Annual Results

RNS Number : 2105F

Murray International Trust PLC

06 March 2020

 

MURRAY INTERNATIONAL TRUST PLC

Legal Entity Identifier (LEI):  549300BP77JO5Y8LM553

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2019

1.  STRATEGIC REPORT - COMPANY SUMMARY AND FINANCIAL HIGHLIGHTS

Financial Highlights

Net asset value total return {AB}		Share price total return{AB}		Benchmark total return{BC}
2019	+12.4%	2019	+16.5%	2019	+21.1%
2018	-7.5%	2018	-6.8%	2018	-5.2%
Dividends per share{BE}		Revenue return per share{B}		Net gearing{AD} -
2019	53.5p	2019	54.1p	2019	11.3%
2018	51.5p	2018	49.6p	2018	12.5%
{A} Alternative Performance Measure (see below).
{B} For the year to 31 December.
{C} 40% FTSE World UK Index and 60% FTSE World ex UK Index.
{D} As at 31 December.
{E} Dividends declared for the year in which they were earned.

2.  CHAIRMAN'S STATEMENT

Performance

Against almost any historical benchmark, 2019 proved to be a remarkable year for financial markets.  All major asset classes recorded positive returns despite lack-lustre global economic growth and muted corporate profitability.  A third of all global bond yields fell below 0% for the first time in history as deflationary fears squeezed bond prices higher.  An unexpected volte face in monetary policy intentions was performed by some Central Banks fearful of slowing economic growth and persistently low inflation rates.  Three interest rate cuts by the US Federal Reserve paved the way for extremely favourable worldwide liquidity conditions, and asset prices responded accordingly.  Sterling volatility related to the UK's protracted European Union divorce periodically impacted the Trust, but such challenges proved temporary.  Over the period solid double-digit returns were achieved in most geographical regions, including from Emerging Market bond exposures.

The Company's net asset value ("NAV") posted a total return (i.e. with net income reinvested) of 12.4%.  Historically, this return would have been viewed as above average in absolute terms but it was below the total return of 21.1% from the Company's benchmark (40% FTSE World UK Index and 60% FTSE World ex UK Index).  The share price posted a total return of 16.5% reflecting an increase in the level of premium to NAV.  Income per share generated from the Company's portfolio amounted to 54.1p for the year.

The Investment Manager's Review below gives further details of performance, including attribution analysis.  Within most regional benchmark indices, low-yielding technology and growth companies contributed most to positive returns.  For the Company's more income focused portfolio this proved challenging in relative performance terms, and not for the first time in recent years.  Against a backdrop of escalating positive investor sentiment, a cautious, disciplined approach was increasingly warranted, and in general this delivered satisfactory results.

Dividends and Dividend Policy

Three interim dividends of 12.0p per share (2018: three interims of 11.5p) have been declared during the year. Your Board is now recommending an increased final dividend of 17.5p (2018: 17.0p) which, subject to the approval of shareholders at the Annual General Meeting, will be paid on 15 May 2020 to shareholders on the register on 3 April 2020.  If approved, the total Ordinary dividends for the year will amount to 53.5p, an increase of 3.9% from last year (2018: 51.5p). After accounting for the payment of the final dividend, there will be a small transfer of approximately £0.6 million to the Company's revenue reserves.

This small transfer to reserves is in line with the policy that I have advised shareholders of in previous years.  The Board intends to maintain its progressive dividend policy given the Company's investment objective. This means that, in some years, revenue will be added to reserves, while, in others, revenue may be taken from reserves to supplement earned revenue for that year, to pay the annual dividend.  Shareholders should not be surprised or concerned by either outcome as, over time, the Company will aim to pay out what the underlying portfolio earns in sterling terms.  We are maintaining our present policy not to hedge the sterling translation risk of revenue arising from non-UK assets.

Management of Premium and Discount

At the Annual General Meeting held in April 2019, shareholders renewed the annual authorities to issue up to 10% of the Company's issued share capital for cash at a premium and to buy back up to 14.99% of the issued share capital at a discount. During the year, no Ordinary shares were purchased for Treasury or cancellation; however, we were able to sell the remaining 406,531 shares that had been held in Treasury and then to issue a further 781,927 new Ordinary shares under the Company's blocklisting facility, with all shares having been issued at a premium to NAV. The Board will be seeking approval from shareholders to renew both authorities in 2020.  As in previous years, new shares will only be issued at a premium to NAV and shares will only be bought back at a discount to NAV. Resolutions to this effect will be proposed at the Annual General Meeting and the Directors strongly encourage shareholders to support these proposals.

During the year, the Ordinary shares have traded at an average premium to the NAV (including income) of 1.5%.  The Board continues to believe that it is appropriate to seek to address temporary imbalances of supply and demand for the Company's shares which might otherwise result in a recurring material discount or premium. Subject to existing shareholder permissions (given at the last AGM) and prevailing market conditions, the Board intends to continue to buy back shares and issue new shares (or, if available, sell shares from Treasury) if shares trade at a persistent significant discount to NAV (excluding income) or premium to NAV (including income), respectively. The Board believes that this process is in all shareholders' interests as it seeks to reduce volatility in the premium or discount to underlying NAV whilst also making a small positive contribution to the NAV.  From the year end up to 5 March 2020, the Company has issued a further 80,000 new Ordinary shares under the Company's blocklisting, all at a premium to the underlying inclusive of income NAV.  At the latest practicable date, the NAV (including income) per share was 1136.0p and the share price was 1092.0p equating to a discount of 3.9% per Ordinary share.

Gearing

At the year end, total borrowings amounted to £200 million, representing net gearing (calculated by dividing the total assets less cash by shareholders' funds) of 11.3% (2018: 12.5%) all of which is drawn in Sterling.  On 17 May 2019, the Company agreed a new £30 million loan facility with The Royal Bank of Scotland International Limited ("RBSI") which was drawn in full and fixed for five years at an all-in rate of 2.25%. The new facility was used to repay a maturing £15 million loan with RBSI with the remainder being invested in the portfolio. The Company also has a loan totalling £50 million with RBSI that is due to mature in May 2020. The Directors are in the process of reviewing options for the replacement of this facility.

Annual General Meeting

This year's Annual General Meeting will be held in London at 12.30 p.m. on 24 April 2020 at The Mermaid Conference Centre, Puddle Dock, Blackfriars, London EC4V 3DB. As at previous AGMs, there will be a presentation from the Manager and an opportunity to meet the Directors and representatives from the Manager over lunch. I should be grateful if you would confirm your attendance by completing the separate notice that will accompany the Annual Report and Financial Statements, and returning it together with an indication of any particular questions. I hope to see as many shareholders as possible at the AGM in London.

In the event that the developing situation surrounding COVID-19 should affect the plans to hold the AGM on 24 April 2020 the Company will update shareholders through an announcement to the London Stock Exchange and will provide further details on the Company's website. The Board would encourage all shareholders to exercise their votes in respect of the meeting in advance. This should ensure that your votes are registered in the event that attendance at the AGM might not be possible.

Benchmark and Investment Objective

I reported last year that one of the implications of the Financial Conduct Authority's publication of its second set of rules following the Asset Management Market Study would be the need for fund managers to explain their use and adherence to benchmarks in the funds they manage. To this end, the Board and Manager have dedicated a significant amount of time during the year to a detailed review of the Company's Benchmark.  The current Benchmark is a composite comprising 40% of the FTSE World UK Index and 60% of the FTSE World ex UK Index and was adopted in 2000 broadly to reflect the Manager's investment outlook and the Company's portfolio composition at that time.  Since then, the allocation of the portfolio has changed significantly.  In particular, the exposure to the UK has fallen considerably, rendering the Benchmark's composition relatively meaningless now.  The Board recognises that the Manager does not manage the portfolio by reference to any particular market index. Instead, the Manager is seeking to find suitable companies with good potential for future earnings growth to support the yield requirement whilst also offering potential for capital growth.  Therefore, it is unlikely that the Company's own performance will ever align with any benchmark that is adopted. However, it is useful and best practice in the market to provide shareholders with a comparator reference index in order to assess performance over the longer term.  As a result, the Board, having consulted with the Manager and broker and subject to shareholder approval at the forthcoming AGM, has decided to remove the Company's Benchmark and introduce a new reference index, the FTSE All World TR Index (the "Reference Index") with immediate effect.  It is accepted that the constituents of the Reference Index do not closely match those of the Company's portfolio and so performance will continue to diverge. Nevertheless this index should resemble the portfolio more closely than the present Benchmark, and has the benefit of being a widely recognised and used benchmark or reference index for global equities.

