EP Global Opportunities Trust : Annual Financial Report

EP GLOBAL OPPORTUNITIES TRUST PLC

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

The full Annual Report and Financial Statements can be accessed via the Company’s website at www.epgot.com or by contacting the Company Secretary by telephone on 0131 270 3800.

HIGHLIGHTS

• At 31 December 2020, the net asset value per share was 308.4p, a decrease of 3.9% over the year. With dividends re-invested, the net asset value total return was -1.3%.

• The share price discount to net asset value per share was 7.9%, compared to 3.4% at the prior year end. With dividends re-invested, the share price total return was -5.6%.

• The revenue return was 4.9p per share.

• Proposed maintained final dividend of 6.0p per share, payable on 28 May 2021.

• Annualised share price total return of 7.9% since the launch of the Company on 15 December 2003 up to the end of 2020. The annualised UK Retail Price Inflation rate was 2.8% over the same period.

• Cautious stance on investment outlook with defensively positioned equity portfolio. At year end, 13% of net assets held in cash and 9% in US Treasury Inflation Protected bonds.

FINANCIAL SUMMARY

Results for year	31 December 2020	31 December 2019	Change
Shareholders’ funds	£119,095,000	£132,009,000	(9.8)%
Net asset value per share (“NAV”)1	308.4p	320.8p	(3.9)%
NAV total return1,2,5	(1.3)%	6.0%
Share price	284.0p	310.0p	(8.4)%
Share price total return1,2,5	(5.6)%	5.0%
Share price discount to NAV5	7.9%	3.4%
Revenue return per share1,3	4.9p	8.1p	(39.4)%
Final dividend per share	6.0p4	6.0p	-
Special dividend per share	-	1.5p
Total dividend per share	6.0p4	7.5p

   

1	See glossary in the full Annual Report and Financial Statements.
2	The NAV and share price total returns are sourced from Edinburgh Partners and include dividends reinvested.
3	Based on the weighted average number of shares in issue, excluding shares held in treasury, during the year.
4	Proposed dividend for the year.
5	Alternative performance measure – see the full Annual Report and Financial Statements.

   

		Year to     31 December 2020	Year to      31 December 2019
Year’s high/low
Share price	- high	312.5p	319.0p
	- low	217.5p	290.0p
NAV	- high	330.1p	335.0p
	- low	259.4p	310.2p
Share price discount to NAV2
	- high	18.7%	8.7%
	- low	3.2%	3.2%
Cost of running the Company
Ongoing charges1,2		1.0%	1.0%

   

1	Based on total expenses, excluding finance costs and certain non-recurring items for the year as a percentage of the average monthly net asset value.
2	Alternative performance measure – see the full Annual Report and Financial Statements.

Past performance is not a guide to future performance.
 

PORTFOLIO OF INVESTMENTS

as at 31 December 2020

Company	Sector	Country	Valuation £’000	% of Net Assets
Equity investments
20 largest equity investments
Samsung Electronics	Information Technology	South Korea	3,880	3.3
Taiwan Semiconductor ADR	Information Technology	Taiwan	3,708	3.1
Tesco	Consumer Staples	United Kingdom	3,644	3.1
Orange	Communication Services	France	3,421	2.9
Vodafone	Communication Services	United Kingdom	3,373	2.8
Murata Manufacturing	Information Technology	Japan	3,275	2.7
Unilever	Consumer Staples	United Kingdom	3,046	2.6
Antofagasta	Materials	United Kingdom	3,032	2.5
Panasonic	Consumer Discretionary	Japan	3,012	2.5
Shanghai Fosun Pharmaceutical H	Health Care	China	3,002	2.5
Samsung SDI	Information Technology	South Korea	2,896	2.4
Novartis	Health Care	Switzerland	2,885	2.4
Sony	Consumer Discretionary	Japan	2,805	2.4
Commerzbank	Financials	Germany	2,728	2.3
Astellas Pharma	Health Care	Japan	2,695	2.3
Verizon Communications	Communication Services	United States	2,655	2.2
Sumitomo Mitsui Trust	Financials	Japan	2,610	2.2
Roche¹	Health Care	Switzerland	2,592	2.2
ING	Financials	Netherlands	2,560	2.1
Sanofi	Health Care	France	2,544	2.1
Total – 20 largest equity investments			60,363	50.6
Other equity investments
AstraZeneca	Health Care	United Kingdom	2,521	2.1
Daiwa House Industry	Real Estate	Japan	2,480	2.1
Singapore Telecommunications	Communication Services	Singapore	2,461	2.1
Total	Energy	France	2,449	2.1
Nokia	Information Technology	Finland	2,430	2.0
Japan Tobacco	Consumer Staples	Japan	2,378	2.0
Credicorp	Financials	Peru	2,363	2.0
BMW	Consumer Discretionary	Germany	2,310	1.9
Fresenius Medical Care	Health Care	Germany	2,173	1.8
China Mobile2	Communication Services	China	1,949	1.6
ENI	Energy	Italy	1,948	1.6
Comsys	Industrials	Japan	1,190	1.0
Raito Kogyo	Industrials	Japan	900	0.8
Ship Healthcare	Health Care	Japan	885	0.8
Mirait	Industrials	Japan	883	0.7
Kyowa Exeo	Industrials	Japan	849	0.7
TBS	Communication Services	Japan	776	0.7
Totetsu Kogyo	Industrials	Japan	775	0.7
Meitec	Industrials	Japan	775	0.7
Total – 39 equity investments			92,858	78.0
Fixed income investments
US Treasury Inflation Protected Security 0.125% 15 July 2030			5,414	4.5
US Treasury Inflation Protected Security 0.25% 15 February 2050			5,378	4.5
Total fixed income investments			10,792	9.0
Cash and other net assets			15,445	13.0
Net assets			119,095	100.0

   

1	The investment is in non-voting shares.
2	The investment was sold in January 2021 to comply with US Executive Order 13959.

Of the ten largest portfolio investments as at 31 December 2020, the valuations at the previous year end, 31 December 2019, were Tesco £3,827,000, Orange £3,218,000 and Vodafone £4,093,000. US Treasury Inflation Protected Security 0.125% 15 July 2030, US Treasury Inflation Protected Security 0.25% 15 February 2050, Samsung Electronics, Taiwan Semiconductor ADR, Murata Manufacturing, Unilever and Antofagasta were purchased during the year.

DISTRIBUTION OF INVESTMENTS  as at 31 December 2020 (% of net assets)
Sector distribution	% of Net assets
Health Care	16.2
Information Technology	13.5
Communication Services	12.3
Financials	8.6
Consumer Staples	7.7
Consumer Discretionary	6.8
Industrials	4.6
Energy	3.7
Materials	2.5
Real Estate	2.1
Cash and other net assets	13.0
	100.0

The figures detailed in the sector distribution table represent the Company’s exposure to those sectors.

Geographical distribution	% of Net assets
Europe ex UK	23.4
Japan	22.3
Asia Pacific ex Japan	15.0
United Kingdom	13.1
Americas	4.2
Fixed income	9.0
Cash and other net assets	13.0
	100.0

The figures detailed in the geographical distribution table represent the Company’s exposure to these countries or regional areas.

The geographical distribution is based on each investment’s principal stock exchange listing, except in instances where this would not give a proper indication of where its activities predominate.

CHAIRMAN’S STATEMENT

Results
At 31 December 2020, our NAV was 308.4p, a reduction of 3.9% in the year. With dividends re-invested, this resulted in a total return of -1.3% for the year.

The share price at the end of the year was 284.0p, a reduction of 8.4% from the share price at the end of 2019 of 310.0p. With dividends re-invested, this resulted in a total return of -5.6% for the year. At 31 December 2020, the share price stood at a discount of 7.9% to the NAV, which compared to 3.4% at the prior year end.

As detailed below, there was a significant reduction in revenue per share in the year under review. As a result, your Board has decided to use part of the Company’s revenue reserve and therefore recommends a maintained final dividend of 6.0p per share.

It was a difficult year for value investors, a year when most major equity markets achieved double digit gains. The exception was the UK FTSE All-Share Index which suffered a 9.8% negative total return. The Company does not have a benchmark, but the Board does monitor how equities in general are performing and does constructively challenge the Investment Manager on its strategy. The Board is concerned about performance of the portfolio while being aware that value investing has been out of favour for the last 10 years.

Since the launch of the Company on 15 December 2003 up to the end of 2020 the Company achieved a 7.9% annualised share price total return. This was a substantial real return when compared to the UK Retail Price Inflation rate which was 2.8% over the same period. Since the launch performance has achieved a similar return to that of the MSCI ACWI Value Index.

Stock market review and investment performance
Stock markets started the year on a firm note after a strong year in 2019. Economies were improving, unemployment was low and real wages had started to rise potentially putting upwards pressure on inflation. The Company’s portfolio was defensively positioned in value shares that would benefit from this environment. Some cash had been raised as valuations of many shares looked stretched and rising interest rates would be likely to cause a market decline bringing overpriced share down to a more reasonable level. The COVID-19 outbreak completely changed the financial environment. As a consequence, some of our holdings did not prove as defensive as hoped in the resultant market crash in February and March. Banking stocks, for example, whose margins would have benefitted from rising interest rates, faced a significant increase in loan losses. However, performance was helped during the market crash by holding 11% in cash at the end of January which was increased to 20% during February. The resilience of some of our pharmaceutical shares was also helpful during the market fall.

Central Banks and Governments reacted promptly to limit the economic damage. Interest rates were slashed, in some cases to negative levels. The financial system was flooded with money and companies were given direct financial aid to avoid a collapse in employment. The unprecedented financial stimulus achieved its objective and markets began to recover as the economic risk was stabilised. Most businesses were badly damaged by events but companies that provided products and services that helped overcome the difficulties caused by the lockdowns thrived. Many others have had their recovery delayed by a second wave of the virus. However, the positive trend for equities continued and the regulatory approval of a number of vaccines helped markets to end the year on a strong note. Our net asset value also recovered but to a lesser extent than the broader market with the cash levels holding back performance. In November, just under half the cash was invested in US government inflation protected bonds. The Investment Manager’s report below explains the reason for this and gives a detailed comment on the changes and structure of the portfolio.

Revenue account and dividend
The revenue per share for the year ended 31 December 2020 was 4.9p, compared with the prior year figure of 8.1p. There were several reasons that contributed to the reduction. Dividend income was reduced as a consequence of the disposal of several higher yielding shares. In addition, there were dividend reductions from a number of holdings due to the COVID-19 pandemic. Cash raised from share disposals which was not reinvested earned very little on deposit with some cash balances giving a negative return, while the investment in US inflation protected bonds also generated a low return.

In 2019 we enjoyed a substantial increase in our revenue per share and paid out a dividend of 7.5p per share, made up of a final dividend of 6.0p and a special dividend of 1.5p. Due to the substantial drop in our revenue in 2020, the Board is not recommending a special dividend this year but believed it appropriate to make use of 1.1p per share of our revenue reserve to match last year’s final dividend. This would leave 5.7p per share in the revenue reserve. The Board therefore recommends a final dividend of 6.0p per share, subject to Shareholders’ approval at the Annual General Meeting to be held on 21 April 2021.

As we have stated in previous years’ annual and half-yearly reports, the level of revenue generated from the portfolio will vary from year to year. As a result, any dividend paid to Shareholders is likely to fluctuate from year to year. Central to our Investment Manager’s investment philosophy is the selection of stocks based on where it finds the best value. This may at times result in a focus on shares with lower dividend yields or in cash and bonds which generate a low return.

Amendment to Expense Allocation Policy
The Company has had a policy of charging 100% of its expenses to revenue. In recent years, many investment companies have adopted a policy of charging a proportion of expenses to capital, to reflect more accurately the returns between capital and income.

The Board has reviewed the Company's policy on the allocation of expenses and believes that, for the year ending 31 December 2021 and future years, the Company should charge 70% of management fees and finance costs related to borrowings to capital and 30% to revenue. The change took effect from 1 January 2021 and has been reflected in the Company’s NAV from that date.

The Board believes the change to the allocation of management fees and finance costs related to borrowings will bring the charging of these expenses more in line with the returns received by the Company.

Shares held in treasury
The Company continued to buy back shares and during the year, we purchased 2,525,000 shares at a total cost of £7,020,000. This represents 6.1 percent of the shares in circulation at the start of the year. Shares that have been bought back under the Company's buy back policy are retained by the Company as treasury shares rather than cancelled, with the intention of re-issuing them when demand warrants doing so.

