Final results

RNS Number : 1668I

Martin Currie Global Portfolio Tst

12 April 2022

 

Martin Currie Global Portfolio Trust plc (the "Company")

Legal Entity Identifier: 549300RKB85NFVSTBM94

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ANNUAL FINANCIAL RESULTS - YEAR TO 31 JANUARY 2022

The financial information set out below does not constitute the Company's statutory accounts for the years ended 31 January 2022 or 2021 but is derived from those accounts.  Statutory accounts for 2021 have been delivered to the Registrar of Companies and those for 2022 will be delivered following the Company's annual general meeting. 

The auditor has reported on those accounts; their report was unqualified.

The unedited full text of those parts of the annual report and accounts for the year ended 31 January 2022 which are required to be published are set out on the following pages.

The annual general meeting of the Company will be held on 16 June 2022.  The notice of meeting will shortly be issued to shareholders and a copy can be downloaded on the Company's website ( www.martincurrieglobal.com ).

A copy of the full annual report and accounts will be submitted to the National Storage Mechanism and will be available for inspection.

FINANCIAL HIGHLIGHTS

Performance^{1, 2}

· +2.9% Net Asset Value total return for the year.

· -2.6% Share price total return for the year.

· +15.9% Benchmark total return for the year.

Three year performance¹

· +54.1% Net Asset Value total return over the three year period.

· +53.1% Share price total return over the three year period.

· +52.5% Benchmark total return over the three year period.

¹ 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. 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.

² The one year figures for net asset value total return and share price total return are Alternative Performance Measures, see the annual report and accounts for more details.

Key data

	Year ended 31 January 2022	Year ended 31 January 2021
Net asset value per share (pence)	364.6p	358.2p
Share price (pence)	356.5p	370.0p
Ongoing charges as a percentage of shareholders' funds	0.68%	0.58%1

¹ Ongoing charges plus the performance fee for the year ended 31 January 2021 were 1.62%.  With effect from 1 February 2021, the performance fee arrangement was discontinued.  See note 3.

 

CHAIRMAN'S STATEMENT

Dear Shareholder

In these sad and difficult times, I would like to start by expressing our sympathy for all of the victims of the Russian invasion of Ukraine. The human cost is horrific and the unified response to Russia's aggression is the only positive consequence.  The potential longer-term effects of the invasion are many and varied and these, and the impact they may have on your Company, are discussed under Outlook below and in the Manager's review.

Against this destabilising background, we can at least bring you a positive report on your Company.  The lead portfolio manager, Zehrid Osmani, has now been managing the portfolio for over three years and his very clear investment style continues to bring benefits to shareholders. This is reflected in strong results: for the three years to the end of January 2022, the net asset value ('NAV') total return was 54.1% and exceeded the return of the benchmark (52.5%).  This performance has been achieved by investing in companies that meet the very stringent investment strategy of the manager, including robust ESG criteria on which the team will not compromise, ensuring a strong focus on improvements in sustainability and the impacts of climate change.

Before discussing key developments at your Company, I would like to draw your attention to the layout of this report. Annual reports of listed companies tend to grow in length each year as regulators and other agencies seek ever more information. While the Board fully supports moves to increase transparency, we also believe that the annual report should be easy to read and, where possible, free from unnecessary duplication and volume. This year we have set out the Strategic report and Report of the directors in a different way, to make the structure more logical and accessible for all readers. We hope that these changes make the annual report easier to read and would welcome any feedback. If you have any comments please write to me at Martin Currie, Saltire Court, 20 Castle Terrace, Edinburgh EH1 2ES or send an email to [e-mail] .

Investment Performance

Whilst investment performance over the year under review was disappointing, with a NAV total return of 2.9% and share price total return of -2.6%, compared with the 15.9% return of the benchmark, this was the first year of underperformance since Zehrid Osmani was appointed as portfolio manager in 2018. As described in the Manager's review, most of the underperformance occurred in January 2022 at the end of what was a year of high volatility in stock markets when at times more cheaply rated value stocks have at times led the market.  In contrast, our investment manager focuses on investments with the prospects of superior longer-term growth and has not been distracted by market gyrations.  This consistent approach to growth reflects our stated investment policy and the expectations of shareholders.

Income and Dividends

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. The Company has substantial distributable reserves and 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.

Net revenue earnings per share for the period amounted to 1.36 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 29 April 2022 to shareholders on the register on 8 April 2022. The total dividends with respect to the year to 31 January 2022 will be 4.2 pence per share, maintaining the same total dividend as the previous year.

At this year's annual general meeting, shareholders will be requested to approve amendments to the Company's Articles of Association which will allow the distribution of realised capital profits by way of dividend. The Company is already permitted to distribute realised capital profits in buying back its shares. The tax regulations governing investment trusts removed the requirement for the Articles of Association of an investment trust to prohibit the distribution of realised capital profits by way of buyback, and subsequently dividend, some years ago and a number of other investment trusts have taken advantage of the additional flexibility this provides.  The Board believes that removing the remaining restriction offers the Company more options in its use of reserves for the payment of dividends. However, there is no intention to change the current dividend policy. Further information about the other proposed changes to the Articles of Association is set out below.

Investment Policy - Enhancing our Environmental, Social and Governance (ESG) leadership

Your Company is recognised as a leader in ESG investing and is the only global investment trust to be awarded the highest possible 'Five Globes' from Morningstar, which also rates it in the top 1% globally for ESG.  The manager's focus is on investing in the highest quality companies that will generate sustainable returns over the long term and the systematic analysis of ESG factors is essential to this stock selection.

To reflect our approach more explicitly and to highlight our conviction in sustainability, the Board is recommending an update to the investment policy. While the proposed changes will not result in any change in the manager's approach to investing, they will state more clearly the importance of ESG to our Company.  For example, in practice, the portfolio is managed such that if the Company was a European open-ended fund then it would comply with Article 8 of the EU's Sustainable Finance Disclosure Regulation. It is the investment manager's intention that the Company's rigorous ESG process will mean that it should comply with any similar criteria as and when, in due course, the UK introduces its own sustainability disclosure regulations and indeed with any other key reporting frameworks. The Board is of the view that providing this clarity on the focus on ESG as a key investment driver further cements our leadership in this important area.  The Board believes this differentiates us further from other investment trusts and funds. In addition the proposed new investment policy sets out more clearly the approach to risk spreading and to gearing.

The proposed new investment policy is set out in detail in the annual report and accounts.

Operations

I reported last year that the Covid-19 pandemic had had a profound effect on the way that our investment manager and other suppliers operated.  The world experienced continued disruption for much of the year under review and, as with last year, the Board took a close interest in ensuring that the investment manager and all of our other key suppliers were able to maintain business as usual. Again we would like to record our thanks to all involved and, as we look forward, we hope to return to more normal ways of working.

Increased demand

We continue to see increased demand for shares from a wide range of investors and improved ratings from agencies and brokers.  Pleasingly, this has led to net issuance of shares under our zero discount policy for the second consecutive year.

Our manager actively markets the Company with the aim of growing the number of shares in issue over time. A larger company has advantages in providing a higher level of liquidity for shareholders and in spreading its fixed costs more widely.

The Company is promoted through a range of media, advertising and investment research. Our positioning it as 'The Sustainable Growth Trust' continues to gather momentum. During the year, our marketing efforts were rewarded in the Association of Investment Companies Annual Investor Communication Awards, in which we were placed first in three categories: Best ESG Communication, Best Use Of Social Media and Best Website.

The Company's website 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. The number of users of our website has almost doubled over the last year and, if you have not already done so, I strongly recommend that you subscribe for email updates that will alert you to new information on the website and 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 to 31 January 2022, the Company:

• bought back 1.6 million shares which were held in Treasury; and

• reissued 3.4 million shares from Treasury.