For comparative purposes the existing Benchmark returned 21.1% over the year to 31 December 2019 versus a return of 22.8% from the Reference Index. 

In conjunction with the above change, the Board and Manager have reviewed the Company's Investment Objective with a view to refreshing the language which referenced performance against a 'benchmark'.  It is now proposed to change the Investment Objective to read "The aim of the Company is to achieve an above average dividend yield, with long term growth in dividends and capital ahead of inflation, by investing principally in global equities".  The Board has been advised that this is not a material change requiring shareholder approval as it is not expected to affect how the Company's portfolio is managed.  However, the Board believes that it would be best practice to put this change to shareholders in order to ensure that our key stakeholder group is supportive of this action.  Therefore, a resolution to approve the change will be submitted for consideration at the forthcoming Annual General Meeting.

Directorate

As reported last year, in accordance with the Board's on-going succession planning, our Senior Independent Director, Peter Dunscombe, will be retiring from the Board at the AGM in 2020, and I will be retiring at the AGM in 2021, along with our Audit Committee Chair, Marcia Campbell, following her completion of nine years as a Board member at that date.  I would like to take this opportunity of conveying my sincere thanks to Peter for the assistance that he has provided to me and the Board, and the enormous contribution that he has made to the Company since his appointment.  Following Peter's retirement, David Hardie will become Senior Independent Director. A process to recruit a new independent Director, led by Peter and David, has now concluded and I am delighted to tell shareholders that Mr Simon Fraser will be joining the Board after the forthcoming AGM, on 1 May 2020, with a view to becoming Chair of the Board upon my retirement. Simon has had a distinguished career in asset management and has recently retired as chairman of F&C Investment Trust PLC, the oldest listed investment company on the London Stock Exchange.

Appointment of New Auditor

In line with best practice and the Board's previously stated intention, during the year the Audit and Risk Committee conducted a tender for independent audit services.  Following a detailed interview process the Board has accepted the Audit and Risk Committee's recommendation to appoint BDO LLP as auditor to the Company.  A shareholder resolution to this effect and to authorise the Directors to agree the new auditor's remuneration will be put to shareholders at the forthcoming AGM.  The Board would like to place on record its thanks to EY for the audit services that it has provided to the Company.

Ongoing Charges Ratio

The Board remains focused upon delivering value to shareholders and regularly reviews the ongoing charges ratio ("OCR").  It is pleasing to note that the OCR for 2019 has reduced to 0.61% (2018: 0.69%) which in part reflects the impact of the reduction agreed last year in the level of fees payable to the Manager.

Outlook

In my Outlook comments from last year, I expressed the view that the market repricing of late 2018 was unlikely to be the end of this corrective phase. Of course, I had in mind the risk of further market declines. Instead, as we now know, the Company's Benchmark rose by over 20% during the year. Apart from the market's capacity to make fools of those predicting its future, this outturn is also testament to the enduring ability of Central Banks to influence both actual money flows as well as investor sentiment.

A rational assessment of where we are now would suggest a considerable portion of near-term future potential market return was "brought forward" into 2019. After all, the present US economic expansion, for example, is very long lived and current prospects only look modest at best. This is reflected in most developed economies.  Meanwhile, Central Banks have already played a good part of the hand they have in 2019 through the rate cuts from last year. Caution therefore seems warranted.  At the time of writing global stock markets are experiencing very significant volatility as a degree of panic related to COVID-19 has swept across the investment world. Time will tell whether this reaction is fully justified, too limited, or excessive. These matters can only be judged in retrospect and during their occurrence investors are usually wise to remain both watchful and humble.

From a portfolio perspective, the ability and flexibility the Manager has to invest globally offers opportunities that are not wholly tied to the developed economies and markets. The Manager is able to find companies whose fortunes are predominantly exposed to apparently more orthodox economies in Asia and Latin America. Such companies are often listed in so called developed markets, in addition to those listed more locally. Whilst mindful of the risks posed by oscillating market sentiment, the Manager's focus will remain on companies that meet the Company's investment objective.

Kevin Carter ,

Chairman

5 March 2020

3.  MANAGER'S REVIEW

Cognitive dissonance is a state of psychological discomfort familiar to most of us. The symptoms involve inconsistent thoughts, beliefs or attitudes in relation to behaviours; essentially believing one thing whilst behaving otherwise. Manifestations in everyday life subject the sufferer to uncomfortable mental conflict unless the contradiction between belief and behaviour can be resolved but torment from such dissonance seldom tends to last.  Individuals can simply change their actions to align with their attitudes or vice versa.  Unfortunately, the same cannot be said or done within financial markets, where cognitive dissonance embedded in economic policy and investor behaviour has caused countless historical catastrophes.  Here "the lies we tell ourselves to justify inconsistent actions" contain significant disruptive consequences and potential financial hardship.  Such blatant disconnect between what was said and what was done dominated the financial landscape over the period under review. 

Rooted in pursuit of pain-free, political popularity, complicit Central Banks succeeded only in shredding the final fragments of their waning credibility.  An unexpected and extraordinary policy U-turn by the US Federal Reserve set the tone as early as January.  Insistence of independence from political and asset price influence crumbled in the wake of previous year-end financial market disruption.  The rhetoric of re-establishing real interest rates and monetary discipline evaporated like the prevailing spring snow, heralding in renewed policy appeasement for both Washington and Wall Street.  Yet again intolerance of upsetting financial asset prices took systemic precedence over prudent long-term policy objectives.  Global financial markets responded ebulliently in the hollow belief that, crisis averted, all would be well.  The strong annual performance from global equities over the period suggested, superficially, the market felt justified in its judgement.

Such disconnect was duplicated throughout the so-called developed world.  The Bank of England sat like a rabbit in the headlights, paralysed from implementing policy or even providing informed opinion.  Base rates stayed at 0.75% throughout as UK savers watched their incomes eroded by inflation.  The message and modus operandi were equally inconsistent within Europe.  Despite enormous monetary stimulus over the past decade failing to deliver economic or financial normality, the European Central Bank renewed its delusional disposition for debt dependency.  More money was printed, yet Germany retreated into recession regardless.  Failure to convince relentlessly rising, liquidity-obsessed equity markets of deteriorating economic fundamentals was hardly surprising.  After all, the response of cutting interest rates to any downward reversal in equity markets has prevailed in established practice for over thirty years now!  Yet bond markets remained much more sceptical and increasingly concerned.  With each successive financial crisis, constantly lower interest rates and exponentially higher debt have squeezed global interest rates downwards to the point where there is virtually nothing left to cut!  What now for a world with interest rates close to zero?

By summer, increasingly apoplectic bond investors began contemplating an imminent income apocalypse, and for very good reason.  With over a third of all outstanding bonds worldwide possessing negative yields, savings were getting decimated.  Negative ten-year German sovereign bond yields meant investors were paying the German Government for the privilege of owning German bonds.  Negative five year Nestle corporate bond yields meant investors paying the company for owning its debt!  This resulted in the surreal situation of investors bearing all the risk but receiving no coupon, no income and no cash. Under any normal rational circumstances such financial distortion makes absolutely no economic sense.  For under-funded pension plans and stretched savers struggling to finance liabilities, such collateral damage caused by Central Bankers was beyond contempt.  The disfigured and distorted economic landscape now prevailing in Europe, the UK and the US represents decades of deceit and policy mismanagement from which fewer and fewer corrective options appear possible.