The imbalance of demand for and supply of shares in the Company has not been corrected by the considerable volume of share buy backs. At the year end the share price was at a 7.9% discount to the NAV. The Board will take firmer action to bring the share price closer to the NAV by making greater use of the authority provided by Shareholders to purchase our own shares in the stock market. Resolution 9 to be considered at the Annual General Meeting will approve a renewal of this authority. If this fails to narrow the discount, the Board will consider what further options are available to the Board to redress the imbalance in demand for the Company’s shares and will continue to engage with the Investment Manager and the larger shareholders in the Company in relation to the strategic position of the Company.

At the most recent Annual General Meeting of the Company, which was held on 22 April 2020, Shareholders passed a resolution permitting the Company to sell shares held in treasury at a weighted average discount of not more than 2.0% to the prevailing NAV and providing that any sale of treasury shares would not result in a dilution greater than 0.2% in aggregate in the period between annual general meetings. While no shares were sold from treasury during the year under review, the Board is recommending that Shareholders approve a similar resolution at this year’s Annual General Meeting. The Board believes that having the ability to sell shares from treasury at a small discount should help improve the liquidity in the Company’s shares when demand for our shares is once again sufficient for sales to be made.

The Board
David Hough retired from the Board on 3 March 2021 having been a Director since the Company was launched in 2003. The Board wishes to thank David for his wise counsel and commitment to the Company. His understanding of the investment trust market and in depth knowledge of the wealth management industry has been of great benefit to the Board. I personally have much appreciated his input and advice.

The Board is seeking two new Directors as replacements for Mr Hough and myself. We were part way through this process when it became disrupted by the necessary restrictions imposed by the COVID-19 pandemic. We have restarted the process as we are acutely aware that the Board needs refreshing as well as added diversification in its membership. With two Board members being replaced by two new members, it will then be an excellent opportunity for the refreshed Board to look at the strategic position of the Company in an economic and financial background that is very different from when the Company was founded.

As this is the last time I will write the Chairman’s Statement in the Annual Report, I would like to record my thanks to all those involved with the Company in management and administration. Also, most importantly to thank you the Shareholders who have supported the Company when the value based investment policy has been so out of favour.

COVID-19
The COVID-19 pandemic was the dominant feature in the period under review. The Directors have noted the operational risks that are posed to the Company and its service providers due to global and local movement restrictions imposed by governments worldwide. Where necessary, business continuity arrangements have been implemented by the Company’s service providers, principally a work at home strategy, and the Board has obtained regular assurances that they are continuing to operate effectively. Since the onset of the pandemic the Board continues to be satisfied that there are no issues which trigger a need to re-examine the going concern assumption in preparing the Company’s financial statements.

Annual General Meeting
The Board of Directors of the Company has been considering how best to deal with the continuing impact of the COVID-19 outbreak on arrangements for the Company’s Annual General Meeting to be held on 21 April 2021, as it was required to do for last year’s Annual General Meeting.

The Annual General Meeting will be held at the offices of the Investment Manager, Edinburgh Partners Limited. Under current government regulations, stay at home measures remain in place and, if they continue to do so, Shareholders will unfortunately not be permitted to attend the Company’s Annual General Meeting in person and, will regrettably be refused entry to the meeting. Shareholders wishing to vote on any of the matters of business at the Annual General Meeting are therefore strongly encouraged to submit their votes by proxy and to appoint the chair of the meeting as their proxy for this purpose. Any other proxy may not be allowed to attend the Annual General Meeting unless it is for the purpose of forming the quorum.

We always welcome questions from our Shareholders at the Annual General Meeting. As detailed below, we are seeking approval at this year’s Annual General Meeting to facilitate participation by way of electronic or hybrid meetings in future years. In the meantime, and for purposes of the Annual General Meeting to be held on 21 April 2021, we invite Shareholders to submit their questions by e-mail to the Company Secretary ([e-mail]). The Board will endeavour to respond to any questions as soon as possible.

The Company is taking the above measures to safeguard the health of Shareholders and other participants, and to make the Annual General Meeting as safe and efficient as possible. Public health advice in relation to COVID-19 can change and the Company will therefore keep the above arrangements under close review. Shareholders will be updated of any changes to these arrangements through the London Stock Exchange Regulatory News Service and the Company’s website at www.epgot.com.

As a presentation by Dr Sandy Nairn of Edinburgh Partners, the Investment Manager, at the Annual General Meeting is unlikely to be possible this year because of the restrictions on attending the meeting, a presentation will be posted on the Company’s website at www.epgot.com shortly after the Annual General Meeting.

Articles of Association
The Company’s Annual General Meetings in 2020 could not be held as normal as a result of COVID-19 restrictions and a similar situation is arising in 2021. Electronic or hybrid meetings would allow greater Shareholder participation in future Annual General Meetings or other general meetings should similar situations arise. Electronic and hybrid meetings are only permitted if expressly provided for in the Company’s Articles of Association. As currently drafted, the Company’s Articles of Association do not allow for hybrid meetings. The Board is therefore proposing a Special Resolution at the Annual General Meeting to be held on 21 April 2021 that the Articles of Association be amended to allow for hybrid meetings.

Electronic Communication with Shareholders
You will find enclosed with the Annual Report a letter asking if you would prefer to receive future annual and half-yearly reports and other communications from the Company in electronic form rather than in printed form. The Company will notify those Shareholders who elect for electronic communication, by post or email if they have provided an email address, that the document is available on the Company’s website. Shareholders can, however, ask for a hard copy of any document at any time. Delivering Shareholder communications electronically has a number of advantages for the Company and its Shareholders. The communications are made more quickly, Shareholders save time, and the Company saves on costs of printing and postage and reduces the environmental impact. I encourage all Shareholders to consider the proposal.

Auditor
As detailed in the 2019 Annual Report, Ernst & Young LLP, the Auditor to the Company since its launch in 2003, ceased to hold office at the Annual General Meeting held on 22 April 2020. We thank Ernst & Young LLP for their services to the Company. At the Annual General Meeting in 2020, Shareholders approved the appointment of Johnson Carmichael LLP as Auditor to the Company.

New Website and Factsheet
In the 2019 Annual Report, the Company updated Shareholders on progress on planned upgrades to the Company’s website and factsheet, projects forming part of the Board’s wider efforts to improve access to and clarity of Shareholder communications. The new website has been launched and is available at www.epgot.com. The website incorporates a number of new features and additional functionality. The new features include a quarterly investment commentary written by the Investment Manager and the monthly factsheet is now in what we hope Shareholders will agree is an improved format.

Outlook
The continued flow of monetary and fiscal stimulus combined with the successful vaccine results has driven equity markets higher. A recovery in corporate profits and low interest rates is a positive environment for equity prices. However, equity valuations are high by historical standards and this makes share prices vulnerable to rising interest rates. As lockdowns end, consumer spending will recover which can be expected to put upwards pressure on prices.  How durable this will be with the increase in unemployment resulting from the economic downturn is far from clear. With a synchronised global recovery, commodity prices already rising and governments increasing spending plans, the inflation outlook may be less benign than many think.

Bull markets can continue even when shares are overvalued but when bullmarkets end the more overvalued shares are the greater the decline is likely to be. Our Investment Manager is taking a very cautious view of the outlook for equities believing that shares are at extreme levels of valuation having risen on the back of an economy underpinned by debt. The equity portfolio remains defensive and is focused on companies in which there is confidence in the earnings prospects and the valuations are still reasonable. As part of this defensive strategy, 13% of the Company’s assets were held in cash at the year-end as well as 9% in US inflation protected bonds. Where our Investment Manager identifies future investment opportunities, it will utilise the cash balances currently held to acquire stocks contingent as always on strict valuation criteria.

Teddy Tulloch

Chairman

 9 March 2021

Past performance is not a guide to future performance.

INVESTMENT MANAGER’S REPORT

The front of this Annual Report features the magnificent statue of Adam Smith situated in Edinburgh’s Royal Mile. The arch proponent of free exchange and the power of the market mechanism would most likely look at today’s world askance.

Prior periods of financial excess are fairly obvious and subsequently referred to by their key characteristics. The ‘nifty fifty’, Japanese real estate, the Asian crisis and the TMT bubble are just some obvious equity market examples. In most cases the extreme over-valuation in the market was confined to particular geographies or sectors/themes, rather than generalised across the whole asset class. So, even in historic periods of financial excess, there were often attractive opportunities for stock pickers in the areas unloved by a market focussed on the theme of the day.

Over-valuation has typically been followed by a period of cleansing which rectified prices. On some occasions these corrections brought with them collateral damage to related assets, on others it was tied primarily to the inflated segment. How the cleansing unfolded depended very much on whether the asset price inflation had spread or the extent to which leverage had been created in the system. The root causes have been varied, but in most instances low interest rates have been one of the key factors which assisted asset price inflation. Interest rate suppression was often a by-product of some form of exchange rate targeting. Examples include the Plaza Accord of the 1980’s which contributed to the Japanese bubble and the dollar linkage of various emerging market currencies in the 1990’s. At other times it was simply that governments had been slow to react to overheating economies and growing inflationary pressures. In the famous phrase, they failed to take away the punch bowl just as the party was starting. The reasons may have been myriad, but the role of interest rates has been a common denominator in most market bubbles.

The global financial crisis (GFC) with its Great Depression resonance elicited a policy response which set out to avoid a repeat of the 1930’s at all costs. In this the policy has been highly successful. Since the GFC almost every twist and turn of the global economy has been met with a monetary reaction from governments worldwide. What began as a policy response to avert a potential collapse of the global banking system has mutated into a world where intervention rather than market signals has become the order of the day. The most obvious manifestation of this has been in the price of money. As James Grant, in Grant’s Interest Rate Observer, points out, we have the lowest interest rates in 5,000 years. Perhaps not surprisingly, with the period of interest rate suppression having entered its second decade the investment world and asset values now operate in a different framework from financial history.

This different monetary framework itself sits at the nexus of a reversal of a number of long-term trends which had hitherto been highly supportive of productivity improvements and economic growth. There is not space to do justice with a full argued narrative but just to list the key topics. The world is ageing. In most major economies the dependency ratio is worsening meaning there are proportionately fewer workers to carry the burden of the economically inactive. Secondly, migration flows are being inhibited by rising populism leading to more structural impediments in labour markets. Thirdly, the influx of labour from the falling of the Iron Curtain and the integration of China to the global economic system has now a much more subdued impact. Fourthly, the global single source supply chain is understandably seen as carrying serious strategic risks both at the corporate and national levels. Finally, the threat of global warming requires a move away from fossil fuels and hydrocarbon related activities. Whilst necessary, this will come at a financial cost in the medium term even if the replacement technologies eventually drop in price. If these factors genuinely prove about to experience a trend reversal it is hard to see how superior productivity growth can come to the rescue of the global debt overhang. It is more likely that the future will see a slower rate of economic growth than what has been achieved in the past forty years.

Against this backdrop we have the political reversal into more government intervention. Almost everything is seen as market failure and governments of all political hues seem inclined to participate either by regulation or government expenditure. This has not historically proven an effective approach to creating economic growth and profitability.

Our commentary this time last year laid out our thinking and why the portfolio was structured the way it was. The 2020 financial year began with a global economy with rising debt levels, record low interest rates and high asset valuations. There were some areas of the market where valuations had lagged but their price recovery often depended, at least in part, on a more normalised interest rate environment. Banks would be one obvious example.

It was against this backdrop that the global pandemic arrived. This served to stop the world economy in its tracks. Again, the natural and explainable policy response was fiscal and monetary expansion with all manner of subsidiary measures being taken to avoid adverse asset pricing reactions. Our consultations with experts in the field of virology and immunology were reassuring in the sense that there was a strong conviction on the likely emergence of a vaccine within twelve months together with a belief that treatments would improve in relatively short order. This meant that the problem the investment markets faced was likely to be bounded.

Against this backdrop the portfolio was reoriented with investments made in long-term technology winners whose prices had dropped significantly. These included Taiwan Semiconductor, the world’s leading silicon fabricator, Samsung SDI, a leading battery producer and Samsung Electronics. We also purchased Antofagasta, the copper miner. Since investment, the share prices of these companies have risen by 50%-130%. In part this simply reflects the market's reaction to the level of debt-financed economic stimulus provided worldwide. We also sold holdings where we felt that the potential severe hit to revenues could compromise their balance sheets leading to meaningful equity issuance. As the year progressed equity prices continued to rally and reached valuation levels where we felt it only prudent to trim or fully exit positions. The amount of stimulus has left many government balance sheets exposed if they fail to continue to control the cost of borrowing.

Following the year end the holding in China Mobile Limited was disposed of to meet the requirements of US Executive Order 13959 which imposed sanctions on securities of Communist Chinese military companies (“CCMCs”). The sanctions prohibit US persons investing in funds that provide exposure to CMCCs. The Company’s shareholders include US persons and the holding was therefore sold before the restrictions came into force on 11 January 2021. As investment manager Edinburgh Partners has also amended its internal investment policies so no CMCCs securities may be purchased for the Company’s portfolio while the restrictions remain in place.