The advantage of holding shares in Treasury is that they can be reissued efficiently and at low cost. Shares will only be bought back at a price which is below the prevailing NAV per share and will only be issued at a price which is above the prevailing NAV per share, so that the assets of existing shareholders are not diluted and when the Board considers buying back or issuing shares to be in the best interests of existing shareholders. The successful execution of this strategy continues, with the share price generally remaining close to NAV.

The Board

Neil Gaskell stepped down from the role of Chairman on 1 February 2021 and retired as a Director on 30 April 2021. I would like to reiterate the Board's thanks to Neil for his leadership, guidance and support during his tenure.

Lindsay Dodsworth joined the Board on 1 November 2021 and will stand for election at this year's annual general meeting ('AGM'). Lindsay is chair of a family office and of its investment oversight committees which she helped the family to set up following the sale of its 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).  She is a governor, member of the advisory council and member of the investment committee at Goodenough College and chair of governors at St. John's College School.

Articles of Association

As noted above the Board is recommending that the Company adopt new Articles of Association (the 'New Articles').  A description of the proposed amendments being introduced in the New Articles is set out in the annual report and accounts.  The key points include removing the current prohibition on using realised capital reserves to pay dividends, permitting more flexibility around notice of meetings, execution of documents and holding of meetings in light of the Covid-19 pandemic and minor updates to reflect best practice. The New Articles are consistent with those used across the investment trust sector.

AGM Arrangements

Having been obliged to hold the last two years' AGMs behind closed doors, I am pleased to be able to invite all shareholders to attend our AGM in person in the Boardroom Suite, Waldorf Astoria The Caledonian, Princes Street, Edinburgh EH1 2AB on Thursday 16 June 2022 at 11.00 am. While we hope that shareholders will be able to attend, the Directors are aware that Government guidance and regulation relating to the Covid-19 pandemic may change. If we are obliged to change the arrangements for the AGM after publishing this document, details will be published via a Stock Exchange announcement and our website. Shareholders who plan to attend the AGM are encouraged to check the website before travelling.

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 [e-mail] or by post to The Company Secretary, Martin Currie Global Portfolio Trust plc, Saltire Court, 20 Castle Terrace Edinburgh EH1 2ES.

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

At the time of writing this statement the news is dominated by the Russian invasion of Ukraine. The invasion led to a sharp increase in the price of energy and some basic foodstuffs, which in turn is producing an increase in general inflation around the world. This is set against the background of already heightened inflation resulting from supply chain difficulties triggered by the Covid-19 pandemic. Governments and central bankers in developed countries will have to draw a fine line between stimulating growth and attempting to control inflation. The effect on markets has - as might be expected - been a fall, followed by continuing volatility, as investors seek to digest the ramifications both of the military action and its consequences over the longer term. While we hope that the fighting in Ukraine will stop soon, absent a change of regime in Moscow it is likely that sanctions will remain in place for some time and the consequences of a prolonged economic struggle are difficult to predict, given in particular Europe's dependence on Russian energy supplies. While our manager is predicting that the world economy will continue its recovery from the effects of the pandemic, that recovery is now likely to be slower and more protracted. Share prices are likely to continue to be volatile as they are affected by the geopolitical news flow and periods of risk aversion.

Our investment strategy is based on identifying, and seeking to take advantage of, long-term trends. Our investment 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. Notwithstanding the current situation, we continue to believe that this approach will produce attractive returns for patient 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: [e-mail] .

Gillian Watson

Chairman

12 April 2022

 

MANAGER'S REVIEW

Review of financial year ended 31 January 2022

The Company's financial year ended 31 January 2022 was overall a strong period for equity markets with the MSCI All Country World index rising by +15.9%, in GBP terms. Equity market recovery post the Covid-19 crisis of 2020 was much sharper than many expected.  The reporting period also experienced a number of changes in market leadership between Growth and Value stocks. This leadership volatility challenged the Company's performance during the latter part of the financial year as Value stocks, to which the portfolio does not have exposure, outperformed. We expand on this later in this section.  

In our view the most important factors affecting financial markets in 2021 and into the early part of 2022 were:

(i)  a sharp recovery in corporate earnings driving positive earnings momentum,

(ii)  an uncertain backdrop in China contributing to underperformance by Emerging Markets,

(iii)  stronger and longer-lasting inflationary pressure than had been expected,

(iv)  pandemic relapse risk materialising with the emergence of the Omicron variant, and

(v)  monetary policies shifting towards more rapid and more sizeable rate hikes as a result of the stronger inflation.

We comment on each of these in more detail below.

Earnings recovery was much stronger than expected in calendar year 2021, with earnings growth over the year likely to be c.+48%, compared to our initial estimate of +26% and consensus at c.+23% at the start of that year. Projections were gradually revised upwards throughout the year as information became available. The supportive earnings momentum and revisions to earnings growth estimates were a key driver of the equity market performance.

2021 was also marked by China shifting its regulatory stance towards big tech companies, with authorities:

· clamping down on monopolistic behaviours and pushing companies to open up their platforms to competition,

· pressurising them to improve employment contracts, and

· inviting them to contribute to funds to help the common prosperity agenda of the Chinese Communist Party.

In addition, China's zero tolerance policy on Covid-19 kept (and is still keeping) parts of the country in lockdown for longer than expected, which also weighed on economic momentum. Both of these contributed to significant underperformance of some of the Chinese big tech companies and, as a result, of Emerging Markets equities during the year.

Inflation remained a big focus point for the market in 2021 and into 2022. Inflationary trends continued to rise throughout the year as a result of the disruptions to production lines, bottlenecks in supply chains, and logistical issues. These all contributed to the frictional inflation that we had predicted, although these pressures were both more significant and longer lasting than we had predicted. As at mid-March, the year-on-year increase in inflation figures (CPI) stand at +7.5% for the US, +5.5% for the UK, +5.1% for the Eurozone, and +1.5% in China. These are levels not experienced since the early 90's for some geographies such as the UK or some of the Eurozone countries, or since the early 80's for the US.

The emergence of the Omicron variant of Covid-19 in the second half of the year led to the materialisation of one of the risks that we highlighted last year. This resulted in many regions going back into partial lockdown which further exacerbated production and supply chain disruptions, fuelling the frictional inflation that is described above.

As economies shift from recovery into the expansion phase of an economic cycle, monetary policies typically change from being accommodative, with low interest rates, to more "normal" levels. The move to more normal interest rates started to be implemented in the latter part of 2021. As monetary policies go through such a transition, volatility in financial markets typically increases. We also experience unpredictable moves in the types of stock leading the market, between "Quality/Growth" and "Value" stocks. There were a number of changes in leadership between Growth and Value during 2021. This started in the first quarter 2021 when Value outperformed, before shifting around again in the second quarter and during the summer months, before another leg of Value outperformance came in briefly in September and dissipated again during the subsequent two months. A renewed bounce of Value since December has been more pronounced, as a result of the significant shift in monetary policy. Expectations of US interest rates moved rapidly from predictions of no change to the market now expecting 5-6 increases by the Federal Reserve during the course of 2022. The US 10 year Treasury bond yield was getting close to 2.0% in mid-March 2022, compared to a level of c.1.1% in January 2021, and c.1.4% in early December 2021, highlighting the magnitude and speed of shift in yield expectations.

With the leadership volatility, and the periodic bounce of Value stocks to which the portfolio is not exposed, performance was challenged during the latter part of the financial year. This was particularly pronounced during the months of December 2021 and January 2022, when the NAV was down by -12.1%, in a market as measured by the MSCI All Country World index down by -2.5%. As a result, for the financial year 2021/22, the Company produced a net asset value total return of +2.9% while the benchmark MSCI All Country World index was up by +15.9%.

