment Manager and major shareholders to discuss aspects of investment performance, governance and strategy and to listen to shareholders' views, in order to help develop a balanced understanding of their issues and concerns. General presentations to both shareholders and analysts follow the publication of the annual financial results. All meetings between the Investment Manager and shareholders are reported to the Board.

**Ongoing charges**

The below table shows the annualised ongoing charges that relate to the management of the Fund as a single percentage of the average NAV over the same year. In terms of the AIC (The Association of Investment Companies) methodology, ongoing charges are those expenses of a type which are likely to recur in the foreseeable future, whether charged to capital or revenue, and which relate to the operation of the Fund as a collective investment fund, excluding the costs of acquisition/disposal of investments, financing charges and gains/losses arising on investments. Ongoing charges are based on actual costs incurred in the year as being the best estimate of future costs.

*Ongoing *
*charges (%)*
31 December 2017 1.03
31 December 2016 1.02

**Results and dividends**

The results for the year are shown in the Statement of Comprehensive Income on page 35 and related notes on pages 38 to 54. During the year, dividends were paid on a quarterly basis (see note 11). Although there is no guarantee, dividends are expected to be paid on a quarterly basis and paid at the end of that month as follows:

Payment Month Gross amount per Share
April 2018 1.275p expected
July 2018 1.275p expected
October 2018 1.275p expected
January 2019 1.275p expected

This is not a profit forecast, nor should it be construed as such. This is a target only and should not be treated as an assurance or guarantee of performance.

**Directors' Report (continued)**

** **

**Going concern and Viability**

The performance of the investments held by the Fund over the reporting year is described in the Statement of Comprehensive Income and in note 9 to the financial statements and the outlook for the future is described in the Chairman's Report and the Investment Manager's Report. The Company's financial position, its cash flows and liquidity position are set out in the financial statements and the Company's financial risk management objectives and policies, details of its financial instruments and its exposures to market price risk, credit risk, liquidity risk, interest rate risk, currency risk and country risk are set out at note 16 to the financial statements. The Company's long term viability and assessment of longer term risks to which the Company is exposed are also reported upon in the Company's long term viability statement included below.

The financial statements have been prepared on a going concern basis, supported by the directors' current assessment of the Company's position based on the following factors:

· ongoing shareholder interest in the continuation of the Fund;
· the Company has sufficient liquidity to meet all on-going expenses;
· should the need arise, the directors have the option to reduce dividend payments in order to positively affect the Fund's cash flows; and
· the Fund's investments in Canadian and U.S. securities are readily realisable to meet liquidity requirements if necessary.

Based on the above, in the opinion of the directors, there is a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.

The directors have also considered the application of the Statement of Recommended Practice for Financial Statements of Investment Trust Companies and Venture Capital Trusts, whereby the going concern basis of preparation of the financial statements is considered appropriate until a vote is passed to discontinue the Fund or Company. At the Fund's Cell AGM held on 16 May 2013 a continuation vote was proposed and passed unanimously by those shareholders voting at the meeting. There is no requirement under the Company's and Fund's articles of association to propose any future continuation vote in respect of either the Company as a whole or the Fund itself and the directors have no intention of proposing any continuation vote in the foreseeable future, subject to unforeseen future events.

For these reasons, the financial statements have been prepared using the going concern basis.

**Viability Statement **

As stated above, C.2.1 and C.2.2 of the Code recommends that companies publish a long term viability statement and this statement is intended to meet that requirement.

The Board of Directors regularly assesses the viability of the Company for at least the three years following the date of that review. In considering the Company's viability, the Board considers the Company's current position and the principal risks to which it is exposed including, but not necessarily limited to, the viability of its investment objective and policy, its exposure to the Canadian and North American economy, foreign exchange risk, gearing risk, hedging risk, interest rate risk, investor demand for equity securities, portfolio performance, liquidity, stability of income generation, taxation risk, dependence on the investment manager, conflicts of interest, and entity / legal risk, such as changes in applicable laws and regulations.