For the year the NAV total return was -1.3% whilst the FTSE All-World Index had a total return of 13.0%, fuelled particularly by a narrow range of US technology stocks. Whilst the Company has no stated benchmark it is instructive to see the magnitude of equity returns achieved against the backdrop of deteriorating economic conditions and debt financed economic aid. Returning to Adam Smith, at some point the market pricing mechanism will return and the economic costs of the pandemic will have to be paid. Pricing may also begin to reflect some of the longer-term trend reversals and policy changes described above. Against this backdrop we have asset markets at historically high levels. In the words of Sir John Templeton, the time to invest is at the point of maximum pessimism. I have no recollection of a direct quote on what to do at the point of maximum optimism, but Sir John was never willing to buy expensive assets. His approach was to withdraw gradually from exposure as prices rose to create a pool of liquidity which could be used when the assets began to suffer from vertigo in their pricing. This is something that we did in 2007-2008 and we believe the current condition is now more extreme.

The Company’s investment policy was specifically created to accommodate those rare periods when investment flexibility is required. We believe such a period has arrived. As a consequence, the portfolio equity holdings have been positioned to be as defensive as possible within the constraints of widespread over-valuation. The over-valuation extends to companies with resilient earnings profiles which would normally been candidates for investment but haverisen as a proxy for bonds. The rising portfolio cash balances reflect these levels of valuation and the consequent difficulty in making new investments. We have diversified the liquidity profile with the addition of US Treasury Inflation Protected bonds. Whilst there is currently little sign of nascent inflation, we see it as highly likely that every economic issue will be dealt with by more stimulus until the point where the market rebels. At some point along this path inflation will begin to appear and hedging some of this risk appears a prudent course of action.

It is extremely difficult to manage assets when what is expensive becomes even more so. The drag of portfolio liquidity shows up in performance when compared to various index benchmarks and the pressure to invest constantly mounts. However, history tells us that bending to such pressure typically only ends with one result. We will continue to follow a disciplined approach to investment, secure in the belief that buying expensive assets is not the correct approach and that the liquidity reserve will be inordinately valuable when the opportunities appear.

Dr Sandy Nairn

Edinburgh Partners

9 March 2021

Past performance is not a guide to future performance.

OTHER STATUTORY INFORMATION

Principal activity and status of the Company
The principal activity of the Company is to carry on business as an investment trust.

The Company is registered as a public limited company and is an investment company within the terms of section 833 of the Companies Act 2006 (the “Act”). The Company has been approved by HM Revenue & Customs as an authorised investment trust under sections 1158 and 1159 of the Corporation Tax Act 2010 (the “CTA”), subject to there being no subsequent serious breaches of the regulations. In the opinion of the Directors, the Company is directing its affairs so as to enable it to continue to qualify for such approval.

The Company's shares are listed on the premium segment of the Official List of the UK Listing Authority and traded on the main market of the London Stock Exchange.

The Company is a member of the AIC, a trade body which promotes investment companies and also develops best practice for its members.

Purpose, business model and strategy
The Board is responsible for the overall management of the Company, and in accordance with the AIC Code, the Board establishes the Company’s purpose, values and strategy, and to report to Shareholders on the detail of how this is achieved.

As an investment company, the Company’s purpose is expressed in its investment objective, which is to provide Shareholders with an attractive real long-term total return by investing globally in undervalued securities. As a closed-ended investment company whose shares are traded on the main market of the London Stock Exchange, the Company can pursue its investment objective by taking long-term investment decisions without being constrained by the need to sell investments to meet redemptions, as other investment funds such as open-ended investment companies may need to do. The strategy applied by the Company in this context is contained in the Company’s investment policy, as set out in the full Annual Report and Financial Statements.

In order to achieve its investment objective, the Board has decided it is appropriate to appoint third party providers with the necessary capability and established track records to deliver the required service requirements to the Company. The AIFM and the Investment Manager have the responsibility of investing and managing the assets of the Company in accordance with the investment objective and for managing its activities on a daily basis. The Company also appoints the Depositary to have responsibility for the safekeeping and monitoring of its assets and the Registrar to maintain Shareholder records.

The Board retains responsibility for decisions regarding corporate strategy, corporate governance, risk and internal control assessment and determining the overall limits under which the AIFM, the Investment Manager and other service providers operate. To ensure that the Company’s service providers continue to deliver the required level of service, the Board receives regular reports, evaluates their control environments and formally assesses their appointment on an annual basis.

The Board maintains a close working relationship with all of its service providers, in particular with the AIFM and Investment Manager, and monitors their performance closely. Further details of the service providers and of how their activities are monitored is detailed in the Corporate Governance Statement in the full Annual Report and Financial Statements.

Investment objective
The investment objective of the Company is to provide Shareholders with an attractive real long-term total return by investing globally in undervalued securities. The portfolio is managed without reference to the composition of any stock market index.

Investment policy
The Company’s investment policy is set out in the full Annual Report and Financial Statements.

The Investment Manager's compliance with the limits set out in the investment policy is monitored by the Board and the AIFM.

Investment strategy
The Company’s portfolio is managed without reference to any stock market index. Investments are selected for the portfolio only after extensive research by the Investment Manager. The process through which an equity must pass in order to be included in the portfolio is rigorous. Only a security where the Investment Manager believes that the price will be significantly higher in the future will pass the selection process. The key to successful stock selection is to identify the long-term value of a company’s shares and to have the patience to hold the shares until that value is appreciated by other investors. Identifying long-term value involves detailed analysis of a company’s earnings prospects over a five-year time horizon. Further details of the investment strategy can be found in the Chairman’s Statement and the Investment Manager’s Report above.

Portfolio analysis
A detailed review of how the Company’s assets have been invested is contained in the Chairman’s Statement and the Investment Manager’s Report above. A list of all the Company’s investments is contained in the Portfolio of Investments above. The portfolio consisted of 41 investments, excluding cash and other net assets as at 31 December 2020, thus ensuring that the Company has a suitable spread of investment risk. A sector and geographical distribution of investments is shown above.

Directors’ duties and stakeholder engagement
Section 172 of the Act requires directors to act in a way that he considers, in good faith, would be most likely to promote the success of a company. In doing so, directors must take into consideration the interests of the various stakeholders of the Company, the impact of the Company’s operations on the community and the environment, take a long-term view on the consequences of the decisions they make as well as maintaining a reputation for high standards of business conduct and fair treatment between the members of the Company.

In complying with the requirements of section 172 of the Act, the Directors should be able to ensure that all decisions are made in a responsible and sustainable way for the benefit of all stakeholders. In accordance with the requirements of the Companies (Miscellaneous Reporting) Regulations 2018, the Company explains below how the Directors have discharged their duty under section 172. This section serves as the Company’s Section 172 Statement.

A company’s stakeholders are normally considered to comprise shareholders, employees, customers, its suppliers as well as the wider community in which the company operates and impacts. The Company is unlike a trading company in that as an investment trust it has no employees and, significantly, its customers are synonymous with its Shareholders. In terms of suppliers, the Company receives professional services from a number of different providers, principal among them being the AIFM and the Investment Manager. The Board believes the wider community in which the Company operates encompasses its portfolio of investee companies and the communities in which they operate.

Details of how the Board seeks to understand the needs and priorities of the Company’s stakeholders and how these are taken into account during all its discussions and as part of its decision-making are set out below:

Shareholders

Communication and regular engagement with Shareholders is given a high priority by both the Board and the AIFM and the Investment Manager. The Directors seek to maintain regular contact with major Shareholders and are always available to enter into dialogue with all Shareholders. A regular dialogue is maintained with the Company’s institutional Shareholders and private client asset managers through the AIFM and the Investment Manager, which regularly report to the Board on significant contact, the views of Shareholders and any changes to the composition of the share register. Following the COVID-19 pandemic meetings with institutional shareholders and private client asset managers have been conducted by electronic means.

All Shareholders are encouraged, if possible, to attend and vote at the Annual General Meeting and at any general meetings of the Company, during which the Board and the AIFM are available to discuss issues affecting the Company. At the date of this report COVID-19 restrictions remain in place which will prevent Shareholders for attending the Annual General Meeting to be held on 21 April 2021. Shareholders wishing to communicate directly with the Board should contact the Company Secretary at the registered office address. The Chairman is available throughout the year to respond to Shareholders, including those who wish to speak with him in person.

Copies of the Annual and Half-Yearly Reports are currently dispatched to Shareholders by mail and are also available, along with the monthly factsheets and quarterly investment commentaries, for downloading from the Company’s website at www.epgot.com. Shareholders will be given the opportunity to receive copies of the Annual Report and Half-Yearly Reports and any other communications from the Company by electronic means, as detailed in the Chairman’s Statement above. The Company also releases portfolio updates to the market on a monthly basis.

AIFM and Investment Manager

The Board believes that maintaining a close and constructive working relationship with the AIFM and the Investment Manager is crucial to promoting the long-term success of the Company in an effective and responsible way. This ensures the interests of all current and potential stakeholders and society at large are properly taken into account when decisions are made. Representatives of the AIFM and the Investment Manager attend Board meetings and provide reports on investments, performance, marketing, operational and administrative matters. An open discussion regarding such matters is encouraged, both at Board meetings and by way of ongoing communication between the Board, the AIFM and the Investment Manager. Board members are encouraged to share their knowledge and experience with the AIFM and the Investment Manager and where appropriate, the Board adopts a tone of constructive challenge in its discussions with the AIFM and the Investment Manager. The Board keeps the ongoing performance of the AIFM and the Investment Manager under continual review and conducts an annual appraisal of both the parties. Details regarding the continuing appointment of the AIFM are set out below. This review includes the performance of an administrator Link Alternative Fund Administrators Limited (the “Administrator”) whose services are provided under contract to the AIFM, rather than directly to the Company.

Other service providers

The Company’s day-to-day operational functions are delegated to a number of third-party service providers, each engaged under separate contracts. In addition to the AIFM and the Investment Manager, the Company’s principal service providers include the Depositary, the Registrar and the Auditor. The Company, through the AIFM, engages with the service providers to develop and maintain positive and productive relationships, and to ensure that they are well informed in respect of all relevant information about the Company’s business and activities. The Board, through its Audit and Management Engagement Committee, keeps the ongoing performance of these service providers under continual review and conducts an annual appraisal of all the third-party service providers.

Portfolio of investee companies

The day-to-day management of the Company’s investment portfolio has been delegated by the AIFM to the Investment Manager. As such, the Investment Manager has primary responsibility for engaging with investee companies on behalf of the Company. The Investment Manager does so in accordance with the United Nations Principles for Responsible Investment, and the UK Stewardship Code, and is a signatory to both regimes. The Investment Manager’s approach to engagement in this context is detailed in its Engagement Policy, an Environmental, SRI and Corporate Governance (“ESG”) Policy Statement and a Proxy Voting Policy. Copies of the Investment Manager’s Engagement Policy and ESG Policy Statement can be found on its website at www.edinburghpartners.com, together with a summary of all votes cast by the Investment Manager as proxy on behalf of its clients. Further details regarding the approach to ESG matters can be found below.  At the date of this report, the Investment Manager is a signatory to the UK Stewardship Code 2012. In 2019, the FRC published a new version of the code, the UK Stewardship Code 2020. To become a signatory to the UK Stewardship Code 2020, organisations are required to submit a stewardship report to the FRC when the application window opens on 15 March 2021. The Investment Manager will apply to become a signatory to the UK Stewardship Code 2020 and a copy of its stewardship report will be available at www.edinburghpartners.com.

The Board recognises the importance of engagement with investee companies, both in the context of ESG matters and more generally. The Board is aware of evolving expectations in this regard and is committed to working with the Investment Manager in relation to future engagement on behalf of the Company.   

The above methods for engaging with stakeholders are kept under review by the Directors and discussed on a regular basis at Board meetings to ensure that they remain effective.

In addition to the above, certain key decisions taken by the Board during the year also serve as examples of how the needs and priorities of the Company’s stakeholders are taken into account by the Board as part of its decision-making process. Key decisions made during the year include:

• In conjunction with the Company Secretary, the Board also reviewed the status of the Company’s compliance with the additional requirements of the AIC Code of Corporate Governance that was implemented in February 2019;
• The decision to undertake a re-tender for statutory audit services for the year ending 31 December 2020. Following the re-tender process, Johnston Carmichael LLP was appointed as the auditor of the Company;
• the Board reviewed the Company’s website and factsheet and decided both should be updated, with a view to improving access to, and clarity of, Shareholder communications.
• Following the recommendation of the Audit and Management Engagement Committee, the Board confirmed that the historic policy of charging 100% of management fees and finance costs relating to borrowings to revenue would be amended, to reflect more accurately the returns between capital and income. From 1 January 2021, 70% of management fees and finance costs related to borrowings will be charged to capital and 30% to revenue.