Performance was particularly weak in the Technology and Medical Technology parts of the portfolio in the latter months of the financial year whilst Energy and Financials, two sectors where we have large underweights, performed strongly, as would be expected in typical periods of rising bond yields. Over the financial year as a whole, the Energy sector, in which we have no exposure, was up +54.7%, whilst Financials were up +31.2%.

In periods of such increased volatility, and of sharp sell-offs in some of the stocks that we hold, we constantly assess whether the sell-off is driven by changes in fundamental expectations or deteriorating operational trends. We believe that the businesses which the portfolio holds continue to deliver solid operational performance and face supportive fundamentals, with superior structural growth prospects and return profiles over our forecast period. We reaffirmed our conviction and we did not change the portfolio during the volatile months of December 2021 and January 2022.

Ongoing Engagements and COP26 increasing focus on energy transition

The year has been busy with our ongoing engagements with investee companies on Governance, Remuneration, Environmental and Social aspects. On the Governance and Remuneration side, we have been notably continuing our engagement to convey our stance on remuneration policy in a year of recovery from the challenging 2020 environment for corporate profits.

On the Environmental and Social sides, we have continued to engage with companies as part of our assessment of Social Exploitation risks, and have been assessing companies' carbon emissions in more detail, notably building a map of Net Zero emissions targets. Summary information on voting at investee companies' shareholder meetings is available on Martin Currie's website at: www.martincurrie.com/about-us/stewardship-and-ESG  

The COP26 summit was an important highlight in the second half of the year, with an extensive range of events during the conference, and a growing number of countries announcing Net Zero targets. The private sector, and corporates in particular, have been increasingly mobilised on this topic. Many companies have increased their focus on reducing their carbon emissions and brought in more targets within their corporate agendas. There is strong evidence of the level of ownership of such targets rising to the Executive and Board levels.

We continue to develop metrics for our carbon footprint, guided by the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). While the available data is not yet complete, an indication of the portfolio's carbon footprint is set out in the table below, highlighting the significantly lower carbon footprint of the Company compared to the market index:-

Scope 1 and 2	Weighted average carbon intensity	Coverage
Investment Portfolio	91.3	98.3%
MSCI World index	157.5	99.9%

Notes:

Data as at 31 January 2022

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

Portfolio Activity

In the Technology sector we purchased Nvidia in March. The company posted results that were well ahead of expectations, leading to earnings upgrades that were supportive. We believe that Nvidia offers strong growth and high and improving returns, arising from positioning itself to capture structural growth opportunities in gaming and data centres. It is now the third largest holding in the portfolio. We funded the purchase by exiting Accenture, which performed well over our long-term holding period, at a share price close to our target.

In the Consumer sector, we purchased online luxury retail platform Farfetch in May 2021. Benefiting from a significant weakness in the share price ahead of results. The stock had posted strong results and bounced from the recent lows. The weak performance over the past six months has been related to the stock being impacted by the market rotation away from growth stocks and the broader sell-off of online platform stocks across markets. Longer term, we continue to believe that Farfetch is in a unique position to commercialise the structural growth in online luxury. We see significant opportunities in its commerce and media solutions along with luxury new retail. The company has continued to see increased sales growth through both new added customers and a high retention rate.  The recently announced joint venture with Alibaba in China also puts it in a good position in the biggest luxury market in the world. We funded this purchase from selling out of Starbucks, which has recovered well from the pandemic crisis lows of last year, and which reached our price target as a result. In November, we took the decision to sell out of our holding in Alibaba itself based on a review of the stock, and a reassessment of the regulatory risk that the company is facing in its home market, China. We mentioned in our 2021 review that the tightening Chinese regulatory landscape for large technology companies was one important highlight of the year. The regulatory pressures have been related to opening up big tech platforms to more competition, reducing fees and pushing these companies to contribute to the common prosperity policies that the government is focusing on. We assessed the risks to Alibaba, and in particular estimated potential downside risk from a further worsening of the regulatory pressures. We took the view that the regulatory uncertainty makes it difficult to have conviction on the stock, given the wide range of implications on our estimated fair value from the different scenarios that we considered. We therefore took the decision to exit the holding.

We also purchased construction software specialist Autodesk, which we believe to be well positioned to capture what we see as supportive trends in the construction sector as a result of the infrastructure spending being deployed across many of the major economies globally. It is also likely to benefit from the growing regulatory requirements for the construction sector to increase its software usage in order to contain project cost overruns, which are costly not only in terms of budget spent, but also in terms of unnecessary wastage and therefore in terms of carbon footprint, an important ESG consideration. We funded this purchase from selling out of CyberArk, given the challenging earnings backdrop that the company is facing.

Finally, with medical precision instruments and services firm Mettler-Toledo performing very strongly, we exited the stock in June and redeployed the proceeds into increasing our positions in Nvidia and Veeva Systems.

This year we have redesigned the annual report and included short summaries of each of the top ten holdings. For a more in-depth look at some of the stocks in the portfolio please follow this link to our web site: www.martincurrie.com/uk/global-portfolio-trust/our-views/inside-story.  

Outlook for 2022

The Russian invasion of Ukraine is leading to tragic loss of human life and devastating consequences for many innocent people. We send our moral support to the Ukrainian people and our thoughts are with all the people affected.

We recently published a report on the effects of the invasion and we summarise this, alongside our wider thoughts on the outlook, below. In a changing situation we encourage you to check our website regularly for further information. 

There are no holdings in Russian companies, nor Eastern European companies, in the portfolio.

Geopolitical risks now at the forefront of investors' minds

The Russian invasion of Ukraine was unexpected by the market and has led to an increased focus on geopolitics. NATO's resolve has been tested but is more unified and stronger than before. Vladimir Putin is unpredictable, leading to the risk of a broader conflict. Expansionist territorial claims by Russia have the potential to increase the market's attention on China and its territorial claims in the South China Sea, a risk that we believe the market has not been addressing properly. At the same time, China might hold the key to a de-escalation of the conflict in Ukraine, through the potential role as a mediator or through diplomatic pressure on Putin.

The situation is highly unpredictable at this stage, and ongoing de-risking action by investors is likely in the near term which is likely to increase the volatility of share prices.

Macroeconomic momentum could be impacted negatively.

The Ukraine conflict is likely to negatively impact consumer and business confidence in the near term. We believe that this could spill over into weaker economic momentum in Europe, and to a lesser extent globally.  We believe that we are more likely to be moving into the Slowdown phase of the economic cycle as a result. Additionally, energy supply disruption could add to near-term downward pressure to economies in Europe, whilst at the same time contributing to yet higher inflationary pressures. Given the relatively low weight of Russia in international trade, we do not believe that this short-term negative impact on confidence will have a lasting impact. This is providing that the conflict does not spread into other territories.

Whilst we continue to see stagflation as a low probability event, we are increasing that probability to 10-15%. This risk is increased from less than 5% which was our view in early December last year. Stagflation risk is clearly higher in Europe than other geographies at this stage.

In our view, armed conflict brings an increased risk of the economic cycle shifting from expansion to slow down. This would typically favour Quality and Growth styles, away from Value, whilst earnings momentum will remain an important contributor to style leadership in this environment.

Inflationary pressures could further increase, and last for longer.

The Ukraine-Russia armed conflict has the potential to fuel more inflation globally, as a result of the higher oil prices and disruptions to energy supplies, but also in soft commodities given Ukraine's and Russia's sizeable agricultural production. Soft commodities price increases risk leading to pronounced increases in food prices, which have the potential to impact countries where food is a high proportion of consumer baskets, notably in emerging markets. This could lead to increased social tensions.

This increased inflationary pressure will further add to the elevated and longer lasting inflation that we have been going through. With the US dollar seen as a safe haven, relatively weaker currencies could also add to inflationary pressures for the European region.