The Directors have made a robust assessment of these principal risks and, together with the Company's Investment Manager, have adopted procedures and strategies to mitigate these risks. The Fund has an established investment policy, which has been approved and is monitored by the Directors. The Company's Investment Manager seeks to operate within this policy, which limits the various elements of portfolio risk, including exposure to any one particular security, sector, asset class or geographical area. The Investment Manager regularly updates the Directors on the Company's portfolio and the overall status of the market. The Directors perform a solvency and investment trust test (for compliance with the requirement to distribute at least 85% of investment income received) before any dividend is declared. In performing its viability analysis, the Board has made the assumption that global growth will continue over the near term.

The Board also monitors cash flow and liquidity at each regular meeting, as well as the Company's ongoing charges ratio, to ensure that its operating costs are reasonable in the current market environment and do not materially exceed those of its competitors. The Company is invested in large, liquid issuers and it can quickly realise investments to raise cash, if required, to meet its expenses when they fall due. The Investment Manager maintains the ability to use hedging as a portfolio management tool, if deemed necessary. The Fund uses gearing tactically, which helps to augment returns or reduce portfolio risk as the case may be. The Fund has not been required to pay any U.K. corporate taxes in recent years and does not anticipate paying such taxes in the foreseeable future. The Investment Manager constantly monitors the portfolio and its ratings. The Investment

**Directors' Report (continued)**

** **

**Viability Statement (continued)**

Manager and the Investment Advisor are continuously reviewing the impact of potential changes of various factors including interest rates, energy prices and foreign exchange rates. As a result, the Directors are confident that the Company will be able to continue to operate and has sufficient assets to meet its liabilities as they fall due over the next three years.

It is the Board's opinion that, while interest rates have risen in recent months, they are expected to remain relatively low for the foreseeable future and equity income should continue to be in demand by both individual and institutional investors. On the advice of the Investment Manager and as suggested by recent economic data, the Board believes that the North American economy will continue to grow over the next few years. Commodity prices, including oil, have recovered from their lows and have stabilised at a value that supports economic growth, especially in Canada. As a result, the Board believes that the Company's investment strategy of investing in North American companies that offer high and growing levels of dividends remains viable.

Being cognisant of the Company's concentrated exposure to the Canadian and U.S. economy and foreign exchange rates, the Company's investment objective and policy is regularly reviewed and, at the extraordinary general meeting in February 2015, the Company's investment restrictions were changed to permit greater geographical diversification. The Board believes this change is in the best interests of the Company.

The Board also has regular communications with the Company's broker to understand local market dynamics and changes in the share register. The Board monitors the discount to the prevailing net asset value at which the Company's shares trade and, when considered necessary or desirable, repurchases its own shares in the market to hold in treasury, which supports the share price and is accretive to the net asset value of the remaining shares in issue. The Company has appointed an experienced corporate secretary, supported by its affiliate, the assistant secretary, which advises the Board on relevant changes to applicable laws and regulations, and the Board may take legal advice on any matter and at any time as it considers to be necessary or desirable. Although the Company can neither anticipate nor control future changes in law or regulation, the Board is confident that its directors and advisors are suitably qualified and experienced and that the Company is unlikely to commit any material offence, whether by action or omission.

Although the Company cannot provide taxation advice and all shareholders are responsible for their own taxation affairs, the Company does monitor relevant developments and takes all necessary action to ensure compliance, including registration under FATCA and the appointment of Link Asset Services as its agent to collate and report relevant data under FATCA and the OECD's Common Reporting Standard.

In light of the above and following careful consideration and analysis of all material risk factors, the Board therefore confirms its belief that the Company will remain viable as a closed-ended investment company for at least the three years following the date of that review.

**Corporate Governance**

The Board is committed to achieving and demonstrating high standards of corporate governance.

