MARTIN CURRIE GLB PORTFOLIO TST PLC

Registered in Scotland, no SC192761 MARTIN CURRIE GLOBAL PORTFOLIO TRUST PLC Annual report – year to 31 January 2023 1 Welcome to the annual report for Martin Currie Global Portfolio Trust plc (the 'Company'). Our objective The objective is to produce long-term returns in excess of the total return from the MSCI All Country World index. Morningstar Sustainability Rating: Source: ©September 2022 Morningstar, Inc. All rights reserved. The information herein is not represented or warranted to be acc urate, complete or timely. Past performance is no guarantee of future results . PRI – Principles for Responsible Investment. A copy of the PRI's assessment of Martin Currie and its methodology is available on request. Martin Currie is a signatory of Net Zero Asset Managers Initiative (NZAMI), 2021. Martin Currie has been a UNPRI signatory since July 2009 Ranking vs peers across all three pillars 1 Top quartile Investment & Stewardship Policy Incorporation Voting A unique blend of features and benefits enjoyed by our shareholders. Global opportunity: A global investment remit provides the widest possible opportunity to invest in the world’s best companies, irrespective of the country which they are listed in. Shareholders benefit from a ready-made global equity portfolio which is diversified across different geographic markets and a range of economic sectors. High conviction and high quality: As active investors handpicking 25-40 companies for the portfolio, we can concentrate on businesses or sectors we believe offer the most sustainable growth over the long term. A concentrated portfolio means we have meaningful allocations in each stock and we believe that gives us the best opportunity to outperform the markets. Leading ESG characteristics: You don’t have to compromise your investment goals and desire to invest in sustainable companies. Our Environmental, Social and Governance ('ESG') credentials are exceptional and we have been awarded the highest possible Morningstar Sustainability Rating™ of 'Five Globes'. We undertake over 50 ESG risk assessments on every company we research and engage with companies to ensure they trend towards best practice. Established track record: Established in 1999, shareholders have enjoyed share price growth ahead of the benchmark over that period. Shareholder-friendly benefits: Investment trusts are listed on the London Stock Exchange and their company structure offers many distinct features that can enhance performance and benefits for shareholders. Low charges: With low ongoing charges and no performance fees, more of your money is invested in the markets. Strategic report Chairman’s statement 6 Manager’s review 9 Our investment manager's process 17 ESG & our investment manager's process 19 Portfolio summary 20 Largest 10 holdings 23 Business review 28 Governance Board of directors 37 Corporate governance statement 38 Report of the directors 43 Audit committee report 50 Directors’ remuneration statement 52 Financial review Independent auditors’ report 56 Statement of comprehensive income 62 Statement of ﬁnancial position 63 Statement of changes in equity 64 Statement of cash flow 65 Notes to the financial statements 67 Investor information Directors and advisers 81 Alternative performance measures 82 Glossary of terms 84 Ways to invest in the Company 86 Notice of annual general meeting 87 Our website 91 2CONTENTS 1 2 3 4 FINANCIAL HIGHLIGHTS 3 Key data 1 Year ended 31 January 2023 Year ended 31 January 2022 Net asset value per share (pence) 2 328.2p 364.6p Net asset value per share ('NAV') total return 2 -8.8% 2.9% MSCI All Country World index (benchmark) total return 3 0.3% 15.9% Share price (pence) 319.0p 365.5p Share price total return -9.3% -2.6% Ongoing charges (as a percentage of shareholders’ funds) 4 0.61% 0.68% Revenue return per share 5 2.16p 1.36p Dividend per share 4.20p 4.20p Past performance is not a guide to future returns. All returns are total returns unless otherwise stated. Source: Martin Currie Investment Management. Total return is the combined effect of the rise and fall in the share price, net asset value or benchmark together with any dividend paid. See page 82 for more details on Alternative Performance Measures. The net asset value per share total return is calculated using the cum income net asset value with dividends reinvested on the ex-dividend date. This is an Alternative Performance Measure, see page 82 for more details. The benchmark with effect from 1 February 2020 is the MSCI All Country World index. Prior to this, the benchmark was the FTSE World index to 31 January 2020. Prior to this, the benchmark was the FTSE All-Share to 31 May 2011. Ongoing charges (as a percentage of shareholders’ funds) are calculated using average net assets over the period. The ongoing charges figure has been calculated in line with the Association of Investment Companies ('AIC') recommended methodology. This is an Alternative Performance Measure, see page 83 for more details. For details of calculation, refer to note 5 on page 70. Three year performance Net Asset Value total return over the three year period. Share price total return over the three year period. Benchmark total return over the three year period. 12.8% 6.5% 30.5% Highlights • Strong performance in the ﬁnal quarter of the ﬁnancial year • Reduction in management fees • Ongoing focus on the quality growth strategy of the Company • Maintained annual dividend 4 As at 31 January Revenue return per share Dividend per share Net asset value per share 9 (Discount)/ premium Investments £000 Net assets £000 2014 3.76p 4.00p 157.4p (0.6%) 163,755 164,201 2015 3.92p 4.10p 178.5p 0.6% 181,798 183,951 2016 4.15p 4.15p 176.3p (1.9%) 174,976 178,107 2017 4.21p 4.20p 223.9p (0.0%) 215,619 216,497 2018 3.72p 4.20p 246.1p 0.4% 223,192 227,186 2019 3.47p 4.20p 245.5p (1.4%) 203,818 205,575 2020 2.52p 4.20p 301.9p 3.0% 251,714 251,695 2021 1.97p 4.20p 358.2p 3.3% 327,988 303,571 2022 1.36p 4.20p 364.6p (2.2%) 339,535 315,834 2023 2.16p 4.20p 328.2p (2.8%) 277,606 249,768 10 year performance 6, 7, 8 Jan 2015Jan 2014 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020 Jan 2021 Jan 2022 Jan 2023 (%) 150 200 250 300 100 50 0 Jan 2013 Share price total return 161.2% NAV total return 159.2% Benchmark 201.0% 10 year record Past performance is not a guide to future returns. All returns are total returns unless otherwise stated. Source: Martin Currie Investment Management. Total return is the combined effect of the rise and fall in the share price, net asset value or benchmark together with any dividend paid. See page 82 for more details on Alternative Performance Measures. The net asset value per share total return is calculated using the cum income net asset value with dividends reinvested on the ex-dividend date. This is an Alternative Performance Measure, see page 82 for more details. The benchmark with effect from 1 February 2020 is the MSCI All Country World index. Prior to this, the benchmark was the FTSE World index to 31 January 2020. Prior to this, the benchmark was the FTSE All-Share to 31 May 2011. Cum-income. 1: STRATEGIC REPORT Dear Shareholder Investment performance The 12 months covered by our ﬁnancial year to 31 January 2023 were turbulent. We started February 2022 with concern about the fallout from the pandemic, its eﬀect on trade and inﬂation along with a legacy of high debt. This was rapidly overtaken by the Russian invasion of Ukraine, which aﬀected the prices of energy and other commodities. The prospect of a period of high and prolonged inﬂation led central banks in most parts of the world to increase interest rates which had hitherto generally been kept at a very low level to counter the aer- eﬀects of the global ﬁnancial crisis a decade previously. The approach to setting interest rates in the current environment is a delicate balancing act between controlling inﬂation while not unnecessarily choking economic growth. The high level of uncertainty led to volatile equity markets. This was a diﬃcult period for our portfolio manager’s investment style in particular and, as a result, your Company’s NAV total return was –8.8%. Negative returns are naturally disappointing. The portfolio manager has remained true to an investment philosophy focused on companies selected for their potential for long-term growth, backed by a ﬁrm focus on ESG credentials and which we believe will generate strong returns over the long term. Income and dividends Net revenue earnings per share for the period amounted to 2.16 pence. The Company has paid three interim dividends of 0.9 pence per share and will pay a fourth interim dividend of 1.5 pence per share on 28 April 2023 to shareholders on the register on 11 April 2023. The total dividends with respect to the year to 31 January 2023 will be 4.2 pence per share, maintaining the same total dividend as the previous year. Capital growth is the primary focus of the investment manager and the investment strategy is not constrained by any income target. Nevertheless, the Board recognises that dividends are important for many shareholders and hence continues to maintain its dividend in line with historic levels. In 2022 shareholders approved changes to the Company’s Articles of Association to permit the distribution of realised capital gains and it has substantial distributable reserves. The Board has again used these alongside revenue earnings to maintain the dividend, while not impinging on the investment manager’s approach to managing the portfolio. 6CHAIRMAN’S STATEMENT Gillian Watson, Chairman “The manager has remained true to his investment process and philosophy and we remain confident that this will lead to superior returns in the long term.” At each Annual General Meeting (‘AGM’) since 2019, shareholders have been asked to approve the Company’s dividend policy. The primary purpose of adopting a formal dividend policy was to allow the Company to continue to pay four quarterly interim dividends each year. Following a review by the Board we have expanded the dividend policy this year, principally to reaﬃrm our commitment to pay quarterly dividends and to conﬁrm an intention at least to maintain the level of dividend each year, subject to market conditions and the Company's ﬁnancial position and outlook. A detailed explanation of the revised dividend policy is set out in the description of AGM resolutions on page 46. ESG leadership and promoting the Company’s shares Martin Currie Global Portfolio Trust is recognised as a leader in ESG investing and has been awarded the highest possible 'Five Globes' from Morningstar. It is also rated in the top 1% of over 7,000 funds in Morningstar’s global large cap category for ESG 1 . The portfolio manager's focus remains on investing in the highest quality companies that are expected to generate sustainable returns over the long term and, as described in this report, ESG analysis is at the core of the investment strategy. We believe that this distinctive approach to investing is important in stimulating demand for shares in a crowded market and against a background of increasing focus on the environment and on social and governance issues. The manager has remained very active in promoting the Company, including regular meetings with major shareholders, a wide variety of online activity designed to encourage investors to go to our website and regular press coverage of the portfolio manager’s distinctive investment style. Our website at www.martincurrieglobal.com is a comprehensive source of information and includes regular portfolio manager updates and outlook videos, monthly performance factsheets and independent research reports. I recommend that you subscribe for regular email updates that will keep you abreast of the news on your Company. A key element of our approach to making the Company attractive to investors is our zero discount policy under which the Company buys back and issues shares with the objective of providing shareholders, in normal market conditions, with: • assurance that the share price is aligned with the prevailing NAV per share; and • liquidity so that investors can buy or sell as many shares as they wish at a price which is not signiﬁcantly diﬀerent from the NAV. During the year under review, the Company bought back 10,510,850 shares which were placed in Treasury. No shares were issued, reﬂecting the diﬃcult market conditions which we have experienced over the last year. While the Company has quite a high proportion of shares in Treasury, market sentiment can change rapidly and the Board believes that it is appropriate to be able to reissue shares in response to demand quickly and at low cost, subject to shareholders' annual approval to disapply pre-emption rights. Shares would only be issued when we believe this to be in the best interests of existing shareholders and at a premium to the prevailing NAV at the time of issue. The Board remains committed to our zero discount policy and it continues to achieve its aims, with the share price generally remaining close to NAV. 7 “Martin Currie Global Portfolio Trust is recognised as a leader in ESG investing and has been awarded the highest possible 'Five Globes' from Morningstar.” Morningstar, 31 December 2021 ©2021 Morningstar, Inc. All rights reserved. The information herein is not represented or warranted to be accurate, complete or timely. Past performance is no guarantee of future results. The Board I joined the Board in April 2013 and, having served ten years as a director, will stand down aer this year’s AGM. My fellow directors have decided to appoint Christopher Metcalfe to take the chair when I stand down. Christopher has extensive experience in global equity fund management and I am conﬁdent that I leave the Board in highly capable hands. Mindful of the size of the Company and its cost base, the Board has decided not to recruit a further director for the time being and will continue with four non-executive directors. Reduced management fees As reported at the half-year stage, the reduction in NAV as a result of market movements and share buybacks led the Board to be concerned that the ongoing charges ratio was increasing. We agreed with the manager that, with eﬀect from 1 July 2022, the investment management fee would be amended to 0.45% of net assets 2 per annum. Previously, the investment management fee was 0.5% per annum for the ﬁrst £300m of the Company's net assets 2 and 0.35% for net assets 2 in excess of £300m. Furthermore, with eﬀect from 1 July 2022, there will no longer be a separate company secretarial fee 2 . At the ﬁnancial year- end net assets 2 of circa £250m, the combined eﬀect of the cut in ad valorem fee and removing the company secretarial fee amounts to a reduction of approximately 14% in annual fees and results in a simpler cost structure. The Board is conﬁdent that the new structure provides a competitive ongoing charge and contributes positively to increasing shareholder value. We would like to thank the AIFM for a helpful and constructive approach to this change. AGM I am pleased to be able to invite all shareholders to attend our AGM in person at the oﬃces of Franklin Templeton, 5 Morrison Street, Edinburgh EH BH on Thursday 1 June 2023 at 11.00 am. We do recognise that some shareholders may be unable to come to the AGM and if you have any questions about the annual report, the investment portfolio or any other matter relevant to the Company, please write to me either via email at [email protected] or by post to The Company Secretary, Martin Currie Global Portfolio Trust plc, 5 Morrison Street Edinburgh EH3 8BH. If you are unable to attend, I urge you to submit your proxy votes in good time for the meeting, following the instructions enclosed with the proxy form. Outlook The outlook for economies around the world remains very diﬃcult, with inﬂation at levels not seen for a generation. Uncertainty is also driven by geopolitical events, in particular the continuing Ukraine-Russia conﬂict and tension between China and the USA. Against this challenging background, there are some tentative signs of recovery. At the time of writing, inﬂation has fallen back from the very high levels triggered by the initial reaction to the conﬂict in Ukraine while China has apparently abandoned its zero-Covid policy. The crucial point will be governments’ and central banks’ ability to negotiate the balance of trying to control inﬂation by raising interest rates while not triggering a prolonged recession. Continued volatility in share prices remains inevitable. While markets seek to anticipate future circumstances, current events in the news are likely to trigger sharp moves in share prices, as witnessed by the recent reaction to problems in the banking sector. This year we did not achieve our KPIs relating to investment returns but it was reassuring to note a marked improvement in performance towards the end of our ﬁnancial year and into the ﬁrst quarter of 2023. Successful investment relies on taking a long-term view and it is important to look beyond volatility and remain consistent to our objective. Our portfolio manager will continue to concentrate on a focused list of investments, researched in depth and selected for their long-term growth prospects and sustainable credentials. We remain of the view that over the longer term our portfolio manager’s consistent approach and strategy will deliver attractive returns to investors. Keep in touch The Company’s website at www.martincurrieglobal.com is a comprehensive source of information and includes regular portfolio manager updates and outlook videos, monthly performance factsheets and independent research reports. I recommend that you subscribe for regular email updates that will keep you abreast of the news on your Company. I thank you for your continued support. Please contact me if you have any questions regarding your Company by email at: [email protected]. 8 Gillian Watson Chairman 6 April 2023 For the purposes of calculating management fees, current period net income is excluded from the calculation of net assets. The Company secretarial fee for the year to 31 January 2022 was £56,000 plus VAT. 9MANAGER'S REVIEW Review of ﬁnancial year ended 31 January 2023 2022 was a signiﬁcant year for ﬁnancial markets, with large movements both in equities and bond markets, and poor performance in both of these asset classes. There were many extreme developments in geopolitics, inﬂation, monetary policies, and ﬁnancial markets. The ﬁnancial year to the end of January 2023 was a disappointing year for us, with marked underperformance by some of the stocks that we held and of the portfolio as a whole. During the year, inﬂation increased signiﬁcantly as demand for goods and services accelerated post the pandemic lockdowns, whilst shortages and production bottlenecks kept the supply- side constrained. This led to a ﬂare up in frictional inﬂation, which was exacerbated by the Russian invasion of Ukraine. In these circumstances it was very diﬃcult for central banks, economists, strategists, and market participants to predict inﬂation accurately. Consumer Price Indices moved to above 10% in many regions across developed markets. This is a level that has not been seen since the early 1980’s or 1970’s in some instances, and a level signiﬁcantly above the c.2% targeted by main central banks such as the US Federal Reserve (the ‘Fed’) and the European Central Bank (’ECB’). Central banks went into a rapid series of interest rate hikes to try to tackle the inﬂation ﬂare up, with the Fed moving from rates of 0.25% at the start of our ﬁnancial year, to 4.75% on 1 February 2023, the day aer the end of the year. This was a rapid 450bps increase in 12 months, with increments of 75bps on four consecutive occasions throughout the year. The signiﬁcant shi in monetary policies was unexpected, and led to a signiﬁcant sell-oﬀ in both equities and bond markets, with rapid negative returns of a magnitude not seen since the early part of the 20th century. In periods of rising interest rates markets can deviate from fundamentals for some time, selling oﬀ companies with long duration of growth and compounding cash ﬂows, such as the companies that we hold in our portfolio. In periods of rising interest rates, the market tends to favour short-duration assets, such as Value stocks to which the Company has no exposure. This therefore led to a style-leadership shi that was detrimental to the portfolio, contributing to the underperformance during the year. In the early part of 2022, we also had the tragic invasion of Ukraine by Russia. The resultant inﬂation led by energy and commodity prices, caused a ﬂight towards defence-exposed stocks, and “defensive” parts of the market. The Company holds no energy and no defence stocks, has little exposure to commodities-related stocks, and has an underweight to defensive sectors such as food producers and pharmaceuticals companies. “2022 was a signiﬁcant year for ﬁnancial markets, with large movements both in equities and bond markets, and poor performance in both of these asset classes.” Zehrid Osmani, Portfolio Manager 10 During 2022, China went into periodic lockdowns to tackle the risk of the Omicron variant of Covid-19. This led to a negative impact on China’s economic activity, and further ampliﬁed bottlenecks in supply chains and production around the world. This exacerbated the frictional inﬂation that we mention above. The Company has, directly or indirectly, exposure to the Chinese economic cycle through companies in the Industrials, Construction, Technology and Consumer space; this also contributed further to the underperformance of the portfolio. The NAV total return for the ﬁnancial year was -8.8%, compared with a return of +2.9% for the benchmark index. Some of the headwinds to performance in 2022 have been rapidly turning into tailwinds for the Company’s performance in the past 2-3 months, as China suddenly and unexpectedly u-turned on its zero-Covid policy, and reopened its economy. This provided support to stocks exposed to China, notably in the Luxury Goods and Industrials sectors. With China being the second largest economy globally, a reopening has the potential to support global economic momentum, and therefore could reduce the fears of recession that the market has been focusing on in the latter part of 2022. As a result, more cyclical ends of the market, including the Technology sector, experienced a signiﬁcant rebound in the last 3 months of our ﬁnancial year. With the Company being sizeably exposed to China-related stocks and to the Technology sector, the performance has been very strongly positive, with the NAV total return being up by 12.9% in the 3 months to the end of January, compared with a benchmark return of 3.7%. The elevated market volatility that we have seen in 2022, and so far in 2023, highlights the diﬃculty in timing the market, and therefore the importance for investors to remain invested in stock markets for the long term. The (in our view) over ampliﬁed fears of recession during 2022 would have also led to some investors missing the signiﬁcant market rally seen in late 2022 and early 2023, as China will likely provide a more supportive backdrop for the global economic cycle than many were predicting for 2023. This also highlights why we manage our shareholders’ assets on a long-term time horizon of 5-10 years, and position the portfolio in companies that can perform through the economic cycle rather than trying to time the cycle, which experience has shown is very diﬃcult to achieve consistently. Despite the underperformance experienced in 2022, we have continued to focus on companies with strong long-term fundamentals. We have maintained our conviction in most of the stocks which we have held, and so have made only limited changes to the list of stocks in the portfolio. We continue to focus on companies that are exposed to industries with high barriers to entry, that have: • dominant market positions • strong pricing power • low disruption risk • exposure to structural growth opportunities • high returns on invested capital with strong cash ﬂows and solid balance sheets • quality management • sustainable business models • good valuation support Valuation discipline remains core to our approach, and with the use of a high discount rate in our valuation methodology, we have been anticipating interest rates returning to more normal levels all along, even when rates were close to 0%, or at times below zero. This makes us conﬁdent that we have been using a conservative interest rate assumption when valuing companies in the portfolio. Valuation discipline is important during all phases of an economic cycle, but even more important when we are going through a period of rising interest rates. We wish to highlight to shareholders that our disciplined, consistent and conservative approach to valuing investment opportunities in stock markets should reassure them. Key stock contributors and detractors Linde performed well in the uncertain economic environment as their ability to increase prices to oﬀset and even exceed inﬂationary pressures came to the fore. The new CEO also elaborated more on the company's strategy, notably seizing opportunities from changing legislation in the US, describing the Inﬂation Reduction Act as “accelerating the clean energy transition”. Linde sees around $30bn of incremental investment opportunities in decarbonising and in new markets such as blue and green hydrogen, nitrogen, oxygen, hydrogen storage, CO2 capture and transportation. CSL, the Australian blood-plasma biotech company, performed strongly in 2022. Through the second half of the year, news ﬂow on collections and therefore plasma supply has turned incrementally positive. This has resulted in not only revenue growth but also margin expansion as the collection centres, which have a high proportion ﬁxed costs, are better utilised. The good news is compounded by early indications that new collection centre soware can dramatically increase yield by up to 30%. Ferrari performed well in the year. In June the luxury sportscar maker hosted investors in Maranello at its ﬁrst Capital Markets Day since 2018. New CEO Benedetto Vigna used the occasion to set out its strategy, sustainability and ﬁnancial targets for the next ﬁve years. Investors seemed to be satisﬁed with the company's focus on the electriﬁcation agenda. Portfolio additions Additions this year included Croda, the British speciality chemical company; Nike, the US sportswear giant; and Zoetis, a leading US producer of animal medicines. 11 Ferrari plans to shi the mix of models from 0% to 40% EV by 2030 with the ﬁrst EV model to be unveiled in 2025. Further, in September, Ferrari launched the Purosangue, the company's ﬁrst foray into the SUV market, a particularly important segment of the Chinese market. Orders of the Purosangue to date have been well beyond management's initial expectations. Adidas underperformed materially in 2022, with a mixture of transitory external factors causing problems, compounded with some poor execution. The transparency on the underlying health of the brand has been complicated by Covid, supply chain disruption and Vietnamese factory closures which have proved diﬃcult for management to navigate. Adidas was then forced to terminate its contract with the artist Ye in October. Whilst we believe this was the proper course of action, the Yeezy issues were compounded by the company's failure to disclose the highly proﬁtable nature of those sales, which leaves a signiﬁcant gap in expected proﬁtability of the group. On this basis and with the CEO resigning prior to this news, we exited the stock. Conviction in Tencent weakened throughout 2022, due to a lack of visibility on the regulatory front, and an ever-growing geopolitical risk. Despite the crackdown easing towards the end of the year, we do not see the regulatory uncertainty substantially lied over the longer term. In a bear case, one could foresee an ongoing request by the Chinese political establishment for tech giants including Tencent to fund the common prosperity initiative that President Xi Jinping has made one of his primary policy focuses. As it was diﬃcult to quantify the downside risk, we exited the stock. Farfetch performed very poorly throughout 2022 with exposure to a number of negative themes. The company held a Capital Markets Day in December, where they laid out the proﬁtability of a recent deal and other recently announced new business, disclosing for the ﬁrst time a signiﬁcantly lower level of proﬁtability than had been anticipated and greater dependence on the brand platform. With real challenges to reach proﬁtable growth, we exited the stock. Portfolio Activity In March we exited the position in JD.com, which came into the portfolio as a result of Tencent’s divestment being distributed in shares. In April we exited the position in TSMC, in favour of ASML. We believe that ASML is better positioned to beneﬁt from the onshoring trend that we are seeing and are likely to continue to see in semiconductor production sites, with plants under construction in the US, approved for construction in Japan, and the EU being likely to follow suit in the next few years. In October we entered into a position in Croda, while exiting positions in Adidas and Tencent as described above. Croda is a stock where we have growing conviction, as the company has continued to reposition its portfolio, disposing of their PTIC business, and making two important acquisitions, Avanti Lipid Systems and Iberchem. These changes make the company more focused, with stronger growth potential going forward. 