Monetary policies likely to continue to normalise despite the uncertain geopolitical backdrop

We expect the US Federal Reserve to keep on its path towards normalisation of monetary policies by increasing interest rates, although the rate of change may be slower.  The European Central Bank is also likely to continue to normalise, although it might delay its first interest rate hikes given the proximity of the crisis. We expect rate hikes in the EU to be weighted to the second-half of 2022. Given ongoing elevated inflationary pressures, and the potential for more inflation from spiking energy prices near term, it will be more difficult for central banks to hold back from tightening, despite the growing geopolitical uncertainties.

Volatility likely to remain elevated for some time

Unfortunately, it is difficult to foresee a rapid resolution to the Ukraine-Russia conflict, or indeed to the broader tensions between Russia, NATO and the EU. As such, volatility in equity prices and exchange rates are likely to be the conditions that investors will need to accept for the time being.

Earnings momentum likely to be even more critical for investors, given the lower earnings growth outlook

Before the Ukraine - Russia conflict earnings growth expectations for this year were pedestrian, after a sharp recovery year in 2021. Current geopolitical developments are leading to downside risk in economic momentum, and therefore will put more downside risk to earnings growth expectations. In such an environment of higher inflation, lower economic growth, and lower earnings growth, there will be an even higher emphasis in the market on companies with consistent growth, higher structural growth profiles, and that have pricing power to protect their margins from the higher inflationary pressures. We believe that Quality and Growth companies are likely to come back in focus for investors.

The Ukraine-Russia conflict carries more risk of negative impact on economic momentum in Europe, and is leading to an increased risk premium attached to European equities relative to other regions.

This crisis is likely to further widen the valuation spread between US and EU equities in the near term, whilst there is uncertainty about the potential developments in the conflict. Selective exposure to companies with a lower risk of negative impact on their earnings from the spill overs of the conflict is, in our view, likely to be an important focus for investors.

Our thoughts on current market opportunities

• Armed conflicts are highly unpredictable and increase risk premia in markets, which investors will need to capture into their expectations

• The risk of conflict escalation is not negligible and such a scenario would lead to a bleak downside risk to equity markets

• Ultimately, elevated risk premia and risk aversion, at a time when equity markets have had a sizeable pullback, can present good entry points for longer term investors, providing that there is no conflict escalation

• Less monetary tightening as a result of the risk of weaker economic momentum is likely to be supportive for quality growth stocks

It is not easy at this stage to see a rapid resolution to this conflict, with potential risk of escalation leading to a worsening impact on markets in the near term. It will be critical to be highly selective in choosing investments, focusing on fundamental analysis, and assessing the risk of deterioration in any company, based on their:

• specific industry exposures

• end-markets, and;

• geographic presence of operations and production bases

Sustainability focus post pandemic recovery to remain high (Higher focus, higher costs, higher investments)

Looking beyond the current geopolitical news, in the same way that we predicted an increased focus on Sustainability in 2021, we believe that 2022, coming on the heels of the COP26 summit, will see an ongoing trend towards more sustainability. This will include action by corporates, investors, policy makers and society as a whole, given the ongoing need to deliver on the ambitious and necessary net zero targets. As the focus on sustainability continues to increase, it will bring with it:

· a higher cost of operating for corporates,

· a higher regulatory burden in some industries, notably the most polluting and high carbon emitting areas,

· potentially some higher tax structures related to carbon emissions,

· higher levels of investment into green initiatives and solutions.

This ongoing increased investment in climate solutions is likely to continue to drive the positive momentum in innovation, which is likely to open up some opportunities for long-term investors. At the same time, it will be important to stay disciplined as investors, in order to avoid over-inflated thematic bubbles that could form in these periods of increased investment in specific areas.

Thematic opportunities remain plentiful in a world transitioning towards sustainability

As long-term investors, we believe that we are facing an exciting period of investment opportunities and strong innovation rates, in a world transitioning towards a more sustainable approach to operating. This brings opportunities notably in:

· Green & Alternative Energy

· Energy Efficient Infrastructure 

· Electric transportation - High Speed Railways and Electric Vehicles

· 5G Telephony

· Healthcare Infrastructure

· Cloud Computing & Cyber Security

· Robotics & Automation

· Metaverse & Quantum Computing

Of these areas, those related to infrastructure are supported by the sizeable spending initiatives that have been unveiled since the pandemic crisis, some of which are still to be deployed in any meaningful way. As ever, a structured and disciplined valuation approach to assessing these thematic areas is key to finding attractive opportunities.

An ever more disruptive decade continues to affirm itself

With the ongoing focus on investing for a world transitioning 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 attractive opportunities, but it also highlights the need to be vigilant to the risks posed by the disruption of existing business models, and to ensure that these risks are 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.

Our focus on the three mega-trends of Demographic Changes, Future of Technology and Resource Scarcity gives us the ability to position the Company to take advantage of long-term structural growth, whilst ensuring that we harness the opportunities of Sustainable Living, Decarbonisation and Climate Change.

Zehrid Osmani

Portfolio Manager, Martin Currie Global Portfolio Trust plc

Head of Global Long-Term Unconstrained Equities,

Martin Currie

12 April 2022

PORTFOLIO SUMMARY

By sector

	31 January 2022 Company %	31 January 2022 MSCI All Country World index %	31 January 2021 Company %	31 January 2021 MSCI All Country World index %
Information Technology	33.7	22.8	28.1	22.0
Healthcare	23.4	11.4	28.2	12.0
Consumer Discretionary	15.2	12.0	18.0	13.2
Industrials	11.3	9.5	9.2	9.5
Consumer Staples	5.8	6.9	5.3	7.1
Materials	4.7	4.7	3.6	4.9
Financials	3.0	14.8	3.5	13.3
Communication Services	2.9	8.5	4.1	9.3
Energy	-	4.0	-	3.1
Utilities	-	2.7	-	3.0
Real Estate	-	2.7	-	2.6
	100.0	100.0	100.0	100.0

By asset class

	31 January 2022 %	31 January 2021 %
Equities	107.5	108.0
Cash	2.0	1.9
Less borrowings	(9.5)	(9.9)
	100.0	100.0

Portfolio distribution by region

	31 January 2022 Company %	31 January 2022 MSCI All Country World index %	31 January 2021 Company %	31 January 2021 MSCI All Country World index %
North America	43.9	63.9	39.8	59.8
Developed Europe	39.1	16.1	34.4	16.5
Global Emerging Markets	10.9	11.5	16.3	13.7
Developed Asia Pacific ex Japan	6.1	2.8	6.8	3.1
Middle East	-	0.2	2.7	0.2
Japan	-	5.5	-	6.7
	100.0	100.0	100.0	100.0

Portfolio holdings as at 31 January 2022

	Sector	Country	Market value £000	% of total portfolio
North America			149,048	43.9
Microsoft	Information Technology	United States	19,489	5.7
Nvidia	Information Technology	United States	17,440	5.1
Linde	Materials	United States	15,820	4.7
ResMed	Healthcare	United States	15,600	4.6
Masimo	Healthcare	United States	13,952	4.1
VISA	Information Technology	United States	13,545	4.0
Adobe	Information Technology	United States	12,493	3.7
Ansys	Information Technology	United States	11,561	3.4
Illumina	Healthcare	United States	10,569	3.1
Veeva Systems	Healthcare	United States	9,734	2.9
Autodesk	Information Technology	United States	8,845	2.6
Developed Europe			132,768	39.1
Kingspan Group	Industrials	Ireland	15,431	4.5
Moncler	Consumer Discretionary	Italy	14,267	4.2
Atlas Copco	Industrials	Sweden	13,956	4.1
Hexagon	Information Technology	Sweden	13,202	3.9
L'Oreal	Consumer Staples	France	12,624	3.7
Kering	Consumer Discretionary	France	10,983	3.2
Ferrari	Consumer Discretionary	Italy	10,786	3.2
Coloplast B	Healthcare	Denmark	10,135	3.0
Assa Abloy	Industrials	Sweden	9,046	2.7
Adidas	Consumer Discretionary	Germany	7,697	2.3
Kerry Group	Consumer Staples	Ireland	7,007	2.1
Farfetch	Consumer Discretionary	United Kingdom	5,926	1.7
Dr. Martens	Consumer Discretionary	United Kingdom	1,708	0.5
Candover Investments1	Financials	United Kingdom	-	-
Global Emerging Markets			36,930	10.9
Taiwan Semiconductor Manufacturing	Information Technology	Taiwan	18,007	5.3
Tencent Holdings	Communication Services	China	9,691	2.9
WuXi Biologics	Healthcare	China	8,959	2.6
JD.com	Consumer Discretionary	China	273	0.1
Developed Asia Pacific ex Japan			20,789	6.1
CSL	Healthcare	Australia	10,509	3.1
AIA Group	Financials	Hong Kong	10,280	3.0
Total portfolio holdings			339,535	100.0

¹ Company in members' voluntary liquidation.