Culture
The Chairman leads the Board and is responsible for its overall effectiveness in directing the Company. He demonstrates objective judgement, promotes a culture of openness and debate, and facilitates effective contributions by all Directors. In liaison with the Company Secretary, he ensures that the Directors receive accurate, timely and clear information. The Directors are required to act with integrity, lead by example and promote this culture within the Company.

The Board seeks to ensure the alignment of the Company’s purpose, values and strategy with the culture of openness, debate and integrity through ongoing dialogue, and engagement with Shareholders, the AIFM, the Investment Manager and the Company’s other service providers. As detailed in the Corporate Governance Statement in the full Annual Report and Financial Statements, the Company has adopted a number of policies, practices and behaviours to facilitate a culture of good governance and ensure that this is maintained.

The culture of the Board is considered as part of the annual performance evaluation process which is undertaken by each Director. The culture of the Company’s service providers is also considered by the Board during the annual review of their performance and while considering their continuing appointment. In the context of the Investment Manager, particular attention is paid to the Investment Manager’s environmental, social and governance, engagement and proxy voting policies. Additional information on the Board’s approach to environmental, social and governance matters is detailed below.

Results and dividends
The results for the year are set out in the Income Statement below and in the Reconciliation of Movements in Shareholders’ Funds below.

For the year ended 31 December 2020, the net revenue return attributable to Shareholders was £1.9 million (2019: £3.4 million) and the net capital return attributable to Shareholders was -£4.8 million (2019: £4.2 million). Total Shareholders’ funds, after taking account of those returns, the dividend payment relating to the prior year of £3.0 million, and share buybacks of £7.0 million, decreased by 9.8% to £119.1 million (2019: £132.0 million).

A final dividend of 6.0p per share for the year ended 31 December 2020 (2019: a final dividend of 6.0p per share and a special dividend of 1.5p per share, a total of 7.5p per share) has been recommended by the Board. Subject to the approval of Shareholders at the Annual General Meeting to be held on 21 April 2021, the dividend will be payable on 28 May 2021 to Shareholders on the register at the close of business on 7 May 2021. The ex-dividend date will be 6 May 2021.

Key performance indicators

At each Board meeting, the Directors consider a number of performance measures to assess how the Company is achieving its investment objective. The key performance indicators used to measure the progress and performance of the Company over time are established industry measures and are as follows:

Net asset value

In the year to 31 December 2020, the NAV decreased by 3.9% from 320.8p to 308.4p. After taking account of the 6.0p per share final dividend and 1.5p per share special dividend, a total of 7.5p per share, paid on 26 May 2020 relating to the year ended 31 December 2019, the NAV total return was -1.3% (2019: 6.0%). The UK Retail Price Inflation rate was 1.2% (2019: 2.2%) over the same period.

The annualised NAV total return since the launch of the Company on 15 December 2003 to 31 December 2020 was 8.6%. The annualised UK Retail Price Inflation rate was 2.8% over the same period.

Share price

In the year to 31 December 2020, the Company’s share price decreased by 8.4% from 310.0p to 284.0p. After taking account of the 6.0p per share final dividend and 1.5p per share special dividend, a total of 7.5p per share, paid on 26 May 2020 relating to the year ended 31 December 2019, the share price total return was -5.6% (2019: 5.0%). The UK Retail Price Inflation rate was 1.2% (2019: 2.2%) over the same period.

The annualised share price total return since the launch of the Company on 15 December 2003 to 31 December 2020 was 7.9%. The annualised UK Retail Price Inflation rate was 2.8% over the same period.

For information, in the year to 31 December 2020, the total return from the FTSE All-World Index, adjusted to sterling, was 13.0% (2019: 22.3%). Since the launch of the Company on 15 December 2003 to 31 December 2020, the annualised total return on the FTSE All-World Index, adjusted to sterling, was 10.4%.

Share price discount to NAV

In the year to 31 December 2020, the share price discount to NAV increased from 3.4% to 7.9%.

Revenue return per share

In the year to 31 December 2020, the revenue per share decreased by 39.4% from 8.1p to 4.9p.

Dividends per share

The Directors are recommending a final dividend of 6.0p per share. This compares to the prior year final dividend of 6.0p per share and a special dividend of 1.5p per share, a total of 7.5p per share.

Subject to approval by Shareholders at the Annual General Meeting to be held on 21 April 2021, the final dividend will be payable on 28 May 2021 to all Shareholders on the register at the close of business on 7 May 2021. The ex-dividend date will be 6 May 2021.

Ongoing charges

In the year to 31 December 2020, the ongoing charges ratio was 1.0% (2019: 1.0%). The ongoing charges ratio is based on total expenses, excluding finance costs and certain non-recurring items for the year as a percentage of the monthly net asset value.

The longer-term records of the key performance indicators are shown in the Performance Record below.

Management Agreement
In order to comply with the Alternative Investment Fund Managers’ Directive (“AIFMD”), the Company appointed Edinburgh Partners AIFM Limited as its Alternative Investment Fund Manager with effect from 16 July 2014. Edinburgh Partners AIFM Limited has been approved as an Alternative Investment Fund Manager by the FCA. With the approval of the Directors, the AIFM appointed Edinburgh Partners as Investment Manager to the Company pursuant to a delegation agreement.

The AIFM receives a management fee of 0.75% per annum (payable monthly in arrears) of the month-end market capitalisation of the issued shares (excluding treasury shares) up to £100 million and 0.65% above £100 million. No performance fee is payable. The AIFM receives an administration and secretarial fee of £142,000 per annum (payable monthly in arrears), which is adjusted annually in line with changes in the Retail Price Index. The Company also pays the Investment Manager £25,000 per annum in respect of marketing-related services.

The Company had a holding in the Edinburgh Partners Emerging Opportunities Fund, which was managed by Edinburgh Partners. The holding was sold in December 2020. No management fee was charged by the AIFM to the Company in relation to its investment in the Edinburgh Partners Emerging Opportunities Fund during the year ended 31 December 2020 (2019: £nil).

The Management Agreement may be terminated by either party giving 12 months’ written notice. No additional compensation is payable to the AIFM on the termination of this agreement other than the fees payable during the notice period. Further details relating to the Management Agreement are detailed in note 3 of the Financial Statements below.

Continuing appointment of the AIFM
The Board keeps the performance of the AIFM under continual review. As the AIFM has delegated the investment management function to Edinburgh Partners, the performance of the Investment Manager is also regularly reviewed. The Investment Manager adopts a consistent, long-term approach to investing which is focused on company valuations. This results in a high conviction approach, with a concentrated portfolio and low turnover. The Board, through delegation to the Audit and Management Engagement Committee, has considered the performance of the AIFM and the terms of its engagement. It is the opinion of the Directors that the continuing appointment of the AIFM on the terms agreed is in the interests of Shareholders as a whole. The reasons are that the long-term real return has been satisfactory and the investment strategy remains convincing. The remuneration of the AIFM is fair both in absolute terms and compared to that of managers of comparable investment companies. The Directors believe that by paying the management fee calculated on a market capitalisation basis, rather than a percentage of assets basis, the interests of the AIFM are more closely aligned with those of Shareholders.

AIFM remuneration disclosures
In accordance with the AIFMD, the remuneration of the Company’s AIFM, is made available to investors as part of a group policy which is available at www.edinburghpartners.com/regulatory-disclosure.

Risk management by the AIFM
As required under the AIFMD, the AIFM has established and maintains a permanent and independent risk management function to ensure that there is a comprehensive and effective risk management policy in place and to monitor compliance with risk limits. This risk policy covers the risks associated with the management of the investment portfolio and the AIFM reviews and approves the adequacy and effectiveness of the policy on at least an annual basis, including the risk management processes and controls and limits for each risk area.

The AIFM sets risk limits that take into account the risk profile of the Company’s investment portfolio, as well as its investment objective and strategy. The AIFM monitors the risk limits, including leverage, and periodically assesses the portfolio’s sensitivity to key risks.

Leverage
Leverage is defined in the AIFMD as any method by which the Company increases its exposure, whether through borrowing of cash or securities, or leverage embedded in derivative positions or by any other means. The Company did not have any borrowings and did not use derivative instruments for currency hedging during the year ended 31 December 2020.

In accordance with the detailed requirements of the AIFMD, leverage has been measured in terms of the Company’s exposure, and is expressed as a ratio of net asset value. The AIFMD requires this ratio to be calculated in accordance with both the Gross Method and the Commitment Method. Details of these methods of calculation can be found by referring to the AIFMD. In summary, these methods express leverage as a ratio of the exposure of debt, non-sterling currency, equity or currency hedging and derivatives exposure against the net asset value. The principal difference between the two methods is that the Commitment Method enables derivative instruments to be netted off to reflect hedging arrangements and the exposure is effectively reduced, while the Gross Method aggregates the exposure.

The AIFMD introduced a requirement for the AIFM to set maximum levels of leverage for the Company. The Company’s AIFM has set a maximum limit of 1.25 for both the Gross and Commitment Methods of calculating leverage. However, the AIFM anticipates that the figures are likely to be lower than this under normal market conditions. At 31 December 2020, the Company’s Gross ratio was 1.0 and its Commitment ratio was 1.0. In accordance with the AIFMD, any changes to the maximum level of leverage set by the Company will be communicated to Shareholders.

Principal risks and uncertainties
The Board considers that the following are the principal risks associated with investing in the Company: investment and strategy risk, key manager risk, discount volatility risk, price risk, foreign currency risk and regulatory risk. Other risks associated with investing in the Company include, but are not limited to, liquidity risk, credit risk, interest rate risk, gearing risk, operational risk and other financial risk. An explanation of these risks and how they are managed and the policy and practice with regards to financial instruments are contained in note 16 below.

The Board, through delegation to the Audit and Management Engagement Committee, has undertaken a robust annual assessment and review of all the risks stated above, together with a review of any new and emerging risks which may have arisen during the year, including those that would threaten the Company’s business model, future performance, solvency or liquidity. These risks are formalised within the Company’s risk assessment matrix.

The Board discussed the ongoing impact of COVID-19, the implications of the United Kingdom’s withdrawal from the European Union and the longer-term impact of issues such as climate change. As detailed in the Company's Half-Yearly Report for the period to 30 June 2020, the Directors have noted the operational risks that COVID-19 posed to the Company and its service providers due to global and local movement restrictions imposed by governments worldwide. Where necessary, business continuity arrangements have been implemented by the Company's service providers, principally a work at home strategy, and the Board has obtained assurances that they are continuing to operate effectively. As detailed above the Board is satisfied that there are no issues which trigger a need to re-examine the going concern assumption at this time. Any emerging risks considered to be of immediate significance will be evaluated, and their potential implications integrated into the principal risks.

Those risks identified by the Board are not exhaustive and various other risks may apply to an investment in the Company. Potential investors may wish to obtain independent financial advice.

Internal financial control
In accordance with guidance issued to directors of listed companies by the Financial Reporting Council (“FRC”), the Directors confirm that they have carried out a review of the effectiveness of the systems of internal financial control during the year ended 31 December 2020, as set out in the Corporate Governance Statement in the full Annual Report and Financial Statements. There were no matters arising from this review that required further investigation and no significant failings or weaknesses were identified.

Depositary agreement
The Board has appointed Northern Trust Global Services SE (“NTGS SE”) to act as its depositary (the “Depositary”). NTGS SE is an authorised credit institution in Luxembourg under Chapter 1 of Part 1 of the Luxembourg law of 5 April 1993 on the financial sector. It is authorised by the European Central Bank (“ECB”) and subject to the prudential supervision of the ECB and the Luxembourg Commission de- Surveillance du Secteur Financier. The UK offices of NTGS SE have become a UK branch of NTGS SE and the branch continues to be  authorised by the UK Prudential Regulation Authority and regulated by the UK Financial Conduct Authority and Prudential Regulation Authority in the conduct of its UK depositary activities.

Custody services are provided by The Northern Trust Company (as a delegate of the Depositary). A fee of 0.01% per annum of the net assets of the Company, plus fees in relation to safekeeping and other activities undertaken to facilitate the investment activity of the Company, are payable to the Depositary. The Company and the Depositary may terminate the Depositary Agreement at any time by giving six months’ written notice. The Depositary may only be removed from office when a new depositary is appointed by the Company.