12 In November we entered positions in Nike and Zoetis. We acquired shares in Nike following an update to our forecasts following weak trading. We assess the stock as having a positive risk-reward proﬁle, despite headwinds related to inventory overhangs in the US and China in the sports apparel segment. With the company having issued a proﬁt warning with third quarter results, we took advantage of the share price weakness. We believe that the company has the potential to recover beyond 2023 and to get back on track with its growth and ROIC. We continue to like Nike's market share dominance in the US and globally and its strategic push to the direct to consumer channel, into key categories like womenswear where they are under-represented and Jordan where they are able to create more choice for the consumer. We entered into a position in Zoetis following a 12% fall in the share price on release of the ﬁnancial results. We believe that this was an over-reaction to results where there will be limited change to consensus estimates, at c.2% and mostly related to currency exchange rates in our view. Zoetis is the market leading pure-play on the structural growth in animal medicines. The industry enjoys relatively high barriers to entry and a sticky customer base of veterinarians and livestock farmers. Zoetis has market leading breadth in its portfolio and geographic reach in its sales force. It is also a R&D leader in the animal health space. This gives the ﬁrm the ability to gain market share through developing superior drugs in markets that are too small and fragmented for larger players to be interested. ESG engagements Engagement has continued to be an important ongoing focal point for us throughout the year. We are pleased that the Company has retained its top-rating of ﬁve Morningstar Globes for Sustainability even under the new, more stringent, methodology that they have applied. Ahead of COP27 which took place in Egypt at the end of last year UNEP, the UN Environmental Programme, produced its seventeenth edition of the Emissions Gap report (www.unep.org/resources/emissions-gap-report-2022). This set out the continuing gap between current commitments from governments (nationally determined contributions or NDCs), pointing to a temperature rise of 2.6°C and the goals of the Paris Agreement to limit the rise to well below 2°C. As such this framed a renewed call for additional policy measures to support the transition to a lower carbon economy. We continue to engage with companies to understand how they are managing and mitigating potential risks as well as embracing some of the opportunities presented by this transition. There is an increasing focus from regulators for companies to provide clarity to investors on their transition plans – notably in Europe and the UK – but we are also seeing moves for the SEC in the US to enhance climate disclosures. Our expectation is for companies to set targets based on science and we continue to see progress in this with just over 50% of your portfolio having set science-based targets by the year end and a further 16% committed to do so in the next two years. Carbon data (as at Jan 31 2023): Weighted average carbon intensity Coverage Portfolio 84.0 100% Benchmark 155.3 99.9% Notes: Data as at 31 January 2023. Source: MSCI. Scope 1 are direct emissions from energy sources owned/controlled by a company. Scope 2 are indirect emissions from the generation of energy purchased by a company. Weighted average carbon intensity: tons CO2e/$M sales. Coverage: Proportion of companies for which data is available. Engagement topics split for 2022: Governance 45 % Social 26 % Environmental 23 % Disclosure 6% 13 Outlook Key risks to watch out for in 2023 The challenges that we face as investment managers are summarised in the ten key risks that we have identiﬁed: Monetary policies risk – over-tightening in interest rates creates a higher potential risk of policy mistakes for markets and economies. Fiscal policies risk – lack of follow-through in stated infrastructure spending programs could put more downside risk to economic momentum. Persistence in inflation – given the difficulty of predicting frictional inflation, risk of stronger and longer lasting inflation could fuel a need for more tightening in monetary policies. Pandemic relapse risk – localised lockdowns could create further disruptions in supply chains and bottlenecks, which could create shortages and further fuel the frictional inflation. Corporate margin pressure – more persistent and more elevated inflation could lead to more corporate margins pressure for companies lacking pricing power. Market volatility and Style leadership volatility – shifting expectations in monetary policies could lead to ongoing volatility in markets, and in style leadership between Growth and Value styles. Lower long-term growth – growing indebtedness is likely to lead to ongoing low long-term growth in our view, with more scarcity in growth opportunities. Higher taxation – given higher indebtedness, there is a high likelihood of higher tax rates, both for households and for corporates. Geopolitical risks flare ups – the Russia-Ukraine conflict will be an ongoing risk, with the risk of the conflict escalating or broadening. Other geopolitical hotspots to watch out for are China-Taiwan, North Korea, Iran-Israel, and China-rest of the world. Some of these geopolitical risks will be military, others will materialise into technological conflicts, such as China-US. Climate disasters risk – climate change related disasters are likely to continue to take their toll on various regions, with risk of negative impact on societies, but also on corporates in terms of risk to productive capacities and to assets in general. $ $ $$ $$ $$ $$ $$ $ $ $ $ $ $ $ $ $$ $$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Geopolitical risks will continue to contribute to volatility The Russia-Ukraine conﬂict shows no sign of an early resolution and there is the risk of further escalation. The ongoing energy supply risk for Europe and the eﬀects on commodity prices are likely to continue to have ramiﬁcations for inﬂation and economies around the world. On the other hand, a resolution to this conﬂict could be an important driver of a risk-on rally - particularly in European equities. The China-Taiwan geopolitical risk is likely to remain for years to come. This is also spilling over into technological conﬂicts with the US administration. This will clearly have implications for corporates exposed to these regulatory changes. North Korea also continues to have the potential to destabilise its region and the wider world, as does Iran. There is a tendency to rising nationalism in periods of economic challenge. In particular we are concerned about tensions between the US and Europe leading to increased protectionism which would damage economic growth. All eyes to remain on inﬂation Equity investors’ focus in 2023 is likely to remain on inﬂation and its impact on monetary policy. Whilst we have started to see some undershooting in inﬂation numbers compared with expectations recently, there is a risk that current elevated inﬂation levels will persist. With current pressure largely related to supply chain disruptions and production bottlenecks, there is a good likelihood that inﬂation rates could be in the process of peaking. However, this could be derailed by high wage inﬂation, which is a particular challenge in the US. This could lead to a risk of inﬂation turning more structural in the US, with a knock-on eﬀect to other markets. Extraneous risks to the inﬂation outlook include (i) further partial lockdowns in China disrupting supply chains and (ii) the continuing eﬀect of the Ukraine/Russia conﬂict on energy and food supplies. In summary, inﬂation remains diﬃcult to forecast. 14 “Equity investors’ focus in 2023 is likely to remain on inﬂation and its impact on monetary policy. ” (%) (2) 0 2 4 6 8 10 Headline CPI inﬂation on a monthly basis (%) 12 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 US UK France Germany (%) 0 (1) 1 2 3 4 5 Global 10-year bond yields (%) US 10yr bond yields UK 10yr bond yields 10yr bund yields Source: FactSet as at 31 January 2023. CPI data is shown to 31 December 2022. “This ongoing increased investment in climate solutions is likely to continue to drive the positive momentum in innovation.” 15 Macro-economic outlook pointing to sharp slowdown particularly in Europe With leading indicators continuing to deteriorate, we believe that 2023 will be a year of low economic growth at the global level and in particular in the US. A key determinant of the global economic cycle will be the Chinese economy, which is now the second largest in the world. The sudden and unexpected u-turn by China on its zero-Covid policy and the reopening of its economy could lead to a rapid improvement in the Chinese leading indicators in the months to come. Europe is particularly challenged and we maintain a high probability of stagﬂation. Europe’s economic momentum will in signiﬁcant part be inﬂuenced by China. There could therefore be a chance of improvement as China reopens. However, any renewed risk of energy rationing as we approach the winter of 2023/24 could put further downward pressure on economic activity in the second half of the year. Central banks will be playing a game of chicken in 2023 Central banks were clear in 2022 that they were focused on inﬂation – they eﬀectively moved from whatever it takes to prop up growth to whatever it takes to reduce inﬂation. During the course of 2023, if inﬂation overshoots expectations interest rates will likely need to further adjust upwards. Conversely, if inﬂation undershoots and concerns of a recession increase then monetary policy expectations will adjust downwards. The recent turmoil in the banking sector could also result in lower interest rates than would have been the case. We could therefore have a scenario in 2023 where central banks tolerate somewhat higher inﬂation in order not to push economies into recession. One sure prediction for 2023 is that the word “pivot” will be used aplenty. Anticipation of monetary policies pivoting will drive volatility and will generate a healthy bull-bear debate in markets. We expect policy expectations to continue to be the dominant driver of share price returns in 2023. Earnings growth lacklustre Earnings momentum turned negative from early 2022, driven by the tragic Russian invasion of Ukraine and the Chinese regional lockdowns. Economic leading indicators have been deteriorating since then, which in turn led to earnings momentum shiing negative rapidly. We believe that earnings revisions are likely to remain negative in the current year. Our top down growth estimates imply -1% for MSCI World, 0% for MSCI North America, and -5% for MSCI Europe, with MSCI Asia at +2%, all of which are noticeably lower than consensus forecasts. We therefore expect downward revisions in consensus estimates and downgrades in the cyclical parts of the market. In this environment it is critical to continue to focus on companies with resilient earnings and pricing power that can protect their margins from the ongoing higher inﬂationary pressures. Valuation levels are more supportive With equity markets having sold oﬀ signiﬁcantly during 2022, equity valuations are now more supportive across the US, EU and Global equity markets in our view. On a relative basis for developed markets, we see more valuation support in European vs US equity markets but against this the risks are higher for Europe. Asian equity valuations also show good support in our view, although there are again also some geopolitical risks in that region. (%) (2) 0 2 4 6 8 10 Headline CPI inﬂation on a monthly basis (%) 12 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 US UK France Germany (%) 0 (1) 1 2 3 4 5 Global 10-year bond yields (%) US 10yr bond yields UK 10yr bond yields 10yr bund yields Source: FactSet as at 31 January 2023. P/E 0 5 10 15 20 25 Forward P/E (FY1) of given equity markets 30 2012 2013 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 ACWI USA Europe Global USA Europe P/E 0 10 5 15 20 25 30 35 Schiller P/E 40 2023 Source: FactSet as at 31 January 2023. The Shiller Price / Earnings ratio is a measure of market valuations based on long-term earnings trends. See Glossary for more information. A more detailed review of the outlook can be obtained from our website. Green & Alternative Energy Energy Eﬃcient Infrastructure Electric transportation – High Speed Railways & Electric Vehicles Cloud Computing & Cyber Security Metaverse & Quantum Computing Robotics & Automation 5G Telephony Healthcare Infrastructure Mid-term opportunities still abound for long-term investors Despite the many uncertainties that we highlight in the market outlook, we ﬁnd opportunities as long-term investors to be exposed to businesses that generate high returns and have attractive structural growth opportunities. These businesses are likely to be able to navigate the diﬃcult near term economic cycle headwinds, and should be able to come out of any market slowdown in a stronger position than many of their competitors. In particular, we highlight that in a market where growth will be scarce, or indeed at risk of being negative for some areas such as Europe, we believe that there are good opportunities for structural growth across the three mega-trends that we have identiﬁed: As long-term investors, we believe that there are opportunities to capture some secular trends and structural growth opportunities, through exposures to themes that have supportive trends. Speciﬁcally, the eight mid-term thematic opportunities that we have identiﬁed previously still represent an important source of structural growth in our view. These eight opportunities are: (i) Green and alternative energy investment is an important focal point as more governments focus on decarbonising their economies, whilst the alternative energy sources have been an important geopolitical imperative for Europe since the Russian invasion of Ukraine. We see this as a long-term structural theme. (ii) Greener infrastructure is an area of focus on decarbonisation, notably focusing on reducing the carbon footprint of buildings, which are an important source of carbon emissions. (iii) Electric transportation is an important thematic opportunity as part of the drive to reduce carbon emissions. In this ﬁeld, we see opportunities both in high-speed railway infrastructure, and in the development of infrastructure for electric vehicles. (iv) Healthcare infrastructure is an important ﬁeld of infrastructure-related thematic opportunity, as governments focus on the need to upgrade post the pandemic crisis. At the same time, with an ageing population in many regions the need for more bespoke healthcare and targeted therapies, and the use of genomics to achieve such developments, are interesting areas of opportunity. (v) The upgrade cycle in 5G telephony is an important opportunity, as countries focus to make their economies more productive, with an upgrade in telecommunications infrastructure being a way to achieve this. (vi) Cloud computing trends in the mid-term are also very supportive, as more businesses migrate their presence online, creating more demand for cloud services. Related to this theme, as more corporates migrate their presence online, there is an increased need to invest in cyber security. (vii) Robotics and automation, and in particular Artiﬁcial Intelligence, is an important area of structural growth opportunity. Following the pandemic corporates are realising the need to make their production lines more robust, and their supply chains more resilient. Increased investment in robotics and automation is the way to do so. Trends towards onshoring or nearshoring of production bases will also accelerate this thematic trend. (viii) Finally, nascent but promising and fast growing opportunities exist in the metaverse and quantum computing ﬁelds. Notably, we believe that, given the sizable investments that big tech companies are channelling into this area, there are opportunities in the enablers of the metaverse. All in all, there are sizeable infrastructure and capital expenditure drivers across these eight areas, which bring some interesting opportunities to capture areas of structural growth through companies exposed to these themes. An ever more disruptive decade continues to aﬃrm itself in 2023 and beyond With the ongoing focus on investing for a transitioning world towards net-zero, innovation rates are likely to continue to increase and, with this, disruption risk to traditional businesses is likely to continue to rise. For long-term investors, this opens up interesting areas of opportunity. However, it also highlights the need to be vigilant in terms of disruption risk on established business models, and to ensure that disruption risk is assessed in a detailed and structured analytical approach. Equally important is the ability for companies to remain innovative, both to fend oﬀ competitive pressures and to stay ahead of the disruptive trends that could challenge their market positioning. Overall, we continue to focus on companies: • with resilient earnings growth proﬁles, given the ongoing risks of earnings downgrades, • exposed to structural growth themes, given the lower growth environment, • with strong pricing power, given the ongoing elevated inﬂationary pressures weighing on corporate margins, • with solid balance sheets, to withstand the potential risk of an economic hard landing. Zehrid Osmani Portfolio Manager, Martin Currie Global Portfolio Trust plc Head of Global Long-Term Unconstrained Equities, Martin Currie 6 April 2023 Future of Technology Demographic Changes Resource Scarcity Green & Alternative Energy Energy Eﬃcient Infrastructure Electric transportation – High Speed Railways & Electric Vehicles Cloud Computing & Cyber Security Metaverse & Quantum Computing Robotics & Automation 5G Telephony Healthcare Infrastructure Green & Alternative Energy Energy Eﬃcient Infrastructure Electric transportation – High Speed Railways & Electric Vehicles Cloud Computing & Cyber Security Metaverse & Quantum Computing Robotics & Automation 5G Telephony Healthcare Infrastructure Green & Alternative Energy Energy Eﬃcient Infrastructure Electric transportation – High Speed Railways & Electric Vehicles Cloud Computing & Cyber Security Metaverse & Quantum Computing Robotics & Automation 5G Telephony Healthcare Infrastructure Green & Alternative Energy Energy Eﬃcient Infrastructure Electric transportation – High Speed Railways & Electric Vehicles Cloud Computing & Cyber Security Metaverse & Quantum Computing Robotics & Automation 5G Telephony Healthcare Infrastructure Green & Alternative Energy Energy Eﬃcient Infrastructure Electric transportation – High Speed Railways & Electric Vehicles Cloud Computing & Cyber Security Metaverse & Quantum Computing Robotics & Automation 5G Telephony Healthcare Infrastructure Green & Alternative Energy Energy Eﬃcient Infrastructure Electric transportation – High Speed Railways & Electric Vehicles Cloud Computing & Cyber Security Metaverse & Quantum Computing Robotics & Automation 5G Telephony Healthcare Infrastructure Green & Alternative Energy Energy Eﬃcient Infrastructure Electric transportation – High Speed Railways & Electric Vehicles Cloud Computing & Cyber Security Metaverse & Quantum Computing Robotics & Automation 5G Telephony Healthcare Infrastructure 16 Valuation ESG $ Returns Corporate ethos $ Financial strength Growth drivers Does the company generate sustained proﬁts? Does the company have a healthy balance sheet? Does the company have strong track record of capital allocation? Does the company excel in the eight criteria below? Assess company against four core risk categories Assess company against 50+ ESG criteria Assess company against mega-trend thematic analysis Accounting diagnostics Industry analysis Industry risks Company risks Governance & sustainability risks Environmental Social Governance Portfolio risks 2. In-depth fundamental research Future of technology Resource scarcity Demographic change 1. IDEA GENERATION 4. PORTFOLIO Analyse the customers of the potential holding End-user markets 3. Portfolio construction Analyse the maturity of the business Industry lifecycle Evaluate in terms of business model diversity Company classiﬁcation Evaluate with thematic mega-trend framework Evaluate exposure to the world’s growth markets Geographic revenue & proﬁt Long-term thematics Our investment universe consists of companies with a combination of sustainable growth and quality We identify quality growth ideas by looking for companies that can generate sustained profits, demonstrated by an ability to consistently generate a Return on Invested Capital (ROIC) in excess of their Weighted Average Cost of Capital (WACC). On the quality side we want those with healthy balance sheets, identified by low gearing and the level of goodwill. Our investment manager's process We establish the quality and sustainability of the business model We aim to be highly efficient in our research, so we use eight criteria to examine the quality and sustainability of the business model – of these, valuation is considered the most important. This allows us to focus on the strongest ideas when conducting our in-depth fundamental research. The proprietary research platform generates maximum insight without compromising on quality Our research templates systematically risk assess a company against four categories – industry dynamics, company risks, governance & sustainability and portfolio risks. This allows for effective comparisons across different companies and provides a framework for the team to build their conviction. ESG is integrated throughout the process Our proprietary ESG risk assessment on Governance and on Sustainability consistently assesses over 50 underlying criteria to capture the complexity of the ESG risks facing a company’s long-term outlook and sustainability – each criterion reflecting what we believe are the most universal material ESG factors. We drill down into a further 20 criteria to analyse social exploitation risk. Thematic analysis is used to identify long-term growth We want to identify multi-decade returns so we incorporate thematic analysis on three mega-trends: Demographic change, Future of technology and Resource scarcity. Demographic change encapsulates areas such as growth in the emerging markets' middle class, healthy living, or ageing populations. In Future of technology, we capture themes such as outsourcing, artificial intelligence and cyber security, while in Resource scarcity, we see opportunities emerging in electric vehicles, climate change, and energy. 17 Valuation ESG $ Returns Corporate ethos $ Financial strength Growth drivers Does the company generate sustained proﬁts? Does the company have a healthy balance sheet? Does the company have strong track record of capital allocation? Does the company excel in the eight criteria below? Assess company against four core risk categories Assess company against 50+ ESG criteria Assess company against mega-trend thematic analysis Accounting diagnostics Industry analysis Industry risks Company risks Governance & sustainability risks Environmental Social Governance Portfolio risks 2. In-depth fundamental research Future of technology Resource scarcity Demographic change 1. IDEA GENERATION 4. PORTFOLIO Analyse the customers of the potential holding End-user markets 3. Portfolio construction Analyse the maturity of the business Industry lifecycle Evaluate in terms of business model diversity Company classiﬁcation Evaluate with thematic mega-trend framework Evaluate exposure to the world’s growth markets Geographic revenue & proﬁt Long-term thematics 18 Built for long-term returns We consider portfolio construction of equal importance to the research process. The same high-quality proprietary data that we generate in our research platform is used in the portfolio analytics, risk assessments and the portfolio construction. This aids our understanding of the portfolio’s diversity and allows us, through appropriate stock weightings, to effectively manage risk and ensure we are positioned to capture long- term growth. Geographic revenue and proﬁt – exposure to the world’s growth markets Breaking down the portfolio by the geographic source of revenue provides greater insight than constructing the portfolio based on a stock’s country of listing. In an increasingly globalised and connected world, companies are more dependent on overseas revenues. Long-term thematics – investing in the drivers of corporate growth Within our three mega-trends of Demographic change, Future of technology and Resource scarcity, we have approximately 35 specific sub-themes, some of which overlap between two or three of the mega-trends. By using our thematic framework we can build a picture of each company and therefore the portfolio’s overall exposure to these growth drivers. Company classiﬁcation – ensuring a diversity of business models We invest in quality growth companies, but our classifications allow us to maintain a diversity of business models that can either offer more defensive or outright growth characteristics to deliver a more consistent return profile. Industry lifecycles – understanding business maturity We assess where a company is in its industry lifecycle through six key stages from early stage and accelerating growth through to decline and renewal. This is important in terms of balancing growth drivers and risk management. End-user markets – seeking proﬁtable sectors and industries An aggregation of our portfolio holdings’ end-customers. As with our analysis of geographic revenues and profit, this provides a more intuitive breakdown than a company’s sector listing. We can understand if companies are operating in potential profitable sectors or areas where we see future growth potential. A portfolio of 25-40 hand-picked stocks from some of the world's leading companies. The investment manager's depth of Environmental, Social and Governance (‘ESG’) research is an integral part of its investment process. We are continually enhancing our assessments to reflect new issues and to ensure our market-leading approach continues to evolve. Source: Morningstar, December 2022. ©2021 Morningstar, Inc. All rights reserved. PRI – Principles for Responsible Investment. A copy of the PRI's assessment of Martin Currie and its methodology is available on request. Holder of highest Morningstar Sustainability Rating The only company in the AIC global sector to be awarded the highest Morningstar Sustainability Rating – 5 globes 1 . This recognises our commitment to mitigate the risks our investors face in the ESG space. Top 1% worldwide The Company is in the top 1% of all the 7,784 products categorised by Morningstar as Global Equity Large Cap. 1 This world-class rating acknowledges the high standards and pioneering in-depth analysis undertaken as part of our stock selection process. Over 50 ESG assessments on every company We evaluate, measure and score over 50 individual criteria for every company that we research. This provides a consistent and systematic analysis across sectors and countries, helps identify the most material risks and gives us an insight into a company’s ESG credentials. Social factors – rated one of the best in sector We are already rated one of the best by Morningstar in the sector for Social factors 1 but this is an area we have recently been focusing on – and is of major importance to our team. We have introduced a second layer of 20 measures to underpin our analysis into exploitation risk, looking at issues relating to: labour rights, human rights, working conditions, age & gender exploitation. Consistently high PRI rating 2 We have a distinct and recognised competitive edge in this area having been a signatory of the UN-supported Principles for Responsible Investment (PRI) since 2009 and we have been consistently rated highly by the PRI. Low-carbon footprint The portfolio has been awarded a low-carbon designation by Morningstar and accounts for a fraction of the emissions of the benchmark index (MSCI ACWI). An index tends to include companies based on their size so can include high polluters or companies judged to have a detrimental impact on society. Our active management approach is more selective. 19ESG & our investment manager's process PORTFOLIO SUMMARY 20 By asset class 31 January 2023 % 31 January 2022 % Equities 111.1 107.5 Cash 0.9 2.0 Less borrowings (12.0) (9.5) 100.0 100.0 By sector 31 January 2023 Company % 31 January 2023 MSCI All Country World index % 31 January 2022 Company % 31 January 2022 MSCI All Country World index % Information Technology 31.5 20.6 33.7 22.8 Healthcare 26.5 12.5 23.4 11.4 Consumer Discretionary 15.3 11.1 15.2 12.0 Industrials 9.7 10.0 11.3 9.5 Materials 7.4 5.1 4.7 4.7 Consumer Staples 5.9 7.3 5.8 6.9 Financials 3.7 15.3 3.0 14.8 Communication Services — 7.1 2.9 8.5 Energy — 5.4 — 4.0 Utilities — 3.0 — 2.7 Real Estate — 2.6 — 2.7 100.0 100.0 100.0 100.0 21 North America 47.1% Developed Europe 41.9% 7.7% Developed Asia ex Japa n Global Emerging Markets 3.3% Portfolio distribution by region 31 January 2023 Company % 31 January 2023 MSCI All Country World index % 31 January 2022 Company % 31 January 2022 MSCI All Country World index % North America 47.1 63.1 43.9 63.9 Developed Europe 41.9 16.6 39.1 16.1 Developed Asia Paciﬁc ex Japan 7.7 3.3 6.1 2.8 Global Emerging Markets 3.3 11.3 10.9 11.5 Middle East — 0.2 — 0.2 Japan — 5.5 — 5.5 100.0 100.0 100.0 100.0 Sector Country Market value £000 % of total portfolio North America 130,556 47.1 Linde Materials United States 15,041 5.4 ResMed Healthcare United States 14,270 5.1 Microso Information Technology United States 14,228 5.1 Nvidia Information Technology United States 12,745 4.6 VISA Information Technology United States 12,633 4.6 Masimo Healthcare United States 9,879 3.6 Nike Consumer Discretionary United States 8,528 3.1 Ansys Information Technology United States 8,302 3.0 Adobe Information Technology United States 7,929 2.9 Zoetis Healthcare United States 7,553 2.7 Autodesk Information Technology United States 6,981 2.5 Veeva Systems Healthcare United States 6,476 2.3 Illumina Healthcare United States 5,991 2.2 Portfolio holdings as at 31 January 2023 22 Sector Country Market value £000 % of total portfolio Developed Europe 116,482 41.9 ASML Holding Information Technology Netherlands 14,223 5.1 Moncler Consumer Discretionary Italy 13,190 4.8 L'Oreal Consumer Staples France 11,623 4.2 Ferrari Consumer Discretionary Italy 11,164 4.0 Atlas Copco Industrials Sweden 10,325 3.7 Hexagon Information Technology Sweden 10,301 3.7 Kingspan Group Industrials Ireland 9,457 3.4 Coloplast B Healthcare Denmark 9,212 3.3 Kering Consumer Discretionary France 8,697 3.1 Assa Abloy Industrials Sweden 7,192 2.6 Croda International Materials United Kingdom 5,562 2.0 Kerry Group Consumer Staples Ireland 4,802 1.7 Dr. Martens Consumer Discretionary United Kingdom 734 0.3 Total portfolio holdings 277,606 100.0 Global Emerging Markets 9,198 3.3 WuXi Biologics Healthcare China 9,198 3.3 Developed Asia Paciﬁc ex Japan 21,370 7.7 CSL Healthcare Australia 11,078 4.0 AIA Group Financials Hong Kong 10,292 3.7 ResMed Healthcare, United States The company is a global leader in the development of medical devices and cloud-based software applications that diagnose, treat, and manage respiratory disorders including sleep disordered breathing (more commonly known as sleep apnea), asthma and chronic obstructive pulmonary disorder (COPD). The company has a very attractive long-term revenue growth outlook. It is estimated that more than 424 million individuals globally have moderate to severe sleep apnea, with the percentage diagnosed below 15% and the percentage treated by ResMed below 3%, despite the company being market leader. The combined potential patient base including asthma and COPD numbers is in excess of 1 billion globally. 