LARGEST 10 HOLDINGS
	31 January 2022	31 January 2022	31 January 2021	31 January 2021
	Market value	% of total	Market value	% of total
	£000	portfolio	£000	portfolio
Microsoft	19,489	5.7	14,045	4.3
Taiwan Semiconductor Manufacturing	18,007	5.3	17,239	5.3
Nvidia	17,440	5.1	-	-
Linde	15,820	4.7	11,764	3.6
ResMed	15,600	4.6	13,274	4.0
Kingspan Group	15,431	4.5	9,111	2.8
Moncler	14,267	4.2	12,347	3.8
Atlas Copco	13,956	4.1	12,652	3.9
Masimo	13,952	4.1	15,658	4.8
VISA	13,545	4.0	11,198	3.4

Largest 10 holdings in detail

Microsoft

Information Technology, United States

Microsoft, 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.

Microsoft's Environmental, Social and Governance strengths, in our view, are strong management and a relatively diverse board. We

note Microsoft's positive contribution to tackling climate change and social issues with such initiatives as 'AI for Earth' and various

educational programmes.

Taiwan Semiconductor Manufacturing ('TSMC')

Information Technology, Taiwan

The growth of fabless semiconductor design has been a major tailwind and Taiwan-listed TSMC has been taking an increasing

share at each new technology node. The competitive landscape has changed substantially and TSMC is now in a position to

price products so that it can maintain its current ROIC. Large capex requirements have led analysts to undervalue the stock as

they assume returns will fade meaningfully in the next few years, despite historical evidence to the contrary.

Through our proprietary ESG risk assessment, TSMC demonstrates good transparency on overall operations with strong reporting practices. More broadly, the extent to which artificial intelligence is rapidly being adopted to answer many sustainability issues will be beneficial to TSMC as a leading chip manufacturer. We continue to monitor the firm's risk from water scarcity issues due to the volumes of water required in the production process.

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, the Metaverse, Cloud, AI and Autonomous Vehicles.

The company is targeting 65% usage of renewable energy by 2025, with 17 of locations now fully powered by renewable energy. Nvidia's products also address the issues of energy efficiency and lower consumption, for example the NVIDIA 'DGX SuperPOD' is the most energy efficient system on the TOP500 list of supercomputers, and 26 out of 30 greenest supercomputers use NVIDIA components.

Linde

Materials, United States

Linde is the global leader in the manufacture and distribution of industrial gases. Due to a resilient industrials-facing business

model based on long-term contracts, fixed 'take-or-pay' fees with increasing exposure to healthcare and food & beverage markets,

Linde is well placed to deliver a GDP+ top-line growth rate through the cycle. In addition, there is significant scope for a profitability uplift in Europe and Asia to the levels already achieved by the Group in the Americas. This is a business with significant pricing power in most market environments. As a dominant player across the industrial gases value chain, Linde is also in a privileged position to profit from hydrogen emerging as a key energy source for a decarbonised global economy.

Linde provides energy solutions to its customers through its onsite industrial gas plants, which help its customers to reduce their own carbon emissions and is targeting a 35% cut in absolute emissions by 2035.

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).  The company has a very attractive long-term revenue growth outlook. It is estimated that more than 424 million 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.

One ongoing point of focus for us is the use of plastics in disposable components contributing to an increased environmental footprint and in 2021 ResMed established their 'Green Team'. They are dedicated to identifying, testing, and implementing new ways to minimize the company's environmental footprint by reducing, reusing, and recycling as much material as possible.

Kingspan Group

Industrials, Ireland

The Irish-based company provides insulating building materials to the construction industry. It is a global leader in insulation and building envelope solutions and we believe it is poised to benefit from tighter energy efficiency regulations. The stock fits well into greener buildings initiatives, as a leader in insulation materials for the construction industry. We engaged extensively with Kingspan's senior management after the inquiry into the Grenfell tragedy and highlighted some control and monitoring issues related to the UK business. The company has taken rapid and decisive steps to further strengthen its governance and internal compliance monitoring, to prevent a repeat of such events in future, with full traceability of products, and management change at the UK and executive levels.

Moncler

Consumer Discretionary, Italy

Is a global leader in super premium down jackets and has a rich heritage and strategic focus on long-term sustainable and

responsible growth. It has a history of high ROIC generation, one of the highest in the industry and is highly cash generative due to

high margin products and sales density. The firm is driven by organic growth from pricing power and geographic expansion -

with strong emerging market potential. We believe that the structural growth potential of the company is compelling, and its

ability to continue to innovate remains strong.

Moncler with its origins in mountain sports clothing, has being close to nature in its DNA, and the firm has created a fully carbon

neutral jacket, the 'Grenoble'. This is made from significant recycled materials and offsetting the emissions as a result. The

company is also channelling efforts in R&D to meet a target of 50% recycled nylon by 2025, in addition to running a project to repair and

refresh consumers' jackets rather than disposing of them.

Atlas Copco

Industrials, Sweden

The Swedish industrial tools and equipment manufacturer is very well-run and has one of the best - and most consistent - return

profiles among European capital goods stocks. Atlas' value proposition is in air compressors, known as the 'fifth utility' critical

in powering certain industries, which will allow it to maintain a high market share and a pricing premium. It has both direct and

indirect exposure to green building construction, renewable energy and infrastructure developments for electric transportation, 5G and healthcare.

Atlas Copco has a very high-quality management team backed by strong talent development, they maintain strong oversight of their

subsidiaries' environmental management programmes, and they have since 2018 established a programme of goals and targets covering areas from CO2 reduction to ethics.

Masimo

Healthcare, United States

A manufacturer of non-invasive patient monitoring technologies boasts high barriers to entry and 50% market share with strong

recurring revenues. It has attractive growth prospects, driven by supportive long-term structural trends, related to ageing populations, improved healthcare infrastructure, and the future of technology related to intelligent patient monitoring. In addition, the business has good-quality management and, importantly, a sustainable business model.

In response to the Covid-19 pandemic, the company launched Masimo SafetyNet, personal wearable remote monitoring devices

linked to a secure, cloud-based patient surveillance platform to help clinicians provide remote care for patients. This allowed

patients to remain at home and in turn clinicians could devote medical attention and hospital beds to patients in a more critical condition.

VISA

Information Technology, United States

VISA is a classic compounding company boosted by the secular shift away from cash and physical sales towards digital and online commerce. The company has a highly attractive ROIC profile as the network model provides structural operating leverage but 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.

The company aligns its ESG efforts to the UN Sustainable Development Goals, in particular, those addressing poverty and inequality via facilitating access to finance and the financial system.  This also includes women's economic advancement and financial education.

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 2022.