As an overseas company with a premium listing, the Company is required to include a statement in its annual financial report as to whether it has complied throughout the accounting period with all relevant provisions set out in the UK Financial Reporting Council's (the "FRC") UK Corporate Governance Code (the "UK Code") or, if not, setting out those provisions with which it has not complied and the reasons for non-compliance.

The Association of Investment Companies (the "AIC"), of which the Company is a member, has published its Code of Corporate Governance for Investment Companies (the "AIC Code") and the Corporate Governance Guide for Investment Companies dated July 2016 (the "AIC Guide"), which incorporates the UK Code, the AIC Code and paragraph 9.8.6 of the FCA's Listing Rules. The FRC has confirmed that "it remains the FRC's view that by following the AIC Corporate Governance Guide, investment company boards should fully meet their obligations in relation to the UK Corporate Governance Code and paragraph LR 9.8.6 of the Listing Rules."

The Board has considered the principles and recommendations of the AIC Guide. The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to the Company. The Board considers that reporting against the principles and recommendations of the AIC Code provides better information to shareholders.

**Directors' Report (continued)**

** **

**Corporate Governance (continued)**

** **

The directors believe that the Company has complied with the provisions of the AIC Code, where appropriate, and that it has complied throughout the year with the provisions where the requirements are of a continuing nature. Following the publication of the revised AIC Code dated July 2016, the directors put in place further measures designed to ensure compliance with the revised AIC Code and report against the 2016 AIC Code in this year's annual financial report.

The UK Code is available for download from the FRC's web-site www.frc.org.uk and the AIC Code and AIC Guide are available for download from the AIC's website www.theaic.co.uk. All of these documents can also be provided by the Secretary by e-mail upon request.

The directors believe that the Company has complied with the provisions of the AIC Code except as set out in the paragraph below, and that it has complied throughout the year with the provisions where the requirements are of a continuing nature.

The AIC Code includes provisions relating to the role of chief executive management. As all of the directors are non-executives, the Board considers that these provisions are not relevant to the Company, which is an externally managed investment company. In accordance with FCA Listing Rule LR 15.6.6, a closed-ended investment fund does not need to comply with the provisions regarding remuneration in the UK Corporate Governance Code. The Company has therefore not reported further in respect of these provisions. The Company continues to operate a comply or explain approach with shareholders.

The Board is responsible for setting the Company's investment policy, subject to shareholders' approval in general meeting of any proposed material changes, and has a schedule of investment matters reserved for the directors' resolution. The Board has contractually delegated to external agencies the management of the investment portfolio, the custodial services and the day to day accounting and secretarial requirements. Each of these contracts is only entered into after proper consideration by the Board of the quality of services being offered. The Company's risk assessment and the way in which significant risks are managed is a key area for the Board. Work here is driven by the Board's assessment of the risks arising in the Company's operations and identification of the controls exercised by the Board and its delegates, the Investment Manager and other service providers. These are recorded in the Company's business risk matrix, which continues to serve as an effective tool to highlight and monitor the principal risks. The Board also receives and considers, together with representatives of the Investment Manager, reports in relation to the operational controls of the Investment Manager, Administrator, Custodian and Registrar. These reviews identified no issues of significance.

*Principal Risks and Uncertainties*

Investment Policy (incorporating the Investment Objective)
There is no guarantee that the Company's investment objective will be achieved or provide the returns sought by shareholders. The Board has established guidelines to ensure that the investment policy that has been approved is pursued by the Investment Manager. The Board reviews the Investment Manager's compliance with the agreed investment restrictions, investment performance and risk against investment objectives and strategy; the portfolio's risk profile; and appropriate strategies employed to mitigate any negative impact of substantial changes in markets. In addition, the Board also performs an annual review of the ongoing suitability of the Investment Manager.