23 Linde Materials, United States A resilient and geographically diverse business, it has high exposure to fast-growing emerging markets, combined with a solid base in the Americas. Linde exerts strong pricing power from its leading positions in the regions in which it operates. Although revenue growth is correlated to global industrial production, the structure of client contracts using ‘take-or-pay’ and ‘facility fees’ means that revenues are relatively cushioned during economic downturns. Further, the merger has accelerated a strategy of focusing on less economically sensitive customers in the healthcare and food and beverage sectors. Largest 10 holdings 31 January 2023 Market value £000 31 January 2023 % of total portfolio 31 January 2022 Market value £000 31 January 2022 % of total portfolio Linde 15,041 5.4 15,820 4.7 ResMed 14,270 5.1 15,600 4.6 Microso 14,228 5.1 19,489 5.7 ASML Holding 14,223 5.1 — — Moncler 13,190 4.8 14,267 4.2 Nvidia 12,745 4.6 17,440 5.1 VISA 12,633 4.6 13,545 4.0 L'Oreal 11,623 4.2 12,624 3.7 Ferrari 11,164 4.0 10,786 3.2 CSL 11,078 4.0 10,509 3.1 Largest 10 holdings in detail LARGEST 10 HOLDINGS Sector Portfolio % Market value £000 5.4 15,041 Sector Portfolio % Market value £000 5.1 14,270 As at January 2023 the largest 10 holdings accounted for 46.9% of the portfolio (46.4% as at January 2022). Microso Information Technology, United States US software company Microsoft, best known for its Windows operating system, the Xbox gaming console and cloud computing service Azure, is in a prime position to benefit from a new ‘golden era’ of investment in technology. IT investment is becoming crucial for every aspect of corporate life – infrastructure, marketing, sales and commerce – and Microsoft stands to capture a significant share of this double-digit-growing expenditure. Furthermore, a progressive move towards a subscription-based model is improving the company’s pricing power and its competitive position in the market. Sector Portfolio % Market value £000 5.1 14,228 24 ASML Holding Information Technology, Netherlands The semiconductor equipment company enjoys a very strong market position and close relationships with customers. In addition the company is benefiting from the trend of on-shoring of semiconductor production. The Dutch company is critical in enabling innovation and development in the semiconductor industry. This backdrop, coupled with strong structural growth in semiconductor volume, gives the company a very attractive long- term growth and profitability outlook. Sector Portfolio % Market value £000 5.1 14,223 Moncler Consumer Discretionary, Italy Is the undisputed global leader in super premium down jackets and has a rich heritage and strategic focus on long-term sustainable and responsible growth. The market is aware that the business is still expanding its distribution and that the total available market is very large relative to its current revenues (20% of total luxury and personal goods is apparel). However, the market seems focused on short-term concerns around trade and a slowdown in China, and seems to be missing the attractive long- term growth opportunity and the management’s exemplary execution within the category. We believe that the structural growth potential of the company is compelling, and its ability to continue to innovate remains strong. Nvidia Information Technology, United States The company designs graphics processing units for gaming and professional markets. We see long-term upside optionality in several secular growth areas, including Gaming, Cloud, AI and Autonomous Vehicles. The growth is driven by the long-term structural trends in gaming and more importantly in data centres. 25 Sector Portfolio % Market value £000 4.8 13,190 Sector Portfolio % Market value £000 4.6 12,74 5 Sector Portfolio % Market value £000 4.2 11,623 L’Oreal Consumer Staples, France Based in France, L'Oreal is number one in global beauty (in 2021 by revenue * ), outgrowing a market which grows 3–5% annually. The company's R&D, marketing capability, logistics platform and global expertise in the space gives us conviction in the sustainability of this outperformance. Thanks to sensible capital allocation, L’Oreal has a long history of value creation through bolt-on acquisitions. Further to this, the balance sheet is highly under-utilised, giving significant opportunity to further beat expectations. *Source company reports, August 2022. Based on 2021 beauty sales from the 10 leading global beauty companies. VISA Information Technology, United States VISA is a classic compounder, boosted by the secular shift away from cash/physical sales towards digital/online commerce. The company's ROIC is highly attractive as the network model provides structural operating leverage, but with low requirements for capital expenditures. The electronic payments space is seeing ongoing disruption, but VISA's prime competitive position ensures that they can face these challenges from a position of strength. 26 Sector Portfolio % Market value £000 4.6 12,633 CSL Healthcare, Australia The Australian blood-plasma company has a long history of high and sustainable returns, driven by cost efficiency in a largely consolidated market with high barriers to entry. Persistent industry supply/demand tightness is allowing CSL to capture an outsized share of growth through its superior collection infrastructure. Meanwhile, visibility of the next phase of growth and sustained returns appear promising, as waste products from the core operations are successfully re-purposed into specialty drugs, for example, Haegarda for hereditary angioedema. Existing molecules are also turned to new treatment areas such as Transplant, all at substantial incremental margins. Ferrari Consumer Discretionary, Italy The Italian sports car manufacturer provides a unique play on the global growth of high-net-worth individuals and their passion for speed. It has enviable pricing power, with huge scope for average selling prices to increase through greater use of the Special Series and Icona platforms – already a sizeable premium to other luxury car manufacturers. Growth potential is further enhanced by electrification as they launch new hybrid and electric models. Sector Portfolio % Market value £000 4.0 11,164 27 Sector Portfolio % Market value £000 4.0 11,078 This report provides shareholders with details of the Company’s business model and strategy as well as the principal and emerging risks and challenges that it faces. Business model The Company has no employees and outsources its entire operational infrastructure to third-party organisations. The Board has appointed Franklin Templeton Investment Trust Management Limited as its Alternative Investment Fund Manager (‘AIFM’), which in turn has appointed Martin Currie Investment Management Limited (the ‘investment manager’ or the ‘manager’) to manage the portfolio. Under the leadership of portfolio manager, Zehrid Osmani, a specialist team analyses the world’s stocks to ﬁnd the very best ideas. The Board sets the Company’s strategy, decides the appropriate ﬁnancial policies to manage the assets and liabilities of the Company, ensures compliance with tax, legal and regulatory requirements and reports regularly to shareholders on the Company’s performance. Further information on the role and operation of the Board is set out under Corporate Governance on page 38. For more information on investment trusts in general please visit www.theaic.co.uk. Investment Objective The investment objective is to produce long-term returns in excess of the total return from the MSCI All Country World index. Purpose In line with the objective outlined above, the Company's purpose is to deliver a sustainable long-term total return to shareholders by implementing the investment policy through the Company's investment manager. Investment Policy The investment policy is: • To invest predominantly in listed global equities of quality growth companies with superior share price appreciation potential, based on projected ROIC (return on invested capital), balance sheet strength and sustainable business models. • To manage a high conviction portfolio with typically 25-40 holdings, with a view to holding stocks over a long-term investment horizon. • To achieve risk spreading through a portfolio of holdings diversiﬁed by types of company and sources of revenue. No more than 10% of total assets will be invested in a single stock. • To fully integrate Environmental, Social and Governance ('ESG') criteria into fundamental analysis when assessing business models. • To exclude investments identiﬁed through the investment manager’s proprietary ESG risk assessment as having a high level of Sustainability or Governance risk. • To potentially use debt to enhance returns to shareholders. Gearing will not exceed 20% of net assets at the time of drawdown. • To not invest in other listed closed-end funds. A description of the investment manager’s process, which includes a fully integrated approach to ESG matters, is set out on pages 17 to 19 of this annual report. Strategies Investment In order to achieve its investment objective, the Company has adopted a distinctive philosophy in implementing its investment policy. This clearly focuses on using the investment manager’s ability to combine investment performance with socially responsible investment. This is done through their leading global research capabilities in identifying high-quality companies that will beneﬁt from exposure to growth megatrends worldwide and their leading performance in engaging with these companies on ESG issues. The Company invests predominantly in blue chip equities with a market capitalisation in excess of $3 billion and selects quality growth companies which are market leaders in their industries with superior share price appreciation potential based on attractive return on invested capital (ROIC), balance sheet strength and ESG credentials. The resulting diversiﬁed portfolio of between 25 and 40 international quoted companies as listed on pages 21 and 22 is actively managed and concentrated, focusing on high conviction stocks selected on the basis of detailed research analysis. This active portfolio management policy will inevitably involve some periods when the Company’s portfolio outperforms or underperforms the Company’s benchmark. The Board does not impose any limits on the investment manager’s discretion to select individual stocks in compliance with the investment policy. The investment manager ensures that investment risk is dominated by the high conviction stocks in the portfolio within the guidelines set by the Board and that the combination of stocks held does not lead to unintended reliance on a particular macroeconomic factor (for example, a higher oil price or higher interest rates). Current asset allocation and actual holdings are discussed in the Manager’s review on pages 10 to 12 and details are contained in the portfolio summary and portfolio holdings on pages 20 to 27. BUSINESS REVIEW 28 Environmental, Social and Governance ('ESG') The Company and investment manager believe that good ESG practices are a fundamental component of a high-quality company and hence rigorously reviews its ESG practices. This will typically include analysis of shareholder rights, accounting standards, remuneration, board structure, supply chain, data protection, pollution/hazardous waste policies, water usage and climate change policies. The investment manager’s ESG analysis may inﬂuence key ﬁnancial assumptions such as cost of capital, revenues or costs and thus the estimate of a company’s intrinsic value. These are discussed in greater detail on pages 12 and 19. A poor governance, environmental or social track record for a company can indicate wider sustainability issues and could lessen the attractiveness of the investment. ESG issues are integral to the Company’s investment philosophy. The investment manager has been a signatory to the Principles for Responsible Investment ('PRI') since 2009. In September 2022, under the new and revised reporting framework the investment manager was awarded the highest possible 5 stars for investment & stewardship policy and for incorporation and 4 stars for voting. Copies of the investment manager's 2021 Assessment Report and Transparency report from the PRI are available on their website www.martincurrie.com/uk/media- centre/martin-currie-stewardship-leadership-pri-2021. The investment manager was accepted as a signatory to the revised Financial Reporting Council ('FRC') Stewardship Code (2020) in 2022. Please see the Section 172 Report on pages 31 and 32 for information on engagement with investee companies. The investment manager’s proprietary ESG risk assessment makes a risk assessment and consistently assesses over 50 underlying criteria to capture the complexity of the ESG risks facing a company’s long-term outlook and sustainability – each criterion reﬂecting what they believe are the most universal material ESG factors. Each risk is rated on a scale 1 (lowest risk) to 5 (highest risk). These risks are analysed under the following headings: • Board quality • Management quality • Remuneration • Culture • Environmental • Social • Understanding and integration • Common factors • Sustainability momentum Under the ‘Social’ heading the investment manager drills down into a further 20 criteria to analyse social exploitation risk. Each risk is rated on a scale 1 (lowest risk) to 5 (highest risk). A company with an overall Sustainability or Governance risk rating of 4.0 or higher will not be included in the portfolio. Marketing The marketing strategy seeks to expand the shareholder base through increased engagement with key audiences, using the most appropriate promotional techniques. This drive to deepen demand for the Company’s shares should enable growth over time in the number of shares in issue, improve the eﬃciency of the Company and increase liquidity in its shares. This is supported by a commitment to provide clear, transparent and regular communication to shareholders delivered primarily through the Franklin Templeton UK Distribution team and the Company’s website which contains information relating to performance, outlook and signiﬁcant developments as they occur as well as interviews with the portfolio manager, Zehrid Osmani. In addition, the Company utilises marketing tools such as advertising, social media, public relations and research. The portfolio manager also meets regularly with existing and potential institutional shareholders, including private wealth managers. Financial The Company's main ﬁnancial strategic goals are: • the management of shareholder capital; and • the management of the Company's ﬁnancial risks. The Board’s principal aim for the management of shareholder capital is the achievement of long-term total return in line with the investment objective. Growth should incorporate both the investment manager’s investment performance and the issuance of shares when suﬃcient demand exists to do this without diluting the value of existing shareholder capital. At the same time, the Board has also maintained or increased dividends each year since the Company’s launch in 1999 and remains committed to delivering strong long-term total returns on shareholder capital. 29 1. Net asset value performance relative to benchmark The Board assessed the net asset value total return compared to the benchmark. It is measured on a ﬁnancial year basis and assessed over a rolling three year period. The benchmark with eﬀect from 1 February 2020 is the MSCI All Country World index. Prior to this, the benchmark was the FTSE World index. The KPI was not achieved for the period. The return of the Company was 12.8% and the benchmark 30.5% for the three years to 31 January 2023. 2. Performance against the Company’s peers The Board monitors the share price total return performance versus all competitor funds within the AIC Global sector over a rolling three year period. The share price total return for the Company was 6.5% over the three years to 31 January 2023 which ranked 10 out of 14 in the AIC Global sector. 3. Ongoing charges The Board monitors ongoing charges on a regular basis to ensure that it meets its target by maintaining cost discipline and its focus on value adding activities. The KPI was met for the year at 0.61%. The ongoing charges ﬁgure has been calculated in line with the Association of Investment Companies ('AIC') recommended methodology. Key Performance Indicators and Performance The Board uses certain key performance indicators (‘KPIs’) to monitor and assess its performance in achieving the Company’s objectives. The Board have made no changes to the KPI targets in the financial year to 31 January 2023. KPI Target 2023 Achieved 2022 Achieved 1. Net asset value performance relative to benchmark (over 3 years) Outperform -17.72% No 1.62% Yes 2. Performance against Company’s peers (over 3 years) Top third performance 10 out of 14 No 5 out of 17 Yes 3. Ongoing charges Less than 0.70% 0.61% Yes 0.68% Ye s 30 Discount management The Company operates a zero discount policy with the objective of providing shareholders, in normal market conditions, with assurance that the Company’s share price is in continuing alignment with the prevailing net asset value per share ('NAV') and liquidity so that investors can buy or sell as many shares as they wish at a price which is not signiﬁcantly diﬀerent from the NAV. This involves the Company both buying back shares and reissuing shares from Treasury or issuing new shares. Shares bought back as part of this policy are held in Treasury and reissued when demand exists which the market cannot supply. Discount is an Alternative Performance Measure, see page 82 for more details. Gearing The Board sets the Company’s policy on the use of gearing as part of the process of delivering returns to shareholders. The Company has an unsecured £30 million sterling term loan facility agreement with The Royal Bank of Scotland International Limited which was drawn down in full on 24 November 2020 at a ﬁxed interest rate of 1.181% and for a ﬁxed term of three years. The Company has no other borrowings. The Board reviews the Company's borrowings to ensure that gearing levels are appropriate. The total borrowings will not exceed 20% of the net assets of the Company at the time of drawdown. The Board monitors the Company’s gearing closely and takes a prudent approach. Further disclosure on leverage as required under AIFM regulations is set out on page 46. Gearing is an Alternative Performance Measure, see page 82 for more details. Section 172 Report – Duty to promote the success of the Company The Company is required to provide a statement which describes how the Directors have had regard to the matters set out in Section 172 of the Companies Act 2006 when performing their duty to promote the success of the Company, including: Section 172 Scope Board's Statement The likely consequences of any decision in the long term. The Board is focused on promoting the long-term success of the Company and regularly reviews the Company’s long-term strategic objectives, including consideration of the impact of the investment manager’s actions on the marketability and reputation of the Company and the likely impact on the Company’s stakeholders of the Company’s principal strategies. The interests of the Company’s employees. The Company has no direct employees. The need to foster the Company’s business relationships with suppliers, customers and others. The Board’s approach to its key stakeholders is set out under 'Stakeholders' below. The impact of the Company’s operations on the community and the environment. The Board’s approach is set out in the section on ESG in 'Strategies' on page 29. The desirability of the Company maintaining a reputation for high standards of business conduct. The Board’s approach is set out in 'Culture and Values' on page 33. The need to act fairly between members of the Company. The Board’s approach is set out under 'Stakeholders' below. 31 Stakeholders Why they are important Board Engagement Shareholders The Company, as an investment trust, does not have any employees and its customers are also its shareholders. The primary purpose of the Company is to deliver long-term returns for shareholders from a portfolio of investments. Continued shareholder support and engagement are critical to the existence of the Company and the delivery of its long-term strategy. The Board and the investment manager recognise the importance of engaging with shareholders on a regular basis in order to maintain a high level of transparency and accountability and to inform the Company’s decision making and future strategy. The Board receives regular reports from the investment manager on shareholder engagement, with the investment manager tasked with maintaining regular and open dialogue with larger shareholders. Directors, primarily through the Chairman, are also available to meet major shareholders to understand their views and to help inform the Board’s decision making process. The Company maintains an award-winning website which hosts copies of the annual and half yearly reports along with factsheets and other relevant materials. Shareholders are also invited to attend the AGM at which they have the opportunity to speak directly with Directors. The investment manager has a dedicated client services team which maintains regular contact with the Company’s shareholders and reports regularly to the Board. Shareholders can also contact the Directors throughout the year via the company secretary or the broker. Stakeholders Why they are important Board Engagement Lenders Alongside shareholders’ equity, the Company has, since November 2020, been partly funded by debt. Although the Company is not dependent on debt financing, continued support from lenders is important to maintain the financial stability of the Company and flexibility in managing the portfolio. The Company’s debt is subject to contractual terms and restrictions. The Company has a procedure in place to report regularly to its lender on compliance with debt terms. The investment manager The performance of the investment manager is critical for the Company to deliver its investment strategy and meet its objective. The management engagement committee is tasked with reviewing the performance of the investment manager. Representatives of the investment manager including the portfolio manager, Zehrid Osmani, attend each regular Board meeting and provide an update on the investment portfolio along with presenting on macroeconomic issues. Other service providers The Company has a number of other key service providers, each of which provides a vital service to the Company and to its shareholders. The audit committee receives reports from and reviews the service, quality and value for money provided by other third party suppliers. The investment manager is tasked with maintaining a constructive relationship with such other third-party suppliers on behalf of the Company. It is the Board’s policy that all payments due to suppliers will be made in full and on time. 32 During the year, the Board made a number of key decisions which fall under the Section 172 scope set out above: • The reduction in NAV as a result of market movements and share buybacks led the Board to be concerned that the ongoing charges ratio was increasing. The Board agreed with the manager that, with eﬀect from 1 July 2022, the AIFM fee would be amended to 0.45% of net assets per annum. Furthermore, with eﬀect from 1 July 2022, there will no longer be a separate company secretarial fee. The eﬀects of these changes are described in the Chairman’s statement on page 8. • The Board decided to maintain the total dividend for the year, which will result in an uncovered dividend. The reasons for this are set out in the Chairman’s statement. Culture and Values The Board considers that its culture of openness of debate combined with strong governance and the beneﬁts of a diverse Board are central to delivering against its purpose, values and strategies that are discussed in this report. The Board monitors and reviews its culture as part of its annual evaluation process and monitors the culture within the investment manager to ensure that it is closely aligned with that of the Company. The key values of the Board are: Independence: To act independently in the interests of shareholders. Sustainability: To ensure that the companies in which the Company invests and the Company's key suppliers are supportive of good environmental, social and governance practices and that its investment manager encourages continuous improvement in these areas. Transparency: To report transparently and accurately to shareholders on the condition, performance and prospects of the Company. The Board works closely with the investment manager to develop and monitor its investment strategy and activities, not only to achieve its investment objective, but also to deliver the Company’s values of Independence, Sustainability and Transparency. Engagement with investee companies The Board also expects good governance standards to be maintained at the companies in which the Company is invested and reviews the engagement and voting activities which are undertaken by the investment manager. The ESG strategy followed by the Company and the investment manager is detailed on pages 19 and 29. The Board receives regular reports of both voting and other engagements by the investment manager with the management teams of companies in the portfolio. Details of Martin Currie’s ESG related policies and activities can be found on its website at www.martincurrie.com. The Board believes that companies which exhibit positive ESG behaviours contribute to increasing value over the long term. Voting policy and the UK Stewardship Code The Company has delegated responsibility for voting at investee company shareholder meetings to Martin Currie, which votes in accordance with its corporate governance and responsible investing policy. Martin Currie has gained a 5-star rating for both Investment & Stewardship Policy and Incorporation (for Direct - Listed equity - Active fundamental), and a 4-star rating for Voting (Direct - Listed equity - Active fundamental) under the PRI's Reporting Framework for 2021. Martin Currie is a signatory of the FRC UK Stewardship Code 2021. A copy of Martin Currie's stewardship report can be found at https://www.martincurrie.com/insights/2022-stewardship- annual-report The Board has published a compliance statement with the UK Stewardship Code on the Company’s website, which incorporates its policies on socially responsible investing and engagement with the companies in which it invests. Anti-bribery and tax evasion The Board has a zero tolerance policy towards bribery and looks to ensure that its service providers and associated persons have eﬀective policies and procedures designed to actively prevent bribery which are high level, proportionate and risk based. In relation to the corporate oﬀence of failing to prevent tax evasion, it is the Company’s policy to conduct all business in an honest and ethical manner. The Company takes a zero tolerance approach to any facilitation of tax evasion whether under UK law or under the law of any foreign country and is committed to acting professionally, fairly and with integrity in all of its business dealings and relationships. 33 Principal and emerging risks and uncertainties Risk and mitigation The Company’s business model is longstanding and resilient to most of the short-term operational uncertainties that it faces. The Board believes that these are eﬀectively mitigated by the internal controls established by the Board and by the AIFM and their combined oversight of the investment manager, as described in the table below. Its principal risks and uncertainties are therefore largely driven by the inherent uncertainties of investing in global equity markets. The Board’s process seeks to mitigate known risks and to identify new risks as they emerge. However, it is recognised that the likelihood and timing of crystallisation of some risks, known and unknown, cannot be predicted and the Board then relies on professional management, eﬀective systems and communication to mitigate and respond to them as and when they arise. Operational and management risks are regularly monitored by the AIFM and by the Board at Board meetings. As part of its annual strategy meeting the Board carries out a robust assessment of the principal and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. The Board's planned mitigation measures for the principal and emerging risks are described below. The Board notes that the dominant global macroeconomic risks are geo-political tensions, inﬂation, and climate transition as well as continuing fallout from the Covid-19 pandemic. These are however considered to be risks that have an impact on the identiﬁed principal and emerging risks and are therefore considered and managed in that context. With regard to Covid-19, in most of the world restrictions on social contact and travel have been reduced or removed completely. While there remains a risk of further outbreaks, the Board has concluded that the recent pandemic no longer represents a principal risk for the Company. Nevertheless, the recent pandemic has highlighted the ability of virulent diseases to travel rapidly around the world and the Board and AIFM will manage the risk by continuing to ensure that the Company and its key suppliers have eﬀective contingency plans in place. 