Thankfully, not all the world pandered to such economic promiscuity.  In Asia and Emerging Markets, constant economic orthodoxy enabled transparent debate over outcomes and expectations.  From an economic textbook point of view, normality prevailed.  Presidential elections in Thailand, India and Indonesia concluded with minimum disruption, leaving  independent Central Banks to manage monetary policy accordingly.  Numerous interest rate cuts across Asia and Latin America reflected improving fundamentals and stoked up the prospects for stronger growth ahead. Free from government intervention or hidden agendas, Emerging Market asset prices were at liberty to reflect prevailing risk and reward.  Bond markets responded positively to lower than expected inflation and prudent fiscal discipline.  The portfolio's Emerging Market bond portfolio contribution of +14.1% total return in Sterling terms was reflective of the path to prosperity currently being followed.  Whilst overall Emerging Market equity returns proved slightly disappointing under the circumstances, rising orders, revenues and margins suggest attractive opportunities lie ahead.  Patience will be required until protectionist disputes dissipate but the economic power shift from the developed to the developing world is unequivocally gathering momentum.

 

Performance

The NAV total return for the year to 31 December 2019 with net dividends reinvested was 12.4% compared with the Benchmark total return of 21.1%. 

The top five and bottom stock contributors are detailed below

Top Five Stock Contributors	%*	Bottom Five Stock Contributors	%*
Taiwan Semiconductor Manufacturing	1.55	Sociedad Quimica	-2.06
Atlas Copco	0.45	Public Bank	-1.04
HSBC	0.39	Daito Trust	-0.93
Royal Dutch Shell	0.33	Unilever Indonesia	-0.88
GlobalWafers	0.28	BAT Malaysia	-0.67

* % relates to the percentage contribution to return relative to the Benchmark

Attribution Analysis

The attribution analysis below details the various influences on portfolio performance.  In summary, of the 930 basis points (before expenses) of performance below the benchmark, asset allocation detracted 550 basis points and stock selection a further 380 basis points. Structural effects, relating to the fixed income portfolio and gearing net of borrowing costs, added 160 basis points of relative performance.

 

	Company		Benchmark		Contribution from:
					Asset	Stock
	Weight	Return	Weight	Return	Allocation	Selection	Total
	%	%	%	%	%	%	%
UK	8.9	18.0	40.0	18.1	0.8	0.0	0.8
Europe ex UK	14.5	18.7	9.5	20.4	-0.1	-0.1	-0.2
North America	21.5	15.7	38.9	26.5	-1.0	-2.0	-3.1
Japan	1.1	-17.5	5.3	14.8	0.0	-1.0	-0.9
Asia Pacific ex Japan	35.4	11.2	4.9	14.9	-2.4	-0.6	-3.0
Other International	18.6	5.6	1.4	14.8	-2.8	-0.1	-2.9
	______	______	______	_____	______	______	______
Gross equity portfolio return	100.0	11.8	100.0	21.1	-5.5	-3.8	-9.3
FX Instruments, fixed interest, cash and gearing effect		1.6
		______
Net portfolio return		13.4
Management fees and administrative expenses		-0.7
Tax charge		-0.5
Technical differences		0.2
		______		_____
Total return		12.4		21.1
		______		_____
Benchmark is 40% FTSE World UK Index and 60% FTSE World ex UK Index
Notes to Performance Analysis
Asset Allocation effect - measures the impact of over or underweighting each asset category, relative to the benchmark weights.
Stock Selection effect - measures the effect of security selection within each category.
Technical differences - the impact of different return calculation methods used for NAV and portfolio performance

North America

Seminal years in economic history tend to stick in the memory, partially because they are few and far between but primarily because they coincide with significant market consequences.  2019 arguably secured such status.  Whether economic foresight or political persuasion prompted the US Federal Reserve to abandon its goal of re-establishing economic orthodoxy in favour of renewed monetary liberalisation will likely never be revealed.  For the most part it largely does not matter.  Of far greater importance to independent interpretation is that, following a decade of futile monetary experimentation, the decelerating debt-dependent US economy ended the period devoid of options.  At its helm, the Fed stands accused of abject failure.  At its core, enormous unfunded health and pension liabilities, contracting real incomes and declining living standards stretch out before the current generation, which is increasingly impoverished for all to see - except for the US equity market.

Roaring to all time historical highs despite declining profitability, the US market's love affair with liquidity blossomed beyond all recognition.  Eye-watering valuations embraced expectations of future economic acceleration, totally ignoring any fundamental reasons to the contrary.  The +26.5% rise in Sterling terms over the period for the North American index was by far the strongest of all global regions.  Portfolio performance performed in line with expectations given its higher yielding focus.  Canadian and US communication companies Telus and Verizon maintained solid double-digit total returns, leading consumer products companies PepsiCo and Philip Morris contributed even more, and technology giant Intel again justified its recent inclusion in the portfolio with significant capital appreciation. A new position in Canadian natural gas transportation company TC Energy was established in January and marked the only significant portfolio activity in the region.

Corporate America's reluctance to return surplus cash to shareholders in the form of dividends in favour of buying back increasingly expensive stock remains philosophically incompatible with the Trust's dividend growth requirements.  Consequently, opportunities remained limited to only selective exposure in this region.

 

UK

Leaving Europe on acceptable, conciliatory terms was always going to prove problematic.  Another year of constant political bickering simply further polluted UK economic fundamentals.  Shallow attempts by politicians and the Bank of England to suggest otherwise increasingly failed to resonate amongst businesses and consumers alike.  Inward foreign direct investment stagnated, reflecting international capital's growing preference to 'shun' the UK and invest elsewhere.  Both the manufacturing and service sectors suffered severe business disruption from intense global competition.  The demise of Britain's international competitiveness through lack of investment, dismal productivity, structural dependence on external debt financing and constant political uncertainty will undoubtedly have serious long-term consequences for national prosperity.  Left with only the prop of consumption to support economic activity, an already exhausted, debt-ridden consumer provided what meagre growth existed.

Somewhat surprisingly, none of this mattered to the equity market.  Unchanged Bank of England base rates throughout the period emphasised economic fragility and prevailing policy passivity, yet the stock market strangely celebrated such circumstances.  During the period, UK portfolio exposure was systematically reduced.  Of the five remaining holdings, BAT, BHP Group and Standard Chartered delivered decent total returns of capital and dividend growth. Whilst Vodafone and Royal Dutch Shell faced challenges on both fronts, sufficient inherent value is deemed to exist in each to warrant continued inclusion.  An expanding credibility vacuum between economic rhetoric and economic reality has drained confidence beyond the paralysis of Brexit related uncertainty.  For many, the rift is unlikely to be repaired.  The portfolio's current historical low in UK exposure reflects diminishing confidence in macro-economic management but also difficulties in identifying genuine, globally competitive UK growth companies committed to paying attractive, growing dividends.  On a relative basis, as the world moves on, UK companies are in great danger of being left behind.

Europe

Disconnect between words and actions featured prominently across Europe.  Concluding a decade of delusion defined by deeply disturbing economic data, recognition of such remained absent from informed debate.  Instead, policymakers preached of cyclical economic recovery and normalised interest rates yet, in practice, growth slowed and living standards fell.  Savings accounts being decimated by negative bond yields seemed of little interest to policymakers obsessed with monetary doctrine.  Renewed monetary printing merely exacerbated the problem causing further distress.  As numerous European economies decelerated towards recessionary levels, policy ineptitude was epitomised by this irrefutable fact.  After eight years in charge, retiring European Central Bank President Mario Draghi left office in November with the dubious accolade of never having presided over an interest rate rise.  This alone speaks volumes of the extraordinary economic stagnation currently prevailing in Europe.

For domestically focused businesses, profitability faced severe headwinds from Europe's challenging economic landscape.  Stretched consumers constrained by real income declines displayed dwindling appetites to spend.  Portfolio exposure, seeking to emphasise truly global companies, avoided most indigenous pitfalls and profited from strength in Swedish industrials Atlas Copco and Epiroc, the defensive growth characteristics of Swiss pharmaceutical giants Roche and Novartis, and a decent recovery in prospects for German industrial Bayer.  A new position in Norwegian communication company Telenor was established, a cash-generative growth-orientated business predominately exposed to digital infrastructure investment in Asia.  Whilst overall European exposure remains low in absolute terms, selective attractive prospects in truly global companies still offer interesting opportunities.