Market Value of Fund Shares
The market value of the Fund Shares will be affected by a number of factors, including the dividend yield from time to time of the Fund Shares, prevailing interest rates and supply of and demand for those Fund Shares, along with wider economic factors and changes in applicable law, including tax law, and political factors. The market value of, and the income derived from, the Fund Shares can fluctuate and may go down as well as up. The market value of the Fund Shares may not always correlate closely with the NAV per Fund Share. While it is the intention of directors to pay dividends to shareholders on a quarterly basis, the ability to do so will largely depend on the amount of income the Company receives on its investments, the timing of such receipts and costs. Any reduction in income receivable by the Company, or increase in the cost of financing, will lead to a reduction in earnings per share and therefore in the Company's ability to pay dividends. Accordingly, the amount of dividends payable by the Company may fluctuate. The Board monitors the income received on investments and available for distribution prior to the declaration of each dividend.

The directors have the power to issue and buy back the Company's shares during the year, which can be used to help manage the level of premium or discount. The Board, the Investment Manager and the Company's Broker monitor the share price and level of premium or discount on a regular basis.

**Directors' Report (continued)**

** **

**Principal Risks and Uncertainties (continued)**

Reliance on External Service Providers
The Company has no employees and the directors have all been appointed on a non-executive basis. The Company is reliant upon the performance of third party service providers for its executive function. The Company's most significant contract is with the Investment Manager, to whom the responsibility for the day-to-day management of the Company's portfolio has been
delegated. The Company has other contractual arrangements with third parties to act as administrator, secretary, auditor, registrar, custodian and broker. Failure by any service provider to carry out its obligations to the Company in accordance with
the terms of its appointment could have a materially detrimental impact on the operations of the Company and could affect the ability of the Company to successfully pursue its investment policy and expose the Company to reputational and financial risk.

The Investment Manager is exposed to the risk that litigation, misconduct, operational failures, negative publicity and press speculation, whether or not valid, may harm its reputation. Any damage to the reputation of the Investment Manager could result in counterparties and other third parties being unwilling to deal with the Investment Manager and by extension the Company. This could have an adverse impact on the ability of the Company to pursue its investment policy.

*The Board seeks to manage these risks, and others, in a number of ways:*

· The Management Engagement Committee monitors the performance of all third party providers in relation to agreed service standards on a regular basis, and any issues and concerns are dealt with and reported to the Board. The Management Engagement Committee formally reviews the performance of all third party providers and reports to the Board on an annual basis.
· The Board monitors the performance of the Investment Manager at every board meeting and otherwise as appropriate. The Board has the power to replace the Investment Manager.
· The Board has adopted guidelines within which the Investment Manager is permitted discretion. Any proposed variation outside these guidelines is referred to the Board.

**Directors**

As at 31 December 2017 and as at the date of this report, the Board of directors comprised five non-executive directors, four of whom were independent of the Investment Manager and its affiliates.

The present members of the Board are listed on pages 66 and 17. In accordance with the provisions of the AIC Code, all directors should submit themselves for re-election at least every three years. In addition, as Mr Orrico is not independent of the Investment Manager, he is required by the FCA's Listing Rules to submit himself for re-election annually.

As the Fund is a Jersey-regulated entity, any change of director is subject to the consent of the Jersey Financial Services Commission ("JFSC") and the resignation of each director will be conditional upon the JFSC's consent to their resignation being obtained. This consent will only be sought if any director is not re-elected at the Company and Cell AGM. Any director whose re-election is not approved at the Company and Cell AGM will therefore remain in office until such time as the JFSC consents to their resignation (and this consent may itself be conditional upon the appointment of a replacement director acceptable to the JFSC). Any such resigning director will not take part in the management of the Fund pending receipt of such regulatory consent (save as may be required to preserve and protect the Fund's assets and interests or as may be required to comply with applicable regulation or legal obligation).