KPI	Target	2022	Achieved	2021	Achieved
1. Net asset value performance relative to benchmark (over 3 years)	Outperform	1.62%	Yes	19.43%	Yes
2. Performance against Company's peers (over 3 years)	Top third performance	5 out of 17	Yes	4 out of 15	Yes
3. Ongoing charges	Less than 0.70%	0.68%	Yes	0.58%	Yes

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 to 31 January 2020.

The KPI was achieved for the period. The return of the Company was 54.12% and the benchmark 52.50% for the three years to 31

January 2022.

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 53.11% over the three years to 31 January 2022 which ranked 5th out of 17 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 0.68%.  Ongoing charges plus the performance fee for the year ended 31 January 2021 was 1.62%.  With effect from 1 February 2021, the performance fee arrangement was discontinued. See note 3.

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 long-term and 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 cannot be predicted in advance and the Board then relies on professional management, effective systems and communication to mitigate these risks as and when they arise.

Operational and management risks are regularly monitored by the AIFM and additionally by the Board at Board meetings and as part of its annual strategy meeting where 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.

Principal Risk	Mitigation
Pandemic risk	In 2020 Covid-19 delivered an abrupt, exogenous shock to the global economy of considerable magnitude, the aftereffects of which continued in 2021 and into 2022. The Company was exposed to market volatility, while the operational resilience of service providers to the Company could have been reduced. The Board receives regular reporting on the ability of Franklin Templeton, Martin Currie and other key service providers to operate in the working environment created by Covid-19. Business continuity plans continue to operate satisfactorily, with operational resilience preserved. In large parts of the world restrictions on social contact and travel have been reduced or removed completely but this is not universally the case and there remains a risk of further outbreaks.  The investment manager continues to monitor the portfolio and the income deriving from it in light of the potential risks arising from the pandemic.
Sustained investment underperformance	The Board monitors the implementation and results of the investment process with the portfolio manager, who attends all Board meetings and reviews data that shows statistical measures of the Company's risk profile. Should investment underperformance be sustained despite the mitigation measures taken by the investment manager, the Board would assess the cause and take appropriate action to manage this risk. There is increasing awareness of the challenges and emerging risks posed by climate change.  The investment process is focused on 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 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 is now 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 volatility in asset prices. Further information on geopolitical risks is set out in the Outlook section of the Manager's review.
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.

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.

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 2022 is shown in the statement of financial position. Note 17 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.

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 2024, 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;

· the mitigation measures which key service providers including the manager have in place to maintain operational resilience particularly in light of Covid-19;

· the challenges posed by climate change;

· the ongoing relevance of the Company's investment objective in the current environment as evidenced by feedback from major shareholders;

· 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 its liquid assets;

· the expectation that in normal markets more than 94% of the current portfolio could be liquidated within two trading days; 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.

Responsibility statement

Each of the Directors confirms that to the best of their knowledge:

· the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, 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, 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 report 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 12 April 2022 and is signed on its behalf by the Chairman, Gillian Watson.

STATEMENT OF COMPREHENSIVE INCOME

		Year to 31 January 2022			Year to 31 January 2021
		Revenue	Capital	Total	Revenue	Capital	Total
	Note	£000	£000	£000	£000	£000	£000
Netgainson investments	7	-	8,224	8,224	-	51,440	51,440
Net currency gains/(losses)		-	55	55	(3)	(47)	(50)
Revenue	2	2,502	-	2,502	2,634	-	2,634
Investment management fee1		(328)	(1,312)	(1,640)	(216)	(864)	(1,080)
Performance fee	3	-	-	-	-	(2,819)	(2,819)
Other expenses	3	(629)	-	(629)	(486)	-	(486)
Net return on ordinary activities before finance costs and taxation		1,545	6,967	8,512	1,929	47,710	49,639
Finance costs	1(d)	(71)	(284)	(355)	(30)	(121)	(151)
Net return on ordinary activities before taxation		1,474	6,683	8,157	1,899	47,589	49,488
Taxation on ordinary activities	4	(313)	-	(313)	(264)	-	(264)
Net return attributable to shareholders		1,161	6,683	7,844	1,635	47,589	49,224
Net returns per Ordinary share	5	1.36p	7.81p	9.17p	1.97p	57.39p	59.36p

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 2021.

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

No operations were acquired or discontinued in the year.

The notes below 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 period.  

¹ The details of the investment management fee are provided in the Report of the directors in the annual report and accounts.

STATEMENT OF FINANCIAL POSITION

		As at 31 January 2022		As at 31 January 2021
	Note	£000	£000	£000	£000
Fixed assets
Investments at fair value through profit or loss	7		339,535		327,988
Current assets
Trade receivables	8	160		1,076
Cash and cash equivalents	9	6,589		10,043
			6,749		11,119
Current liabilities
Bank overdrafts	9	-		(16)
Performance fee payable	10	-		(2,819)
Trade payables	11	(450)		(2,701)
			(450)		(5,536)
Total assets less current liabilities			345,834		333,571
Amounts falling due after more than one year
Bank loan	12		(30,000)		(30,000)
Total net assets			315,834		303,571
Equity
Called up Ordinary share capital	13	4,934		4,934
Share premium account		11,424		6.221
Capital redemption reserve		11,083		11,083
Special distributable reserve		76,297		70,017
Capital reserve	14	211,583		209,929
Revenue reserve		513		1,387
Total shareholders' funds			315,834		303,571
Net asset value per Ordinary share	15		364.6p		358.2p

The notes below form part of these financial statements. 

Martin Currie Global Portfolio Trust plc is registered in Scotland, company number SC192761.

The financial statements were approved by the Board of directors on 12 April 2022 and signed on its behalf by Gillian Watson, Chairman.

STATEMENT OF CHANGES IN EQUITY

		Called up	Share	Capital	Special
		Ordinary	premium	redemption	distributable	Capital	Revenue
		share capital	account	reserve	reserve	reserve	reserve	Total
	Note	£000	£000	£000	£000	£000	£000	£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	1(j), 13	-	5,203	-	7,833	550	-	13,586
Ordinary shares bought back	1 (j), 13	-	-	-	-	(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

		Calledup Ordinary sharecapital	Share premium account	Capital redemption reserve	Special distributable reserve	Capital reserve	Revenue reserve	Total
	Note	£000	£000	£000	£000	£000	£000	£000
As at 31 January 2020		4,934	-	11,083	70,100	162,340	3,238	251,695
Net return attributable to shareholders		-	-	-	-	47,589	1,635	49,224
Ordinary shares issued	13	-	4,630	-	9,008	-	-	13,638
Ordinary shares bought back	13	-	-	-	(7,500)	-	-	(7,500)
Transfer between reserves1		-	1,591	-	(1,591)	-	-	-
Dividends paid	6	-	-	-	-	-	(3,486)	(3,486)
As at 31 January 2021		4,934	6,221	11,083	70,017	209,929	1,387	303,571

¹ Transfer from the special distributable reserve to the new share premium account of the premium over the weighted average price of shares issued from Treasury in prior years. Refer to accounting policy Note 1(j). 

The notes below form part of these financial statements. 