 

Latin America

Economic orthodoxy merged seamlessly with economic outcomes evolving in Latin America.  For a continent renowned for taking it easy, it was the monetary easing activity of Central Banks that captured the attention of financial markets.  On a macro-economic level, independent policymakers exercised commendable diligence and discretion. 

Four fifty basis point reductions in Brazilian benchmark interest rates reduced borrowing costs to historical lows.  Congressional approval of ambitious pension fund reform further boosted confidence in an economy recovering from recent domestic political uncertainty and international scepticism.  Overall portfolio contributions from Brazilian equity and bond exposures enhanced overall total returns.  Large positions in Telefonica Brazil, logistics operator Wilson & Sons and Banco Bradesco all delivered in excess of expectations.  Domestic sovereign bonds benefited from improved fiscal dynamics and lower short-term interest rates.  In short, Brazilian assets generally behaved in conventional fashion. 

Opinion over newly elected Mexican President Obrador's political and economic agenda remained polarised over the period: for some, he is a calculating ideologist, for others a pragmatic populist.  Cautious sentiment limited equity market returns to just under 7% in Sterling terms.  Success by the Mexican Central Bank in squeezing inflation below 3% enabled commencement of monetary easing only grudgingly acknowledged by financial markets.  With real interest rates still historically high, further scope exists for additional easing.  A stable peso and rising foreign direct investment complemented improving fundamentals, despite repeated attempts by American protectionism to pronounce otherwise.  Portfolio holdings performed very strongly with over +20% total returns in Sterling terms from both airport operator Asur and tissue manufacturer Kimberly-Clark de Mexico.  Exposures to Mexican sovereign and corporate bonds also proved their worth from both a capital and income perspective.  During the period the Uruguayan Government Bond was fully divested following a period of strong outperformance.

 

Asia

Adherence to orthodoxy accompanied economic events unfolding in Asia.  Benign global interest rates provided the catalyst for monetary easing throughout the region.  Central Banks in India, Indonesia, Malaysia, Thailand and Korea responded accordingly delivering numerous rate cuts.  Growth stimulation commenced, with expanding order books symptomatic of improving trends.  Unburdened by punitive debts or stretched balance sheets, lower credit costs combined with lower bond yields effortlessly flowed into bolstering confidence.  Relative to unrealistic expectations reverberating around the rest of the world, analysing Asia encountered little ambiguity.  Economic progress evolved amid an atmosphere of generally rational, realistic responses.  Regional politics witnessed numerous Government elections, none of which proved unduly problematic, although political tensions in Hong Kong periodically boiled over into serious social and economic disorder.  Increasingly toxic, US inspired, global trade relationships also periodically exerted their toll on Asian confidence.  Thankfully, by period end, hostilities appeared to be thawing without serious damage to commerce or investment.

Overall, Asian portfolio returns were respectable but fell short of those delivered elsewhere in the world.  Corporate profitability and dividend growth remained solid, supported by decent profit margins and strong balance sheets.  Standout contributions came from Taiwan Semiconductor, recently established positions in GlobalWafers and Samsung Electronics plus supportive total returns of Singapore Telecom and Taiwan Mobile.  Positive lagging effects of lower interest rates should enhance credit sensitive holdings such as Overseas Chinese Bank, Siam Commercial Bank and Public Bank of Malaysia, all of which underperformed over the period.  Elsewhere, 2019 proved another fruitful year for Chinese tourist dependant Auckland Airport in New Zealand and soft drink distributor Coca Cola Amatil in Australia.

The large reduction in Japanese exposure reflected the outright disposal of the domestic real estate developer Daito Trust.

Summary of Investment Changes During the Year

	Valuation		Appreciation/		Valuation
	31 December 2019		(depreciation)	Transactions	31 December 2018
	£'000	%	£'000	£'000	£'000	%
Equities
United Kingdom	127,902	7.4	17,810	(51,589)	161,681	10.1
North America	308,165	17.7	29,634	22,931	255,600	15.9
Europe ex UK	207,755	12.0	24,014	19,248	164,493	10.3
Japan	15,710	0.9	(8,723)	(35,934)	60,367	3.8
Asia Pacific ex Japan	506,596	29.1	28,383	57,351	420,862	26.2
Latin America	258,028	14.8	3,652	5,406	248,970	15.5
Africa	8,906	0.5	(806)	-	9,712	0.6
	_______	_______	_______	_______	_______	_______
	1,433,062	82.4	93,964	17,413	1,321,685	82.4
	_______	_______	_______	_______	_______	_______
Preference shares
United Kingdom	7,677	0.4	956	-	6,721	0.4
	_______	_______	_______	_______	_______	_______
	7,677	0.4	956	-	6,721	0.4
	_______	_______	_______	_______	_______	_______
Fixed income
Europe ex UK	17,256	1.0	920	167	16,169	1.0
Asia Pacific ex Japan	86,668	5.0	758	315	85,595	5.3
Latin America	138,650	8.0	12,912	(11,319)	137,057	8.6
Africa	18,260	1.1	203	118	17,939	1.1
	_______	_______	_______	_______	_______	_______
	260,834	15.1	14,793	(10,719)	256,760	16.0
	_______	_______	_______	_______	_______	_______
Other net assets	37,186	2.1	18,088	-	19,098	1.2
	_______	_______	_______	_______	_______	_______
Total assets{A}	1,738,759	100.0	127,801	6,694	1,604,264	100.0
	_______	_______	_______	_______	_______	_______
{A} See definition on page 103 of the published Annual Report for the year ended 31 December 2019 .

Outlook

Consistency can cause conflict in most walks of life.  Having the courage and conviction to align thoughts and actions without compromise demands strength and resilience.  Seldom pure and rarely simple, the path to such a paradigm invariably involves pain.  By contrast, the path of current financial populism has witnessed constant misrepresentation.  Enormous monetary stimulus and debt expansion has failed to normalise economic and financial systems despite repeated claims to the contrary.  Anaemic economic recovery in western economies suggest a "pain-free" path to zero interest rates has delivered nothing but distortion.  Asset prices may well rejoice in the result but can expect no repeat.  The decade-long monetary experiment concludes devoid of substance and even less integrity.

Where this leaves Western policymakers and politicians is impossible to predict.  Limited options, rising inequality, expectant financial markets and aging demographics present a toxic combination unlikely to be painlessly resolved. Some hard truths desperately need addressing.  Looking eastwards such developed world dichotomies present increasingly diminishing influence.  Once the exporting engine to global growth elsewhere, Asia and associated Emerging Markets now progressively capitalise on domestic growth opportunities.  Rising real incomes, expanding populations and improving credit affordability support future consumption- based economies becoming even more intra-regionally linked.  Investment focus will continue to emphasise high quality, financially strong companies exposed to such positive trends through a truly, globally diversified portfolio.

At the time of writing, global financial markets are beginning to exhibit considerable volatility given concerns over the impact of COVID-19. This is a very fluid situation and the Board and the Manager will remain vigilant and focused on the aims of the Company and the investment processes which we adhere to in delivering those aims. Whilst volatility and heightened risk aversion can be a challenging environment in which to be a steward of shareholders' capital, it also represents an opportunity for the investor with a long term time horizon.

Bruce Stout

Senior Investment Director

Aberdeen Asset Managers Limited

5 March 2020

4. STRATEGIC REPORT - OVERVIEW OF STRATEGY

 

THE MANAGER'S INVESTMENT PROCESS AND ESG ENGAGEMENT

 

The Manager's Investment Process

The Company's Alternative Investment Fund Manager is Aberdeen Standard Fund Managers Limited ("ASFML") which is authorised and regulated by the Financial Conduct Authority. Day to day management of the portfolio is delegated to Aberdeen Asset Managers Limited ("AAM"). AAM and ASFML are collectively referred to as the "Investment Manager" or the "Manager". Aberdeen Standard Investments ("ASI") is the investment arm of Standard Life Aberdeen plc, the ultimate parent of AAM and ASFML.