Main trends and future development
A review of the main features of the year ended 31 December 2020, the outlook for the current year and the factors likely to affect the future development performance and position of the business, can be found in the Chairman’s Statement and the Investment Manager’s Report above. The Board’s main focus is on the investment return and strategy, with attention paid to the integrity and success of the investment approach and on the factors which may have an impact on this.

Forward-looking statements
This Strategic Report contains “forward-looking statements” with respect to the Company’s plans and its current goals and expectations relating to its future financial condition, performance and results. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events that are beyond the Company’s control. Factors that could cause actual results to differ materially from those estimated by the forward-looking statements include, but are not limited to:

• global economic conditions and equity market performance and prices;
• changes in government policies and monetary and interest rate policies worldwide;
• changes to regulations and taxes worldwide;
• currency exchange rates;
• use of gearing; and
• the Company’s success in managing its assets and business to mitigate the impact of the above factors.

As a result, the Company’s actual future condition, performance and results may differ materially from the plans set out in the Company’s forward-looking statements. The Company undertakes no obligation to update the forward-looking statements contained within the Strategic Report or any other forward-looking statements it makes.

Environmental, human rights and community issues
The Board recognises the requirement under the Act to detail information about human rights, employees and community issues, including information about any policies it has in relation to these matters and the effectiveness of these policies. These requirements do not apply to the Company as it has no employees, all the Directors are non-executive and it has outsourced all its functions to third party service providers. The Company has therefore not reported further in respect of these provisions.

The Company is not within the scope of the Modern Slavery Act 2015 because it has not exceeded the turnover threshold and therefore, no further disclosure is required in this regard.

Gender diversity
As at 31 December 2020, the Board of Directors of the Company comprised four male Directors. The appointment of any new Director is made in accordance with the Company’s diversity policy as detailed in the full Annual Report and Financial Statements.

Environmental, social and governance policy
The Company seeks to invest in companies that are well managed with high standards of corporate governance. The Board believes this creates the proper conditions to enhance long-term value for Shareholders. The Company adopts a positive approach to corporate governance and engagement with companies in which it invests.

In pursuit of the above objective, the Board believes that proxy voting is an important part of the corporate governance process and considers seriously its obligation to manage the voting rights of companies in which it is invested. It is the policy of the Company to vote, as far as possible, at all shareholder meetings of investee companies. The Company follows the relevant applicable regulatory and legislative requirements in the UK, with the guiding principles being to make proxy voting decisions which favour proposals that will lead to maximising shareholder value while avoiding any conflicts of interest. Voting decisions are taken on a case-by-case basis by the AIFM on behalf of the Company. The AIFM makes use of an external agency, Institutional Shareholders Services, a recognised authority on proxy voting and corporate governance to assist on voting procedures. The key issues on which the AIFM focuses are corporate governance, including disclosure and transparency, board composition and independence, control structures, remuneration and social and environmental issues.

The day-to-day management of the Company’s investment portfolio has been delegated by the AIFM to the Company’s Investment Manager, Edinburgh Partners, which has an ESG policy in place. The ESG policy statement, which can be found on the website at www.edinburghpartners.com and on the AIC website at www.theaic.co.uk, describes the manner in which the principles of the UK Stewardship Code  are incorporated within the investment process.  The Investment Manager is also a signatory to the United Nations Principles for Responsible Investment. At the date of this report, the Investment Manager is a signatory to the UK Stewardship Code 2012. In 2019, the FRC published a new version of the code, the UK Stewardship Code 2020. To become a signatory to the UK Stewardship Code 2020, organisations are required to submit a stewardship report to the FRC when the application window opens on 15 March 2021. The Investment Manager will apply to become a signatory to the UK Stewardship Code 2020 and a copy of its stewardship report will be available at www.edinburghpartners.com.

The assessment of the quality of investee companies in relation to environmental considerations, socially responsible investment and corporate governance is embedded in the Investment Manager’s stock selection process.

Approval

This Strategic Report has been approved by the Board and signed on its behalf by:

Teddy Tulloch

Chairman

9 March 2021

Past performance is not a guide to future performance.

EXTRACTS FROM THE DIRECTORS’ REPORT

Share capital
At 31 December 2020, the Company’s issued share capital comprised 64,509,642 ordinary shares of one pence each, of which 25,886,917 shares were held in treasury.

At general meetings of the Company, on a show of hands every Shareholder who is present in person or by proxy shall have one vote and on a poll every Shareholder present in person shall have one vote for every share held. Shares held in treasury do not carry voting rights. The total voting rights of the Company at 31 December 2020 were 38,622,725.

Issue of shares

On 11 October 2005, the Company applied for a block listing of 1,300,000 ordinary shares on the main market of the London Stock Exchange. As at 31 December 2020, and at the date of signing this report, a balance of 745,830 shares may be issued under this block listing.

No shares were issued during the year or since the year end.

Purchase of shares

During the year ended 31 December 2020, the Company purchased in the stock market 2,525,000 shares (with a nominal value of £25,250) to be held in treasury, at a total cost of £7,020,000. This represented 3.9% of the issued share capital at 31 December 2019. During the year ended 31 December 2020, no shares were purchased for cancellation.

Subsequent to the year end of 31 December 2020 and up to 9 March 2021, the date of signing this report, the Company purchased in the stock market 740,000 shares (with a nominal value of £7,400) for treasury, at a total cost of £2,075,000, representing 1.1% of the issued share capital as at 31 December 2020.

The share purchases were made with a view to reducing discount volatility and maintaining the middle market price at which the shares traded close to the NAV.

Sale of shares from treasury

No shares were sold from treasury during the year ended 31 December 2020 or since the year end.

Shares held in treasury

Holding shares in treasury enables a company to cost-effectively issue shares that might otherwise have been cancelled. The total number of own shares held in treasury as at 31 December 2020, including those shares bought back in prior accounting periods, was 25,886,917 shares. The Board has not set a limit on the number of shares that can be held in treasury at any one time. The maximum number of own shares held in treasury during the year was 25,886,917 shares (with a nominal value of £258,869.17) representing 40.1% of the issued share capital at the time they were held in treasury.

Going concern
The Company’s business activities, together with the factors likely to affect its future development, performance and position, are set out in the Strategic Report above. In addition, notes 16 and 17 of the Financial Statements below include the Company’s objective, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments; and its risk exposure. The Company’s principal risks are set out in the Strategic Report above. The Company’s assets consist principally of a diversified portfolio of listed equity shares and fixed income securities which in most circumstances are realisable within a short period of time and exceed its liabilities by a significant amount.

After due consideration of the above factors, the principal and emerging risks facing the Company, consideration of the implications of the Covid-19 pandemic as detailed in note 1 on page 51 of the Financial Statements and where appropriate, action taken by the Company's service providers, and the information detailed in the long-term viability statement below, the Directors have concluded that the Company has adequate resources to continue in operational existence for the forseeable future, being a period of at least 12 months from the date of this Annual Report and Financial Statements. For this reason, they have adopted the going concern basis in preparing the Financial Statements.

Long-term viability statement
The Directors have assessed the prospects of the Company over a period longer than one year. The Board considers that, for a company with an investment objective to provide Shareholders with an attractive real long-term return by investing globally in undervalued securities, a period of five years is an appropriate period to consider for the purpose of the Long-term Viability Statement. Furthermore, five years is the time period used for identifying long-term value, as detailed in the Strategic Report in the investment strategy section above.

In making its assessment, the Board considered a number of factors, including those detailed below:

• the Company’s current financial position;

• the principal risks the Company faces, as detailed in note 16 of the Financial Statements below;

• that the portfolio comprises principally of investments traded on major global stock markets, fixed income securities and cash, and that there is a satisfactory spread of investments. There is no expectation that the nature of the investments held within the portfolio will be materially different in the future;

• that the expenses of the Company are predictable and modest in comparison with the assets and there are no capital commitments foreseen which would alter that position;

• that the Company has no employees. All of the Directors are non-executive and consequently do not have any employment-related liabilities or responsibilities; and

• that, should performance be less than the Board considers to be acceptable, it has appropriate powers to replace the AIFM.

The Board’s assessment was based on the following assumptions:

• that investors will still wish to have an exposure to global equity portfolios;

• that there will continue to be a demand for closed-ended investment trusts from investors; and

• that regulation will not increase to a level that makes the running of the Company uneconomical in

comparison to other competitive products.

The Board considers that, following its assessment, there is a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five-year period of their assessment.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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 period. Under that law, they have elected to prepare the Financial Statements in accordance with UK Accounting Standards (United Kingdom Generally Accepted Accounting Practice), 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 the profit or loss of the Company 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; and

• prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping 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 Act and include the information required by the Listing Rules of the FCA. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

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 comply with that law and those regulations.

The Directors, to the best of their knowledge, state that:

• the Financial Statements, prepared in accordance with UK 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 and the Directors’ Report include a fair review of the development and performance of the business and the position of the Company together with a description of the principal risks and uncertainties that it faces.

The Annual Report and Financial Statements, taken as a whole, are considered by the Board to be fair, balanced and understandable and provide the information necessary for Shareholders to assess the Company’s position and performance, business model and strategy.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. The work carried out by the Auditor does not include consideration of these matters and, accordingly, the Auditor accepts no responsibility for any changes that may have occurred to the Financial Statements since they were initially presented on the website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

On behalf of the Board

Teddy Tulloch

Chairman

9 March 2021

NON-STATUTORY ACCOUNTS
The financial information set out below does not constitute the Company’s statutory accounts for the years ended 31 December 2019 and 31 December 2020 but is derived from those accounts. Statutory accounts for the year ended 31 December 2019 have been delivered to the Registrar of Companies, and those for the year ended 31 December 2020 will be delivered in due course. The Auditor has reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the Auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498 (2) or (3) of the Act. The text of the Auditor’s report can be found in the Company’s full Annual Report and Financial Statements at www.epgot.com.

INCOME STATEMENT
for the year ended 31 December 2020

	Note	Revenue  £’000	2020  Capital  £’000	Total   £’000	Revenue  £’000	2019  Capital £’000	Total  £’000
(Losses)/gains) on investments at fair value	8	-	(5,456)	(5,456)	-	4,737	4,737
Foreign exchange gains/(losses) on capital item		-	629	629	-	(491)	(491)
Income	2	3,415	-	3,415	5,032	-	5,032
Management fee	3	(766)	-	(766)	(903)	-	(903)
Other expenses	4	(411)	-	(411)	(429)	-	(429)
Net return before finance costs and taxation		2,238	(4,827)	(2,589)	3,700	4,246	7,946
Finance costs
Interest payable and related charges		(76)	-	(76)	(10)	-	(10)
Net return before taxation		2,162	(4,827)	(2,665)	3,690	4,246	7,936
Taxation	5	(204)	-	(204)	(310)	-	(310)
Net return after taxation		1,958	(4,827)	(2,869)	3,380	4,246	7,626
		pence	pence	pence	pence	pence	pence
Return per share	7	4.9	(12.1)	(7.2)	8.1	10.1	18.2

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

The total column of this statement is the profit and loss account of the Company. The revenue and capital columns are prepared under guidance published by the AIC.

There were no items of other comprehensive income in the year and therefore the return for the year is also the total comprehensive income for the year.

Dividend information
A final dividend for the year ended 31 December 2020 of 6.0p per share (2019: final dividend of 6.0p per share and a special dividend of 1.5p per share, a total of 7.5p per share, paid on 26 May 2020) has been recommended by the Board. Subject to Shareholders' approval, the final dividend will be payable on 28 May 2021 to Shareholders on the register at the close of business on 7 May 2021. The ex-dividend date will be 6 May 2021. Based on 37,882,725 shares, being the number of shares in issue (excluding shares held in treasury) on 9 March 2021, the date of signing this report, the total dividend payment will amount to £2,273,000. Dividends are accounted for in the period in when they become a liability of the Company. Further information on dividend distributions can be found in note 6 below.

The notes form part of these Financial Statements.

BALANCE SHEET
as at 31 December 2020

	Note	2020 £’000	2019 £’000
Fixed asset investments
Investments at fair value through profit or loss	8	103,650	120,796
Current assets
Debtors	10	508	607
Cash at bank and short-term deposits		15,227	10,911
		15,735	11,518
Current liabilities
Creditors	11	290	305
		290	305
Net current assets		15,445	11,213
Net assets		119,095	132,009
Capital and reserves
Called-up share capital	12	645	645
Share premium		1,597	1,597
Capital redemption reserve		14	14
Special reserve		38,945	45,965
Capital reserve		73,436	78,263
Revenue reserve		4,458	5,525
Total Shareholders’ funds		119,095	132,009
		pence	pence
Net asset value per share	14	308.4	320.8

These Financial Statements were approved and authorised for issue by the Board of Directors of EP Global Opportunities Trust plc and were signed on its behalf by:

Teddy Tulloch

Chairman

 9 March 2021

Registered in Scotland No. 259207

The notes form part of these Financial Statements.