STATEMENT OF CASH FLOW

		Year to 31 January 2022		Year to 31 January 2021
	Note	£000	£000	£000	£000
Cash flows from operating activities
Net return on ordinary activities before taxation			8,157		49,488
Adjustments for:
Gains on investments	7	(8,224)		(51,440)
Finance costs		355		151
Dividend income	2	(2,493)		(2,593)
Interest income	2	-		(28)
Stock lending income	2	(9)		(13)
Dividends received		2,489		2,621
Interest received		-		28
Stock lending income received		9		13
Decrease in receivables		2		-
(Decrease)/increase in payables		(2,885)		300
Overseas withholding tax suffered	4	(313)		(264)
			(11,069)		(51,225)
Net cash flows from operating activities			(2,912)		(1,737)
Cash flows for investing activities
Purchases of investments		(45,791)		(86,285)
Sales of investments	7	40,248		63,671
Net cash flows from investing activities			(5,543)		(22,614)
Cash flows from financing activities
Repurchase of Ordinary share capital		(5,544)		(7,500)
Shares issued for cash		14,504		12,720
Equity dividends paid	6	(3,588)		(3,486)
Cash inflow from bank loan		-		30,000
Interest and fees paid on bank loan		(355)		(84)
Net cash flows from financing activities			5,017		31,650
Net (decrease)/increase in cash and cash equivalents			(3,438)		7,299
Cash and cash equivalents at the start of the period			10,027		2,728
Cash and cash equivalents at the end of the period			6,589		10,027

Analysis of debt

	Note	Year to 31 January 2021 £000	Cash flows £000	Exchange movements £000	Year to 31 January 2022 £000
Cash at bank	9	10,027	(3,438)	-	6,589
Bank loan	12	(30,000)	-	-	(30,000)
Net debt		(19,973)	(3,438)	-	(23,411)

The notes below form part of these financial statements. 

NOTES TO THE FINANCIAL STATEMENTS

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 including those related to Covid-19, 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 2024, 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 April 2021.

Functional currency - the Company is required to nominate 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, performance fee (now discontinued) and other expenses are measured on an accruals basis.

d)  The investment management fee and finance costs in relation to debt are recognised four-fifths as a capital item and one-fifth 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 overdrafts.  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.  The performance fee (now discontinued) is recognised 100% as a capital item in the statement of comprehensive income as it relates to the capital performance of Company.

e)  Investments - investments have been classified upon initial recognition as 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 as 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 7 April 2022.

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.

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. This reserve is fully distributable.

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.

Following a review of the Company's uses of its available reserves and in order to maximise the reserves available for payments of dividends, effective 1 February 2021, the Board elected to deduct the costs of share buybacks from the realised portion of the capital reserve (which is distributable for this purpose) rather than the special distributable reserve. In addition, where any shares held in Treasury are re-issued, the proceeds up to the original cost of repurchase, calculated by applying the weighted average price of shares held in Treasury, are allocated to the realised portion of the capital reserve and to the special distributable reserve on a proportionate basis based on the number of shares in Treasury funded from each reserve.

The above change resulted in the capital reserve being £5,029,000 lower and the special distributable reserve being £5,029,000 higher at 31 January 2022 than if the change in accounting policy had not been made.

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)  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.

Note 2: Revenue from investments	Year ended	Year ended
	31 January 2022 £000	31 January2021 £000
Dividends from listed investments
UK equities	210	166
International equities	2,283	2,427
Other revenue
Interest on deposits	-	28
Stock lending	9	13
	2,502	2,634

There were no capital dividends received during the year ended 31 January 2022 (2021: £nil).

Note 3: Other expenses

	Year ended 31 January 2022 £000	Year ended 31 January 2021 £000
Directors' fees	139	145
Advertising and public relations	96	95
Secretarial fee	67	66
Depositary fees	66	10
Audit fees1	58	46
Registration fees	41	36
Regulatory and listing fees	64	41
Custody fees	31	28
Legal fee	31	44
Printing and postage	25	13
Directors' and officers' liability insurance	10	7
VAT recovered	(44)	(69)
Other	45	24
	629	486

All expenses detailed above include VAT where applicable.

¹ In addition to the annual audit fee paid by the Company to EY the following were also paid to EY on behalf of the Company:

• In relation to the 2021 annual audit, State Street Bank acting as the administrators paid overrun fees of £5,000 plus VAT; and

• During the year to 31 January 2022 the Company changed administrators and Martin Currie Investment Management paid the additional audit fee in relation to this change, which was £3,000 plus VAT

Performance fee

With effect from 1 February 2021, the performance fee arrangement was discontinued and the investment management fee amended from 0.4% to 0.5% per annum for the first £300 million of the Company's net asset value (excluding income) and from 0.4% to 0.35% for net assets (excluding income) in excess of £300 million. The performance fee earned in the year ended 31 January 2021 was £2,819,000, this amount was paid in May 2021.

Note 4: Taxation on ordinary activities

	Year ended 31 July 2022			Year ended 31 January 2021
	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000
Overseas tax suffered	313	-	313	264	-	264

The corporation tax rate was 19.00% (2021: 19.00%).  The tax charge for the year differs from the charge resulting from applying the standard rate of corporation tax in the UK for an investment trust company.  The differences are explained below.

	Year ended 31 January 2022 £000	Year ended 31 January 2021 £000
Net return before taxation	8,157	49,488
Corporation tax at rate of 19.00% (2021: 19.00%)	1,550	9,403
Effects of:
UK dividends not taxable	(40)	(32)
Currency losses not taxable	-	9
Gains on investments not taxable	(1,573)	(9,773)
Overseas dividends not taxable	(434)	(464)
Overseas tax suffered	313	264
Increase in excess management and loan expenses	497	857
Total tax charge for the year	313	264

As at 31 January 2022, the Company had unutilised management expenses of £42 million (2021: £40 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 2022	Year ended 31 January 2021
The returns and net asset value per Ordinary share are calculated with reference to the following figures:
Revenue return £000	1,161	1,635
Capital return £000	6,683	47,589
Total return £000	7,844	49,224
Weighted average number of shares in issue during the year	85,587,856	82,918,070
Revenue return per share	1.36p	1.97p
Capital return per share	7.81p	57.39p
Total return per share	9.17p	59.36p

Note 6: Dividends

	Year ended 31 January 2022 £000	Year ended 31 January 2021 £000
Year ended 31 January 2020 - fourth interim dividend of 1.50p	-	1,257
Year ended 31 January 2021 - fourth interim dividend of 1.50p	1,270	-
Year ended 31 January 2022 - first interim dividend of 0.90p (2021: 0.90p)	765	739
Year ended 31 January 2022 - second interim dividend of 0.90p (2021: 0.90p)	774	736
Year ended 31 January 2022 - third interim dividend of 0.90p (2021: 0.90p)	779	754
	3,588	3,486

Revenue return per share for the year ended 31 January 2022 is 1.36p (2021: 1.97p), refer to note 5 for details of calculation.

The fourth interim dividend for the year ended 31 January 2021 and the first interim dividend for the year ended 31 January 2022 have been allocated to the revenue reserve.  The second and third interim dividends for the year ended 31 January 2022 have been allocated to the special distributable reserve. All dividends paid in the year ended 31 January 2021 were allocated to the revenue 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 2022 £000	Year ended 31 January 2021 £000
First interim dividend of 0.90p for the year ended 31 January 2022 (2021: 0.90p)	765	739
Second interim dividend of 0.90p for the year ended 31 January 2022 (2021: 0.90p)	774	736
Third interim dividend of 0.90p for the year ended 31 January 2022 (2021: 0.90p)	779	754
Proposed fourth interim dividend of 1.50p for the year ended 31 January 2022 (2021: 1.50p)	1,285	1,270
	3,603	3,499

Note 7: Investments at fair value through profit or loss

	Year ended 31 January 2022 £000	Year ended 31 January 2021 £000
Opening book cost	225,072	191,768
Opening investment holding gains	102,916	59,946
Opening market value	327,988	251,714
Additions at cost	43,571	88,505
Disposals proceeds received	(40,248)	(63,671)
Gains on investments	8,224	51,440
Market value of investments held at 31 January	339,535	327,988
Closing book cost	238,463	225,072
Closing investment holding gains	101,072	102,916
Closing market value	339,535	327,988

The Company received £40,248,000 (2021: £63,671,000) from investments sold in the year. The book cost of these investments when they were purchased was £30,180,000 (2021: £55,201,000).