34 Principal risk Mitigation Sustained investment underperformance The Board oversees the implementation of the investment strategy and monitors the performance of the investment portfolio. The portfolio manager attends all Board meetings and reviews the portfolio with the Board together with data that shows statistical measures of the Company’s risk and return profile. Should there be sustained investment underperformance despite reasonable mitigation measures taken by the investment manager, the Board would assess the cause and take appropriate action to manage this risk. The investment strategy will underperform in certain market conditions and the Board will assess whether underperformance is due to market conditions, poor manager performance or whether the strategy itself is unsustainable. There is increasing awareness of the challenges and emerging risks posed by climate change. The investment process incorporates detailed analysis of ESG issues and, as set out in the Manager’s review, this includes an assessment of the potential impact of climate change. Overall, the specific potential effects of climate change are difficult, if not impossible, to predict and to measure and the Board and investment manager will continue to monitor developments in this important risk area. Geopolitical risks have always been an input into the investment process. This risk area continues to be highlighted as a result of the Russian invasion of Ukraine, with the resultant effects on global trade posed by supply shocks, higher levels of inflation, and higher interest rates as central banks seek to contain inflation and volatility in asset prices. Further information on geopolitical risks is set out in the Outlook section of the Manager’s review. On the basis of its continual and ongoing assessment of the principal and emerging risks facing the Company, and given its current position, the Board is confident that the Company will be able to continue in operation and meet its liabilities as they fall due. The Board believes that the processes of internal control that the Company has adopted and oversight by the AIFM continue to be effective. As previously stated, the Board’s main focus is the achievement of a competitive total annual return. The future of the Company is dependent upon the success of the investment strategy in light of economic factors and developments in equity markets. The outlook and future prospects for the Company are discussed in both the Chairman’s statement on page 8 and in the Manager’s review on pages 13 to 16. Gillian Watson Chairman 6 April 2023 35 Principal risk Mitigation Material decline in market capitalisation of the Company The Board recognises that the zero discount policy allows new shareholders to purchase shares and current shareholders to sell their shares at close to NAV, in normal market conditions. Although this level of liquidity encourages investment in the Company, it could also increase the risk of a material decline in the size of the Company. The Board monitors the performance and pace of share buybacks and the Company's shareholder profile. Decline could also come as a consequence of the Company's failure to meet its investment objective. The Board believes that good long-term performance will mitigate this likelihood, increase demand for the Company's shares and, subject to overall market stability, permit the market capitalisation of the Company to increase. Loss of s1158-9 tax status Loss of s1158-9 tax status would have serious consequences for the attractiveness of the Company’s shares. The Board considers that, given the regular oversight of this risk by the audit committee, the AIFM and the investment manager, the likelihood of this risk occurring is minimal but as the consequence of loss of the tax status would be very damaging it is highlighted as a principal risk. The audit committee regularly reviews the eligibility conditions and the Company’s compliance against each, including the minimum dividend requirements and shareholder composition for close company status. 2: GOVERNANCE Gillian Watson, Non-executive director, Chairman Gillian is currently Senior Managing Director at Noble & Co., the Edinburgh based boutique investment bank. She is Chair of Vietnam DC25 Limited and of Char.gy Ltd and holds non-executive director positions in Vidrala S.A. and Meallmore Limited. Gillian has worked in corporate ﬁnance, strategy and business development across various industry sectors in a range of geographies. She sits on the University of Strathclyde’s Enterprise and Investment Committee and is a Trustee of The Boswell Trust. Gillian was appointed to the Board on 1 April 2013 and appointed as Chairman on 1 February 2021. Gillian will retire as Chairman and as a director of the Company at the conclusion of the AGM in June 2023. Gary Le Sueur, Non-executive director, Senior Independent Director Gary is a founding partner of clean energy investment ﬁrm, Corran Capital, and a former partner of venture capital ﬁrm, Scottish Equity Partners, where he is now Senior Adviser. He has signiﬁcant investment experience in the clean energy, sustainability and environmental sectors. Prior to venture capital, Gary worked in corporate law with Shepherd & Wedderburn (Solicitors), before moving to Deutsche Morgan Grenfell and then National Australia Bank. Gary is also a non-executive director of venture philanthropy organisation Inspiring Scotland. Gary was appointed to the Board on 1 December 2016. BOARD OF DIRECTORS 37 Marian Glen, Non-executive director Marian is a non-executive director of The Medical and Dental Defence Union of Scotland. She was formerly the General Counsel of AEGON UK and prior to that was a corporate partner and Head of Funds and Financial Services at Shepherd & Wedderburn (Solicitors). She was previously a non-executive director of Shires Income plc, Financial Services Compensation Scheme, Friends Life Group Limited and certain of its subsidiaries and Murray Income Trust plc. Marian was appointed to the Board on 1 December 2016. Christopher Metcalfe, Non-executive director Christopher is senior independent non-executive director of JPMorgan US Smaller Companies Investment Trust plc and a non-executive director of abrdn Smaller Companies Income Trust plc. He has extensive global equity fund management and investment trust experience, with a deep understanding of UK investors having previously worked in senior positions at Newton, Schroder Investment Management and Henderson. Christopher was appointed to the Board on 19 September 2019. Christopher will be appointed as Chairman of the Company at the conclusion of the AGM in June 2023. Lindsay Dodsworth, Non-executive director, Chair of the audit committee Lindsay Dodsworth is a trustee and member of the ﬁnance and investment committee at Goodenough College, a non-executive director of Moebus Income & Growth 4 VCT and chair of governors at St. John’s College School. She was previously chair of a family oﬃce and its investment oversight committees which she helped the family to set up following the sale of their business. She trained as a chartered accountant and a chartered tax adviser with Price Waterhouse (now PwC) before becoming a partner at Ernst & Young (now EY). Corporate governance Corporate governance is the process by which the Board seeks to look aer stakeholders’ interests and to protect and enhance shareholder value. This report explains how the Board addresses its responsibility, authority and accountability. Compliance with the Principles of the AIC Code The Board of the Company has considered the Principles and Provisions of the 2019 AIC Code of Corporate Governance (‘AIC Code’). The AIC Code addresses the principles and provisions set out in the 2018 UK Corporate Governance Code (the ‘UK Code’), as well as setting out additional principles on issues that are of speciﬁc relevance to the Company as an investment company. The Board considers that reporting against the principles and provisions of the AIC Code, which has been endorsed by the Financial Reporting Council, provides more relevant information to shareholders than reporting only with respect to the UK Code. The AIC Code is available on the AIC website (www.theaic.co.uk). It includes an explanation of how the AIC Code adapts the Principles and Provisions set out in the UK Code to make them relevant for investment companies. The UK Code includes provisions relating to the role of the chief executive, executive directors’ remuneration and the need for an internal audit function. For the reasons set out in the AIC Code, and as explained in the UK Corporate Governance Code, the Board considers that these provisions are not relevant to the position of the Company, being an externally managed investment company. The Company has therefore not reported further in respect of these provisions. Details of the AIC principles and how the Company complies with them can be found on the Company’s website at www.martincurrieglobal.com. Role of the Board As an investment company, the Company has a Board of Directors whose duty it is to govern the Company within the framework set out in the Company’s Articles of Association – in other words, to look aer the interests of shareholders and also of the Company’s stakeholders as a whole. The Board sets the Company’s values and objectives and ensures that its obligations to its shareholders and other stakeholders are met. It has formally adopted a schedule of matters which are required to be brought to it for decision, thus ensuring that it maintains full and eﬀective control over appropriate strategic, ﬁnancial, operational and compliance issues. The Board undertakes a regular review of the AIFM's and investment manager’s culture, policies and practices to ensure that they are aligned with the Company’s values. It also reviews its service providers to satisfy itself that they maintain policies and practices consistent with good risk management, compliance with regulatory frameworks and deliver a value for money service to the Company. The Board met six times during the year under review on a formal basis (as well as on an ad-hoc basis when required), to consider the Company’s strategy and monitor the Company’s performance. An investment trust board provides a very speciﬁc and proactive form of direct oversight of the investment of the shareholders’ funds. The primary focus at regular Board meetings is a review of investment performance of the investment manager and associated matters including asset allocation, promotion and investor relations, peer group information and industry issues. To enable the Board to function eﬀectively and to allow Directors to discharge their responsibilities, full and timely access is given to all relevant information. In the case of Board meetings, this consists of a comprehensive set of papers, including the investment manager’s review, performance reports and discussion documents regarding speciﬁc matters. Directors make further enquiries where necessary. CORPORATE GOVERNANCE STATEMENT 38 39 Committee structure The Board has established a number of committees whose remit is to oversee speciﬁc aspects of management of the Company. During the year the Board decided to streamline the committees and combined the Nominations and Remuneration committees. The Board also agreed to merge the activities of the Marketing and Communications committee into the Board meetings. Management engagement committee Nominations and remuneration committee Audit committee Chair: Gillian Watson Chair: Gary Le Sueur Chair: Lindsay Dodsworth • reviews the continuing appointment of the AIFM and the investment manager; • reviews the performance of the AIFM and the investment manager in terms of investment performance and the company secretarial and administrative services provided; • reviews the performance of the personnel employed by the AIFM and the investment manager in relation to the provision of such services; and • reviews the terms of the AIFM agreement to ensure that it remains competitive and in the best interests of shareholders. • assesses the skills, knowledge, experience and diversity required on the Board and the extent to which each is represented; • establishes processes for the review of the performance of the Board committees and the Board as a whole; • establishes processes for the identiﬁcation of suitable candidates for appointment to the Board; • oversees succession planning for the Board; • sets the remuneration policy for all Directors; and • reviews and sets Directors' remuneration levels. Further information can be found in the Directors' remuneration report. The role and responsibilities of this committee are set out in its report on pages 50 and 51. Directors’ meetings The following table shows the number of formal Board and committee meetings held during the year and the number attended by each Director or committee member. There were also two strategy meetings held during the year. Formal Board meetings (6 meetings) Management engagement committee (1 meeting) Audit committee (2 meetings) Nominations and remuneration committee (2 meetings) Lindsay Dodsworth 6 1 2 2 Marian Glen 6 1 2 2 Christopher Metcalfe 6 1 2 2 Gary Le Sueur 6 1 2 2 Gillian Watson 6 1 2 2 Directors’ independence All of the Directors are considered under the AIC Code to be independent of the AIFM, Franklin Templeton Investment Trust Management Limited and of the investment manager, Martin Currie Investment Management Limited. The Directors are free of any relationship which could materially interfere with the exercise of their independent judgement on issues of strategy, performance, resources and standards of conduct and demonstrate a breadth of investment knowledge, business and ﬁnancial skills which enable them to provide eﬀective strategic leadership and proper governance of the Company. Directors are initially appointed until the general meeting following their initial appointment when, under the Company’s Articles of Association, it is required that they be elected by shareholders. None of the Directors has a service contract with the Company. The terms of their appointment are detailed in a letter sent to them when they join the Board. These letters are available for inspection at the registered oﬃce of the Company. Conﬂicts of interest The Board has approved a policy on Directors’ conflicts of interest. Under this policy Directors are required to disclose all actual and potential conflicts of interest to the Board as they arise for consideration and approval. The Board may impose restrictions or refuse to authorise such conflicts if deemed appropriate. A register of Directors’ interests, including potential conflicts of interest, is maintained by the Company and is regularly monitored. Directors who have potential conflicts of interest will not take part in any discussions which relate to that particular conflict. The Board considers that the framework has worked effectively throughout the year under review. 40 Tenure The Board has adopted a Tenure Policy for all Directors, including the Chairman, which states that the Board believes that it is an advantage to have the continuous contribution of Directors over a period of time during which they are able to develop awareness of and insight into the Company and thereby are able to make a valuable contribution to the Board as a whole. The Board believes that it is appropriate for a Director to serve for up to nine years following their initial election and it is expected that Directors will stand down from the Board at the AGM following the ninth anniversary of their initial appointment. However, a ﬂexible approach to tenure has been adopted and that period may be extended for a limited time to facilitate eﬀective succession planning whilst still ensuring regular refreshment and diversity on the Board. This ﬂexibility has been applied to Gillian Watson who was due to step down at the annual general meeting in June 2022. In order to provide continuity and allow for appropriate succession planning, the other Directors agreed with Gillian Watson that she will remain on the Board until the conclusion of the annual general meeting in 2023 at which point she will retire from the Board. The Board has decided that all Directors who wish to remain on the Board will be required to stand for annual re-election in line with best practice. Succession planning The Board plans for its own succession with the assistance of the nominations and remuneration committee. This process ordinarily involves the identiﬁcation of the need for a new appointment and the preparation of a brief including a description of the role and speciﬁcation of the capabilities required. The nominations and remuneration committee seeks assistance in identifying suitable candidates by appointing an external recruitment ﬁrm each time that there is a vacancy. During the year the Company did not engage with any external recruitment ﬁrms. The nominations and remuneration committee considers candidates from a wide range of backgrounds, having consideration for the diversity of the Board as a whole including, but not limited to, gender. During the year the nominations and remuneration committee discussed the composition of the Board and agreed that following Gillian Watson stepping down at the conclusion of the AGM on 1 June 2023 Christopher Metcalfe will be appointed Chairman of the Board. The Board have agreed that following a review of the directors' balance of skills, knowledge, gender and experience it will not recruit another non-executive director at present. Board diversity The nominations and remuneration committee considers diversity, including the balance of skills, knowledge, gender and experience, amongst other factors, when reviewing the composition of the Board. It does not consider that it is appropriate to establish targets or quotas in this regard. The Board has made a commitment to consider diversity when reviewing the composition of the Board and notes the upcoming requirement to have an individual on the Board who is from a minority ethnic background. The Board will be considering this requirement when the next Board appointment is made. Reporting against the upcoming diversity targets at present 60% of individuals on the Board are women and a woman (Lindsay Dodsworth) is chair of the audit committee. Following the conclusion of the AGM on 1 June 2023, when Gillian Watson retires from the Board, 50% of the individuals on the Board will be women. The Board currently consists of ﬁve directors, three female and two male. Following Gillian Watson's planned retirement at the conclusion of the AGM, the Board will consist of four directors, two female and two male. Induction and training The company secretary provides all Directors with induction training on appointment, tailored to the needs of individual appointees. The induction programme is designed to familiarise the appointee with the Company, its operations and obligations and regular ongoing brieﬁngs are provided on changes in regulatory requirements that aﬀect the Company and Directors. Performance evaluation A formal, annual appraisal system has been agreed for the evaluation of the Board, its committees and the individual Directors, including the Chairman. Board and committee evaluation questionnaires are completed by each Director with responses collated and discussed. The Chairman leads the evaluation of the Board, committees and individual Directors, including consideration of the time commitment, skills and experience of the Directors, while the Senior Independent Director leads the evaluation of the Chairman’s performance. There were no signiﬁcant actions arising from the evaluation process conducted during the year and it concluded that the Board as a whole, the individual Directors and its committees were functioning eﬀectively. As a result of the Board’s evaluation process the Chairman conﬁrms that all remaining Directors continue to be eﬀective and their election and re-election is recommended. The Board has given consideration to appointing an external board evaluator, however, it does not believe it is necessary at this time. The Board also regularly reviews the performance of the AIFM and the investment manager. The management engagement committee meets to review the continuing appointment of the AIFM and the investment manager and reviews the terms of the relevant agreement to ensure that it remains competitive and in the best interest of shareholders. The management engagement committee regularly reviews the continuing appointment of other key service providers. 41 Company secretary The Board has direct access to the company secretarial service provided by the AIFM which, through its nominated representative, is responsible for ensuring that applicable regulations are complied with and that Board and committee procedures are followed. Terms of reference for each of the committees are available via the company secretary. As the Company has only ﬁve Directors (and four following the AGM), all of whom are non-executive, it is the Board’s policy that all Directors will sit on all Board Committees. Internal control The AIC Code and the Disclosure Guidance and Transparency Rules require Directors, at least annually, to review the eﬀectiveness of the Company's system of internal control and include a description of the main features relating to the ﬁnancial reporting process. The Company has appointed Franklin Templeton Investment Trust Management Limited as its AIFM. With the Company’s permission, the AIFM has delegated the portfolio management function to Martin Currie Investment Management Limited, while retaining responsibility for certain risk management and administrative functions. Since investment management and administrative services are provided to the Company by members of the Franklin Templeton group, the Company's system of internal control mainly comprises monitoring the services provided by members of that group, including the operating controls established by them, to ensure that they meet the Company's business objectives. The Company does not have a risk or an internal audit function of its own but relies on the risk and compliance department of the Franklin Templeton group and the group's internal audit function. This arrangement is kept under review. The Company, and with the Board’s permission the AIFM, have also delegated certain depositary/custodial and administrative functions, including fund accounting, to JPMorgan. Franklin Templeton also carries out a review of the depositary/custodial and administration activities performed by JPMorgan. The Board, either directly or through committees, reviews the eﬀectiveness of the Company’s system of internal control by monitoring the operation of the key controls of the AIFM and Martin Currie and: • reviews an internal controls report, as provided to the Board twice yearly by the AIFM. This report details signiﬁcant risks, regulatory issues, error management and complaint handling; • reviews the terms of the AIFM agreement; • reviews reports on the internal controls and the operations of the AIFM, of Martin Currie, and of JPMorgan; and • reviews the risk proﬁle of the Company and considers investment risk at every Board meeting. There is an ongoing process for identifying, evaluating and managing the signiﬁcant risks faced by the Company as outlined on pages 34 and 35. This process accords with the FRC’s ‘Guidance on Risk Management, Internal Control and Related Financial and Business Reporting’. During the course of its review of internal controls the Board has not identiﬁed or been advised of any failings or weaknesses which it has determined to be signiﬁcant and is satisﬁed with the arrangements. Internal control and risk management systems in relation to the financial reporting process The Directors are responsible for the Company’s system of internal control, designed to safeguard the Company’s assets, maintain proper accounting records and ensure that ﬁnancial information used within the business, or published, is reliable. The AIFM and Martin Currie have in place stringent controls that monitor the following activities within the ﬁnancial reporting process: • investment and related cash transactions are completely and accurately recorded and settled in a timely manner; • corporate actions and proxy voting instructions are identiﬁed and generated, and then processed and recorded accurately and in a timely manner; • investment income is accurately recorded in the proper period; • investments are valued using current prices obtained from independent external pricing sources; • cash and securities positions are completely and accurately recorded and reconciled to third-party data; • amounts due to lenders are calculated accurately and paid according to the relevant contractual terms; and • the investment management fee and the Company’s other operating expenses, are accurately calculated and recorded. The system of internal control can only be designed to manage rather than eliminate the risk of failure to achieve business objectives and therefore can provide only reasonable, but not absolute, assurance against fraud, material mis-statement or loss. By means of the procedures set out above, the Board conﬁrms that it has reviewed the eﬀectiveness of the Company's systems of internal control for the year ended 31 January 2023 and to the date of approval of this annual report. On behalf of the Board Gillian Watson Chairman 6 April 2023 42 Status The Company is registered as a public limited company in Scotland under number SC192761 and is an investment company as deﬁned by Section 833 of the Companies Act 2006. It is a member of the Association of Investment Companies (the ‘AIC’). The Company has been accepted by HM Revenue & Customs as an investment trust subject to it continuing to meet the relevant eligibility conditions of Section 1158 of the Corporation Tax Act 2010 and the ongoing requirements of Part 2 Chapter 3 Statutory Instrument 2011/2999 for all ﬁnancial years commencing on or aer 1 April 2012. The Directors are of the opinion that the Company has conducted its aﬀairs for the year ended 31 January 2023 so as to enable it to comply with the ongoing requirements for investment trust status. Business model review The AIFM and investment manager The Company has appointed Franklin Templeton Investment Trust Management Limited as its AIFM. The AIFM has been authorised by the FCA to act as an AIFM. The AIFM has delegated the function of managing the Company’s investment portfolio to the investment manager, Martin Currie Fund Management Limited, the manager of the Company’s assets since its launch in 1999. Martin Currie is an international equity specialist based in Edinburgh, managing money for a wide range of global clients. Its investment process is focused on selecting stocks through fundamental proprietary research and constructing well balanced high conviction portfolios. The Board closely monitors investment performance and Zehrid Osmani, the portfolio manager, attends each Board meeting to present a detailed update to the Board. The Board uses this opportunity to challenge the portfolio manager on any aspect of the portfolio’s management. The ultimate parent company of the AIFM is Franklin Resources Inc ('Franklin'). The AIFM has delegated certain administration and support functions to other Franklin entities. Continued appointment of the AIFM Following the annual appraisal carried out by the management engagement committee in January 2023, the Board considers that it is in the best interests of shareholders to continue with the appointment of Franklin Templeton Investment Trust Management Limited as AIFM, with investment management delegated to the investment manager and the Board remains content with this arrangement. Main features of the contractual arrangement with the AIFM (the 'AIFM agreement'): The Company entered into the agreement with the AIFM on 2 August 2021. The AIFM agreement includes: • Six month notice period; • Immediate termination if the AIFM ceases to be capable of acting as an AIFM; and • In the event that the Company terminates the agreement otherwise than as set out above, the AIFM is entitled to receive compensation equivalent to the fees paid in the previous annual period. Company secretarial and certain administrative services are provided to the Company by the AIFM pursuant to the AIFM agreement. With eﬀect from 1 July 2022, the investment management fee was amended to 0.45% of the Company's net asset value (excluding income) and the AIFM will no longer charge a separate company secretarial fee. Until the change noted above, the investment management fee was 0.5% per annum for the ﬁrst £300 million of the Company's net asset value (excluding income) and 0.35% for net assets (excluding income) in excess of £300 million and the secretarial fee charged during the year ended 31 January 2023 was £25,000 including VAT (31 January 2022: £67,000). The Directors present their report and the audited ﬁnancial statements of the Company for the year ended 31 January 2023. REPORT OF THE DIRECTORS 43 Depositary arrangements JPMorgan Europe Limited has been appointed as the Company's depositary. The depositary is responsible for the safekeeping of the Company’s assets, monitoring the cash ﬂows of the Company and must ensure that certain processes carried out by the AIFM are performed in accordance with the applicable rules and constitutive documents of the Company. JPMorgan Chase Bank N.A. London Branch is the Company's custodian. The custodian may from time to time delegate safe keeping/custody of the Company’s assets to local custody providers. The depositary and custodian are entitled to a fee payable out of the assets of the Company. Further contractual arrangements The Company has outsourced its operational infrastructure to third-party organisations. Contracts and service level agreements have been defined to ensure that the service provided by each of the third-party organisations is of a sufficiently professional and technically high standard. The Board actively monitors the performance of service providers. The counterparty risk of dealing with each service provider is analysed with the Board monitoring any identified risks. Further details of the Company’s main service providers can be found in the investor information section on page 81. Directors The Board currently consists of five non-executive Directors. The names and biographies of the current Directors are on page 37, indicating their range of experience as well as length of service. In line with best practice all of the Directors who have been on the Board for more than a year will stand for re-election at the AGM. Gillian Watson will retire following the conclusion of the AGM and will not stand for re-election. The role of the Board and its governance arrangements are set out in the Company’s corporate governance statement on pages 38 to 42 which forms part of this Report of the directors. Directors’ insurance and indemnities The Directors have the benefit of the indemnity provisions contained in the Company’s Articles of Association, and the Company has maintained throughout the year Directors' and Officers’ liability insurance for the benefit of the Company and the Directors. The Company has entered into qualifying third party indemnity arrangements for the benefit of all of its Directors in a form and scope which comply with the requirements of the Companies Act 2006 and which were in force throughout the year and remain in force. Environmental matters As an externally managed investment company with no employees, the Company’s direct greenhouse gas emissions are negligible, being emissions resulting from Directors' travel to meetings in Edinburgh or London. The Company encourages and actively oversees Martin Currie’s application of its ESG policies in the investment processes as set out in the Strategic Report. 