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
for the year ended 31 December 2020

	Note	Share capital £’000	Share premium £’000	Capital redemption reserve £’000	Special  reserve  £’000	Capital reserve £’000	Revenue  reserve  £’000	Total   £’000
Year ended 31 December 2020
At 31 December 2019		645	1,597	14	45,965	78,263	5,525	132,009
Net return after taxation		-	-	-	-	(4,827)	1,958	(2,869)
Dividends paid	6	-	-	-	-	-	(3,025)	(3,025)
Share purchases for treasury	13	-	-	-	(7,020)	-	-	(7,020)
At 31 December 2020		645	1,597	14	38,945	73,436	4,458	119,095
Year ended 31 December 2019
At 31 December 2018		645	1,597	14	50,662	74,017	4,864	131,799
Net return after taxation		-	-	-	-	4,246	3,380	7,626
Dividends paid	6	-	-	-	-	-	(2,719)	(2,719)
Share purchases for treasury	13	-	-	-	(4,697)	-	-	(4,697)
At 31 December 2019		645	1,597	14	45,965	78,263	5,525	132,009

The notes form part of these Financial Statements.

NOTES TO THE FINANCIAL STATEMENTS
at 31 December 2020

1. Accounting policies

Statement of compliance
EP Global Opportunities Trust plc is a company incorporated in Scotland. The Company is registered as a public limited company and is an investment company within the terms of section 833 of the Act. The registered office is detailed below. The nature of the Company’s operations and its principal activities are set out in the Strategic Report above.

The Company’s Financial Statements have been prepared under FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” and in accordance with the Act and with the Statement of Recommended Practice issued by the AIC in November 2014 (the “AIC SORP”). The Company meets the requirements of section 7.1A of FRS 102 and therefore has elected not to present the Statement of Cash Flows for the year ended 31 December 2020.

The comparative figures for the Financial Statements are for the year ended 31 December 2019.

Going concern
The financial statements have been prepared on a going concern basis and on the basis that approval as an investment trust company will continue to be met.

The Directors have made an assessment of the Company’s ability to continue as a going concern and are satisfied that the Company has adequate resources to continue in operational existence for a period of at least 12 months from the date when these financial statements were approved.

In making this assessment, the Directors have considered in particular the likely economic effects and the effects on the Company’s operations of the current COVID-19 pandemic.

The longer term economic effects of the pandemic are very difficult to predict but in considering preparing the accounts on a going concern basis the Directors noted the Company holds a portfolio of liquid investments whose value is a multiple of the Company's liabilities. The Directors are of the view that the Company can meet its obligations as and when they fall due. The cash available enables the Company to meet any funding requirements and finance future additional investments. The Company is a closed-end fund, where assets are not required to be liquidated to meet day-to-day redemptions.

The Board has reviewed stress testing and scenario analysis prepared by the Investment Manager to assist them in assessing the impact of changes in market value and income with associated cash flows. In making this assessment, the Investment Manager has considered plausible downside scenarios. These tests included the possible further effects of the continuation of the COVID-19 pandemic but, as an arithmetic exercise, apply equally to any other set of circumstances in which asset value and income are significantly impaired. It was concluded that in a plausible downside scenario, the Company could continue to meet its liabilities. Whilst the economic future is uncertain, and the Directors believe that it is possible the Company could experience further reductions in income and/or market value, the opinion of the Directors is that this should not be to a level which would threaten the Company’s ability to continue as a going concern.

The Investment Manager and the Company’s third-party service providers have contingency plans to ensure  the continued operation of their business in the event of disruption, such as the impact of COVID-19. The Board was satisfied that there has been minimal impact to the services provided during the year and are confident that this will continue. Furthermore, the Directors are not aware of any material uncertainties that may cast significant doubt on the Company’s ability to continue as a going concern, having taken into account the liquidity of the Company’s investment portfolio and the Company’s financial position in respect of its cash flows, borrowing facilities and investment commitments, of which there are none of significance. Therefore, the financial statements have been prepared on the going concern basis.

Segmental reporting
The Directors are of the opinion that the Company is engaged in a single segment of business, being investment business. The Company primarily invests in listed companies.

Income recognition
Dividend and other investment income is included as revenue on the ex-dividend date, the date the Company’s right to receive payment is established. Dividends from overseas companies are shown gross of withholding tax. Where the Company has elected to receive scrip dividends in the form of additional shares rather than in cash, the amount of the cash dividend foregone is recognised as income. Any excess or shortfall compared to the cash dividend is recognised as capital. Special dividends are reviewed on an individual basis to determine whether they should be accounted for as revenue or capital.  Deposit and fixed income receivable a is included on an accruals basis.

Expenses and finance costs
All management expenses and finance costs are accounted for on an accruals basis. Finance costs are debited using the effective interest rate method. Until 31 December 2020 all management fees and finance costs related to borrowings were charged to revenue in the Income Statement. From 1 January 2021 the Company charges 30% of management fees and finance costs related to borrowings to revenue in the Income Statement and 70% to capital in the Income Statement. All other operating expenses and finance costs are charged to revenue in the Income Statement, except costs that are incidental to the acquisition or disposal of investments, which are charged to capital in the Income Statement. Transaction costs are included within the gains and losses on investments, as disclosed in the Income Statement.

Investments
In accordance with FRS 102, Sections 11 and 12, all investments held by the Company are designated as held at fair value upon initial recognition and are measured at fair value through profit or loss in subsequent accounting periods. Investments are initially recognised at cost, being the fair value of the consideration given.

After initial recognition, investments are measured at fair value, with changes in the fair value of investments recognised in the Income Statement and allocated to capital. Realised gains and losses on investments sold are calculated as the difference between sales proceeds and cost.

For investments actively traded in organised financial markets, fair value is generally determined by reference to Stock Exchange quoted market bid prices at the close of business on the Balance Sheet date, without adjustment for transaction costs necessary to realise the asset. Unlisted investments will be valued by the Directors at fair value, using the guidelines on valuation published by the International Private Equity and Venture Capital Association (“IPEVC Valuation Guidelines”). This represents the Directors’ view of the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s length transaction.

Foreign currency
The Financial Statements have been prepared in sterling, rounded to the nearest £’000, which is the functional and reporting currency of the Company. Sterling is the currency of the primary economic environment in which the Company operates.

Transactions denominated in foreign currencies are converted to sterling at the actual exchange rate as at the date of the transaction. Assets and liabilities denominated in foreign currencies at the year end are reported at the rate of exchange at the Balance Sheet date. Any gain or loss arising from a change in exchange rate subsequent to the date of the transaction is included as an exchange gain or loss in the Income Statement, in the capital or the revenue column, depending on whether the gain or loss is of a capital or revenue nature.

Taxation
The charge for taxation is based on the net revenue for the year and takes into account taxation deferred or accelerated because of timing differences between the treatment of certain items for accounting and taxation purposes. Full provision for deferred taxation is made under the liability method, without discounting, on all timing differences between taxable profits and total comprehensive income that have arisen but not been reversed by the Balance Sheet date, unless such provision is not permitted by FRS 102. Deferred tax assets are only 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.

Cash at bank and short-term deposits
Cash at bank and short-term deposits comprise cash at bank and short-term deposits with an original maturity date of three months or less.

Short-term debtors and creditors
Debtors and creditors with no stated interest rate and receivable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the Income Statement in other operating expenses.

Dividends payable to Shareholders
Dividends payable are recognised when they become a liability of the Company. Final dividends are recognised in the period in which they have been approved by Shareholders in a general meeting. Interim dividends are recognised in the period in which they have been declared and paid.

Own shares held in treasury
From time to time, the Company buys back shares and holds them in treasury for potential sale at a later date or for cancellation. The consideration paid and received for these shares is accounted for in Shareholders’ funds and, in accordance with the AIC SORP, the cost has been allocated to the Company’s special reserve. The cost of shares sold from treasury is calculated by taking the average cost of shares held in treasury at the time of sale. Any difference between the proceeds from shares sold from treasury and above average cost is taken to share premium.

Judgements and key sources of estimation uncertainty
The preparation of the Financial Statements requires the Company to make judgements, estimates and assumptions that affect amounts reported for assets and liabilities as at the Balance Sheet date and the amounts reported for revenues and expenses during the year. The nature of estimation means that the actual outcomes could differ from those estimates, possibly significantly. The judgements related to the Company’s previous unlisted investment in Edinburgh Partners Limited, which was acquired by Franklin Resources Inc. in May 2018, as detailed in note 8.

Reserves

Capital reserve
The following are accounted for in this reserve:

• gains and losses on the realisation of investments;

• realised exchange differences of a capital nature;

• net movement arising from changes in the fair value of investments;

• from 1 January 2021,70% of management fees and finance costs related to borrowings; and

• expenses, together with related taxation effect, charged to this account in accordance with the above policies.

Share premium
This reserve records the amount above the nominal value received for shares sold, less transaction costs.

Special reserve
The special reserve was created by a reduction in the share premium account by order of the High Court. The Special Reserve is distributable and can be used for the repurchase of the Company’s shares.

In accordance with the AIC SORP, the consideration paid for shares bought into and held in treasury is shown as a deduction from the special reserve. The average cost of shares sold from treasury is shown as an increase to the special reserve, with any consideration in excess of average cost being accounted for in the share premium reserve.

Capital redemption reserve
The capital redemption reserve accounts for nominal amounts by which the issued capital is diminished through the repurchase and cancellation of the Company’s own shares.

Revenue reserve
The revenue reserve represents the balance of revenue retained within the Company after the payment of any dividends.

2. Income

	2020 £’000	2019 £’000
Income from investments
UK net dividend income	652	660
Overseas dividend income	2,711	4,298
Fixed income	4	-
Income from investments	3,367	4,958
Total income comprises
Dividends	3,363	4,958
Bank interest	48	74
Fixed Income	4	-
	3,415	5,032

3. Management fee

	2020 £’000	2019 £’000
Management fee	766	903
	766	903

With effect from 16 July 2014, the Company appointed Edinburgh Partners AIFM Limited as the Company’s AIFM. Under the Management Agreement, the AIFM is entitled to a fee paid monthly in arrears at the rate of 0.75% per annum of the equity market capitalisation of the Company to £100,000,000 and at a rate of 0.65% per annum of the equity market capitalisation which exceeds this amount. The equity market capitalisation is based on shares in circulation which excludes shares held in treasury. No performance fee will be paid.

No management fee is payable in relation to the Company’s investment in Edinburgh Partners Emerging Opportunities Fund, which is managed by Edinburgh Partners. The holding was sold in December 2020.

During the year ended 31 December 2020, the management fees payable to the AIFM totalled £766,000 (2019: £903,000). At 31 December 2020, there was £135,000 outstanding payable to the AIFM (2019: £79,000) in relation to management fees.

During the year ended 31 December 2020, the administration fees payable to the AIFM, as detailed in note 4, totalled £141,000 (2019: £139,000). At 31 December 2020, there was £23,000 outstanding payable to the AIFM (2019: £12,000) in relation to administration fees.

During the year ended 31 December 2020, the Company paid Edinburgh Partners £25,000 (2019: £25,000) for marketing-related services. At 31 December 2020, there was £6,000 outstanding to Edinburgh Partners (2019: £6,000) in relation to marketing-related services. The fees for marketing-related services are included within marketing and website costs as detailed in note 4.

4. Other expenses

	2020 £’000	2019 £’000
Audit fees and expenses (net of VAT) for:
Audit	26	25
Directors’ remuneration	97	97
Directors’ national insurance	5	5
Directors’ expenses	-	1
Administration fee	142	139
Marketing and website costs	39	41
Depositary and custodian fees	30	38
London Stock Exchange and FCA fees	16	15
Registrar fees	12	11
AIC membership fee	10	10
Legal and professional fees	7	17
Other expenses	27	30
	411	429

Directors’ remuneration and outstanding amounts are detailed in the Directors’ Remuneration Report in the full Annual Report and Financial Statements.