The transaction costs in acquiring investments during the year were £52,000 (2021: £193,000). For disposals, transaction costs were £20,000 (2021: £32,000).

	Year ended 31 January 2022 £000	Year ended31 January 2021 £000
Net realised gain on investments	10,068	8,470
Net change in unrealised (losses) and gains on investments	(1,844)	42,970
Total capital gains and losses	8,224	51,440

Note 8: Trade receivables

	As at 31 January 2022 £000	As at 31 January 2021 £000
Taxation recoverable	103	134
VAT recoverable	49	-
Dividends receivable	7	24
Amount receivable for Ordinary shares issued	-	918
Other debtors	1	-
	160	1,076

Note 9: Cash and cash equivalents

	As at 31 January 2022 £000	As at 31 January 2021 £000
Sterling bank account	6,589	10,043
Non-sterling bank account	-	(16)
	6,589	10,027

Note 10: Payables - performance fee

	As at 31 January 2022 £000	As at 31 January 2021 £000
Performance fee payable	-	2,819

With effect from 1 February 2021, the performance fee arrangement was discontinued and the investment management fee amended from 0.4% to 0.5% per annum for the first £300 million of the Company's net asset value (excluding income) and from 0.4% to 0.35% for net assets (excluding income) in excess of £300 million.

Note 11 Trade payables

	As at 31 January 2022 £000	As at 31 January 2021 £000
Amounts falling due within one year:
Investment management and secretarial fees	134	323
Interest accrued on bank loan	67	67
Purchases awaiting settlement	35	2,220
Other payables	214	91
	450	2,701

Note 12: Payables - amounts falling due after more than one year

	As at 31 January 2022 £000	As at 31 January 2021 £000
Bank loan	30,000	30,000
	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.

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.

Note 13: Ordinary shares of 5p

	Number of shares	As at 31 January 2022 £000	Number of shares	As at 31 January 2021 £000
Ordinary shares of 5p
Ordinary shares in issue at the beginning of the year	84,759,499	4,237	83,364,105	4,167
Ordinary shares issued from Treasury during the year	3,415,000	171	3,815,000	191
Ordinary shares bought back to Treasury during the year	(1,558,095)	(78)	(2,419,606)	(121)
Ordinary shares in issue at end of the year	86,614,404	4,330	84,759,499	4,237

	Number of shares	As at 31 January 2022 £000	Number of shares	As at 31 January 2021 £000
Treasury shares (Ordinary shares of 5p)
Treasury shares in issue at the beginning of the year	13,916,408	697	15,311,802	767
Ordinary shares issued from Treasury during the year	(3,415,000)	(171)	(3,815,000)	(191)
Ordinary shares bought back to Treasury during the year	1,558,095	78	2,419,606	121
Treasury shares in issue at end of the year	12,059,503	604	13,916,408	697
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 2022, the proceeds received for shares issued from Treasury less payments made for shares bought back to Treasury was £8,007,000 (2021: the proceeds received for shares issued from Treasury less payments made for shares bought back to Treasury was £6,138,000).

Between 1 February 2022 and 7 April 2022, 985,975 Ordinary shares of 5p were bought back to Treasury and no Ordinary shares of 5p were issued from Treasury.

Note 14: Capital reserve

	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	(5,579)	-	(5,579)
Proceeds from the issue of Shares from Treasury1	550	-	550
Capital expenses	(1,596)	-	(1,596)
As at 31 January 2022	110,511	101,072	211,583

¹ Refer to accounting policy 1(j) for details on the calculation of the proceeds.

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 2021'.

Note 15: Net asset value per share

	As at 31 January 2022 £000	As at 31 January 2021 £000
Net assets attributable to shareholders	£315,834,000	£303,571,000
Number of shares in issue at the year end	86,616,404	84,759,499
Net asset value per share	364.6p	358.2p

Note 16: Related party transactions

With the exception of the investment management and secretarial fees (as set out in the annual report and accounts), performance fee paid in the year related to the prior financial year (as set out in the annual report and accounts), Directors' fees (as set out in the annual report and accounts), and Directors' shareholdings (as set out in the annual report and accounts), 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 2022 are £14,000 (2021: £12,000).

Note 17: 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 (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 gearing levels are appropriate and reviews these on a regular basis. Borrowings may comprise fixed rate, revolving, and uncommitted facilities.  The total borrowings will not exceed 20% of the net assets of the Company at time of drawdown. On 23 November 2020, the Company entered into a £30 million sterling 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 2022	As at 31 January 2021
Cash and cash equivalents	6,589	10,027
Total net exposure to interest rate risk	6,589	10,027

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 75 (2021: 75) basis points higher or lower and all other variables were held constant, the Company's profit for the year ended 31 January 2022 would increase/decrease by £49,000 (2021: increase/decrease by £75,000).

This is mainly attributable to the Company's exposure to interest rates on its floating rate cash balances.

As at 31 January 2022 an interest rate of 0.75% is used, given that the prevailing base rate is 0.50%. This level is considered possible based on observations of market conditions and historic trends.

(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:

	Year ended 31 January 2022	Year ended 31 January 2021
	Total currency exposure £000	Total currency exposure £000
US dollar	172,981	167,201
Euro	78,826	66,818
Swedish kroner	36,204	32,717
Hong Kong dollar	29,203	37,725
Australian dollar	10,510	10,917
Danish krone	10,195	10,198
Swiss franc	12	25
Canadian dollar	-	(16)
Total overseas investments	337,931	325,585
Sterling	(22,096)	(22,014)
Total	315,835	303,571

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.

Foreign currency sensitivity

At 31 January 2022, 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 2022 £000	Year ended 31 January 2021 £000
Total net sensitivity to foreign currencies	16,897	16,279

(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 above, 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% (2021: 30%) higher or lower while all other variables remained constant, the return attributable to Ordinary shareholders at the year ended 31 January 2022 would have increased/decreased by £101,900,000 (2021: increase/decrease of £98,400,000) 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 2022 was £6,749,000 (2021: £11,103,000). 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 18: 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.

Note 19: 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:

As at 31 January 2022	Level 1	Level 2	Level 3	Total
	£000	£000	£000	£000
Financial assets at fair value through profit or loss
Quoted equities	339,535	-	-	339,535
Net fair value	339,535	-	-	339,535

	Level 1	Level 2	Level 3	Total
As at 31 January 2021	£000	£000	£000	£000
Financial assets at fair value through profit or loss
Quoted equities	327,988	-	-	327,988
Net fair value	327,988	-	-	327,988

Note 20: Stock lending

Up until 31 July 2021 the Company had a Securities Lending Authorisation Agreement with State Street Bank & Trust Company. From 1 August 2021 the Company no longer undertakes any stock lending activity.

At the reporting date the Company was no longer involved in securities financing transactions (SFTs) as defined in Article 3 of Regulation (EU) 2015/2365. As a result of this there are no outstanding balances, collateral, or SFTR counterparties at the reporting date.

As at 31 January 2021 £11,475,000 of investments were subject to stock lending agreements and £12,220,000 was held in collateral.  The prior year end collateral was held in the form of cash (in GBP, USD or EUR), government securities issued by any of the OECD countries or equity securities listed and/or traded on an exchange in the following countries: Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, Switzerland and USA.

The value of collateral in respect of the securities on loan was not less than the value of the securities lent during the period to 31 July 2021.

The maximum aggregate value of securities on loan at any time during the accounting period was £21,309,000.

The gross earnings and the fees paid for the year are £11,000 (2021: £16,000) and £2,000 (2021: £3,000) respectively.

Note 21: Post balance sheet events

On 24 March 2022, the Board declared a fourth interim dividend of 1.50p per share.

As at 7 April 2022, the Company had bought back a further 985,975 ordinary shares at an average price of 333.2p per share.

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