44 Share capital As at 31 January 2023 the Company had 76,105,554 Ordinary shares of 5p ('Ordinary shares') in issue (2022: 86,616,404) and a further 22,570,353 Ordinary shares held in Treasury (2022: 12,059,503). The following table summarises transactions made by the Company in its shares. Further details of the Company's transactions involving Treasury shares can be found within accounting policy Note 1(j) on page 67. Allocation of (cost)/proceeds Number of shares (Cost)/proceeds Special distributable reserve Share premium account Capital reserve Shares repurchased into Treasury 10,510,850 (£32,848,000) n/a n /a (£32,848,000) Shares issued from Treasury — — — — — Shareholder analysis as at 31 January 2023 % of shareholders % of equity capital Individuals and trustees 80.4 10.4 Banks and nominee companies 15.5 65.8 Insurance and investment companies 1.1 0.2 Other holders 3.0 23.6 100.0 100.0 Shareholder and voting rights Each Ordinary shareholder is entitled to one vote on a show of hands and, on a poll, to one vote for every share held. The Ordinary shares carry a right to receive dividends which are declared from time to time by the Company. On a winding-up, aer meeting the liabilities of the Company, any surplus assets would be paid to Ordinary shareholders in proportion to their shareholdings. There are no restrictions on the transfer of Ordinary shares in the Company other than certain restrictions which may from time to time be imposed by law (for example, insider trading law) and there are no special rights attached to any of the Ordinary shares. The Company is not aware of any agreements between shareholders which may result in restrictions on the transfer of Ordinary shares or the voting rights attached to them. Substantial interests As at 31 January 2023, the Company had received notification in accordance with the FCA’s Disclosure Guidance and Transparency Rule 5.1.2R of the following interests in 3% or more of the voting rights attaching to the Company’s issued share capital. As at 31 January 2023 Date of announcement Number of shares in announcement Percentage of voting rights as at 31 January 2023 1 DC Thomson & Company Limited 4 February 2019 5,880,000 2 7.7% Rathbone Investment Management 8 August 2019 4,193,681 5.5% Based on the shares included in the announcement. On 1 February 2023 the Company received notification that DC Thomson & Company Limited's shareholding was 5,420,000 shares. Related party transactions With the exception of the investment management and secretarial fees (disclosed on page 43), Directors’ fees (disclosed on page 53), and Directors’ shareholdings (disclosed on page 52), there were no related party transactions through the financial year. 45 Revenue and dividends 2023 2022 Tota l Pence per share Tota l Pence per share Net revenue return for the year aer expenses, interest and taxation £1,781,000 2.16p £1,161,000 1.36 Dividends paid and declared for the year 1 £3,297,000 2 4.20p £3,603,000 4.20 Revenue reserve at end of year £864,000 1.14p £513,000 0.59 Special distributable reserve at end of year 3 — — £76,297,000 88.09 Realised capital reserve at end of year 3 £154,191,000 202.60p £110,511,000 127.59p Includes interim dividends paid throughout the year and final interim dividend announced/paid after the financial year end. The total fourth interim dividend was calculated based on the number of shares in issue on 31 March 2023. Fully distributable including by way of dividend. Following the Board decision to simplify the Company's reserves, the balance of the special distributable reserve was transferred in full to the capital reserve on 16 June 2022. Corporate governance statement The Company’s corporate governance statement is set out on pages 38 to 42 and forms part of this Report of the directors. Performance, outlook and trends likely to aﬀect future performance Please refer to the Chairman’s statement on pages 6 to 8 and the Manager’s review on pages 9 to 16 for an update on the performance of the Company over the year and outlook for 2023, together with information on the trends likely to aﬀect the future performance of the Company. Regulatory The Alternative Investment Fund Managers Regulations 2013 ('AIFM Regulations') AIFM remuneration In accordance with the AIFM Regulations, details of the remuneration policy of the AIFM and amounts attributable to the Company are available to existing shareholders upon request at the registered oﬃce of the Company. Leverage Under the AIFM regulations, the maximum leverage which the AIFM is entitled to employ on behalf of the Company is 250% under the gross method and 200% under the commitment method. This indicates the highest level that exposure could reach using these calculations if all available instruments introducing leverage were used to the maximum permitted level at the same time. In practice, the maximum level of leverage is restricted by the Company's investment policy to 20%. Any changes to these limits will be agreed in advance between the AIFM and the Company. At 31 January 2023, the Company’s gross ratio was 112% and its commitment ratio was 112%. Audit information As required by Section 418 of the Companies Act 2006 each of the Directors who held oﬃce at the date of approval of this Report of the directors conﬁrms that, so far as they are aware, there is no relevant audit information of which the Company’s auditors are unaware and each Director has taken all of the steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and to establish that the Company’s auditors are aware of that information. Listing Rule 9.8.4R Listing Rule 9.8.4R requires the Company to include certain information in a single identiﬁable section of the annual report or a cross-reference table indicating where the information is set out. The information covers areas such as long-term incentive schemes, allotment of shares, investment in subsidiary companies and agreements with controlling shareholders. The Directors conﬁrm that there are no disclosures to be made in this regard. Annual general meeting The annual general meeting (‘AGM’) of the Company will be held at the oﬃces of Franklin Templeton, 5 Morrison Street, Edinburgh EH BH at 11.00am on 1 June 2023. Further information is contained in the Notice of AGM which is included on pages 87 to 90. Resolutions relating to the following items of business will be proposed: Dividend policy – ordinary resolution As a result of the timing of the payment of the Company’s quarterly dividends in January, April, July and October, the Company’s shareholders are unable to approve a ﬁnal dividend each year. As an alternative, the Board will put the Company’s dividend policy to shareholders for approval on an annual basis. Resolution 4, which is an ordinary resolution, relates to the approval of the Company’s dividend policy which is as follows: The Company’s policy is to pay regular dividends on the Ordinary Shares which are currently paid quarterly in January, April, July and October. The Company intends to at least maintain in absolute terms the total ordinary dividends paid in respect of each ﬁnancial year compared with the preceding ﬁnancial year. The total annual dividend in respect of each ﬁnancial year will be at least at a level that ensures that the Company continues to qualify as an investment trust. The Board does not set an income target for the manager and dividends may be funded from current period earnings and/or from distributable reserves. The payment of dividends in accordance with this dividend policy is subject to market conditions and the Company's ﬁnancial position and outlook. The dividend policy is subject to shareholder approval at each annual general meeting. Allotment of shares – ordinary resolution Section 551 of the Companies Act 2006 provides that the Directors may not allot new shares without shareholder approval. Resolution 11 seeks to renew the Directors' authority to allot new shares up to a maximum aggregate nominal amount of £1,239,443 (being an amount equal to one third of the issued share capital of the Company (excluding Treasury shares) as at 31 March 2023, being the last practicable date before the date of this document). The Board intends to exercise this power only once the number of shares held by the Company in Treasury is not sufficient to support share issuance by the Company. This resolution in isolation only allows the Directors to allot new shares to existing shareholders pro rata to their existing holdings. Resolutions 13 and 14 will, if approved, then disapply pre-emption rights allowing the Company to issue up to 14,873,324 shares for cash on a non-pre-emptive basis. As at 31 March 2023, being the last practicable date prior to the publication of this document, the Company held 24,309,281 Ordinary shares in Treasury, representing approximately 24.6% of the Company's issued share capital (including Treasury shares). 46 The authority contained in resolution 11 will expire on 31 July 2024 or, if earlier, at the AGM of the Company to be held in 2024 unless previously cancelled or varied by the Company in a general meeting. Disapplication of statutory pre-emption rights – special resolutions Under s561 of the Companies Act 2006, when shares are to be allotted for cash or sold from Treasury, such shares first must be offered to existing shareholders in proportion to their existing holdings of shares. Resolutions 13 and 14 proposed as special resolutions would, if passed, then disapply pre-emption rights allowing the Company to issue shares for cash on a non-pre- emptive basis. This authority would enable the Directors to issue shares for cash to take advantage of demand in the market that may arise in order to increase the amount of the Company’s issued share capital. The purpose of such an increase would be to improve the liquidity of the market in the Company’s shares and to spread the fixed cost of administering the Company over a wider base. The Directors believe that the issue of further shares would increase the investment attractions of the Company to the benefit of existing shareholders. If resolutions 13 and 14 are approved by shareholders, the Board will only use the authority to disapply pre-emption rights and issue shares: (i) at a premium to the prevailing NAV at the time of issue; and (ii) when the Board believes that it is in the best interests of the Company and its existing shareholders to do so. As shares will only be issued at a sufficient premium to cover issue costs to the prevailing NAV at the time of issue, the value of the underlying assets attributable to the shares will not be diluted as a result of issuing further shares. The resolutions, if both are passed, will give the Directors power to issue for cash equity securities of the Company up to a maximum of £743,666 (being an amount equal to 20% of the issued share capital of the Company (excluding Treasury shares) as at 31 March 2023, the latest practicable date prior to this document) without the application of pre-emption rights described above. The authority contained in resolutions 13 and 14 will continue until 31 July 2024 or, if earlier, the AGM of the Company in 2024. Purchase of own shares – special resolution Each year the Directors seek authority from shareholders to purchase the Company’s own shares. The Directors recommend that shareholders renew this authority as detailed in resolution 12. Any shares purchased pursuant to the authority will be held in Treasury or cancelled. The Directors currently intend to hold in Treasury the shares purchased under this authority. The authority will lapse at the earlier of the Company’s next AGM or 15 months after the date of the resolution. The purpose of holding shares in Treasury is to allow the Company to reissue those shares quickly and cost effectively in accordance with resolutions 13 and 14. If passed, resolution 12 gives authority for the Company to purchase up to 11,147,557 of the Company’s own shares or, if less, 14.99% of the Company’s issued share capital (excluding Treasury shares) as at the date of the passing of the resolution. The Directors will only exercise this authority to purchase shares where they consider that such purchases will be in the best interests of shareholders generally and only at a discount to the prevailing NAV per share. Notice of general meeting – special resolution Resolution 15, proposed as a special resolution, would give the Directors authority to call a general meeting, other than the AGM, on 14 days’ clear notice. The Directors believe that it is in the best interests of shareholders to have the ﬂexibility to call a general meeting at short notice, although it is intended that this ﬂexibility will only be used for non-routine business and when it is deemed in the interests of shareholders as a whole. If approved, the authority contained in resolution 15 will continue until the AGM of the Company or, if earlier, 31 July 2024. Recommendation The Directors believe that all of the resolutions proposed are in the best interests of the Company and shareholders as a whole. The Directors unanimously recommend that all shareholders vote in favour of all of the resolutions. The results of the votes on the resolutions at the AGM will be published on the Company’s website (www.martincurrieglobal.com). 47 Going concern status The Company’s business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman’s statement, Manager’s review, Strategic report and the Report of the directors. The financial position of the Company as at 31 January 2023 is shown in the statement of financial position on page 63. The statement of cash flow of the Company is set out on page 65. Note 16 on pages 76 to 78 sets out the Company’s risk management policies, including those covering market risk, liquidity risk and credit risk. In accordance with the 2019 AIC Code of Corporate Governance and the 2018 UK Corporate Governance Code, the Directors have undertaken a rigorous review of the Company’s ability to continue as a going concern. The Company’s assets consist of a diverse portfolio of listed equity shares which, in most circumstances, are realisable within a very short timescale. The Directors are mindful of the principal and emerging risks and uncertainties disclosed on page 34. They have reviewed revenue forecasts for the next two financial years, including liabilities arising from the loan facility, and believe that the Company has adequate financial resources to continue its operational existence for the period to 31 January 2025, which is at least 12 months from the date on which the financial statements are authorised for issue. Accordingly, the Directors continue to adopt the going concern basis in preparing these financial statements. Viability statement The Company’s business model is designed to deliver long-term returns to its shareholders through investment in large and liquid stocks in global equity markets. Its plans are therefore based on having no fixed or limited life provided that global equity markets continue to operate normally. The Board has assessed the Company’s viability over a three year period in accordance with provision 31 of the UK Corporate Governance Code as it believes that this is an appropriate period over which it does not expect there to be any significant change to the principal risks and adequacy of the mitigating controls in place. The Board considers that this reflects the minimum period which should be considered in the context of the Company’s long-term objective but one which is limited by the inherent and increasing uncertainties involved in assessment over a longer period. In making this assessment the Directors have considered the following factors: • the principal and emerging risks and uncertainties and the mitigating actions set out on page 34, including specifically the current geopolitical and economic environment; • the mitigation measures which key service providers including the manager have in place to maintain operational resilience; • the challenges posed by climate change; • the ongoing relevance of the Company’s investment objective in the current environment; • the level of income forecast to be generated by the Company and the liquidity of the Company’s portfolio; • the low level of fixed costs relative to the Company's liquid assets; • the expectation that in normal markets more than 94% of the current portfolio could be liquidated within two trading days; and • the quantity of debt, the fixed interest rate on the debt and the ability of the Company to make payments of interest and repayments of principal on its debt on their due dates. Based on the results of their analysis and the Company’s processes for monitoring each of the factors set out above, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over at least the next three years. 48 Responsibility statement Each of the Directors, whose names and functions are listed in the Board of Directors on page 37, confirms that to the best of their knowledge: • the financial statements which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including the Financial Reporting Standard applicable in the UK and Republic of Ireland (‘FRS 102’), give a true and fair view of the assets, liabilities, financial position and profit of the Company; and • the Report of the directors, Strategic report and Manager's review include a fair, balanced and understandable review of the development and performance of the business and the position of the Company, together with a description of the principal risks and the uncertainties that it faces; and • the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s performance, business model and strategy. The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (and applicable law). 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 accounting estimates that are reasonable and prudent; • state whether applicable UK Accounting Standards have been followed, including the Financial Reporting Standard applicable in the UK and Republic of Ireland (‘FRS 102’), subject to any material departures disclosed and explained in the financial statements respectively; 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 the financial statements and the Directors’ remuneration statement comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The financial statements are published on the Company’s website (www.martincurrieglobal.com) which is maintained by the investment manager. The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. This responsibility statement was approved by the Board of Directors on 6 April 2023 and is signed on its behalf by: Gillian Watson Chairman 6 April 2023 49 AUDIT COMMITTEE REPORT The audit committee is chaired by Lindsay Dodsworth and, during the year under review comprised all of the Directors. Lindsay Dodsworth joined the audit committee on the date of her appointment to the Board and was appointed chair of the audit committee following the conclusion of the AGM on 16 June 2022. The Board notes that the AIC Code permits the Chairman of the Board to be a member of the audit committee of an investment trust. In light of the fact that the Board consists of only ﬁve members and recognising Gillian Watson’s relevant experience, the audit committee resolved to continue her appointment to the committee following her appointment as Chairman of the Company. At the AGM on 1 June 2023 Gillian Watson will retire from the Board, Christopher Metcalfe will be appointed Chairman. The audit committee has resolved that Christopher will also continue to be a member of the audit committee following his appointment as Chairman. The Board reviews the relevant skills and experience of the audit committee as part of the annual Board review and believes that the members of the committee have the appropriate skills and experience. Biographies of the members of the committee are on page 37. Audit committee responsibilities and activities during the year The audit committee met twice during the year and reviewed the scope and results of the audit and considered and approved the external auditors’ plan for the audit of the ﬁnancial statements for the year ended 31 January 2023. The audit committee’s responsibilities and activities during the year included: • Monitoring and reviewing the integrity of the ﬁnancial statements of the Company and ensuring, in particular, that, taken as a whole, they are fair, balanced and understandable; • Reviewing the appropriateness and consistency of the Company's accounting policies; • Reviewing and challenging the Company's going concern and viability statements; • Oversight of the eﬀectiveness of internal ﬁnancial controls and reporting, risk management systems and internal control policies and procedures for the identiﬁcation, assessment and reporting of risks; • Monitoring and reviewing the independence, objectivity and eﬀectiveness of the external auditors; • Making recommendations to the Board in relation to the appointment, evaluation and dismissal of the external auditors, their remuneration, terms of their engagement and reviewing their independence and objectivity; • Developing and implementing policy on the engagement of the external auditors to supply non-audit services; • Monitoring the impact of any accounting or regulatory changes impacting the Company; and • Reporting to the Board, identifying any matter in respect of which it considers that action or improvement is needed and making recommendations as to the steps to be taken. The audit committee takes account of the most signiﬁcant issues and risks, both operational and ﬁnancial, likely to impact the Company’s ﬁnancial statements. Having reviewed the annual report and ﬁnancial statements, the committee recommended to the Board that the annual report and ﬁnancial statements are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy. During the year the committee considered the appropriateness of the expense allocations between capital and revenue, concluding that the current allocation for the AIFM fee and finance costs was appropriate. It also considered the fee level, independence, effectiveness and re-appointment of the auditors. The committee also received a report from the AIFM on oversight of the service providers. There were no non-audit fees for the year ended 31 January 2023 (2022: none). Auditors’ independence The Company has in place a policy governing and controlling the provision of non-audit services by the external auditors, in order to help safeguard the auditors' independence and objectivity. This is achieved by prohibiting non-audit work where independence may be compromised or conﬂicts arise. Any non-audit work requires speciﬁc approval of the audit committee in each case. The audit fee amounts to £49,500 plus VAT for the year ended 31 January 2023 (2022: £45,000 plus VAT). Following review, the committee is satisﬁed that the Company’s auditors, Ernst & Young LLP (‘EY’), remain independent. Auditors’ rotation A competitive tender for the audit of the Company was last held in May 2015, following which EY were selected as the Company’s auditors. Under UK rotation guidance, the Company’s audit engagement partner will rotate every ﬁve years. The current audit engagement partner, Ahmer Huda, took over the role in 2022. Auditors’ report At the conclusion of the audit, EY did not highlight any issues to the audit committee which would cause it to qualify its audit report nor did it highlight any fundamental internal control weaknesses. EY issued an unqualiﬁed audit report which is included on pages 56 to 61. 50 Matter Action Accuracy of portfolio valuation Actively traded listed investments are valued using stock exchange prices provided by third-party service providers. The AIFM reviews and summarises the internal controls reports, prepared annually by JPMorgan Chase Bank N.A. covering Global Fund Accounting and Custody and the audit committee reviews this summarised report annually. The internal controls report is reported on by independent external accountants and includes details of the systems, processes and controls around the daily pricing of equity securities, including the application of exchange rate movements. Stale prices are monitored monthly by the AIFM's pricing team and would be reported to the audit committee. Accuracy of revenue recognition The audit committee reviews a summary of JPMorgan Chase Bank N.A.’s internal controls report annually. The internal controls report includes details of the systems, processes and controls around the recording of investment income. The Board also reviews revenue forecasts at each Board meeting. The investment manager and the Board review all special dividends to make sure that they are correctly treated in accordance with the Company's accounting policy. Allocation of expenses between revenue and capital The allocation is reviewed by the audit committee annually considering the long-term split of returns from the portfolio, both historic and projected, the objectives of the Company and current, historical and prospective yields. Going concern and viability statement The committee reviewed evidence provided by the manager to support the Going Concern and Viability Statements on page 48 and was satisfied that it could recommend to the Board the relevant statements. The following signiﬁcant issues were considered by the audit committee in relation to the ﬁnancial statements: Eﬀectiveness of the external audit process The audit committee evaluated the eﬀectiveness of the external auditors and the external audit that they undertook prior to making a recommendation on the re-appointment of EY at the forthcoming AGM. This evaluation involved an assessment of the eﬀectiveness of the auditors’ performance against criteria including qualiﬁcation, expertise and resources, independence and eﬀectiveness of the audit process. The committee reviewed and agreed the audit plan including the level of audit materiality and discussed the key risk areas with the auditors and deemed these appropriate. The committee also discussed with the auditors any signiﬁcant areas where they challenged the AIFM's assumptions in connection with the preparation of the ﬁnancial statements, noting that there were no disagreements with the AIFM. Having reviewed the performance of the external auditors as described above, the audit committee considered it appropriate to recommend the re-appointment of EY as external auditors. EY have expressed their willingness to be re-appointed to oﬃce and a resolution to re-appoint them as auditors to the Company and to authorise the Directors to determine the remuneration payable will be proposed at the forthcoming AGM. On behalf of the Board Lindsay Dodsworth Chair of the Audit Committee 6 April 2023 51 Nominations and remuneration committee The nominations and remuneration committee has responsibility for setting the remuneration policy for Directors, taking into account factors such as time commitment and responsibilities, with the objective to attract and retain Directors of the quality required to run the Company successfully, without paying more than necessary. The committee is also responsible for reviewing and setting Directors’ remuneration levels. Remuneration statement The Board has prepared this report in accordance with the requirements of the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013. An ordinary resolution to approve this report will be put to shareholders at the AGM. Company law requires the Company’s auditors to audit certain disclosures provided in this report. Where disclosures have been audited, they are indicated as such. The auditors’ opinion is included in their report on pages 56 to 61. Directors’ remuneration policy The Board’s policy is that the remuneration of non-executive Directors should reflect the experience of the Board as a whole, be fair and comparable to that of other investment companies that are similar in size, have a similar capital structure and have similar investment objectives. It is intended that this policy will continue for the year ended 31 January 2024 and subsequent years. The fees for the Directors are determined within the limits set out in the Company’s Articles of Association. Each Director abstains from voting on their own remuneration. The Directors’ remuneration policy will be put to a shareholders’ vote annually. Directors are entitled to be reimbursed for any reasonable expenses properly incurred by them in connection with the performance of their duties. Directors are not eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits. Additional fees may be payable where (i) a Director is required to perform services outside the ordinary duties of a Director; or (ii) where the work performed is outside the ordinary course of Company business and in each case where the time commitment is exceptional. Directors do not have service contracts but are provided with letters of appointment. All Directors are appointed for an initial term covering the period from the date of that appointment until the first AGM at which they are required to stand for election in accordance with the Company’s Articles of Association. Thereafter, in line with best practice, all Directors will stand for re-election at the AGM each year. There is no notice period and no provision for compensation upon early termination of appointment. The Company’s Articles of Association provide for a maximum level of total remuneration of £200,000 per annum for the Directors in aggregate. Annual report on remuneration For the year to 31 January 2023, the non-executive Directors received a fee of £27,500 per annum, the audit committee Chair received a fee of £34,000 and the Chairman received a fee of £41,000 per annum. During the year, the nominations and remuneration committee considered the Directors’ fees in the context of the benchmark data from its peer group. Following a review of this and considering the increasing regulatory responsibilities on directors, it was agreed that the Chairman's fee would be increased to £43,500, the audit committee Chair to £36,000 and the other Directors' fees to £29,000 per annum, with eﬀect from 1 February 2023. Directors’ shareholdings (audited) The shareholdings detailed above have not changed between 31 January 2023 and 6 April 2023, the date of signing the accounts. The Company conﬁrms that it has not set out any formal requirements or guidelines for a Director to own shares in the Company. Approval Ordinary resolutions for the approval of the Directors’ remuneration policy and annual report on remuneration will be put to shareholders at the forthcoming AGM. At the AGM on 16 June 2022, 99.81% of proxy votes were cast in favour of the Directors’ remuneration report for the year ended 31 January 2022 and 99.79% of proxy votes were cast in favour of the Directors' remuneration policy. As at 31 January 2023 2022 Lindsay Dodsworth 2,542 2,542 Marian Glen — — Gary Le Sueur 31,735 31,735 Christopher Metcalfe 8,600 8,600 Gillian Watson 3,329 3,329 DIRECTORS’ REMUNERATION STATEMENT 52 Total return (ten ﬁnancial years) Source: Martin Currie Investment Management Limited. The benchmark is the MSCI All Country World index. Directors’ emoluments for the year (audited) Year ended 31 January 2023 £ Year ended 31 January 2022 £ Lindsay Dodsworth 1 31,562 6,625 Neil Gaskell 2 — 6,625 Marian Glen 3 29,938 33,000 Gary Le Sueur 27,500 26,500 Christopher Metcalfe 27,500 26,500 Gillian Watson 41,000 40,000 157,500 139,250 Benchmark 201.0% 1 % 250 200 150 100 50 0 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020 Jan 2021 Jan 2022 Jan 2023 Share price total return 161.2% The graph below compares, for the ten ﬁnancial years ended 31 January 2023, the total return (assuming all dividends were reinvested) to Ordinary shareholders compared to the total return of the benchmark. 