5. Taxation

a) Analysis of charge in year	Revenue £’000	2020 Capital £’000	Total £’000	Revenue £’000	2019 Capital £’000	Total £’000
Current tax
Overseas tax suffered	204	-	204	310	-	310
	204	-	204	310	-	310

b) The current taxation charge for the year ended 31 December 2019 is higher than the standard rate of corporation tax in the UK of 19% (NB The standard rate of corporation tax has been 19% from 1 April 2017. Previously it had been 20% from 1 April 2015). The differences are explained below:

	Revenue  £’000	2020  Capital  £’000	Total  £’000	Revenue  £’000	2019 Capital  £’000	Total  £’000
Net return before taxation	2,162	(4,827)	(2,665)	3,691	4,245	7,936
Theoretical tax at UK corporation tax rate of 19% (2019: 19%)	411	(917)	(506)	701	807	1,508
Effects of:
- UK dividends that are not taxable	(124)	-	(124)	(125)	-	(125)
- Foreign dividends that are not taxable	(515)	-	(515)	(815)	-	(815)
- Non-taxable investment losses/(gains)	-	917	917	-	(807)	(807)
- Unrelieved excess expenses	228	-	228	239	-	239
- Overseas tax suffered	204	-	204	310	-	310
	204	-	204	310	-	310

At 31 December 2020, the Company had no unprovided deferred tax liabilities (2019: £nil). At that date, based on current estimates and including the accumulation of net allowable losses, the Company had unrelieved losses of £11,191,000 (2019: £9,980,000) that are available to offset future taxable revenue. A deferred tax asset of £2,126,000 (2019: £1,696,000) has not been recognised because the Company is not expected to generate sufficient taxable income in future periods in excess of the available deductible expenses and accordingly, the Company is unlikely to be able to reduce future tax liabilities through the use of existing surplus losses.

Deferred tax is not provided on capital gains and losses arising on the revaluation or disposal of investments because the Company meets (and intends to continue for the foreseeable future to meet) the conditions for approval as an investment trust company, pursuant to sections 1158 and 1159 of the CTA.

6. Dividends

	2020 £’000	2019 £’000
Declared and paid
2019 final dividend of 6.0p per share and a special dividend of 1.5p per share, a total of 7.5p per share, paid on 26 May 2020 (2019: year ended 31 December 2018 final dividend of 5.5p and a special dividend of 1.0p per share, a total of 6.5p per share, paid on 21 May 2019).	3,025	2,719
Net revenue return after taxation	1,958	3,380
Proposed
2020 final dividend of 6.0p per share (2019 final dividend of 6.0p per share and a special dividend of 1.5p per share, a total of 7.5p per share, paid on 26 May 2020).	2,273	3,025

The Directors recommend a final dividend of 6.0p per share for the year ended 31 December 2020 (2019: final dividend of 6.0p per share and a special dividend of 1.5p per share, a total of 7.5p per share, paid on 26 May 2020). Subject to Shareholder approval at the Annual General Meeting to be held on 21 April 2021, the dividend will be payable on 28 May 2021 to Shareholders on the register at the close of business on 7 May 2021. The ex-dividend date will be 6 May 2021. Based on 37,882,725 shares, being the number of shares in issue (excluding shares held in treasury) at 9 March 2021, the date of signing this report, the total dividend payment will amount to £2,273,000. The proposed dividend will be paid from the revenue reserve.

7. Return per share

	Net  return  £’000	2020 Number of shares1	Per  share  pence	Net return £’000	2019 Number of shares1	Per  share  pence
Revenue return after taxation	1,958	39,875,049	4.9	3,380	41,857,001	8.1
Capital return after taxation	(4,827)	39,875,049	(12.1)	4,246	41,857,001	10.1
Total return after taxation	(2,869)	38,875,049	(7.2)	7,626	41,857,001	18.2

¹ Weighted average number of shares, excluding shares held in treasury, in issue during the year.  

8. Investments

			2020  £’000	2019  £’000
Equity investments			92,858	120,796
Fixed income investments			10,792	-
			103,650	120,796
			2020  £’000	2019  £’000
Analysis of investment portfolio movements
Opening book cost			113,587	113,751
Opening investment holdings gains			7,209	3,218
Opening fair value			120,796	116,969
Movements in the year:
Purchases at cost			43,350	28,325
Sales – proceeds			(55,040)	(29,235)
- realised(losses)/gains on sales			(1,311)	746
Changes in fair value of investments			(4,145)	3,991
Closing fair value			103,650	120,796

   

Closing book cost			100,586	113,587
Closing investment holding gains			3,064	7,209
Closing fair value			103,650	120,796

Transaction costs
During the year, the Company incurred transaction costs of £52,000 (2019: £42,000) and £61,000 (2019: £26,000) on purchases and sales of investments respectively. These amounts are included in gains on investments at fair value, as disclosed in the Income Statement in the Financial Statements.

The Company sold investments in the year at a total of £55,040,000 (2019: £29,235,000). The book cost of these investments when purchased was £56,351,000 (2019: £28,489,000). These investments have been revalued over time and until they were sold any unrealised gains or losses were included in the fair value of  investments.

			2020  £’000	2019 £’000
Analysis of capital gains and losses
Realised (losses)/gains on sales			(1,311)	746
Changes in fair value of investments			(4,145)	3,991
			(5,456)	4,737

Fair value hierarchy
In accordance with FRS 102, the Company must disclose the fair value hierarchy of financial instruments.

The different levels of the fair value hierarchy are as follows:

1. The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.2.
2. Inputs other than quoted prices included within level 1 that are observable (developed using market data) for the asset or liability, either directly or indirectly.
3. Inputs are unobservable (for which market data is unavailable) for the asset or liability.

All of the Company’s financial instruments fall into level 1.

The Company's previous investment in Edinburgh Partners Limited, the Company's Investment Manager, which was acquired by Franklin Resources Inc. in May 2018, fell into level 3. The final proceeds of £282,000 were received and accounted for in May 2020.

No unlisted investments were held during the year ended 31 December 2020 (2019: £nil).

9. Significant holdings
As at 31 December the Company had no holdings of 3.0% or more of the share capital of any portfolio companies.

10. Debtors

	2020 £’000	2019 £’000
Accrued bond interest Dividends receivable	7 274	- 247
Prepayments and accrued income	16	24
Taxation recoverable	211	336
	508	607

11. Creditors: amounts falling due within one year

	2020 £’000	2019 £’000
Due to brokers on shares purchased for treasury	57	121
Other creditors and accruals	233	184
	290	305

   

12. Share capital	Number of shares Ordinary 1p	2020 £’000	Number  of shares  Ordinary 1p	2019 £’000
Allotted, called-up and fully paid:
At 1 January	64,509,642	645	64,509,642	645
At 31 December	64,509,642	645	64,509,642	645

The voting rights attached to the Company’s shares are detailed in the extracts from the Directors’ Report above.

Duration of the Company
The Company does not have a termination date or the requirement for any periodic continuation vote.

13. Own shares held in treasury

Details of own shares purchased for and sold from treasury are shown below:

	2020 Number of Shares	2019 Number of shares
At 1 January	23,361,917	21,821,917
Shares purchased for treasury	2,525,000	1,540,000
At 31 December	25,886,917	23,361,917

During the year ended 31 December 2020, 2,525,000 shares (2019: 1,540,000) were purchased for treasury at a cost of £7,020,000 (2019: £4,697,000) and no shares were sold from treasury (2019: none). Please see the Chairman’s Statement above for details of share buy backs.

14. Net asset value per share

The NAV, calculated in accordance with the Articles of Association, is as follows:

	2020 pence	2019 pence
Share	308.4	320.8

The NAV is based on net assets of £119,095,000 (2019: £132,009,000) and on 38,622,725 (2019: 41,147,725) shares, being the number of shares, excluding shares held in treasury, in issue at the year end.

15. Analysis of financial assets and liabilities

Interest rate and currency profile
The interest rate and currency profile of the Company’s financial assets and liabilities were:

	No  interest  rate  exposure  £’000	2020 Cash flow interest rate risk exposure £’000	Total  £’000	No  interest  rate  exposure  £’000	2019 Cash flow interest rate risk exposure £’000	Total  £’000
Equity shares
Japanese yen	26,288	-	26,288	25,144	-	25,144
Euro	22,563	-	22,563	38,402	-	38,402
Sterling	15,616	-	15,616	15,413	-	15,413
US dollar	8,726	-	8,726	9,839	-	9,839
South Korean won	6,776	-	6,776	2,663	-	2,663
Swiss franc	5,477	-	5,477	9,250	-	9,250
Hong Kong dollar	4,951	-	4,951	13,811	-	13,811
Singapore dollar	2,461	-	2,461	3,643	-	3,643
Thailand baht	-	-	-	2,631	-	2,631
Fixed income investment
US dollar	-	10,792	10,792	-	-	-
Cash at bank and short-term deposits
Japanese yen	-	8,808	8,808		-	-
US dollar	-	4,580	4,580	-	10,861	10,861
Swiss Franc	-	1,838	1,838	-	-	-
Sterling	-	1	1	-	50	50
Debtors
Sterling	129	7	136	131	-	131
Swiss franc	107	-	107	232	-	232
Euro	78	-	78	83	-	83
Japanese yen	78	-	78	66	-	66
Singapore dollar	54	-	54	74	-	74
South Korean won	22	-	22	-	-	-
Norwegian krone	21	-	21	21	-	21
US dollar	12	-	12	-	-	-
Creditors
Sterling	(290)	-	(290)	(305)	-	(305)
	93,069	26,026	119,095	121,098	10,911	132,009

At 31 December 2020, the Company had no financial liabilities other than the short-term creditors as stated above (2019: £nil). The carrying amount on the Balance Sheet approximates the fair value of all financial assets and liabilities.

The following exchange rates were used to convert investments, assets and liabilities to the functional currency of the Company which is sterling.

Foreign Exchange rates against sterling	2020	2019	Change %
Japanese yen	141.16	143.91	(2)
Euro	1.12	1.18	(5)
US dollar	1.37	1.32	3
Swiss franc South Korean won	1.21 1,486.55	1.28 1,528.98	(6) (3)
Hong Kong dollar	10.60	10.32	3
Singapore dollar	1.81	1.78	1
Thailand baht	41.01	39.41	4
Norwegian krone	11.70	11.64	0

16. Risk analysis

Principal risks
The principal risks the Company faces are:

• Investment and strategy risk

• Key manager risk

• Discount volatility risk

• Market risk

• Price risk

• Foreign currency risk

• Regulatory risk

The Board undertakes an annual assessment and review of all the risks stated above together with a review of any new risks which may have arisen during the year. These risks are formalised within the Company’s risk assessment matrix.

The Investment Manager monitors the financial risks affecting the Company on an ongoing basis within the policies and guidelines determined by the Board. The Directors receive financial information, which is used to identify and monitor risk, quarterly. The Company may enter into derivative contracts to manage risk. A description of the principal risks the Company faces is set out below.

Investment and strategy risk
There can be no guarantee that the investment objective of the Company, to provide Shareholders with an attractive real long-term total return by investing globally in undervalued securities, will be achieved.

The Investment Manager meets regularly with the Board to discuss the portfolio performance and strategy. The Board receives quarterly reports from the Investment Manager detailing all portfolio transactions and any other significant changes in the market or stock outlooks.

Key manager risk
A change in key investment management personnel who are involved in the management of the Company’s portfolio could impact on future performance and the Company’s ability to deliver on its investment strategy.

The Investment Manager frequently considers succession planning. The Board is in regular contact with the Investment Manager and would be informed of any proposed change in the lead manager.

Discount volatility risk
The Board recognises that it is in the long-term interests of Shareholders to reduce discount volatility and believes that the prime driver of discounts over the longer term is investment performance. The Company is permitted to employ gearing, a process whereby funds are borrowed principally for the purpose of purchasing securities, should the Board feel that it is appropriate to do so. The use of gearing can magnify discount volatility.

The Board actively monitors the discount at which the Company’s shares trade, and is committed to using its powers to allot or repurchase the Company’s shares with a view to maintaining the middle market price at which the shares trade at close to the net asset value most recently published by the Company (taking into account the effect on the NAV of any rights to which the shares are trading ex-dividend).

The Board’s commitment to allot or repurchase shares is subject to it being satisfied that any offer to allot or purchase shares is in the best interests of Shareholders of the Company as a whole, the Board having the requisite authority pursuant to the Articles of Association and relevant legislation to allot or purchase shares, and all other applicable legislative and regulatory provisions.

Details of the shares purchased into treasury during the year are set out in note 13.

Price risk
The Company is exposed to market risk due to fluctuations in the market prices of its investments. Market price risk arises mainly from uncertainty about future prices of financial instruments used in the Company’s business. It represents the potential loss the Company might suffer through holding market positions in the face of price movements. The Investment Manager monitors the prices of financial instruments held by the Company on an ongoing basis.

The Investment Manager actively monitors market and economic data and reports to the Board, which considers investment policy on a regular basis. The NAV of the Company is issued daily to the London Stock Exchange and is also available on the Company’s website at www.epgot.com.