The Manager operates a comprehensive risk system with tools that provide better insights for its individual portfolio managers and a more complete understanding of all risk exposures in the portfolios to ensure that the managers only take the sort of risk that the Manager is comfortable with and can back with insight from extensive first hand research. An overview of the investment process is provided below and further information on the Manager can be found on page 98 of the published Annual Report for the year ended 31 December 2019.

Delivering the Investment Policy

Day-to-day management of the Company's assets has been delegated to the Manager. The Manager invests in a diversified range of international companies in accordance with the investment objective.

The portfolio manager, Bruce Stout, has responsibility for portfolio construction across all regional segments.  The management team utilises a "Global Coverage List" which is constructed by each of the specialist country management teams. This list contains all buy (and hold) recommendations for each management team, which are then used by the portfolio manager as the Company's investment universe. Stock selection is the major source of added value over time.

Top-down investment factors are secondary in the Manager's portfolio construction, with stock diversification rather than formal controls guiding stock and sector weights. Market capitalisation is not a primary concern.

A detailed description of the investment process and risk controls employed by the Manager is disclosed on pages 17 and 98 of the published Annual Report for the year ended 31 December 2019. A comprehensive analysis of the Company's portfolio is disclosed below including a description of the ten largest investments, the portfolio of investments by value, distribution of investments and distribution of equity investments. The portfolio attribution analysis is in the Manager's Review.

In addition to equity exposures, the investment mandate provides the flexibility to invest in fixed income securities. The process of identifying, selecting and monitoring both sovereign and corporate bonds follows exactly the same structure and methodology as that for equity investment, fully utilising the global investment resources of the Manager. As in the case of equity exposure, the total amount, geographical preference, sector bias and specific securities will ultimately depend upon relative valuation and future prospects.

At the year end, the Company's portfolio consisted of 49 equity and 27 bond holdings. The Manager is authorised by the Board to hold between 45 and 150 holdings in the portfolio.

Benchmark/Reference Index

The Company's Benchmark during the year was a composite index comprising 40% of the FTSE World UK Index and 60% of the FTSE World ex-UK Index. Given the composition of the portfolio and the Manager's investment process, as explained on page 17 of the published Annual Report for the year ended 31 December 2019, it is likely that the Company's investment performance will diverge, possibly significantly, from this Benchmark.

Shareholders' attention is drawn to the recommended proposals to amend the Company's Investment Objective and introduce a new Reference Index in place of the current Benchmark, contained in the Chairman's Statement.

Environmental, Social and Governance ("ESG") Engagement

Whilst the management of the Company's investments is not undertaken with any specific instructions to exclude certain asset types or classes, the Manager embeds ESG into the research of each asset class as part of the investment process.  ESG investment is about active engagement, with the goal of improving the performance of assets held around the world.

The Manager aims to make the best possible investments for the Company, by understanding the whole picture of the investments - before, during and after an investment is made. That includes understanding the environmental, social and governance risks and opportunities they present - and how these could affect longer-term performance.  Environmental, social and governance considerations underpin all investment activities. With 1,000+ investment professionals, the Manager is able to take account of ESG factors in its company research, stock selection and portfolio construction - supported by more than 50 ESG specialists around the world.

Active Engagement

Through engagement and exercising voting rights, the Manager, on behalf of the Company, actively works with companies to improve corporate standards, transparency and accountability. By making ESG central to its investment capabilities, the Manager looks to deliver improved financial performance in the longer term as well as actively contributing to a fairer, more sustainable world.

The primary goal is to generate the best long-term outcomes for the Company in order to fulfil fiduciary responsibilities to the Company. The Manager sees ESG factors as being financially material and impacting corporate performance. ESG factors put the 'long-term' in long-term investing. The Manager focuses on understanding the ESG risks and opportunities of investments alongside other financial metrics to make better investment decisions.  The Manager aims for better risk-adjusted returns by actively undertaking informed and constructive engagement and asset management to generate better performance from the investments. This helps to enhance the value of clients' assets. Comprehensive assessment of ESG factors, combined with constructive company engagement, should lead to better long term performance for clients.

Vale - Case-Study 1

Following on from the Feijao dam collapse in the city of Brumadinho in 2018, the Manager has met and engaged with various stakeholders at Vale. This has ranged from meetings with top management and an independent director to visiting the site at Brumadinho to examine the work being undertaken. Separate to the individual engagement efforts, the Manager has also been involved in the Principles for Responsible Investment ("PRI") collaborative engagement with Vale, and with the Church of England initiative, conducted with the International Council on Mining and Metals, to produce a global disclosure standard for tailings dam safety.

During the engagements, the Manager has prompted Vale to adopt more prudent margins for safety than the minimum required under Brazilian regulation. Vale's prior position was to apply Brazilian standards and it had not planned to exceed what was mandated locally. Recently, Vale is now beginning to benchmark against Australian and Canadian standards.  From a governance perspective, following the tragedy, Vale has adopted a new approach to operational risk management. The newly-created Safety & Operational Excellence office oversees the application of technical standards and should drive adherence to best practice within the company. This new area reports directly to the CEO, sits independently from operations and has the authority to halt operations.

BHP - Case Study 2

In October 2019, the Manager publicly announced, prior to the AGM of BHP, that it would be supporting a shareholder resolution asking the BHP board to suspend memberships of industry associations that they evaluated as undertaking lobbying or advocacy activities that were inconsistent with the Paris Agreement goals and therefore not aligned with BHP's own climate strategy.

Following the move to publically support a resolution, several other leading asset managers voted in favour. Despite neither of the major proxy advisors supporting this advisory resolution, it gained a significant 22.16% support from investors, with a further 7.72% abstaining, taking it close to 30% in total. Corporates and industries can be extremely effective at undermining the political will needed to address climate change. For this reason, the Manager views proper oversight of companies' lobbying activities as a significant climate issue for investors' stewardship efforts.

Promoting the Company's Success

What We Do

The Board is now required to describe to the Company's shareholders how the Directors have discharged their duties and responsibilities over the course of the financial year under section 172 (1) of the Companies Act 2006 (the "s172 Statement").  This s172 Statement, from 'What We Do' to "Long Term Investment", provides an explanation of how the Directors have promoted the success of the Company for the benefit of its members as a whole, taking into account the likely long term consequences of decisions, the need to foster relationships with all stakeholders and the impact of the Company's operations on the environment.

The purpose of the Company is to act as a vehicle to provide, over time, financial returns (both income and capital) to its shareholders. The Company's Investment Objective is disclosed on page 24 of the published Annual Report for the year ended 31 December 2019.  The activities of the Company are overseen by the Board of Directors of the Company.

The Board's philosophy is that the Company should operate in a transparent culture where all parties are provided with respect as well as the opportunity to offer practical challenge and participate in positive debate which is focused on the aim of achieving the expectations of shareholders and other stakeholders alike.  The Board reviews the culture and manner in which the Manager operates at its regular meetings and receives regular reporting and feedback from the other key service providers. 

The mechanics of how the Company operates are set out in the published Annual Report for the year ended 31 December 2019.  These mechanics, which have evolved over time, are designed to protect shareholders' interests.

Investment trusts, such as the Company, are long-term investment vehicles, with a recommended holding period of five or more years.  Typically, investment trusts are externally managed, have no employees, and are overseen by an independent non-executive board of directors.  Your Company's Board of Directors sets the investment mandate, monitors the performance of all service providers (including the Manager) and is responsible for reviewing strategy on a regular basis. All this is done with the aim of preserving and enhancing shareholder value over the longer term.

