for review by the Investment Manager's Supplier Management 
? Company Secretarial Services to Link Company Matters  Team. The Committee would seek further representations from the 
Limited                                                 service providers if not satisfied with the effectiveness of 
                                                        their control environment. 
? Registrar services to Link Group 
                                                        The Management Engagement and Audit Committees also consider 
? Worldwide custody of the Company's assets to State    the business  continuity arrangements of the Company's key 
Street Bank and Trust Company                           service providers and reviews these as part of the review of 
                                                        the Company's risk register. 
? Safekeeping and depositary services to State Street 
Trustees Limited                                        In respect of the emerging risks posed by the COVID-19 pandemic 
                                                        in terms of the ability of service providers to function 
Failure by any service provider to carry out its        effectively, the key service providers have provided details of 
obligations to the Company in accordance with the terms the measures that they have put in place to address the crisis, 
of its appointment could have a materially detrimental  in addition to their existing business continuity framework. 
impact on the operation of the Company or               Having considered these arrangements and reviewed service 
administration of its investments. The termination of   levels since the crisis has evolved, the Committees and Board 
the Company's relationship with any third-party service are confident that a good level of service has and will be 
provider or any delay in appointing a replacement for   maintained. 
such service provider could disrupt the business of the 
Company materially and could have a material adverse 
effect on the Company's performance. 
 
 
Regulatory, legal and statutory risk: changes in laws, 
government policy or regulations 
The Company is subject to laws, government policy and 
regulations enacted by national and local governments. 
Any change in the law, regulation or government policy 
affecting the Company may have a material adverse       The Company mitigates any such failure by delegating key 
effect on the value of its investments, its ability to  operational tasks to specialist third-party service providers 
carry on its business and successfully pursue its       combined with close oversight and monitoring through the Audit 
investment policy and on its earnings and returns to    Committee. 
Shareholders. 
                                                        The Investment Manager monitors investment movements, the level 
In particular, the Company is required to comply with   and type of forecast income and expenditure and the amount of 
certain requirements that are applicable to listed      proposed dividends to ensure that the provisions of Chapter 4 
closed- ended investment companies, including section   of Part 24 of the Corporation Tax Act 2010 are not breached. 
1158 of the Corporation Tax Act 2010. Any failure to    The results are reported to the Board at each meeting. 
comply may potentially result in a loss of investment 
trust company status.                                   Compliance with the accounting rules affecting investment 
                                                        trusts are also carefully and regularly monitored. 
The Company must comply with the Listing Rules, 
Prospectus Rules, the Disclosure Guidance and           The Company Secretary, Investment Manager and the Company's 
Transparency Rules, the Market Abuse Regulation (MAR)   professional advisers provide regular reports to the Board in 
and the rules of the London Stock Exchange. Any failure respect of compliance with all applicable rules and 
in future to comply with any future changes to such     regulations. The Board and the Investment Manager also monitor 
rules and regulations may result in the Shares being    changes in government policy and legislation which may have an 
suspended from trading on the London Stock Exchange.    impact on the Company. 
MAR can be defined as Regulation (EU) No 596/2014 of    The risk to the company of failure to comply with MAR is 
the European Parliament on market abuse, otherwise      mitigated by close Board oversight and monitoring through the 
known as the Market Abuse Regulation, or "MAR". It      compliance function at the Investment Manager. 
requires the Board of the Company to adopt certain 
processes to ensure that, inter alia, price sensitive 
information must be, subject to certain exemptions, 
promptly disclosed to the public via a regulatory news 
service in order to ensure an orderly market in the 
Company's shares. 
 
 
Sustainability Risk 
Sustainability risk means exposure to an environmental, Please refer to the 'Sustainability risk and investment 
social or governance ("ESG") event or condition that,   process' section below for further details. 
if it occurs, could cause an actual or a potential 
material negative impact on the value of an investment.

UK exit from the European Union

The UK officially left the EU on 31 January 2020 ("Brexit") and the agreed transitional arrangements, where all relevant rules and regulations remained in place, ended on 31 December 2020. A post-Brexit agreement on trade and other issues was agreed just a week before the transitional period ended, although, there is still no established bilateral agreement relating to the provision of cross border financial services.

The Directors believe the activities by the Company will continue to be largely unchanged by the UK's ongoing relationship with the EU, at least for the foreseeable future.

Viability statement

The UK Financial Reporting Council (FRC) maintains the UK's Corporate Governance Code ("the Code") to promote high quality corporate governance and reporting. Under the Code, the Directors are required to state that in their opinion the Company's resources are adequate for it to continue in business for at least 12 months from the date of the Financial Statements and, therefore, it is appropriate that the Financial Statements be prepared on a going concern basis. This statement appears below.

The Directors are also required, in accordance with provision 31 of the 2018 UK Corporate Governance Code, to assess the prospects for the Company over a longer period than the 12 months referred to in the going concern guidance and statement. The Directors have elected to review the viability of the Company for a three-year period by reference to the weighted average life of the Debt Instruments in the Company's portfolio.

In assessing the viability of the Company over this three-year period, the Directors have considered a number of factors. Most importantly, they have weighed the characteristics of a closed-end fund and the investment policy of the Company against the risks the Company faces as set out in this Strategic Report. The Directors have also taken account in their assessment of the uncertainty around the potential duration of the COVID-19 pandemic, its impact on the global economy and the prospects for the Company's portfolio.

The Directors have assumed that neither the closed-ended structure of the Company, the investment policy it follows nor the risks it faces are likely to change substantially, or for the worse with respect to the viability of the Company, over the three-year period they have selected for the purposes of this viability statement. The Directors have also assumed that the Company will continue to maintain a sufficient level of liquidity and to generate substantial income for the foreseeable future in order to meet its liabilities. As the Directors are ultimately responsible for ensuring that the investment policy of the Company is followed by the Investment Manager, they are confident in making these assumptions about the future of the Company.

The Company is an investment trust, not a trading company, and it invests in a diversified portfolio. As a closed-ended fund, it is not subject to redemptions by Shareholders prior to, potentially, the 2024 exit opportunity.

Before the Company's fifth annual general meeting in 2024, the Board will formulate and submit to Shareholders proposals (which may constitute a tender offer or other method of distribution) to provide Shareholders an opportunity to realise the value of their Ordinary Shares at NAV per Ordinary Share less costs. In all circumstances, the Board will seek to balance the interests of both continuing Shareholders and those electing to realise their investment with a view to minimising any reduction in the overall size of the Company.

The Company's portfolio also generates substantial levels of income to meet its expenses, which are largely fixed overheads that represent a small percentage of its net assets. Based on their assessment of the nature of the Company, its investment policy and financial resources, the Directors have a reasonable expectation that the Company will be able to continue in operation and to meet its liabilities as they fall due over the next three years.

Going concern statement

The activities of the Company, together with the factors likely to affect its future development, including its performance, financial position, cash flows and liquidity position, are described in the Strategic Report.

In addition, the Company's policies and processes for managing its key financial risks are described in note 14.

As at 31 December 2020, the Company's total assets less current liabilities were GBP146.63m (31 December 2019: GBP132.23m). The Directors have reviewed the financial projections of the Company from the date of this report, which shows that the Company will be able to generate sufficient cash flows in order to meet its liabilities as they fall due.

(MORE TO FOLLOW) Dow Jones Newswires

April 28, 2021 02:01 ET (06:01 GMT)