53 Appointed on 1 November 2021 and became chair of the audit committee on 16 June 2022. Retired on 30 April 2021. Stepped down from her position as chair of the audit committee on 16 June 2022. On behalf of the Board Gary Le Sueur Chairman of the Nominations and Remuneration Committee 6 April 2023 Relative importance of spend on Directors’ remuneration To enable shareholders to assess the relative importance of spend on remuneration, the Directors’ total remuneration has been shown in a table below compared with the Company’s distributions. Year ended 31 January 2023 Year ended 31 January 2022 % change Directors’ total remuneration (£000) 158 139 13.7 Dividends paid and payable (£000) 3,297 3,603 (8.5) Share buybacks (£000) 32,848 5,579 488.8 Dividend per share (p) 4.20 4.20 — Percentage change in annual remuneration of Directors Yea r Lindsay Dodsworth Marian Glen Gary Le Sueur Christopher Metcalfe Gillian Watson 2022-2023 28% 1 -17% 2 4% 4% 3% 2021-2022 n/a 1 10% 4% 4% 57% 3 Lindsay Dodsworth was appointed on 1 November 2021 and became chair of the audit committee on 16 June 2022. Marian Glen stepped down from her position as chair of the audit committee on 16 June 2022. Gillian Watson was appointed as Chairman on 1 February 2021. 54 3: FINANCIAL REVIEW Independent auditors’ report to the members of Martin Currie Global Portfolio Trust plc Opinion We have audited the financial statements of Martin Currie Global Portfolio Trust plc (the ‘Company’) for the year ended 31 January 2023 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flow and the related notes 1 to 20, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice). In our opinion, the financial statements: • give a true and fair view of the Company’s aﬀairs as at 31 January 2023 and of its loss for the year then ended; • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • have been prepared in accordance with the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the ﬁnancial statements section of our report. We believe that the audit evidence we have obtained is suﬃcient and appropriate to provide a basis for our opinion. Independence We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the ﬁnancial statements in the UK, including the FRC’s Ethical Standard as applied to public interest entities, and we have fulﬁlled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Company and we remain independent of Company in conducting the audit. Conclusions relating to going concern In auditing the ﬁnancial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the ﬁnancial statements is appropriate. Our evaluation of the directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting included: • Conﬁrmation of our understanding of the Company’s going concern assessment process and engaged with the Directors and the company secretary to determine if all key factors that we have become aware of during our audit were considered in their assessment. • Inspection of the Directors’ assessment of going concern, including the revenue forecast, for the period to 31 January 2025 which is at least twelve months from the date the ﬁnancial statements were authorised for issue. In preparing the revenue forecast, the Company has concluded that it is able to continue to meet its ongoing costs as they fall due. • Review of the factors and assumptions, including the impact of the current economic environment, as applied to the revenue forecast and the liquidity assessment of the investments. We considered the appropriateness of the methods used to calculate the revenue forecast and the liquidity assessment and determined, through testing of the methodology and calculations, that the methods, inputs and assumptions utilised were appropriate to be able to make an assessment for the Company. • Assessment of the risk of breaching the debt covenants as a result of a reduction in the value of the Company’s portfolio. We calculated the Company’s compliance with debt covenants, and we performed reverse stress testing in order to identify what factors would lead to the Company breaching the ﬁnancial covenants. • Consideration of the mitigating factors included in the revenue forecasts and covenant calculations that are within the control of the Company. We reviewed the Company’s assessment of the liquidity of investments held and evaluated the Company’s ability to sell those investments in order to cover working capital requirements should revenue decline signiﬁcantly. • Review of the Company’s going concern disclosures included in the annual report in order to assess that the disclosures were appropriate and in conformity with the reporting standards. Based on the work we have performed, we have not identiﬁed any material uncertainties relating to events or conditions that, individually or collectively, may cast signiﬁcant doubt on the Company’s ability to continue as a going concern for a period to 31 January 2025 In relation to the Company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the directors’ statement in the ﬁnancial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company’s ability to continue as a going concern. INDEPENDENT AUDITORS’ REPORT 56 Overview of our audit approach Key audit matters • Risk of incomplete or inaccurate revenue recognition, including the classiﬁcation of special dividends as revenue or capital items in the Statement of Comprehensive Income • Risk of incorrect valuation or ownership of the investment portfolio Materiality • Overall materiality of £2.50m (2022: £3.16m) which represents 1% (2022: 1%) of total shareholders’ funds. An overview of the scope of our audit Tailoring the scope Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for the Company. This enables us to form an opinion on the financial statements. We take into account size, risk profile, the organisation of the Company and effectiveness of controls, the potential impact of climate change and changes in the business environment when assessing the level of work to be performed. Climate change Stakeholders are increasingly interested in how climate change will impact the Company. The Company has determined that the impact of climate change could affect the Company’s investments and the overall investment process. This is explained on page 34 in the principal risks and uncertainties. This disclosure forms part of the “Other information,” rather than the audited financial statements. Our procedures on these unaudited disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial statements, or our knowledge obtained in the course of the audit or otherwise appear to be materially misstated, in line with our responsibilities on “Other information”. Our audit effort in considering climate change was focused on the adequacy of the Company’s disclosures in the financial statements as set out in Note 1a and conclusion that there was no further impact of climate change to be taken into account as the investments are valued based on market pricing as required by FRS102. We also challenged the Directors’ considerations of climate change in their assessment of viability and associated disclosures. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters. 57 58 Risk Our response to the risk Key observations communicated to the Audit Committee Incomplete or inaccurate revenue recognition, including the classiﬁcation of special dividends as revenue or capital in the Statement of Comprehensive Income (as described on page 51 in the audit committee’s report and as per the accounting policy set out on page 67). The total revenue for the year to 31 January 2023 was £2.89m (2022: £2.50m), consisting primarily of dividend income from listed equity investments. There is a risk of incomplete or inaccurate recognition of revenue through the failure to recognise proper income entitlements or to apply an appropriate accounting treatment. In addition to the above, the Directors may be required to exercise judgment in determining whether income receivable in the form of special dividends should be classiﬁed as ‘revenue’ or ‘capital’ in the Statement of Comprehensive. Income. We have performed the following procedures: We obtained an understanding of the processes and controls surrounding revenue recognition, including the classiﬁcation of special dividends, by performing walkthrough procedures. For all dividends received, we recalculated the dividend income by multiplying the investment holdings at the ex-dividend date, traced from the accounting records, by the dividend per share, which was agreed to an independent data vendor. For a sample of dividends received, we agreed amounts to bank statements and agreed the exchange rates used to an external source. For all accrued dividends, we reviewed the investee company announcements to assess whether the dividend entitlements arose prior to 31 January 2023. We agreed the dividend rate to corresponding announcements made by the investee Company, recalculated the dividend amount receivable by multiplying the investment holdings at the ex-dividend date, traced from the accounting records, and conﬁrmed this was consistent with cash received as shown on post year end bank statements, for a sample of dividends where paid. To test completeness of recorded income, we veriﬁed that expected dividends for each investee Company held during the year had been recorded as income with reference to investee company announcements obtained from an independent data vendor. For all investments held during the year, we reviewed the type of dividends paid with reference to an external data source and conﬁrmed that we did not identify any special dividends in the year. The results of our procedures identiﬁed no material misstatement in relation to incomplete or inaccurate revenue recognition, including incorrect classiﬁcation of special dividends as revenue or capital items in the Statement of Comprehensive Income. Incorrect valuation or ownership of the investment portfolio (as described on page 51 in the Report of the audit committee and as per the accounting policy set out on page 67). The valuation of the investment portfolio at 31 January 2023 was £277.61m (2022: £339.54m) consisting primarily of listed investments. The valuation of the assets held in the investment portfolio is the primary driver of the Company’s net asset value and total return. Incorrect investment pricing, or a failure to maintain proper legal title of the assets held by the Company could have a signiﬁcant impact on the portfolio valuation and the return generated for shareholders. The fair value of listed investments is determined by reference to stock exchange quoted market bid prices at the close of business on the reporting date. We have performed the following procedures: We obtained an understanding of the processes and controls surrounding investment pricing and legal title of listed investments by performing walkthrough procedures. For all investments in the portfolio, we compared the market prices and exchange rates applied to an independent pricing vendor and recalculated the investment valuations as at the year-end. We conﬁrmed with the Administrator that there were no investments with stale prices as at the year-end and therefore no stale pricing report produced. We obtained the market prices, from an independent pricing vendor, for ﬁve business days pre and post the year end date and calculated the day-on-day movement and conﬁrmed there are no stale prices. We compared the Company’s investment holdings at 31 January 2023 to independent conﬁrmations received directly from the Company’s Custodian and Depositary. The results of our procedures identiﬁed no material misstatement in relation to the risk of incorrect valuation or ownership of the investment portfolio. There have been no changes to the areas of audit focus raised in the above risk table from the prior year. Our application of materiality We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and in forming our audit opinion. Materiality The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to inﬂuence the economic decisions of the users of the ﬁnancial statements. Materiality provides a basis for determining the nature and extent of our audit procedures. We determined materiality for the Company to be £2.50 million (2022: £3.16 million), which is 1% (2022: 1%) of shareholders’ funds. We believe that shareholder’s funds provide us with a materiality aligned to the key measure of the Company’s performance. Performance materiality The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality. On the basis of our risk assessments, together with our assessment of the Company’s overall control environment, our judgement was that performance materiality was 75% (2022: 75%) of our planning materiality, namely £1.87m (2022: £2.37m). We have set performance materiality at this percentage due to the fact there has been no misstatements in prior periods. Given the importance of the distinction between revenue and capital for investment trusts, we have also applied a separate testing threshold for the revenue column of the Statement of Comprehensive Income of £0.12m (2022: £0.16m), being our reporting threshold. Reporting threshold An amount below which identiﬁed misstatements are considered as being clearly trivial. We agreed with the audit committee that we would report to them all uncorrected audit diﬀerences in excess of £0.16m (2021: £0.15m), which is set at 5% of planning materiality, as well as diﬀerences below that threshold that, in our view, warranted reporting on qualitative grounds. We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other relevant qualitative considerations in forming our opinion. Other information The other information comprises the information included in the annual report other than the ﬁnancial statements and our auditors’ report thereon. The Directors are responsible for the other information contained within the annual report. Our opinion on the ﬁnancial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the ﬁnancial statements, or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the ﬁnancial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact. We have nothing to report in this regard. Opinion on other matters prescribed by the Companies Act 2006 In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. In our opinion, based on the work undertaken in the course of the audit: • the information given in the Strategic report and the Report of the directors for the ﬁnancial year for which the ﬁnancial statements are prepared is consistent with the ﬁnancial statements; and • the Strategic report and the Report of the directors have been prepared in accordance with applicable legal requirements. Matters on which we are required to report by exception In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identiﬁed material misstatements in the strategic report or Directors’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: • adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or • the ﬁnancial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and returns; or • certain disclosures of Directors’ remuneration speciﬁed by law are not made; or • we have not received all the information and explanations we require for our audit 59 Corporate Governance Statement We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code speciﬁed for our review by the Listing Rules. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the ﬁnancial statements or our knowledge obtained during the audit: • Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identiﬁed set out on page 48; • Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and why the period is appropriate set out on page 48; • Director’s statement on whether it has a reasonable expectation that the group will be able to continue in operation and meets its liabilities set out on page 48; • Directors’ statement on fair, balanced and understandable set out on page 49; • Board’s conﬁrmation that it has carried out a robust assessment of the emerging and principal risks set out on page 34; • The section of the annual report that describes the review of eﬀectiveness of risk management and internal control systems set out on page 42; and • The section describing the work of the audit committee set out on page 50. Responsibilities of Directors As explained more fully in the Directors’ responsibilities statement set out on page 49, the Directors are responsible for the preparation of the ﬁnancial statements and for being satisﬁed that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error. In preparing the ﬁnancial statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. Auditors’ responsibilities for the audit of the ﬁnancial statements Our objectives are to obtain reasonable assurance about whether the ﬁnancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to inﬂuence the economic decisions of users taken on the basis of these ﬁnancial statements. Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the Company and management. • We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most signiﬁcant are FRS 102, the Companies Act 2006, the Listing Rules, UK Corporate Governance Code, the Association of Investment Companies’ Code and Statement of Recommended Practice, Section 1158 of the Corporation Tax Act 2010 and The Companies (Miscellaneous Reporting) Regulations 2018. • We understood how the Company is complying with those frameworks through discussions with the audit committee and company secretary and review of Board minutes and the Company’s documented policies and procedures. • We assessed the susceptibility of the Company’s ﬁnancial statements to material misstatement, including how fraud might occur by considering the key risks impacting the ﬁnancial statements. We identiﬁed a fraud risk with respect to the incomplete or inaccurate revenue recognition through incorrect the classiﬁcation of special dividends as revenue or capital items. Further discussion of our approach is set out in the section on key audit matters above. 60 • Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved review of the company secretary’s reporting to the Directors with respect to the application of the documented policies and procedures and review of the ﬁnancial statements to ensure compliance with the reporting requirements of the Company. A further description of our responsibilities for the audit of the ﬁnancial statements is located on the Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report. Other matters we are required to address • Following the recommendation from the audit committee, we were appointed by the Company and signed an engagement letter on 13 August 2015 to audit the ﬁnancial statements of the Company for the year ending 31 January 2016 and subsequent ﬁnancial periods. The period of total uninterrupted engagement including previous renewals and reappointments is 8 years, covering the years ending 31 January 2016 to 31 January 2023. • The audit opinion is consistent with the additional report to the audit committee. Use of our report This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Ahmer Huda (Senior Statutory Auditor) for and on behalf of Ernst & Young LLP, Statutory Auditor London 6 April 2023 61 Year to 31 January 2023 Year to 31 January 2022 Note Revenue £000 Capital £000 Tota l £000 Revenue £000 Capital £000 Tota l £000 Net (losses)/gains on investments 7 — (30,227) (30,227) — 8,224 8,224 Net currency (losses)/gains — (43) (43) — 55 55 Revenue 2 2,889 — 2,889 2,502 — 2,502 Investment management fee 1 (244) (978) (1,222) (328) (1,312) (1,640) Other expenses 3 (493) — (493) (629) — (629) Net (loss)/return on ordinary activities before ﬁnance costs and taxation 2,152 (31,248) (29,096) 1,545 6,967 8,512 Finance costs 1(d) (71) (284) (355) (71) (284) (355) Net (loss)/return on ordinary activities before taxation 2,081 (31,532) (29,451) 1, 474 6,683 8,157 Taxation on ordinary activities 4 (300) — (300) (313) — (313) Net (loss)/return attributable to shareholders 1,781 (31,532) (29,751) 1,161 6,683 7,844 Net (loss)/return per Ordinary share 5 2.16p (38.20)p (36.04)p 1.36p 7.81p 9.17p The total columns of this statement are the profit and loss accounts of the Company. The revenue and capital items are presented in accordance with the Association of Investment Companies ('AIC') Statement of Recommended Practice 2022. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. The notes on pages 67 to 79 form part of these financial statements. There is no other comprehensive income and therefore the return attributable to shareholders is also the total comprehensive income for the year. The details of the investment management fee are provided in the Report of the directors on page 43. STATEMENT OF COMPREHENSIVE INCOME 62 The notes on pages 67 to 79 form part of these financial statements. Martin Currie Global Portfolio Trust plc is registered in Scotland, company number SC192761. The financial statements on pages 62 to 79 were approved by the Board of Directors on 6 April 2023 and signed on its behalf by As at 31 January 2023 As at 31 January 2022 Note £000 £000 £000 £000 £000 £000 Non-current assets Investments at fair value through proﬁt or loss 7 277,606 339,535 Current assets Trade receivables 8 1,771 160 Cash and cash equivalents 9 1,256 6,589 3,027 6,749 Current liabilities Trade payables 10 (865) (450) Bank loan 10 (30,000) — (30,865) (450) Total assets less current liabilities 249,768 345,834 Amounts falling due aer more than one year Bank loan 11 — (30,000) Total net assets 249,768 315,834 Equity Called up Ordinary share capital 12 4,934 4,934 Share premium account 11,424 11,424 Capital redemption reserve 11,083 11,083 Special distributable reserve 1(j) — 76,297 Capital reserve, of which: 13 221,463 211,583 Realised capital reserve (distributable) 154,191 110,511 Unrealised gains on investments (undistributable) 67,272 101,072 Revenue reserve 864 513 Total shareholders' funds 249,768 315,834 Net asset value per Ordinary share 14 328.2p 364.6p STATEMENT OF FINANCIAL POSITION On behalf of the Board Gillian Watson Chairman 6 April 2023 63 STATEMENT OF CHANGES IN EQUITY Note Called up Ordinary share capital £000 Share premium account £000 Capital redemption reserve £000 Special distributable reserve £000 Capital reserve £000 Revenue reserve £000 Total £000 As at 31 January 2022 4,934 11,424 11,083 76,297 211,583 513 315,834 Net (loss)/return attributable to shareholders — — — — (31,532) 1,781 (29,751) Ordinary shares bought back 12 — — — — (32,848) — (32,848) Dividends paid 6 — — — (2,037) — (1,430) (3,467) Transfers between reserves 1(j) — — — (74,260) 74,260 — — Year to 31 January 2023 4,934 11,424 11,083 — 221,463 864 249,768 The notes on pages 67 to 79 form part of these financial statements. 64 Note Called up Ordinary share capital £000 Share premium account £000 Capital redemption reserve £000 Special distributable reserve £000 Capital reserve £000 Revenue reserve £000 Total £000 As at 31 January 2021 4,934 6,221 11,083 70,017 209,929 1,387 303,571 Net return attributable to shareholders — — — — 6,683 1,161 7,844 Ordinary shares issued 12 — 5,203 — 7,833 550 — 13,586 Ordinary shares bought back 12 — — — — (5,579) — (5,579) Dividends paid 6 — — — (1,553) — (2,035) (3,588) As at 31 January 2022 4,934 11,424 11,083 76,297 211,583 513 315,834 STATEMENT OF CASH FLOW Year to 31 January 2023 Year to 31 January 2022 Note £000 £000 £000 £000 Cash ﬂows from operating activities Net (loss)/return on ordinary activities before taxation (29,451) 8,157 Adjustments for: Losses/(gains) on investments 7 30,227 (8,224) Finance costs 355 355 Dividend income recognised 2 (2,885) (2,493) Interest income recognised 2 (4) — Stock lending income recognised 2 — (9) (Increase)/decrease in receivables (18) 2 Decrease in payables (75) (2,885) Overseas withholding tax suﬀered 4 (300) (313) 27,300 (13,567) Net cash ﬂows from operations (2,151) (5,410) Interest received 4 — Stock lending income received — 9 Dividends received 2,730 2,489 2,734 2,498 Net cash ﬂows from operating activities 583 (2,912) Cash ﬂows for investing activities Purchases of investments (39,765) (45,791) Sales of investments 70,029 40,248 Net cash ﬂows from investing activities 30,264 (5,543) Cash ﬂows from ﬁnancing activities Repurchase of Ordinary share capital (32,358) (5,544) Shares issued for cash — 14,504 Equity dividends paid 6 (3,467) (3,588) Interest and fees paid on bank loan (355) (355) Net cash ﬂows from ﬁnancing activities (36,180) 5,017 Net decrease in cash and cash equivalents (5,333) (3,438) Cash and cash equivalents at the start of the year 6,589 10,027 Cash and cash equivalents at the end of the year 1,256 6,589 65 The notes on pages 67 to 79 form part of these financial statements. Analysis of debt Year to 31 January 2022 Cash flows Exchange movements Year to 31 January 2023 Note £000 £000 £000 £000 Cash at bank 9 6,589 (5,333) — 1,256 Bank loan 10, 11 (30,000) — — (30,000) Net debt (23,411) (5,333) — (28,744) Year to 31 January 2021 Cash flows Exchange movements Year to 31 January 2022 Note £000 £000 £000 £000 Cash at bank 9 10,027 (3,438) — 6,589 Bank loan 11 (30,000) — — (30,000) Net debt (19,973) (3,438) — (23,411) 66 Note 1: Accounting policies (a) For the reporting period, the Company is applying FRS 102 Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), which forms part of the Generally Accepted Accounting Practice ('UK GAAP') issued by the Financial Reporting Council ('FRC'). The Company’s assets consist of a diverse portfolio of listed equity shares which, in most circumstances, are realisable within a very short timescale. The Directors are mindful of the principal and emerging risks and uncertainties disclosed on page 34 including those related to geopolitical risks and climate considerations. They have reviewed revenue forecasts for the next two ﬁnancial years, including liabilities arising from the loan facility, and believe that the Company has adequate ﬁnancial resources to continue its operational existence for the period to 31 January 2025, which is at least 12 months from the date the ﬁnancial statements are authorised for issue. Accordingly, the Directors continue to adopt the going concern basis in preparing these ﬁnancial statements. These ﬁnancial statements have been prepared in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, FRS102 issued by the FRC and the revised Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (SORP) issued by the AIC in July 2022. Functional currency – the Company is required to identify a functional currency, being the currency in which the Company predominately operates. The Board has determined that sterling is the Company’s functional currency, which is also the currency in which these ﬁnancial statements are prepared. This is also the currency in which all expenses and dividends are paid. The Directors have considered the impact of climate change on the value of the listed investments that the Company holds. In the view of the Directors, as the portfolio consists of listed equities, their market prices should reﬂect the impact, if any, of climate change and accordingly no adjustment has been made to take account of climate change in the valuation of the portfolio in these ﬁnancial statements. (b) Income from investments (other than capital dividends), including taxes deducted at source, is included in revenue by reference to the date on which the investment is quoted ex-dividend, or where no ex-dividend date is quoted, when the Company’s right to receive payment is established. UK investment income is stated net of the relevant tax credit. Overseas dividends include any taxes deducted at source. Special dividends are credited to capital or revenue, according to the circumstances. Stock dividends are treated as unfranked investment income; any excess in value of the shares received over the amount of the cash dividend is recognised as a capital item in the statement of comprehensive income. (c) Interest receivable