The Manager

The key service provider for the Company is the Alternative Investment Fund Manager and the performance of the Manager is reviewed in detail at each Board meeting.  The Manager's investment process is outlined on page 17 of the published Annual Report for the year ended 31 December 2019 and further information about the Manager is given on page 98 of the published Annual Report for the year ended 31 December 2019.  Shareholders are key stakeholders in the Company - they are looking to the Manager to achieve the investment objective over time and to deliver a regular growing income together with some capital growth.  The Board is available to meet at least annually with shareholders at the Annual General Meeting and this includes informal meetings with them over lunch following the formal business of the AGM.  This is seen as a very useful opportunity to understand the needs and views of the shareholders.  In between AGMs, the Directors and Manager also conduct programmes of investor meetings with larger institutional, private wealth and other shareholders to ensure that the Company is meeting their needs.  Such regular meetings may take the form of joint presentations with the Investment Manager or meetings directly with a Director where any matters of concern may be raised directly. 

Shareholder Engagement

The following table describes some of the ways we engage with our shareholders:

AGM	The AGM provides an opportunity for the Directors to engage with shareholders, answer their questions and meet them informally.  The next AGM will take place on 24 April 2020 in London. We invite all shareholders to attend and use the opportunity to ask questions. We encourage those who cannot attend to vote by proxy on all the resolutions put forward.
Annual Report	We publish a full annual report each year that contains a strategic report, governance section, financial statements and additional information.  The report is available online and in paper format.
Company Announcements	We issue announcements for all substantive news relating to the Company. You can find these announcements on the Company's website.
Results Announcements	We release a full set of financial results at the half year and full year stage. Updated net asset value figures are announced on a daily basis.
Monthly Factsheets	The Manager publishes monthly factsheets on the Company's website including commentary on portfolio and market performance.
Website	Our website contains a range of information on the Company and includes a full monthly portfolio listing of our investments.  Details of financial results, the investment process and Manager together with Company announcements and contact details can be found here: murray-intl.co.uk

Other Service Providers

The other key stakeholder group is that of the Company's third party service providers.  The Board is responsible for selecting the most appropriate outsourced service providers and monitoring the relationships with these suppliers regularly in order to ensure a constructive working relationship.  Our service providers look to the Company to provide them with a clear understanding of the Company's needs in order that those requirements can be delivered efficiently and fairly. The Board, via the Management Engagement Committee, ensures that the arrangements with service providers are reviewed at least annually in detail.  The aim is to ensure that contractual arrangements remain in line with best practice, services being offered meet the requirements and needs of the Company and performance is in line with the expectations of the Board, Manager and other relevant stakeholders.  Reviews include those of the Company's depositary and custodian, share registrar, broker and auditor.  In addition the Manager operates a 'three lines of defence' model with the business itself responsible for adhering to applicable rules and regulations; the compliance team is then responsible for checking that the rules are being followed and then internal audit is responsible for independently reviewing these arrangements.

Principal Decisions

Pursuant to the Board's aim of promoting the long term success of the Company, the following principal decisions have been taken during the year:

Portfolio

The Investment Manager's Review details the key investment decisions taken during the year and subsequently.  The Manager has continued to monitor the investment portfolio throughout the year under the supervision of the Board. A list of the key portfolio changes can be found on page 15 of the published Annual Report for the year ended 31 December 2019. 

Gearing

In May 2019 the Board agreed a new loan facility of £30m to replace a maturing £15m facility, locking in lower interest rates for a five year period.  The aim has been to enhance shareholder returns over the longer term. The Board and Manager are now actively investigating options for the replacement of the £50m facility that will be maturing in May 2020.

Share Issuance

During the year, the Board has continued to review the trading in the Company's shares and has successfully issued new shares in order to manage the level of premium at which the shares have been trading, to increase the size of the Company and improve the liquidity of the Company's shares.

ESG

As highlighted on page 18 of the published Annual Report for the year ended 31 December 2019, the Board is responsible for overseeing the work of the Manager and this is not limited solely to the investment performance of the portfolio companies.  The Board also has regard for environmental, social and governance matters (ESG) that subsist within the portfolio companies. The Board has conducted regular meetings with the Manager and is supportive of the Manager's pro-active approach to ESG engagement.  Particular attention was paid by the Board to the circumstances surrounding the Feijao dam collapse and the engagement of the Manager with Vale as outlined on page 18 of the published Annual Report for the year ended 31 December 2019.

New Investment Objective and Reference Index

As explained in the Chairman's Statement, the Board has consulted extensively with the Manager to agree a new proposed Investment Objective and to introduce a new Reference Index. The aim has been to make it easier for shareholders to understand what the Company does and simpler to compare its performance in the future.

Directorate

The Board has continued to progress its succession plans resulting in the decision to appoint Mr Simon Fraser as an independent non executive Director with effect from 1 May 2020. Further details are provided in the Chairman's Statement.  The Board believes that shareholders' interests are best served by ensuring a smooth and orderly refreshment of the Board.  This provides continuity and maintains the Board's open and collegiate style.

Audit

In accordance with best practice the Audit and Risk Committee conducted an audit tender to select a new independent auditor. Having established the needs of the Company, a number of audit firms were invited to tender.  Following a detailed review and interview process, BDO LLP has been chosen as the next independent auditor for the Company, subject to shareholder approval at the Annual General Meeting in April 2020.

Long Term Investment

The Company is in its 113^th year. It is a long term investor and the Board has in place the necessary procedures and processes to continue to promote the long term success of the Company. The Board will continue to monitor, evaluate and seek to improve these processes as the Company grows over time, to ensure that the investment proposition is delivered to shareholders and other stakeholders in line with their expectations.

Key Performance Indicators (KPIs)

The Board uses a number of financial performance measures to assess the Company's success in achieving its objective and determine the progress of the Company in pursuing its investment policy. The main KPIs (refer to glossary on page 103 of the published Annual Report for the year ended 31 December 2019 for definition) identified by the Board in relation to the Company which are considered at each Board meeting are as follows:

KPI	Description
Performance versus Benchmark/ Reference Index	Absolute Performance : The Board considers the Company's NAV total return figures to be the best indicators of performance over time and these are therefore the main indicators of performance used by the Board. Relative Performance : The Board also measures performance against the Benchmark and performance relative to investment trusts within the Company's peer group over a range of time periods, taking into consideration the differing investment policies and objectives employed by those companies. Share Price Performance : The Board also monitors the price at which the Company's shares trade relative to the Benchmark/Reference Index on a total return basis over time A graph showing absolute, relative and share price performance is shown on page 30 of the published Annual Report for the year ended 31 December 2019 .
Discount/Premium to NAV	The discount/premium relative to the NAV per share represented by the share price is closely monitored by the Board. The objective is to avoid large fluctuations in the discount/premium by the use of share buy backs and the issuance of new shares or the sale of Treasury shares, subject to market conditions.  A graph showing the share price premium/(discount) relative to the NAV is shown on page 30 of the published Annual Report for the year ended 31 December 2019 .
Dividend	The Board's aim is to seek to increase the Company's revenues over time in order to maintain an above average dividend yield. Dividends paid over the past 10 years are set out on page 29 of the published Annual Report for the year ended 31 December 2019 together with a graph showing dividend growth against CPI and RPI on page 30 of the published Annual Report for the year ended 31 December 2019 .
Gearing	The Board's aim is to ensure that gearing is kept within the Board's guidelines issued to the Manager as disclosed on page 25 of the published Annual Report for the year ended 31 December 2019 .

 

Investment Objective

The aim of the Company is to achieve a total return greater than its benchmark by investing predominantly in equities worldwide. Within this objective, the Manager will seek to increase the Company's revenues in order to maintain an above average dividend yield.

Shareholders' attention is drawn to the recommended proposals to amend the Company's Investment Objective and to introduce a new Reference Index in place of the current Benchmark, contained in the Chairman's Statement.

Investment Policy

Asset Allocation

The Company's assets are invested in a diversified portfolio of international equities and fixed income securities spread across a range of industries and economies. The Company's investment policy is flexible and it may, from time to time, hold other securities including (but not limited to) index-linked securities, convertible securities, preference shares, unlisted securities, depositary receipts and other equity-related securities. The Company may invest in derivatives for the purposes of efficient portfolio management.