The interests as at 31 December 2017 and 2016 of the directors who served on the Board and their connected persons during the year were as follows:

*2017* *2016* * *
*Fund Shares* *Fund Shares* * *

Raymond Apsey 75,000 75,000
Philip Bisson 920,000 845,125
Philean Trust Company Limited (a company connected with Philip Bisson) 581,381 691,381
Thomas Grose 62,000 62,000
Dean Orrico 100,000 100,000
Nicholas Villiers (Chairman) 35,000 35,000

**Directors' Report (continued)**

*Directors (continued)*

The current directors are:

Nicholas Villiers (Chairman)
Mr Villiers was Vice Chairman of Royal Bank of Canada Europe Limited and Managing Director of RBC Capital Markets (previously RBC Dominion Securities). Mr Villiers joined the Royal Bank of Canada Group in 1983 as a director and Head of Mergers and Acquisitions at Orion Royal Bank, London (a subsidiary of Royal Bank of Canada). During his 19-year career with the RBC Group, Mr Villiers led the international mergers and acquisitions team based in London and was also responsible for the Royal Bank of Canada Group's successful participation in international privatisations. Prior to joining the Royal Bank of Canada Group, Mr Villiers served from 1977 to 1983 as joint Managing Director of Delcon Financial Corporation.

Raymond Apsey
Mr Apsey is a Fellow of the Institute of Chartered Secretaries and Administrators with extensive experience at management level of the offshore finance industry in the Bahamas, the Channel Islands and the Cayman Islands. He joined the Morgan Grenfell Offshore Group in 1975 to head the Corporate and Trust Division and held various senior appointments including Deputy Managing Director of Jersey, Managing Director of Cayman and Group director before retiring in December 1995. Mr Apsey resides in Jersey.

Philip Bisson
Mr Bisson is a Fellow Member of the Chartered Institute of Bankers, and is or has been a member of various Jersey committees including the Jersey Association of Trust Companies of which he is also treasurer. From 1979 to 1986 Mr Bisson was Trust Manager and Company Secretary of Chase Bank and Trust Company (CI) Limited and from 1986 to 1994 was a Director of BT Trustees (Jersey) Limited. Mr Bisson is domiciled in Jersey and is currently the Managing Director of Philean Trust Company Limited.

Thomas Grose
Following service with the United States Army, Mr Grose began his career in finance with Citibank in New York, where he rose to become an Assistant Vice President. After a spell as Vice President - Finance and Chief Financial Officer with Great American Industries, Inc., he joined Bankers Trust Company, where he spent 18 years variously in New York, London and Tunisia. Since 1991, Mr Grose has worked for Stock Market Index International, a company that he established in the UK, which provides proprietary research to asset managers, hedge funds and other financial institutions.

Dean Orrico
Mr Orrico is President, Chief Executive Officer and Chief Investment Officer of Middlefield Capital Corporation and has been employed by the firm since 1996. Prior to joining Middlefield, Mr Orrico was a commercial account manager with the Toronto-Dominion Bank. Mr Orrico is currently responsible for overseeing the creation and ongoing management of all of Middlefield's investment funds including mutual funds, Toronto and London Stock Exchange-listed funds and flow-through funds. He graduated with a Bachelor of Commerce degree from the Rotman School of Management (University of Toronto) and holds an MBA from the Schulich School of Business (York University). Mr Orrico is a registered Portfolio Manager.

Mr Orrico oversees approximately $4 billion in assets under management at Middlefield and has developed expertise in both equity and fixed income securities. Having spent many years managing equity portfolios and meeting with international companies and investors, Mr Orrico has overseen the diversification of Middlefield's portfolios into global equity income securities.

The Company and Fund do not have any executive directors or employees.

The structure of the Board is such that it is considered unnecessary to identify a senior independent non-executive director other than the Chairman because the Board currently has a majority of independent directors and is expected to continue to have a majority of independent directors after the forthcoming Company and Cell AGM. As such, it complies with the FCA's Listing Rules and the AIC Code. On 26 May 2010, a Nomination and Remuneration Committee was established and comprised of all the directors of the Company and Fund. In accordance with PIRC's published guidance, all directors will continue to offer themselves for annual re-election for the foreseeable future.

Although no formal training in corporate governance is given to directors, the directors are kept apprised of corporate governance issues through bulletins and training materials provided from time to time by the Secretary and the AIC.