and payable, investment management fees and other expenses are measured on an accrual basis. (d) The investment management fee and ﬁnance costs in relation to debt are recognised four-ﬁhs as a capital item and one- ﬁh as a revenue item in the statement of comprehensive income in accordance with the Board’s expected long-term split of returns in the form of capital gains and revenue, respectively. Finance costs relate to interest and fees on bank loans and overdras. All other expenses are charged to revenue except where they directly relate to the acquisition or disposal of an investment, in which case, they are treated as described in (f) below. Full details of the investment management fee are included in the Report of the directors on page 43. (e) Investments – investments have been classiﬁed upon initial recognition at fair value through proﬁt or loss. Investments are recognised and derecognised at trade date where a purchase or sale is under a contract whose terms require delivery within the time frame established by the market concerned, and are initially measured at fair value. Subsequent to initial recognition, investments are valued at fair value. For listed investments, this is deemed to be bid market prices. Gains and losses arising from changes in fair value are included in net proﬁt or loss for the year as a capital item in the statement of comprehensive income and are ultimately recognised in the capital reserve. (f) Transaction costs incurred on the purchase and disposal of investments are recognised as a capital item in the statement of comprehensive income. (g) Monetary assets and liabilities expressed in foreign currencies are translated into sterling at rates of exchange ruling at the date of the statement of ﬁnancial position. Non-monetary items expressed in foreign currencies held at fair value are translated into sterling at rates of exchange ruling at the date the fair value is measured. Transactions in foreign currency are converted to sterling at the rate ruling at the date of the transaction. Exchange gains and losses are taken to the income statement as a capital or revenue item depending on the nature of the underlying item. (h) Cash and cash equivalents comprise cash and demand deposits which are readily convertible to a known amount of cash and are subject to insigniﬁcant risk of changes in value. (i) Dividends payable – under FRS102 dividends should not be accrued in the ﬁnancial statements unless they have been approved by shareholders before the statement of ﬁnancial position date. Dividends to equity shareholders are recognised in the statement of changes in equity when the shareholder's right to receive the payment is established. In the case of the fourth interim dividend, this would be the ex- dividend date of 6 April 2023. (j) Called up ordinary share capital – represents the nominal value of the issued share capital including shares held in Treasury. This reserve is non-distributable. NOTES TO THE FINANCIAL STATEMENTS 67 The share premium account – when shares held in Treasury are reissued, the excess of the sales proceeds over the weighted average price of repurchase is allocated to the share premium account. This reserve is non-distributable. The capital redemption reserve – represents the nominal value of the shares bought back and cancelled. This reserve is non-distributable. The special distributable reserve – created through the cancellation and reclassiﬁcation of the share premium account in 1999 and 2004. Prior to 1 February 2021, the costs of share buybacks and the proceeds of shares re-issued from Treasury up to the original cost of repurchase, calculated by applying the weighted average price of shares held in Treasury, were allocated to the special distributable reserve. Following the Board's decision to simplify the Company's reserves, the balance of the special distributable reserve of £74,260,000 was transferred in full to the capital reserve on 16 June 2022 (see statement of changes in equity for more details on the movement in reserves). Thus, the balance of this reserve as at 31 January 2023 is nil. The capital reserve – gains or losses on realisation of investments and changes in fair values of investments are transferred to the capital reserve. Any changes in fair values of investments that are not readily convertible to cash are treated as unrealised gains or losses within the capital reserve. The capital element of the investment management fee and relevant ﬁnance costs are charged to this reserve. Any associated tax relief is also credited to this reserve. With eﬀect from 16 June 2022, the accounting policy has been updated following the passing of Resolution 18 at the Company's AGM, whereby the new Articles of Association were adopted which allow the realised portion of the capital reserve to be distributable by way of dividend in addition to continuing to be available for distribution by way of share buybacks. The consolidation of the special distributable reserve and the capital reserve has had no impact on the Company's cash or net assets. The revenue reserve – represents net revenue earned that has not been distributed to shareholders. This reserve is fully distributable. (k) Taxation – the charge for taxation is based upon the revenue for the year and is allocated according to the marginal basis between revenue and capital using the Company’s eﬀective rate of corporation tax for the accounting period. (l) Deferred taxation – deferred taxation is recognised in respect of all timing diﬀerences that have originated but not reversed at the statement of ﬁnancial position date where transactions or events that result in an obligation to pay more or a right to pay less tax in future have occurred at the statement of ﬁnancial position date measured on an undiscounted basis and based on enacted tax rates. This is subject to deferred tax assets being recognised only if it is considered more likely than not that there will be suitable proﬁts from which the future reversal of the underlying temporary diﬀerences can be deducted. Timing diﬀerences are diﬀerences arising between the Company’s taxable proﬁts and its results as stated in the accounts which are capable of reversal in one or more subsequent periods. Due to the Company’s status as an investment trust, and the intention to continue meeting the conditions required to obtain approval as an investment trust in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments. (m) Stock lending income (now discontinued) is received net of associated costs and recognised in revenue as earned. (n) Estimates – estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods aﬀected. There have been no signiﬁcant judgements, estimates or assumptions for the year. (o) Bank loans are classiﬁed as ﬁnancial liabilities at amortised cost. Interest payable on the bank loan is accounted for on an accrual basis in the statement of comprehensive income. 68 Note 2: Revenue from investments Year ended 31 January 2023 £000 Year ended 31 January 2022 £000 Dividends from listed investments UK equities 275 210 International equities 2,610 2,283 Other revenue Interest on deposits 4 — Stock lending — 9 2,889 2,502 There were no capital dividends received during the year ended 31 January 2023 (2022: £nil). 69 Note 3: Other expenses Year ended 31 January 2023 £000 Year ended 31 January 2022 £000 Directors' fees 158 139 Advertising and public relations 122 96 Audit fees 1 56 58 Registration fees 38 41 Regulatory and listing fees 35 64 Legal fees 26 31 Secretarial fee 2 25 67 Depositary fees 19 66 Printing and postage 19 25 Directors' and oﬃcers' liability insurance 12 10 Custody fees 7 31 VAT recovered (56) (44) Other 32 45 493 629 All expenses detailed above include VAT where applicable. During the year to 31 January 2022 the Company changed administrators and Martin Currie Investment Management paid an additional audit fee in relation to this change of £3,000 plus VAT. During the year to 31 January 2023 the audit fee has been adjusted for inflation and an additional £2,500 plus VAT to reflect the change in scope as a result of the revised ISA 315 requirements. With effect from 1 July 2022, the AIFM ceased charging a separate company secretarial fee. 70 Note 4: Taxation on ordinary activities Year ended 31 January 2023 Year ended 31 January 2022 Revenue £000 Capital £000 Total £000 Revenue £000 Capital £000 Total £000 Overseas tax suﬀered 300 — 300 313 — 313 Year ended 31 January 2023 £000 Year ended 31 January 2022 £000 Net (loss)/return before taxation (29,451) 8,157 Corporation tax at rate of 19.00% (2022: 19.00%) (5,596) 1,550 Eﬀects of: UK dividends not taxable (52) (40) Gains/(losses) on investments not taxable 5,751 (1,573) Overseas dividends not taxable (496) (434) Overseas tax suﬀered 300 313 Increase in excess management and loan expenses 393 497 Total tax charge for the year 300 313 The corporation tax rate was 19.00% (2022: 19.00%). The tax charge for the year differs from the charge resulting from applying the standard rate of corporation tax in the UK. The differences are explained below. As at 31 January 2023, the Company had unutilised management expenses of £44 million (2022: £42 million) carried forward. Due to the Company's status as an investment trust and the intention to continue to meet the conditions required to obtain approval for that status in the foreseeable future, the Company has not provided deferred tax on capital gains and losses arising on the revaluation or disposal of investments. Note 5: Returns per share Year ended 31 January 2023 Year ended 31 January 2022 The returns and net asset value per Ordinary share are calculated with reference to the following ﬁgures: Revenue return £000 1,781 1,161 Capital return £000 (31,532) 6,683 Total return £000 (29,751) 7,844 Weighted average number of shares in issue during the year 82,551,425 85,587,856 Revenue return per share 2.16p 1.36p Capital return per share (38.20p) 7.81p Total return per share (36.04p) 9.17p 71 Revenue return per share for the year ended 31 January 2023 is 2.16p (2022: 1.36p), refer to note 5 on page 70 for details of calculation. The fourth interim dividend for the year ended 31 January 2022 and the first interim dividend for the year ended 31 January 2023 have been allocated to the special distributable reserve. The second and third interim dividends for the year ended 31 January 2023 have been allocated to the revenue reserve. (2022: The fourth interim dividend for the year ended 31 January 2021 and the first interim dividend for the year ended 31 January 2022 were allocated to the revenue reserve. The second and third interim dividends for the year ended 31 January 2022 were allocated to the special distributable reserve). Set out below are the total dividends paid/payable in respect of the financial year which forms the basis on which the requirements of s1158-1159 of the Corporation Taxes Act 2010 are considered. Year ended 31 January 2023 £000 Year ended 31 January 2022 £000 First interim dividend of 0.90p for the year ended 31 January 2023 (2022: 0.90p) 752 765 Second interim dividend of 0.90p for the year ended 31 January 2023 (2022: 0.90p) 728 774 Third interim dividend of 0.90p for the year ended 31 January 2023 (2022: 0.90p) 702 779 Proposed fourth interim dividend of 1.50p for the year ended 31 January 2023 (2022: 1.50p) 1,115 1,285 3,297 3,603 Note 6: Dividends Year ended 31 January 2023 £000 Year ended 31 January 2022 £000 Year ended 31 January 2021 - fourth interim dividend of 1.50p — 1,270 Year ended 31 January 2022 - fourth interim dividend of 1.50p 1,285 — Year ended 31 January 2023 - ﬁrst interim dividend of 0.90p (2022: 0.90p) 752 765 Year ended 31 January 2023 - second interim dividend of 0.90p (2022: 0.90p) 728 774 Year ended 31 January 2023 - third interim dividend of 0.90p (2022: 0.90p) 702 779 3,467 3,588 72 Note 7: Investments at fair value through proﬁt or loss Year ended 31 January 2023 £000 Year ended 31 January 2022 £000 Opening book cost 238,463 225,072 Opening investment holding gains 101,072 102,916 Opening market value 339,535 327,988 Additions at cost 39,765 43,571 Disposals proceeds received (71,467) (40,248) (Losses)/gains on investments (30,227) 8,224 Market value of investments held at 31 January 277,606 339,535 Closing book cost 210,334 238,463 Closing investment holding gains 67,272 101,072 Closing market value 277,606 339,535 The Company received £71,467,000 (2022: £40,248,000) from investments sold in the year. The book cost of these investments when they were purchased was £67,894,000 (2022: £30,180,000). The transaction costs in acquiring investments during the year were £52,000 (2022: £52,000). For disposals, transaction costs were £37,000 (2022: £20,000). Note 8: Trade receivables As at 31 January 2023 £000 As at 31 January 2022 £000 Sales awaiting settlement 1,438 — Taxation recoverable 243 103 VAT recoverable 49 49 Dividends receivable 22 7 Other debtors 19 1 1,771 160 Note 9: Cash and cash equivalents As at 31 January 2023 £000 As at 31 January 2022 £000 Sterling bank account 1,256 6,589 1,256 6,589 Year ended 31 January 2023 £000 Year ended 31 January 2022 £000 Net realised gains on investments 3,573 10,068 Net change in unrealised losses on investments (33,800) (1,844) Total capital gains/(losses) (30,227) 8,224 73 Note 10: Trade payables As at 31 January 2023 £000 As at 31 January 2022 £000 Amounts falling due within one year: Ordinary shares bought back awaiting settlement 525 35 Investment management and secretarial fees 83 134 Interest accrued on bank loan 67 67 Other payables 190 214 865 450 Bank loan 1 30,000 — For details please see narrative below Note 11. Note 11: Payables – amounts falling due after more than one year As at 31 January 2023 £000 As at 31 January 2022 £000 Bank loan — 30,000 — 30,000 On 23 November 2020, the Company entered into an unsecured three year £30 million sterling term loan facility agreement with The Royal Bank of Scotland International Limited at a ﬁxed interest rate of 1.181%. This facility was fully drawn down on 24 November 2020 and matures on 24 November 2023. Due to its maturity in less than one year, this credit facility has been reclassiﬁed as a current liability. The facility agreement contains covenants that the adjusted investment portfolio value at each month end should not be less than £120 million, the gross borrowings should not exceed 30% of the Company’s adjusted investment portfolio value and the portfolio must contain at least 22 eligible investments. The facility is shown at amortised cost. Finance costs are charged to capital (80%) and revenue (20%) in accordance with the Company’s accounting policies. 74 Note 12: Ordinary shares of 5p Number of shares As at 31 January 2023 £000 Number of shares As at 31 January 2022 £000 Ordinary shares of 5p Ordinary shares in issue at the beginning of the year 86,616,404 4,330 84,759,499 4,237 Ordinary shares issued from Treasury during the year — — 3,415,000 171 Ordinary shares bought back to Treasury during the year (10,510,850) (526) (1,558,095) (78) Ordinary shares in issue at end of the year 76,105,554 3,804 86,616,404 4,330 Number of shares As at 31 January 2023 £000 Number of shares As at 31 January 2022 £000 Treasury shares (Ordinary shares 5p) Treasury shares in issue at the beginning of the year 12,059,503 604 13,916,408 697 Ordinary shares issued from Treasury during the year — — (3,415,000) (171) Ordinary shares bought back to Treasury during the year 10,510,850 526 1,558,095 78 Treasury shares in issue at end of the year 22,570,353 1,130 12,059,503 604 Total Ordinary shares in issue and in Treasury at the end of the year 98,675,907 4,934 98,675,907 4,934 For the financial year to 31 January 2023, the net proceeds received for shares issued from Treasury less payments made for shares bought back to Treasury was -£32,848,000 (2022: the net proceeds received for shares issued from Treasury less payments made for shares bought back to Treasury was £8,007,000). Between 1 February 2023 and 31 March 2023, 1,738,928 Ordinary shares of 5p were bought back to Treasury and no Ordinary shares of 5p were issued from Treasury. Note 13: Capital reserves Realised capital reserve £000 Unrealised investment holding gains £000 Total capital reserve £000 As at 31 January 2022 110,511 101,072 211,583 Gains on realisation of investments at fair value 3,573 — 3,573 Movement in fair value gains of investments — (33,800) (33,800) Realised currency losses during the year (43) — (43) Cost of shares bought back into Treasury (32,848) — (32,848) Capital expenses (1,262) — (1,262) Transfer of reserves 1 74,260 — 74,260 As at 31 January 2023 154,191 67,272 221,463 Refer to Note 1(j): Accounting policies for details on the consolidation of reserves. Prior to the consolidation, the balance of the special distributable reserve was reduced by £2,037,000, the amount of the dividends paid during the period. The realised capital reserve is distributable by way of dividend and by way of share buybacks. The unrealised investment holding gains is non-distributable. The above split in capital reserve is shown in accordance with provisions of the Statement of Recommended Practice ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts 2022’. 75 Realised capital reserve £000 Unrealised investment holding gains £000 Total capital reserve £000 As at 31 January 2021 107,013 102,916 209,929 Gains on realisation of investments at fair value 10,068 — 10,068 Movement in fair value gains of investments — (1,844) (1,844) Realised currency gains during the year 55 — 55 Cost of shares bought back into Treasury 550 — 550 Proceeds from the issue of Shares from Treasury (5,579) — (5,579) Capital expenses (1,596) — (1,596) As at 31 January 2022 110,511 101,072 211,583 76 Note 14: Net asset value per share As at 31 January 2023 As at 31 January 2022 Net assets attributable to shareholders £249,768,000 £315,834,000 Number of shares in issue at the year end 76,105,554 86,616,404 Net asset value per share 328.2p 364.6p Note 15: Related party transactions With the exception of the investment management and secretarial fees (as disclosed on page 43), and Directors’ shareholdings (disclosed on page 52), there have been no related party transactions during the year, or in the prior year. The amounts payable for Directors' fees as at 31 January 2023 are £14,478 (2022: £14,000). Note 16: Financial instruments The Company’s ﬁnancial instruments comprise securities and other investments, cash balances, receivables and payables that arise directly from its operations; for example, in respect of sales and purchases awaiting settlement, and receivables for accrued income. The Company also has the ability to enter into derivative transactions in the form of forward foreign currency contracts, futures and options, for the purpose of managing currency and market risks arising from the Company’s activities. The main risks the Company faces from its ﬁnancial instruments are (a) market price risk (comprising of (i) interest rate risk, (ii) currency risk and (iii) other price risk), (b) liquidity risk and (c) credit risk. The Board regularly reviews and agrees policies for managing each of these risks. The AIFM's policies for managing these risks are summarised below and have been applied throughout the year. The numerical disclosures exclude short-term receivables and payables, other than for currency disclosures. (a) Market price risk The fair value or future cash ﬂows of a ﬁnancial instrument held by the Company may ﬂuctuate because of changes in market prices. This market risk comprises three elements – interest rate risk, currency risk and other price risk. (i) Market risk arising from interest rate risk Interest rate movements may affect the level of income receivable on cash deposits. The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment and borrowing decisions. The Board imposes borrowing limits to ensure that gearing levels are appropriate and reviews these on a regular basis. Borrowings may comprise fixed rate, revolving, and uncommitted facilities. Current guidelines state that the total borrowings will not exceed 20% of the net assets of the Company at the time of drawdown. On 23 November 2020, the Company entered into a £30 million sterling fixed rate term loan facility agreement. The facility was fully drawn down on 24 November 2020 and the term loan is shown at amortised cost. Interest risk profile The interest rate risk proﬁle of the Company at the reporting date was as follows: As at 31 January 2023 As at 31 January 2022 Cash and cash equivalents 1,256 6,589 Total net exposure to interest rate risk 1,256 6,589 77 Interest rate sensitivity The sensitivity analysis below has been determined based on the exposure to interest rates for non-derivative instruments at the statement of ﬁnancial position date and the stipulated change taking place at the beginning of the ﬁnancial year and held constant throughout the reporting period in the case of instruments that have ﬂoating rates. If interest rates had been 2% (2022: 0.75%) higher or lower and all other variables were held constant, the Company’s proﬁt for the year ended 31 January 2023 would increase/ decrease by £25,000 (2022: increase/decrease by £49,000). This is mainly attributable to the Company’s exposure to interest rates on its ﬂoating rate cash balances. An interest rate variation of 2% is used at 31 January 2023 as the Bank of England has increased the Bank Rate to 3.5% as of the year-end date, while market expectations are that this will reach to 5% during the second half of 2023. (ii) Market risk arising from foreign currency risk A significant proportion of the Company’s investment portfolio is invested in overseas securities and the statement of financial position can be significantly affected by movements in foreign exchange rates. It is not currently the Company’s policy to hedge this risk. The revenue account is subject to currency fluctuation arising on overseas income. Foreign currency risk profile Foreign currency risk exposure by currency of denomination: The asset allocation between speciﬁc markets can vary from time to time based on the portfolio manager’s opinion of the attractiveness of the individual stocks. Year ended 31 January 2023 £000 Year ended 31 January 2022 £000 Total net sensitivity to foreign currencies 13,649 16,897 Foreign currency sensitivity At 31 January 2023, if sterling had strengthened by 5% in relation to all currencies, with all other variables held constant, total net assets and total return on ordinary activities would have decreased by the amounts shown below. A 5% weakening of sterling against all currencies, with all other variables held constant, would have had an equal but opposite eﬀect on the ﬁnancial statement amounts. The level of change is considered to be a reasonable illustration based on the volatility of exchange rates during the year. Year ended 31 January 2023 Total currency exposure £000 Year ended 31 January 2022 Total currency exposure £000 US dollar 131,244 172,981 Euro 73,668 78,826 Swedish krona 28,004 36,204 Hong Kong dollar 19,590 29,203 Australian dollar 11,136 10,509 Danish krone 9,330 10,195 Swiss franc — 12 Total overseas investments 272,972 337,930 Sterling (23,204) (22,096) Tota l 249,768 315,834 78 (iii) Market risk arising from other price risk Other price risks (i.e. changes in market prices other than those arising from interest rate or currency risk) may aﬀect the value of the quoted investments. It is the Board’s policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors speciﬁc to a particular country or sector. The allocation of assets to international markets as detailed on page 77, and the stock selection process both act to reduce market risk. The investment manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. All investments held by the Company are listed on various stock exchanges worldwide. Other price risk sensitivity If market prices at the statement of ﬁnancial position date had been 30% (2022: 30%) higher or lower while all other variables remained constant, the return attributable to Ordinary shareholders at the year ended 31 January 2023 would have increased/decreased by £83,300,000 (2022: increase/decrease of £101,900,000) and capital reserves would have increased/ decreased by the same amount. This level of change is considered to be reasonably possible based on observation of market conditions and historic trends. (b) Liquidity risk This is the risk that the Company will encounter diﬃculty in meeting obligations associated with ﬁnancial liabilities. Liquidity risk is not considered to be signiﬁcant as the Company’s assets comprise mainly readily realisable securities, which can be sold to meet funding commitments if necessary. (c) Credit risk This is the risk of failure of the counterparty to a transaction to discharge its obligations under that transaction that could result in the Company suﬀering a loss. The risk is managed as follows: • investment transactions are carried out with a large number of brokers, whose credit ratings are reviewed periodically by the portfolio manager, and limits are set on the amount that may be due from any one broker; and • cash is held only with reputable banks with high-quality external credit ratings. The maximum credit risk exposure as at 31 January 2023 was £3,027,000 (2022: £6,749,000). This was due to trade receivables and cash as per notes 8 and 9. Fair values of financial assets and financial liabilities All ﬁnancial assets and liabilities of the Company are included in the statement of ﬁnancial position at fair value or a reasonable approximation of fair value with no material diﬀerence in the carrying amount. Note 17: Capital management policies and procedures The Company’s capital management objectives are: • to ensure that the Company will be able to continue as a going concern; • to maximise the return to its equity shareholders through an appropriate balance of equity capital and debt; and • to limit gearing to 20% of net assets at time of drawdown. The Board monitors and reviews the broad structure of the Company’s capital on an ongoing basis. This review includes the nature and planned level of gearing, which takes account of the portfolio manager’s views on the market and the extent to which revenue in excess of that which is required to be distributed under the investment trust rules should be retained. The capital of the Company consists of the equity reserves as shown on the equity section of the statement of ﬁnancial position, and the bank loan as disclosed in the liabilities section. 79 Note 18: Fair value hierarchy Under FRS 102, the Company is required to classify fair value measurements using a fair value hierarchy that reﬂects the signiﬁcance of the inputs used in making the measurements. The fair value hierarchy shall have the following levels: • Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level 2: other signiﬁcant observable inputs (including quoted prices for similar investments, interest rates, prepayments, credit risk, etc); • Level 3: signiﬁcant unobservable input (including the Company’s own assumptions in determining the fair value of investments). The ﬁnancial assets measured at fair value through proﬁt and loss are grouped into the fair value hierarchy as follows: Note 19: Stock lending During the ﬁnancial year ended 31 January 2023, the Company was not involved in securities ﬁnancing transactions (SFTs) as deﬁned in Article 3 of UK version of Regulation (EU) 2015/2365, as a result there are no outstanding balances, collateral, or SFTs reportable counterparties at the reporting date. During the prior ﬁnancial year, the Company was engaged in securities lending, the net securities lending income is disclosed in note 2 to the ﬁnancial statements. Note 20: Post balance sheet events On 22 March 2023, the Board declared a fourth interim dividend of 1.50p per share. As at 31 March 2023, the Company had bought back a further 1,738,928 ordinary shares at an average price of 328.0p per share. At 31 January 2023 £000 At 31 January 2022 £000 Level 1 277,606 339,535 Net fair value 277,606 339,535 4: INVESTOR INFORMATION Directors and Advisers Financial calendar – key dates 2023/24 Directors Gillian Watson (Chairman) Lindsay Dodsworth Marian Glen Gary Le Sueur Christopher Metcalfe Alternative Investment Fund Manager and Company Secretary Franklin Templeton Investment Trust Management Limited 5 Morrison Street Edinburgh EH3 8BH Investment Manager Martin Currie Investment Management Limited 5 Morrison Street Edinburgh EH BH www.martincurrie.com Martin Currie Investment Management Limited is authorised and regulated by the Financial Conduct Authority. Registered oﬃce Martin Currie Global Portfolio Trust plc 5 Morrison Street Edinburgh EH BH Registered in Scotland, registered number SC192761 Independent Auditors Ernst & Young LLP 25 Churchill Place Canary Wharf London E EY Broker JPMorgan Cazenove Limited 25 Bank Street Canary Wharf London ESP Registrar Link Group 10th Floor Central Square 29 Wellington Street Leeds LS DL www.linkgroup.eu Bankers The Royal Bank of Scotland International Limited London Branch, 1 Princes Street London ECR BP Depositary JPMorgan Europe Limited 25 Bank Street Canary Wharf London EJP Custodian JPMorgan Chase Bank N.A. 25 Bank Street Canary Wharf London EJP Association of Investment Companies 9th Floor 24 Chiswell Street London ECYYY www.theaic.co.uk Martin Currie Global Portfolio Trust is a member of the AIC (the trade body of the investment company industry). INVESTOR INFORMATION Half-yearly results announced Fourth interim dividend payment Annual results announced Second interim dividend payment October Third interim dividend payment JanuarySeptemberApril First interim dividend payment Annual general meeting June 81 The European Securities and Markets Authority ('ESMA') has published guidelines on Alternative Performance Measures ('APMs'). APMs are deﬁned as being a ‘ﬁnancial measure of historical or future ﬁnancial performance, ﬁnancial position, or cash ﬂows, other than a ﬁnancial measure deﬁned or speciﬁed in the applicable accounting framework.’ The guidelines aim to improve comparability, reliability and/or comprehensibility of APMs. The Company uses the following APMs throughout the annual report, ﬁnancial statements and notes to the ﬁnancial statements: Benchmark total return A measure showing how the benchmark has performed over a period of time, considering both capital returns and dividends paid to shareholders. Discount/Premium Discount The amount, expressed as a percentage, by which the share price is less than the net asset value per share. Premium The amount, expressed as a percentage, by which the share price is more than the net asset value per share. As at 31 January 2023 the share price was 319.0p and the net asset value per share (cum-income) was 328.2p, the discount was therefore 2.8% (2022: 2.2%). Gearing Gearing means borrowing money to buy more assets in the hope that the company makes enough proﬁt to pay back the debt and interest and leave something extra for shareholders. However, if the investment portfolio does not perform well, gearing can increase losses. The more an investment company gears, the higher the risk. The gearing on 31 January 2023 was 12.0% (2022: 9.5%). The calculation of gearing is provided below. 2023 £000 2022 £000 (a) Borrowing (Note 10/Note 11) 30,000 30,000 (b) Net assets per the Statement of Financial Position 249,768 315,834 Gearing % (a)/(b) 12.0% 9.5% NAV per share A common measure of the underlying value of a share in an investment company. The net asset value (‘NAV’) is the value of the investment company’s assets, less any liabilities that it has. The NAV per share is the NAV divided by the number of shares in issue. This will very often be different to the share price. The difference is known as the discount or premium. The NAV per share quoted is the cum-income NAV per share unless otherwise noted. As shown in note 14 the NAV per share was 328.2p as at 31 January 2023 (2022: 364.6p). NAV total return A measure showing how the net asset value (‘NAV’) per share has performed over a period of time, considering both capital returns and dividends paid to shareholders. NAV total return shows performance which is not aﬀected by movements in discounts and premiums. It also considers the fact that diﬀerent investment companies pay out diﬀerent levels of dividends. The NAV total return, calculated using the cum-income NAV, for the year end 31 January 2023 was -8.8%. 2023 2022 NAV at start of financial year per the Statement of Financial Position 364.6p 358.2p NAV at end of financial year per the Statement of Financial Position 328.2p 364.6p Effect of dividend reinvestment 1 4.3p 4.0p NAV at the end of the financial year including effect of dividends 332.5p 368.6p NAV Total Return -8.8% 2.9% Dividend assumed to be reinvested on ex-date (see table of ex-dates overleaf). Share price total return A measure showing how the share price has performed over a period of time, considering both capital returns and dividends paid to shareholders. The share price total return for the year end 31 January 2023 was -9.3%. 2023 2022 Share price at start of financial year 356.5p 370.0p Share price at end of financial year 319.0p 356.5p Effect of dividend reinvestment 1 4.3p 3.9p Share price at the end of the year including effect of dividends 323.3p 360.4p Share price total return -9.3% -2.6% Dividend assumed to be reinvested on ex-date (see table of ex-dates overleaf). ALTERNATIVE PERFORMANCE MEASURES 82 31 January 2023 Dividend rate NAV Share price 31 January 2022 (prior-year end) n/a 364.6p 356.5p 7 April 2022 (ex dividend) 1.5p 344.0p 341.0p 7 July 2022 (ex dividend) 0.9p 308.8p 303.0p 6 October 2022 (ex dividend) 0.9p 305.0p 302.0p 5 January 2023 (ex dividend) 0.9p 306.5p 303.0p 31 January 2023 (year end) n/a 328.2p 319.0p 31 January 2022 31 January 2021 (prior-year end) n/a 358.2p 370.0p 8 April 2021 (ex dividend) 1.5p 373.4p 369.0p 8 July 2021 (ex dividend) 0.9p 402.6p 402.0p 7 October 2021 (ex dividend) 0.9p 389.0p 386.0p 6 January 2022 (ex dividend) 0.9p 396.5p 402.0p 31 January 2022 (year end) n /a 364.6p 356.5p Year ended 31 January 2023 Year ended 31 January 2022 Revenue £000 Capital £000 Total £000 Revenue £000 Capital £000 Total £000 Investment management fee (223) (894) (1,117) (328) (1,312) (1,640) Other expenses (493) — (493) (629) — (629) Total expenses (716) (894) (1,610) (957) (1,312) (2,269) Average net assets over the year 262,321 335,858 Ongoing charges 0.61% 0.68% Full details of the investment management fee are included in the Report of the directors on page 43, details of the Directors’ fees are included in the Directors’ remuneration statement on pages 52 to 54. Ongoing charges are calculated with reference to the following figures: Ongoing charges Ongoing charges are the total of the Company’s expenses, including both the investment management fee and other costs expressed as a percentage of NAV. The calculation of the ongoing charges is carried out in accordance with the AIC's methodology. The ﬁgure as at 31 January 2023 is an estimated annualised ﬁgure. In accordance with the AIC's guidance, the change in management fee eﬀective from 1 July 2022 is considered to be a material change, therefore for the purposes of the ongoing charges calculation, the latest management fee rate has been used to more accurately reﬂect the expected future ongoing charges of the Company. The calculation of the ongoing charges is provided below. 83 Assets Anything owned or controlled that has value. For investment companies, this might include shares and securities, property, cash etc. Basis Points A common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01%, or 0.0001, and is used to denote the percentage change in a financial instrument. Benchmark An index or other measure against which the performance of an investment company is compared or its objectives are set. The ﬁnancial statements will include an explanation of how a company has performed against its benchmark over the year and the reasons for any under or over performance. Bid price The price at which you sell your shares when two prices are quoted. This is sometimes shown as the ‘sell’ price and will be the lower of the two prices shown. Dividend Income from an investment in shares. Dividends are usually paid twice a year but can also be paid quarterly or monthly. Not all investment companies pay dividends. Dividend income is not guaranteed and may fall as well as rise. Environmental, social and corporate governance (ESG) Assessment of material environmental, social and corporate governance (ESG) factors and the potential impact on that company’s cash ﬂows, statement of ﬁnancial position, reputation and, ultimately, corporate value in the long term. Leverage Leverage is deﬁned in the AIFM Regulations 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. Leverage is measured in terms of the Company’s exposure and is expressed as a percentage of net asset value. Pursuant to the AIFM Regulations, it can be calculated using a gross and a commitment method. Under the gross method, exposure represents the sum of the Company’s positions aer the deduction of sterling cash balances, without taking into account any hedging and netting arrangements. Under the commitment method, exposure is calculated without the deduction of sterling cash balances and aer certain hedging and netting positions are oﬀset against each other. Internal and external AIFM Under the AIFM Regulations, the AIFM of a company may be either (a) another person appointed by or on behalf the company and which, through that appointment, is responsible for managing the company (an ‘external AIFM’); or (b) where the legal form of the company permits internal management and the board chooses not to appoint an external AIFM, the company itself (an ‘internal AIFM’). Franklin Templeton Investment Trust Management Limited is the external AIFM of the Company. Investment company A closed-ended fund which invests in a diversiﬁed portfolio of assets. Investors buy and sell their shares in the investment company on a stock exchange. Investment trust An investment company which is based in the UK and which meets certain tax conditions so that it does not pay tax on gains made within the portfolio. Net assets – cum-income A measure of the size of an investment company. The total value of all assets held, less liabilities and prior charges, including income for the current year. Net assets – excluding income A measure of the size of an investment company. The total value of all assets held, less liabilities and prior charges, excluding income for the current year. Offer price The price at which you can buy shares when two prices are quoted. This is also shown as the ‘buy’ price and will be the higher of the two prices. Peer group The Board monitors performance against the Company's peer group, the AIC Global Sector. Share buybacks Describes an investment company buying its own shares and reducing the number of shares held in the market. Share buybacks can be used to return money to shareholders but are also oen used to tackle a company’s discount. Discounts may reﬂect an imbalance between the demand for shares and the number of shares held in the market. The hope is that, by reducing the number of shares held in the market, the buyback will help to prevent the discount widening or even reduce it. See also under Treasury shares below. GLOSSARY OF TERMS 84 Share price The price of a share as determined by the stock market. If you see a single share price shown, it is likely that this is the mid-market price. This is diﬀerent to the price at which you buy and sell the shares, which are known as the bid price (sell) and oﬀer price (buy). Shiller P/E The cyclically adjusted price-to-earnings ratio, commonly known as CAPE or Shiller P/E is a valuation measure applied to equity prices. The ratio is used to gauge whether a stock, or equity index, is undervalued or overvalued by comparing its current market price to its inflation-adjusted historical earnings record. It is defined as price divided by the average of ten years of earnings (moving average), adjusted for inflation. As such, it is principally used to assess likely future returns from equities over timescales of 10 to 20 years, with higher than average CAPE values implying lower than average future long-term annual average returns and lower CAPE implying higher returns. The ratio was invented by American economist Robert J. Shiller. Stock lending The act of loaning a stock or security to a third party for a fee. Treasury shares Shares in a company’s own share capital which the company itself owns and which can be sold to investors to raise new funds. Treasury shares come into existence only when a company buys back shares. Instead of cancelling the shares (i.e. they cease to exist) they are held ‘in Treasury’ by the company and can be sold at a later date to raise new funds. Volatility A measure of how much a share moves up and down in price over a period of time. Zero discount policy A mechanism that aims to ensure that, in normal market conditions, the share price trades close to NAV. 85 WAYS TO INVEST IN THE COMPANY The Company’s shares qualify for tax efficient wrapper products like individual savings accounts (‘ISAs’) and self-invested personal pensions (‘SIPPs’) as well as many other investment wrappers that can be used, including those designed for children. Platforms, fund supermarkets and online stockbrokers You can invest using a number of fund platforms and fund supermarkets. Many offer wrapper products like ISAs and SIPPs and children’s savings products. A number of real-time execution only stockbroking services also allow you to trade online, manage your portfolio and buy UK listed shares. These services do not offer financial advice and if you are unsure about investing, we recommend that you speak to a qualified financial adviser. Independent ﬁnancial advisers An increasing number of independent financial advisers are including investment trusts within their investment recommendations for clients. To find an adviser who advises on investment trusts, visit www.unbiased.co.uk. Private client stockbrokers If you have a large sum to invest, you may want to contact a private client stockbroker. They can manage your entire portfolio of shares and will advise you on your investments. To find a private client stockbroker visit the Personal Investment Management & Financial Advice Association: www.pimfa.co.uk. Link Group You can buy and sell shares directly by visiting www.linkgroup.eu/share-deal or by calling the Link dealing team on 0371 664 0454. To change your address, request tax vouchers or obtain an up to date valuation of your shareholding please visit www.signalshares.com. Alternatively, contact Link Group on 0371 664 0300 calls are charged at the standard geographical rate and will vary by provider. Calls outside the United Kingdom are charged at the applicable international rate. Lines are open 9:00am – 5:30pm Mon-Fri). Trading codes (You may be asked for these when investing) TIDM code: MNP Sedol: 0537241 Reuters code: MNP.L ISIN: GB0005372411 Shareholder services The registrars of the Company are Link Group. You can buy and sell shares directly by calling the Link dealing team on 0371 664 0454. For other services you can contact Link by telephone, online or by email to [email protected]. Online Telephone Contact details www.linkgroup.eu 0371 664 0300 Opening times 24 hours 9:00am - 5:30pm Monday to Friday Change your address   Request dividend conﬁrmations —  Valuation   Online proxy voting  — Dividend payment records   Register and change bank mandate instructions for receipt of dividends   Elect to receive shareholder communication electronically   Request/download shareholder forms   Checking the share price The share price is available through many sources including www.londonstockexchange.com and www.martincurrieglobal.com. 86 NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that the annual general meeting ('AGM') of Martin Currie Global Portfolio Trust plc (the ‘Company’) will be held at the oﬃces of Franklin Templeton, 5 Morrison Street, Edinburgh EH BH on Thursday, 1 June 2023 at 11.00 am, to consider and, if thought ﬁt, pass the resolutions below. The resolutions numbered 1 to 11 are proposed as ordinary resolutions and must receive more than 50% of the votes cast in favour in order to be passed. The resolutions numbered 12 to 15 are proposed as special resolutions and must receive at least 75% of the votes cast in in favour in order to be passed. Ordinary business To consider and, if thought ﬁt, pass the following resolutions as ordinary resolutions: 1. That the Report of the directors and auditors and the ﬁnancial statements for the year ended 31 January 2023 be received; 2. That the Directors’ annual remuneration report for the year ended 31 January 2023 be approved; 3. That the Directors’ remuneration policy be approved; 4. That the dividend policy be approved; 5. That Marian Glen be re-elected as a Director; 6. That Gary Le Sueur be re-elected as a Director; 7. That Christopher Metcalfe be re-elected as a Director; 8. That Lindsay Dodsworth be re-elected as a Director; 9. That Ernst & Young LLP be re-appointed as auditors of the Company to hold oﬃce from the conclusion of this meeting until the conclusion of the next general meeting at which accounts are laid before the Company; 10. That the Directors be authorised to ﬁx the remuneration of the auditors for the year ending 31 January 2024; and 11. That, in substitution for any existing authority, the directors of the Company be and are hereby generally and unconditionally authorised pursuant to s551 of the Companies Act 2006 (the ‘Act’) to allot equity securities (as deﬁned in s560 of the Act) up to a maximum nominal amount of £1,239,443 (being approximately one third of the issued share capital of the Company (excluding Treasury shares) as at 31 March 2023, being the latest practicable date before the date of this notice) provided that the authority hereby given shall expire on 31 July 2024 or, if earlier, the conclusion of the annual general meeting of the Company in 2024 save that the Company may, at any time before the expiry of such authority, make an oﬀer or enter into an agreement which would or might require equity securities to be allotted aer the expiry of such authority and the directors may allot equity securities in pursuance of such an oﬀer or agreement as if such authority had not expired. Special business To consider and, if thought fit, pass the following resolutions as special resolutions: 12. That, pursuant to Article 12 of the Articles of Association of the Company and in accordance with s701 of the Companies Act 2006 (the ‘Act’) and in substitution for any existing authority, the Company be and is hereby generally and unconditionally authorised to make market purchases (within the meaning of s693(4) of the Act) of Ordinary shares of 5 pence each in the capital of the Company provided that: (a) the maximum aggregate number of Ordinary shares hereby authorised to be purchased is 11,147,557 (or, if less, 14.99% of the number of Ordinary shares in issue (excluding Treasury shares) immediately prior to the passing of this resolution); (b) the minimum price which may be paid for an Ordinary share is 5 pence (exclusive of expenses); (c) the maximum price (exclusive of expenses) which may be paid for an Ordinary share shall be not more than the higher of (i) 5% above the average of the mid-market quotations for an Ordinary share of the Company as derived from the Daily Official List of the London Stock Exchange for the five business days immediately preceding the date of purchase; and (ii) the higher of the last independent trade and the highest current independent bid on the London Stock Exchange; (d) the authority hereby conferred shall expire 15 months after the date of passing of this resolution or, if earlier, at the conclusion of the AGM of the Company in 2024, unless such authority is renewed, issued or revoked prior to such time; and (e) the Company may conclude a contract to purchase Ordinary shares under the authority hereby conferred prior to the expiry of such authority which will or may be executed wholly or partly after the expiry of such authority and may make a purchase of Ordinary shares in pursuance of any such contract as if the authority hereby confirmed had not expired. 87 13. That the Directors be and they are hereby empowered in accordance with s570 and s573 of the Companies Act 2006 (the ‘Act’) to allot equity securities (as defined in s560 of the Act), where they are generally authorised pursuant to the authority to allot equity securities conferred upon them by resolution 11 and/or to sell Ordinary shares held by the Company as Treasury shares, for cash, as if s561 of the Act did not apply provided that the power conferred by this resolution shall be limited to the allotment of equity securities having a nominal amount not exceeding in aggregate £371,833 (being an amount equal to 10% of issued equity share capital (excluding Treasury shares) as at 31 March 2023 being the latest practicable date before the date of this notice). Unless previously varied, revoked or renewed, the authority hereby conferred shall expire on 31 July 2024 or, if earlier at the conclusion of the annual general meeting of the Company in 2024, save that the Company may, before the expiry of any power contained in this resolution, make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of such an offer or agreement as if the power conferred hereby had not expired. 14. That, in addition to any authority granted under resolution 13, the Directors be and they are hereby empowered in accordance with s570 and s573 of the Companies Act 2006 (the ‘Act’) to allot equity securities (as defined in s560 of the Act), where they are generally authorised pursuant to the authority to allot equity securities conferred upon them by resolution 11 and/or to sell Ordinary shares held by the Company as Treasury shares, for cash, as if s561 of the Act did not apply provided that the power conferred by this resolution shall be limited to the further allotment of equity securities having a nominal amount not exceeding in aggregate £371,833 (being an amount equal to 10% of issued equity share capital (excluding Treasury shares) as at 31 March 2023 being the latest practicable date before the date of this notice). Unless previously varied, revoked or renewed, the authority hereby conferred shall expire on 31 July 2024 or, if earlier, at the conclusion of the annual general meeting of the Company in 2024, save that the Company may, before the expiry of any power contained in this resolution, make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of such an offer or agreement as if the power conferred hereby had not expired. 15. That a general meeting, other than an annual general meeting, may be called on not less than 14 clear days’ notice. Unless previously varied, revoked or renewed, the authority hereby conferred shall expire on 31 July 2024 or, if earlier, at the conclusion of the annual general meeting of the Company in 2024. By order of the Board Franklin Templeton Investment Trust Management Limited Secretary 6 April 2023 Registered office: 5 Morrison Street, Edinburgh EH BH 88 1. All shareholders are entitled to attend or vote at the meeting. Shareholders are strongly encouraged to appoint a proxy in accordance with note 3. 2. The Company has specified that to be entitled to attend and vote at the meeting (and for the purpose of determining the number of votes they may cast), members must be entered on the register of members 48 hours before the time fixed for the meeting. 3. A member entitled to attend, speak and vote may appoint a proxy or proxies to attend and, on a poll, vote instead of them. A proxy need not be a member of the Company. A shareholder may appoint more than one proxy provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder. To be valid, proxies must be lodged at the office of the registrars of the Company not less than 48 hours (excluding non-working days) before the time of the meeting. A form of proxy is enclosed. In usual circumstances, appointment of a proxy will not preclude a member from attending and voting in person. 4. A corporation which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all of its powers as a member provided that no more than one corporate representative exercises powers over the same share. 5. Any person to whom this notice is sent who is a person nominated under s146 of the Companies Act 2006 to enjoy information rights (a ‘Nominated Person’) may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the annual general meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights. 6. There are no contracts between the Company and the directors, other than their letters of appointment and deeds of indemnity. 7. As at 31 March 2023 (being the latest practicable date prior to the publication of this Notice) the Company’s issued voting share capital consisted of 74,366,626 Ordinary shares (carrying one vote each). Therefore, the total voting rights in the Company as at 31 March 2023 were 74,366,626 votes, in respect of the Ordinary shares only. 8. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the meeting and any adjournment(s) thereof by using the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members and those CREST members who have appointed a voting service provider(s) should refer to their CREST sponsors or voting service provider(s), who will be able to take the appropriate action on their behalf. In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a ‘CREST Proxy Instruction’) must be properly authenticated in accordance with Euroclear UK & International Limited’s specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the Company’s agent, Link Group (CREST Participant ID: RA10), no later than 48 hours (excluding non- working days) before the time appointed for the meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Application Host) form which the Company’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. CREST members and, where applicable, their CREST sponsors or voting service provider(s) should note that Euroclear UK & International Limited does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service provider(s) are referred in particular to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5) (a) of the Uncertificated Securities Regulations 2001. 9. Proxymity Voting – if you are an institutional investor you may also be able to appoint a proxy electronically via the Proxymity platform, a process which has been agreed by the Company and approved by the Registrar. For further information regarding Proxymity, please go to www.proxymity.io. Your proxy must be lodged not less than 48 hours (excluding non- working days) before the meeting in order to be considered valid or, if the meeting is adjourned, by the time which is 48 hours before the time of the adjourned meeting. NOTES 89 Before you can appoint a proxy via this process you will need to have agreed to Proxymity’s associated terms and conditions. It is important that you read these carefully as you will be bound by them and they will govern the electronic appointment of your proxy. An electronic proxy appointment via the Proxymity platform may be revoked completely by sending an authenticated message via the platform instructing the removal of your proxy vote. 10. Unless otherwise indicated on the Form of Proxy, CREST voting or any other electronic voting channel instruction, the proxy will vote as they think fit or, at their discretion, withhold from voting. 11. Pursuant to s319A of the Companies Act 2006, the Company must provide an answer to any question which is put by a member attending the annual general meeting relating to the business being considered, except if a response would not be in the interest of the Company or for the good order of the meeting or if to do so would involve the disclosure of confidential information. 12. Members may require the Company to place on its website a statement, made available also to the Company’s auditors, setting out any matter relating to the audit of the Company’s financial statements, including the independent auditors’ report and the conduct of the audit, which members intend to raise at the annual general meeting. The Company becomes required to place such a statement on the website once a) members with at least 5% of the total voting rights of the Company or b) at least 100 members who are entitled to vote and on whose shares an average sum per member of at least £100 has been paid have submitted such a request to the Company. Members seeking to do this should write to the Company providing their full name and address or email the Company at [email protected] providing their full name and address, stating ‘AGM’ in the subject line of the email. 13. In accordance with s338 of the Companies Act 2006, shareholders may require the Company to give members notice of a resolution which may properly be moved and is intended to be moved at the annual general meeting. The request must be received by the Company at least six weeks before the AGM and not later than 20 April 2023. The resolution must not, if passed, be ineffective (whether by reason of inconsistency with any enactment or the Company’s constitution or otherwise). The resolution must not be defamatory of any person, frivolous or vexatious. The request must identify the resolution of which notice is to be given by either setting out the resolution in full or, if supporting a resolution sent by another member, clearly identifying the resolution which is being supported. The Company becomes required to give members notice of a resolution to be moved at the annual general meeting once a) members with at least 5% of the total voting rights of the Company or b) at least 100 members who are entitled to vote and on whose shares an average sum per member of at least £100 has been paid have submitted a request to the Company in accordance with the provisions of this paragraph. Members seeking to do this should write to the Company providing their full name and address or email the Company at [email protected] providing their full name and address, stating ‘AGM’ in the subject line of the email. 14. In accordance with s338A of the Companies Act 2006, shareholders may require the Company to include in the business to be dealt with at the meeting a matter (other than a proposed resolution) which may properly be included in the business (a matter of business). The request must be received by the Company at least six weeks before the AGM and not later than 20 April 2023. The matter of business must not be defamatory of any person, frivolous or vexatious. The request must identify the matter of business by either setting it out in full or, if supporting a statement sent by another member, clearly identify the matter of business which is being supported. The request must be accompanied by a statement setting out the grounds for the request. The Company becomes required to give members notice of a resolution to be moved at the annual general meeting once a) members with at least 5% of the total voting rights of the Company or b) at least 100 members who are entitled to vote and on whose shares an average sum per member of at least £100 has been paid have submitted such a request to the Company in accordance with the provisions of this paragraph. Members seeking to do this should write to the Company providing their full name and address or email the Company at [email protected] providing their full name and address, stating ‘AGM’ in the subject line of the email. 15. Information regarding the annual general meeting, including the information required by s311A of the Companies Act 2006, is available from: www.martincurrieglobal.com. 90 OUR WEBSITE • latest prices • manager videos • performance data • portfolio information • latest factsheet • research Enquiries If you have an enquiry about Martin Currie Global Portfolio Trust, please get in touch. 0131 229 5252 II [email protected] Mail: The Chairman c/o Company secretary Martin Currie Global Portfolio Trust plc 5 Morrison Street Edinburgh EH BH • press releases and articles • annual and half-yearly reports Martin Currie Global Portfolio Trust has an award winning website at martincurrieglobal.com. This oﬀers a wealth of information about the Company. Register for monthly updates Subscribe to monthly email updates that oﬀer information on the following: 91 The Chairman c/o Company secretary Martin Currie Global Portfolio Trust plc 5 Morrison Street Edinburgh EH BH Tel: 0131 229 5252 Email: [email protected] www.martincurrieglobal.com Calls to the above may be recorded. How to contact us

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