The Company's investment policy does not impose any geographical, sectoral or industrial constraints upon the Manager. The Board has set guidelines which the Manager is required to work within from meeting to meeting. It is the investment policy of the Company to invest no more than 15% of its gross assets in other listed investment companies (including listed investment trusts), at the time of purchase. The Company currently does not have any investments in other investment companies.

Risk Diversification

The Manager actively monitors the Company's portfolio and attempts to mitigate risk primarily through diversification. The Company is permitted to invest up to 15% of its investments by value in any single holding (at the time of purchase) although typically individual investments do not exceed 5% of the total portfolio.

 

Gearing

The Board considers that returns to shareholders can be enhanced by the judicious use of borrowing. The Board is responsible for the level of gearing in the Company and reviews the position on a regular basis. Any borrowing, except for short-term liquidity purposes, is used for investment purposes or to fund the purchase of the Company's own shares.

Total gearing will not in normal circumstances exceed 30% of net assets with cash deposits netted against the level of borrowings. At the year end, there was net gearing of 11.3% (calculated in accordance with Association of Investment Companies guidance) and particular care is taken to ensure that any bank covenants permit maximum flexibility in investment policy.

 

Changes to Investment Policy

Any material change to the investment policy will require the approval of the shareholders by way of an ordinary resolution at a general meeting. The Company will promptly issue an announcement to inform the shareholders and the public of any change of its investment policy.

Risk Management

There are a number of risks which, if realised, could have a material adverse effect on the Company and its financial condition, performance and prospects.  A summary of the principal risks is set out below, together with a description of the mitigating actions taken by the Board.  The principal risks associated with an investment in the Company's shares are published monthly on the Company's fact sheet and can also be found in the pre-investment disclosure document ("PIDD") published by the Manager, both of which are available on the Company's website. 

With the help of a detailed risk matrix, the Board regularly undertakes a robust review of the principal risks and uncertainties facing the Company, including those that would threaten its business model, future performance, solvency or liquidity.  The Board also has a process in place to identify emerging risks.  If any of these are deemed to be significant, these risks are categorised, rated and added to the Company's risk matrix.  Although the uncertainty surrounding Brexit has now abated there may remain potential issues surrounding the certainty and/or timing of future withholding tax repayments following the expiry of transitional arrangements in 2021.

Significant matters relating to the work of the Audit and Risk Committee are discussed in the Report of the Audit and Risk Committee on page 60 of the published Annual Report for the year ended 31 December 2019 and further detail on financial risks and risk management is disclosed in note 18 to the financial statements.  In all other respects, the Company's principal risks and uncertainties have not changed materially since the date of the Annual Report and are not expected to change materially for the current financial year. 

 

Principal Risks	Mitigating Action
Investment strategy and objectives - if the Company's investment objective becomes unattractive and the Company fails to adapt to changes in investor demand, the Company may become unattractive to investors, leading to decreased demand for its shares and a widening discount.	The Board keeps the level of discount and/or premium at which the Company's shares trade as well as the investment objective and policy under review. The Board holds an annual strategy meeting where the Board reviews updates from the Manager and investor relations reports, and the Broker reports on the market. In addition, the Board is updated at each Board meeting on the make up of and any movements in the shareholder register and the Directors attend meetings with shareholders to keep abreast of investor opinion.
Investment portfolio, investment management - investing outside of the investment restrictions and guidelines set by the Board or poor stock selection could result in poor performance and inability to meet the Company's objectives.	The Board sets and monitors its investment restrictions and guidelines and receives regular Board reports which include performance reporting on the implementation of the investment policy, the investment process and application of the guidelines. The Manager attends all Board meetings. The Board also monitors the Company's share price relative to the NAV.
Financial obligations - the ability of the Company to meet its financial obligations, or increasing the level of gearing, could result in the Company becoming over-geared or unable to take advantage of potential opportunities and result in a loss of value to the Company's shares.	The Board sets a gearing limit and receives regular updates on the actual gearing levels the Company has reached from the Manager together with the assets and liabilities of the Company and reviews these at each Board meeting. In addition, ASFML, as Alternative Investment Fund Manager, in conjunction with the Board, has set an overall leverage limit of 2.0x on a commitment basis (2.5x on a gross notional basis) and provides regular updates to the Board (see page 101 of the published Annual Report for the year ended 31 December 2019 ).
Financial and Regulatory - the financial risks associated with the portfolio, including the impact of movements in foreign currency exchange rates, could result in losses to the Company. In addition, failure to comply with relevant regulation (including the Companies Act, the Corporation Taxes Act, the Alternative Investment Fund Managers Directive, Accounting Standards and the FCA's Listing Rules, Disclosure and Prospectus Rules) may have an impact on the Company.	The financial risks associated with the Company include market risk, liquidity risk and credit risk, all of which are mitigated in conjunction with the Manager. Further details of the steps taken to mitigate the financial risks associated with the portfolio are set out in note 18 to the financial statements. The Board relies upon the Standard Life Aberdeen Group to ensure the Company's compliance with applicable regulations and from time to time employs external advisers to advise on specific concerns.
Operational - the Company is dependent on third parties for the provision of all systems and services (in particular, those of the Standard Life Aberdeen Group) and any control failures and gaps in these systems and services could result in a loss or damage to the Company.	The Board receives reports from the Manager on internal controls and risk management at each Board meeting. It receives assurances from all its significant service providers including the depositary, as well as back to back assurance from the Manager at least annually. Further details of the internal controls which are in place are set out in the Directors' Report on pages 52 and 53 of the published Annual Report for the year ended 31 December 2019 .

Viability Statement

The Company does not have a fixed period strategic plan but the Board formally considers risks and strategy at least annually. The Board considers the Company, with no fixed life, to be a long term investment vehicle but, for the purposes of this viability statement, has decided that a period of five years is an appropriate period over which to report. The Board considers that this period reflects a balance between looking out over a long term horizon and the inherent uncertainties of looking out further than five years.

In assessing the viability of the Company over the review period, the Directors have focused upon the following factors:

-  The principal risks detailed in the Strategic Report on pages 25 and 26 of the published Annual Report for the year ended 31 December 2019;

-  The ongoing relevance of the Company's investment objective in the current environment;

-  The demand for the Company's shares evidenced by the historical level of premium and/or discount;

-  The level of income generated by the Company;

-  The liquidity of the Company's portfolio; and

-  The profile of the Company's £200 million loan facilities which mature between May 2020 and May 2024 and the ability of the Company to refinance or repay the £50m facility that matures in May 2020.

As an investment trust, investing in a global equity portfolio, the Company's portfolio has not been adversely impacted as a direct result of the UK's withdrawal from the EU on 31 January 2020 although there may be potential issues surrounding the certainty and/or timing of future withholding tax repayments following the expiry of transitional arrangements.

Accordingly, taking into account the Company's current position, the fact that the Company's investments are mostly liquid and the potential impact of its principal risks and uncertainties, the Directors have a reasonable expectation that the Company will be able to continue in operation and to meet its liabilities as they fall due for a period of five years from the date of this Report. In making this assessment, the Board has considered that matters such as significant economic or stock market volatility, a substantial reduction in the liquidity of the portfolio or changes in investor sentiment could have an impact on its assessment of the Company's prospects and viability in the future.

Promoting the Company

The Board recognises the importance of communicating the long-term attractions of your Company to prospective investors both for improving liquidity and for enhancing the value and rating of the Company's shares.  The Board believes an effective way to achieve this is through subscription to and participation in the promotional programme run by the Manager on behalf of a number of investment companies under its management. The Company also supports the Manager's investor relations programme which involves regional roadshows, promotional and public relations campaigns. The purpose of these initiatives is both to communicate effectively with existing shareholders and to gain new shareholders with the aim of improving liquidity and enhancing the value and rating of the Company's shares. The Company's financial contribution to the programmes is matched by the Manager.  The Manager reports quarterly to the Board providing an analysis of the promotional activities as well as updates on the shareholder register and any changes in the make up of that register.