**Directors' Report (continued)**

*Conflicts of Interest*
The Board meets at least quarterly to review the overall business of the Company and to consider matters specifically reserved for its review. At these meetings, the Board monitors the investment performance of the Fund. The directors also review the Fund's activities every quarter to ensure that it adheres to the Fund's investment objective and policy or, if appropriate, to consider changes to that policy. Additional ad hoc reports are received as required and directors have access at all times to the advice and services of the Secretary, which is responsible for guiding the Board on procedures and applicable rules and regulations.

A director must avoid a situation where he has or might have a direct or indirect interest that either conflicts or has the potential to conflict with the Company's interests. The Company's and Fund's Articles of Association give the directors authority to authorise potential conflicts of interest and there are safeguards in place which will apply whenever the directors decide that such are necessary or desirable.

Firstly, only directors who have no interest in the matter being considered are able to vote upon the relevant decision, and secondly, in voting on the decision, the directors must act in a way they consider, in good faith, will be in the best interests of the Company. The directors can impose limits or conditions when giving authorisation if they consider this to be appropriate.

The directors declare any potential conflicts of interest to the Board at each Board meeting. Any actual or potential conflicts of interest are entered into the Company's register of such conflicts, which register is reviewed regularly by the Board. The register of conflicts of interest is kept at the Company's registered office. The directors advise the Secretary as soon as they become aware of any new actual or potential conflicts of interest or any material changes to an existing conflict.

*Directors' and Officers' Liability Insurance*
The Company purchases directors' and officers' liability insurance cover at a level which is considered appropriate for the Company.

*Directors' Remuneration*
No director has a service contract with the Company or Fund and details of the directors' fees are disclosed in note 13.

Directors' fees are recommended by the full Board. The non-executive directors were each paid the following in the 2017 and 2016 financial years:

*Director* *2017 Fees* *2016 Fees*

Raymond Apsey £20,000 £20,000
Philip Bisson £20,000 £20,000
Thomas Grose £20,000 £20,000
Dean Orrico - -
Nicholas Villiers (Chairman) £25,000 £25,000

The figures above represent emoluments earned as directors during the relevant financial year, which are paid quarterly in arrears. Mr Orrico has waived his entitlement for remuneration for acting as a director, because of his employment by the Investment Manager. The directors receive no other remuneration or benefits from the Company other than the fees stated above. The directors are paid out of pocket expenses for attendance at Board meetings and for any other expenditure they incur when acting on the Company's behalf.

The Board has considered the remuneration paid to the directors, which was last increased effective 1 January, 2012. Since such time, in addition to the dilutive effects of inflation, the demands on the directors have increased significantly, not least due to the large number of additional regulations relevant to the Company's operations including, but not limited to, the Alternative Investment Fund Manager's Directive, the EU Market Abuse Regulations, the Packaged Retail and Insurance-Based Investment Products Regulations and the Amended Markets in Financial Instruments Directive. The directors therefore propose that the directors' remuneration be increased with effect from 1 July, 2018 to the following annual amounts, payable quarterly in arrears:

**Directors' Report (continued)**

*Directors' Remuneration (continued)*

*Director* *Proposed Fees*

Raymond Apsey £22,000
Philip Bisson £22,000
Thomas Grose £24,000
Dean Orrico -
Nicholas Villiers (Chairman) £28,000

The above fees represent an increase of £2,000 per annum per director, save that the Chairman's fees shall be increased by £3,000 per annum, with an additional £2,000 to be paid to Mr Grose as Chairman of the Audit Committee.

As explained in the Chairman's Report, the Board anticipates that an additional director will be appointed in the coming months. It is proposed that he or she will also be paid a fee of £22,000 per annum, payable quarterly in arrears.

As required by the articles of association of the Company and the Fund, resolutions approving these increased fees, together with the proposed fees for an anticipated additional director, will be proposed to shareholders at the forthcoming Cell and Company annual general meetings.