Details of the Company’s investment portfolio as at 31 December 2020 are disclosed in the Portfolio of Investments above.

If the investment portfolio valuation fell by 1.0% from the amount detailed in the Financial Statements as at 31 December 2020, it would have the effect, with all other variables held constant, of reducing the total return before taxation and therefore net assets by £1,036,000 (2019: £1,208,000). An increase of 1.0% in the investment portfolio valuation would have an equal and opposite effect on the total return before taxation and net assets.

Foreign currency risk
The functional currency of the Company is sterling. The international nature of the Company’s investment activities gives rise to a currency risk which is inherent in the performance of its overseas investments. The Company’s overseas income is also subject to currency fluctuations.

It is not the Company’s policy to hedge this risk on a continuous basis.

Details of the Company’s foreign currency risk exposure as at 31 December 2020 are disclosed in note 15.

If sterling had strengthened by 1.0% against all other currencies on 31 December 2020, with all other variables held constant, it would have the effect of reducing the total return before taxation and net assets by £1,036,000 (2019: £1,167,000). If sterling had weakened by 1.0% against all other currencies, there would have been an equal and opposite effect on the total return before taxation and net assets.

Regulatory risk
The Company operates in an evolving regulatory environment and faces a number of regulatory risks.

Relevant legislation and regulations which apply to the Company include the Act, the CTA, the Listing Rules and the Disclosure Guidance and Transparency Rules of the FCA, the AIFMD, the GDPR, the Foreign Account Tax Compliance Act and the Common Reporting Standard.

Failure to qualify under the terms of sections 1158 and 1159 of the CTA may lead to the Company being subject to capital gains tax. A breach of the Listing Rule may result in censure by the FCA and/or the suspension of the Company’s shares from listing.

The Directors note the corporate offence of failure to prevent tax evasion and believe all necessary steps have been taken to prevent facilitation of tax evasion.

The implementation of GDPR provides for greater data privacy. While the risk to the Company is deemed to be low, the impact of fines should they occur could be significant. The Directors are satisfied that all necessary steps have been taken to prevent any breach of GDPR, including ensuring that all third party service providers have appropriate GDPR policies in place.

If all price sensitive issues are not disclosed in a timely manner, this could create a misleading market in the Company’s shares. The Directors are aware of their responsibilities relating to price sensitive information and would consult with their advisers if any potential issues arose. This includes ensuring compliance with the Market Abuse Regulation. The AIFM would notify the Board immediately if it became aware of any disclosure issues.

The Investment Manager has a comprehensive market abuse policy and any potential breaches of this policy would be promptly reported to the Board.

Although not considered to be a principal risk for the Company, the Board continues to monitor developments around the UK’s departure from the European Union. Many of the Company’s holdings, particularly those in European and UK equities, will be impacted by the new agreement between the UK and the European Union which became effective on 1 January 2021. We believe that overall the Company’s portfolio has a relatively modest exposure to the UK economy, but the Board and Investment Manager remain alert to developments at both macroeconomic level and a stock-specific level.

The Board has agreed service levels with the Company Secretary and Investment Manager which include active and regular review of compliance with these requirements.

Other risks
Other risks the Company faces are:

• Liquidity risk

• Credit risk

• Interest rate risk

• Gearing risk

• Operational risk

A description of these other risks is set out below.

Liquidity risk

The Company’s policy with regard to liquidity is to ensure continuity of funding. Short-term flexibility is achieved through cash management.

The Company’s assets comprise mainly of readily realisable securities which, it is believed, can be sold freely to meet funding requirements if necessary. Securities listed on a recognised stock exchange have been valued at bid prices and exchange rates ruling at the close of business on 31 December 2020. In certain circumstances, the market prices at which investments are valued may not represent the realisable value of those investments, taking into account both the size of the Company’s holding and the frequency with which such investments are traded.

The maturity profile of the Company’s financial liabilities, including creditors, is as follows:

	As at 31 December 2020 £’000	As at 31 December  2019 £’000
In one year or less	290	305
	290	305

Credit risk
Credit risk is the risk of financial loss to the Company if the contractual party to a financial instrument fails to meet its contractual obligations.

The carrying amounts of financial assets best represent the maximum credit risk exposure at the Balance Sheet date.

Investment transactions are carried out with a large number of brokers whose creditworthiness is reviewed by the Investment Manager. Transactions are ordinarily undertaken on a delivery versus payment basis whereby the Company’s custodian bank ensures that the counterparty to any transaction entered into by the Company has delivered on its obligations before any transfer of cash or securities away from the Company is completed.

Cash is only held at banks and in liquidity funds that have been identified by the Board as reputable and of high credit quality. As at 31 December 2020, The Northern Trust Company London Branch had a long-term rating from Standard and Poors of AA-.

The maximum exposure to credit risk as at 31 December 2020 was £26,528,000 (2019: £11,518,000). The calculation is based on the Company’s credit risk exposure, being fixed income investments, cash at bank and short-term deposits and debtors, as at 31 December 2020 and this may not be representative of the year as a whole.

None of the Company’s assets are past due or impaired.

Interest rate risk
The Company’s assets and liabilities, excluding short-term debtors and creditors, may comprise financial instruments which include investments in fixed interest securities.

Details of the Company’s interest rate exposure as at 31 December 2020 are disclosed in note 15.

Surplus cash is invested in liquidity funds.

If interest rates had reduced by 0.25% (2019: 0.25%) from those obtained as at 31 December 2020 it would have the effect, with all other variables held constant, of decreasing the total return before taxation and therefore net assets on an annualised basis by £65,000 (2019: £27,000). If there had been an increase in interest rates of 0.25% (2019: 0.25%) there would have been an equal and opposite effect in the total return before taxation and net assets. The calculations are based on cash at bank and short-term deposits as at 31 December 2020 and these may not be representative of the year as a whole.

Gearing risk
Gearing can be used to enhance long-term returns to Shareholders. The Company is permitted to employ gearing should the Board feel it appropriate to do so up to a maximum of 25% of total assets.

The use of gearing is likely to lead to volatility in the NAV, meaning that a relatively small movement either down or up in the value of the Company’s total investments may result in a magnified movement in the same direction of the NAV. The greater the level of gearing, the greater the level of risk and likely fluctuation in the share price.

At the year end, the Company had no gearing (2019: nil).

Operational risk
There are a number of operational risks associated with the fact that third parties undertake the Company’s administration, depositary and custody functions. The main risk is that third parties may fail to ensure that statutory requirements, such as compliance with the Act and the FCA requirements, are met.

The Board regularly receives and reviews management information on third parties which the Company Secretary compiles. In addition, each of the third parties provides a copy of its report on internal controls (ISAE 3402, SSAE 16 or equivalent) to the Board each year.

The AIFM employs the Administrator to prepare all financial statements of the Company and meets with the Auditor at least once a year to discuss all financial matters including appropriate accounting policies.

The Company is a member of the AIC, a trade body which promotes investment trusts and also develops best practice for its members.

The Investment Manager and the Company's third party suppliers have contingency plans to ensure the continued operation of the business in the event of disruption, such as the impact of COVID-19. The Board monitor the risks associated with COVID-19 and its impact on the operation of the business.

17. Capital management policies

The Company’s investment objective is to provide Shareholders with an attractive real long-term total return by investing globally in undervalued securities. The portfolio is managed without reference to the composition of any stock market index. In pursuing this objective, the Board has a responsibility for ensuring the Company’s ability to continue as a going concern. This involves the ability to: issue and buy back share capital within limits set by the Shareholders in general meeting; borrow monies in the short and long term; and pay dividends to Shareholders out of current year revenue earnings as well as out of brought-forward revenue reserves.

The Company’s capital is set out in the Balance Sheet above.

The Company’s objectives for managing capital are the same as the previous year and have been complied with throughout the year.

18. Transactions with the AIFM and the Investment Manager

Information with respect to transactions with the AIFM and the Investment Manager is detailed in note 3 and in the Strategic Report above.

19. Related party transactions

Details in respect of the Directors’ remuneration are set out in note 4 and in the Directors’ Remuneration Report in the full Annual Report and Financial Statements. Under the AIC SORP, an investment manager is not considered to be a related party of the Company. There were no other transactions with related parties in the year ended 31 December 2020.

20. Post Balance Sheet events

Until 31 December 2020 all management fees and finance costs related to borrowings were charged to revenue in the Income Statement. From 1 January 2021 the Company charges 30% of management fees and finance costs related to borrowings to revenue in the Income Statement and 70% to capital in the Income Statement.

As disclosed in the Directors’ Report in the full Annual Report and Financial Statements and in the extract of the Directors’ Report above, subsequent to the year end and up to 9 March 2021, the date of signing this report, the Company bought back 740,000 shares into treasury at a total cost of £2,075,000.

PERFORMANCE RECORD
	Shareholders’   funds	Net asset  value per  share	Share  price per  share	Share price    discount to    net asset    value	Revenue   return per   share	Dividend    per     share	Ongoing        charges        ratio5
Year ended 31 December
20041	£26.1m	116.4p	110.5p	5.1%	0.6p	0.4p	1.7%6
2005	£52.2m	156.2p	154.5p	1.1%	1.1p	0.8p	1.5%6
2006	£58.8m	172.8p	170.0p	1.6%	2.1p	1.8p	1.2%6
2007	£57.7m	177.2p	160.0p	9.7%	2.7p	2.3p	1.1%6
2008	£46.4m	150.4p	132.5p	11.9%	3.9p	3.1p	1.1%6
2009	£50.7m	175.9p	172.0p	2.2%	2.7p	2.4p	1.0%6,7
2010	£51.6m	188.2p	186.8p	0.7%	3.2p	2.8p	1.3%6
2011	£95.1m	169.9p	167.0p	1.7%	5.0p	4.2p	0.8%8
2012	£91.8m	183.1p	175.5p	4.2%	3.9p	3.9p	1.1%
2013	£112.6m	233.6p	230.0p	1.5%	2.7p	2.7p	1.1%
2014	£112.1m	236.0p	234.6p	0.6%	3.7p	3.3p	1.1%
2015	£118.4m	239.8p	234.5p	2.2%	3.1p	3.1p	1.0%
2016	£143.8m	300.2p	293.0p	2.4%	5.3p	5.3p2	1.0%
2017	£148.8m	337.7p	320.0p	5.2%	5.3p	5.3p	0.9%
2018	£131.8m	308.8p	301.5p	2.3%	6.9p	6.5p2	0.9%
2019	£132.0m	320.8p	310.0p	3.4%	8.1p	7.5p3,	1.0%
2020	£119.1m	308.4p	284.0p	7.9%	4.9p	6.0p4	1.0%

¹ Period 13 November 2003 to 31 December 2004. The Company commenced operations on the admission of its shares to trading on the London Stock Exchange on 15 December 2003.

² Includes a special dividend of 1.0p.

³ Includes a special dividend of 1.5p.

⁴ Proposed dividend for the year.

⁵ Ongoing charges ratio based on total expenses, excluding finance costs, transaction costs and certain non-recurring items for the year as a percentage of the average monthly net asset value.

⁶ Total expense ratio based on total expenses for the year as a percentage of the average monthly net asset value.

⁷ Total expense ratio 1.3% excluding VAT refund.

⁸ The total expense ratio would have been 1.0% if investment management fees of £236,000 had not been waived as a consequence of the merger with Anglo & Overseas Plc.

Past performance is not a guide to future performance.

ANNUAL GENERAL MEETING

The Company’s Annual General Meeting will be held at the offices of the Investment Manager, Edinburgh Partners, at 27-31 Melville Street, Edinburgh, EH3 7JF on Wednesday, 21 April 2021 at 12.00 noon.

DIRECTORS

Teddy Tulloch (Chairman)

David Ross

Tom Walker

All of the Directors are non-executive and independent of the AIFM and the Investment Manager.

ALTERNATIVE INVESTMENT FUND MANAGER

Edinburgh Partners AIFM Limited

27-31 Melville Street

Edinburgh

EH3 7JF

INVESTMENT MANAGER

Edinburgh Partners Limited
27-31 Melville Street
Edinburgh
EH3 7JF

National Storage Mechanism

A copy of the full Annual Report and Financial Statements will shortly be submitted to the National Storage Mechanism (“NSM”) and will be available for inspection at the NSM, which is situated at:

https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Enquiries:

Dr Sandy Nairn
Kenneth J Greig

Edinburgh Partners AIFM Limited
Tel: [phone]

The Company’s registered office address is:

27-31 Melville Street
Edinburgh
EH3 7JF

Neither the contents of the Company’s website nor the contents of any website accessible from hyperlinks on this announcement (or any other website) is incorporated into, or forms part of, this announcement.

LEI: 2138005T5CT5ITZ7ZX58

END