*Board, Committee and Directors' Performance Evaluation*
The directors recognise the importance of the AIC Code in terms of evaluating the performance of the Board as a whole, its respective Committees and individual directors. During the year, the performance of the Board, Committees of the Board and individual directors was assessed in terms of:

· attendance at Board and Committee Meetings;
· the independence of individual directors;
· the ability of individual directors to make an effective contribution to the Board and Committees of the Board, together with the diversity of skills and experience each director brings to meetings; and
· the Board's ability to effectively challenge the Investment Manager's recommendations, suggest areas of debate and fix timetables for debates on the future strategy of the Company.

The directors concluded that the performance evaluation process had proven successful, with the Board, the Committees of the Board and the individual directors scoring well in all areas. The Board and the Committees of the Board continued to be effective and the individual directors continued to demonstrate commitment to their respective roles and responsibilities.

* *

*Directors' Attendance*

The table below summarises the directors' attendance at each type of meeting held during the year.

* *

*Quarterly Board* *Ad hoc Board * *Audit*
*Committee * *Nomination and*
*Remuneration Committee * *Dividend*
*Committee* *Management Engagement Committee*
No. of meetings in the year 4 2 1 4 1
Raymond Apsey 4 2 1 1 1
Philip Bisson 4 2 1 1
Thomas Grose 4 2 1 3 1
Dean Orrico 4 2 1 1
Nicholas Villiers 4 2 1 1

* *

*Independence of Directors*

During the year, the Board consisted of five members, all of whom are non-executive. Mr Orrico is a director o Reported by GlobeNewswire 11 hours ago.

The market is estimated to expand at a CAGR of 8.7% during the forecast period from 2018 to 2026. In terms of volume, the market is expected to reach around 332 million units at a CAGR of over 6.1% by 2026.

Albany, New York, April 20, 2018 (GLOBE NEWSWIRE) -- According to a new market report published by Transparency Market Research titled *“Sheet Face Masks Market – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2018– 2026,” *the *global sheet face mask market* is expected to reach a value of US$ 551.3 Mn by 2026. The market is estimated to expand at a CAGR of 8.7% during the forecast period from 2018 to 2026. In terms of volume, the market is expected to reach around 332 million units at a CAGR of over 6.1% by 2026. The Asia Pacific sheet face mask market is projected to have the highest growth during the forecast period. The cosmetic industry in Europe experienced significant growth in 2016. The European Free Trade Association has majorly impacted the cosmetics industry in Europe. China, India, and Japan are the major markets for sheet face masks in Asia Pacific in terms of their consumption. The rapid growth is mainly attributed to the increasing disposable income of consumers, which is driving the utilization of beauty products and personal care products. Another driver is the changing lifestyles of consumers coupled with the influence of western culture in terms of cosmetics skin care. Additionally, the trend toward using organic products, and the trend to look young or use anti-aging products has also resulted in the growth of the sheet face mask market.

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The market for sheet face masks in developing countries such as India, Brazil, China, Indonesia, and Argentina is witnessing steady growth for the past few years due to the strengthening economic condition in these countries. This factor has resulted in the increasing purchasing power of consumers, thereby leading them to use sheet face masks as a skin care product. Further, with the improving economic conditions of developing countries, manufacturers operating in the field of sheet face masks are increasing their presence in these countries for expansion opportunities.

Sheet face masks have gained popularity among the urban population of almost every country worldwide. Improved economic conditions in countries of APAC, MEA, and South America have resulted in growth of purchasing power of the people, which has positively impacted the sheet face masks market. In Asia Pacific, sheet face masks are popular in countries such as China, Japan, India, and also in Rest of Asia Pacific. China holds the largest market for sheet face masks in the Asia Pacific followed by Korea in 2016. In addition, there are opportunities in semi urban areas for the sheet face masks market due to the improving disposable income and changing lifestyles. The young generations' growing focus on their appearance has changed the scenario of the sheet face masks market in APAC, MEA, and South America.

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On the basis of fabric type, sheet face masks are categorized into: non-woven, cotton, hydrogel, bio-cellulose and others. Non-woven fabric has a loutish texture that feels like paper. This fabric is cost-effective and has some capacity to fill moisture to skin. Non-woven fabric has a steady growth due to its quick drying nature and lack of sticking capacity. Cotton fabric sheet face masks are made of micro fibers, which allow the oil to absorb other ingredients in the sheet. Cotton fabric had the largest share in 2016 in the sheet face masks market, due to its soft and breathable properties. Cotton fibers also have better absorption features. In addition, hydrogel fabric is used in sheet face masks owing to its hydrophilic nature, which helps to hold considerable proportion of water in its three dimensional structure. Synthetic hydrogel is preferred more than natural hydrogel fabric owing to its efficient water absorption nature. However, hydrogel fabrics are more expensive. Bio cellulose sheet masks are gaining popularity and are expected to have the highest growth rate of 10.1% owing to the usage of natural ingredients in the product. Further, sheet face masks are also segmented into premium sheet face masks and mass sheet face masks. Mass sheet masks have a larger market share currently; however, premium sheet face masks are expected to have a larger share during the forecast period. This change is due to the rising consumer spending capacity and growing awareness about personal care. Sheet face masks are available for consumers through two major distribution channels, offline and online.

By geography, the sheet face masks market is segmented into North America, Europe, Asia Pacific, Middle East & Africa, and South America. Asia Pacific, with presence of large number of manufacturing utilities and upcoming technological developments is expected to have a positive impact on the demand for sheet face masks. South Korea and China are some of the major countries fueling the demand for sheet face masks in Asia Pacific. Similarly, in North America, the U.S. is one of the major markets for sheet face masks.

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Some of the key players profiled in the report are Sephora Inc, Innisfree Corporation, Lancome Paris, Decleor Paris, ES Cosmetics, Tonymoly Co Ltd, The Face Shop, Boss Biological Technique Ltd, Bio Republic Skin Care, Star Skin, It’ Skin, Kracie Holdings Ltd, 3LAB Inc., and Yunos Co Ltd. The companies involved in this market are concentrating on research and development along with mergers and acquisitions, and product innovation to strengthen their foothold in this market. Product development is focused on providing personalized experience to the consumers. For instance, Estee Lauder launched a special brand Osiao for the China market with products that are specially manufactured for the Asian skin and to deal with Asian skin problems. The brands further focus on being a leading name in the Asian skin care industry.

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*Sheet Face Mask Market by Type*

· Non-Woven
· Cotton
· Hydrogel
· Bio Cellulose
· Others (Ecoderma, Pulp etc.)

*By Category Type*

· Premium Sheet Face masks
· Mass Sheet Face Masks

*By Distribution Channel*

· Online
· Offline

*By Geography*

· North America

· U.S.
· Canada
· Rest of North America

· Europe

· U.K.
· Germany
· France
· Italy
· Rest of Europe

· Asia Pacific

· China
· Korea
· Australia
· New Zealand
· Thailand
· Singapore
· Malaysia
· Rest of Asia Pacific

· Middle East & Africa (MEA)

· GCC
· South Africa
· Rest of MEA

· South America

· Brazil
· Rest of South America

*About Us:*

Transparency Market Research is a next-generation market intelligence provider, offering fact-based solutions to business leaders, consultants, and strategy professionals.

Our reports are single-point solutions for businesses to grow, evolve, and mature. Our real-time data collection methods along with ability to track more than one million high growth niche products are aligned with your aims. The detailed and proprietary statistical models used by our analysts offer insights for making right decision in the shortest span of time. For organizations that require specific but comprehensive information we offer customized solutions through adhoc reports. These requests are delivered with the perfect combination of right sense of fact-oriented problem solving methodologies and leveraging existing data repositories.

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Research Blog: http://www.techyounme.com/ Reported by GlobeNewswire 10 hours ago.

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