Board Diversity Policy

The Board recognises the importance of having a range of skilled, experienced individuals with the right knowledge represented on the Board in order to allow the Board to fulfil its obligations. The Board also recognises the benefits and is supportive of the principle of diversity in its recruitment of new Board members.  The Board will not display any bias for age, gender, race, sexual orientation, religion, ethnic or national origins, or disability in considering the appointment of its Directors.  However, the Board will continue to ensure that all appointments are made on the basis of merit against the specification prepared for each appointment and, therefore, the Company does not consider it appropriate to set diversity targets.  At 31 December 2019, there were three male Directors and three female Directors on the Board.

Environmental, Social and Human Rights Issues

The Company has no employees as the Board has delegated day to day management and administrative functions to Aberdeen Standard Fund Managers Limited. There are, therefore, no disclosures to be made in respect of employees. The Company's socially responsible investment policy is outlined below and on page 17 of the published Annual Report for the year ended 31 December 2019.

Due to the nature of the Company's business, being a Company that does not offer goods and services to customers, the Board considers that it is not within the scope of the Modern Slavery Act 2015 because it has no turnover.  The Company, therefore, is not required to make a slavery and human trafficking statement.

Socially Responsible Investment Policy

The Company supports the UK's Stewardship Code, and seeks to play its role in supporting good stewardship of the companies in which it invests. While the delivery of stewardship activities has been delegated to the Manager, the Board acknowledges its role in setting the tone for the effective delivery of stewardship on the Company's behalf.

Further details on stewardship may be found on page 55 of the published Annual Report for the year ended 31 December 2019.

 

Global Greenhouse Gas Emissions

The Company has no greenhouse gas emissions to report from the operations of its business, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013.

 

Website

murray-intl.co.uk

Kevin Carter

Chairman

5 March 2020

5.  EXTRACTS FROM THE DIRECTORS' REPORT

The Directors present their report and the audited financial statements for the year ended 31 December 2019.

 

Results and Dividends

Details of the Company's results and proposed dividends are shown on pages 2 and 29 of the published Annual Report for the year ended 31 December 2019.

 

Investment Trust Status

The Company is registered as a public limited company (registered in Scotland No. SC006705) and has been accepted by HM Revenue & Customs as an investment trust subject to the Company continuing to meet the relevant eligibility conditions of Section 1158 of the Corporation Tax Act 2010 and the ongoing requirements of Part 2 Chapter 3 Statutory Instrument 2011/2999 for all financial years commencing on or after 1 January 2012.  The Directors are of the opinion that the Company has conducted its affairs for the year ended 31 December 2019 so as to enable it to comply with the ongoing requirements for investment trust status.

 

Individual Savings Accounts

The Company has conducted its affairs so as to satisfy the requirements as a qualifying security for Individual Savings Accounts. The Directors intend that the Company will continue to conduct its affairs in this manner.

Capital Structure

The Company's capital structure is summarised in note 14 to the financial statements.  At 31 December 2019, there were 129,332,003 fully paid Ordinary shares of 25p each (2018 -128,143,545 Ordinary shares) in issue.  At the year end there were no Ordinary shares held in Treasury (2018 - 406,531).

 

Share Issuance and Buybacks

During the year 406,531 Ordinary shares were sold from Treasury all at a premium to the prevailing NAV per share (2018 - 357,665), 781,927 new Ordinary shares were issued at a premium under the Company's blocklisting authority and no Ordinary shares were purchased in the market for Treasury or cancellation (2018 - nil).  Subsequent to the year end, a further 80,000 new Ordinary shares have been allotted under the Company's blocklisting, all at a premium to the prevailing NAV per share.

 

Share Rights

Ordinary shareholders are entitled to vote on all resolutions which are proposed at general meetings of the Company. The Ordinary shares carry a right to receive dividends and on a winding up, after meeting the liabilities of the Company, the surplus assets will be paid to Ordinary shareholders in proportion to their shareholdings.

 

Borrowings

On 16 May 2019, the Company agreed a new £30 million loan facility with RBSI which was drawn in full and fixed for five years at an all-in rate of 2.25%. The new facility was, in part, used to repay a maturing £15 million loan (also with the Royal Bank of Scotland International Limited), with the remainder used for investment purposes. In May 2020 a further £50 million loan with RBSI is due to mature and the Directors are in the process of reviewing options to replace that facility.

 

Management and Secretarial Arrangements

The Company has appointed Aberdeen Standard Fund Managers Limited ("ASFML"), a wholly owned subsidiary of Standard Life Aberdeen plc, as its alternative investment fund manager under the terms of an investment management agreement dated 14 July 2014 (as amended). Under the terms of the agreement, the Company's portfolio is managed by Aberdeen Asset Managers ("AAM") by way of a group delegation agreement in place between ASFML and AAM. Investment management services are provided to the Company by ASFML. Company secretarial, accounting and administrative services have been delegated by ASFML to Aberdeen Asset Management PLC.

With effect from 1 January 2019, the Board and the Manager agreed a new fee level for calculating the Company's management fees payable to ASFML.  The annual management is charged on net assets (ie excluding borrowings for investment purposes), averaged over the six previous quarters ("Net Assets"), on a tiered basis. The annual management fee from 1 January 2019 is now charged at 0.5% of Net Assets up to £1,200m and 0.425% of Net Assets above £1,200m.  For the year ended 31 December 2018, the annual management fee was charged at 0.575% of Net Assets up to £1,200 million, 0.5% of Net Assets between £1,200 million and £1,400 million, and 0.425% of Net Assets above £1,400 million.

The secretarial fee of £100,000 per annum is included within the first tier of the annual management fee and is chargeable 100% to revenue.  A fee of 1.5% per annum remains chargeable on the value of any unlisted investments. The investment management fee is chargeable 30% against revenue and 70% against realised capital reserves. No fees are charged in the case of investments managed or advised by the Standard Life Aberdeen Group. The management agreement may be terminated by either party on the expiry of six months' written notice. On termination, the Manager would be entitled to receive fees which would otherwise have been due up to that date.

The Board considers the continued appointment of the Manager on the terms agreed to be in the interests of the shareholders as a whole because the Standard Life Aberdeen Group has the investment management, secretarial, promotional and administrative skills and expertise required for the effective operation of the Company.

The Board

The Board currently consists of six non-executive Directors.  The names and biographies of the current Directors are disclosed on pages 45 to 47 of the published Annual Report for the year ended 31 December 2019 indicating their range of experience as well as length of service.

The Directors will retire at the AGM in April 2020 and, with the exception of Mr Dunscombe, each Director will stand for re-election. Mr Dunscombe has advised that, as part of the on-going Board succession planning, and having completed nine years on the Board, he will be retiring at the conclusion of the AGM in April 2020.  Following Mr Dunscombe's retirement, Mr Hardie will become Senior Independent Director.  Mr Simon Fraser has accepted an invitation to join the Board as an independent non executive Director with effect from 1 May 2020 and will submit himself for election to the Board at the AGM to be held in 2021.

The Board considers that there is a balance of skills and experience within the Board relevant to the leadership and direction of the Company and that all the Directors contribute effectively.  The reasons for the re-election, where relevant, of the individual Directors are set out on pages 45 to 47 of the published Annual Report for the year ended 31 December 2019 .

In common with most investment trusts, the Company has no employees. Directors' & Officers' liability insurance cover has been maintained throughout the year at the expense of the Company. The Company's Articles of Association provide an indemnity to the Directors out of the assets of the Company against any liability incurred in defending proceedings or in connection with any application to the Court in which relief is granted.

The Role of the Chairman and Senior Independent Director

The Chairman is responsible for providing effective leadership to the Board, by setting the tone of the Company, demonstrating objective judgement and promoting a culture of openness and debate. The Chairman facilitates the effective contribution, and encourages active engagement, by each Director. In conjunction with the Company Secretary, the Chairman ensures that Directors receive accurate, timely and clear information to assist them with effective decision-making. The Chairman leads the evaluation of the Board and individual Directors, and acts upon the results of the evaluation process by recognising strengths and addressing any weaknesses. The Chairman also engages with major shareholders and ensures that all Directors understand shareholder views.

The Senior Independent Director acts as a sounding board for the Chairman and acts as an intermediary for other directors, when necessary. Working closely with the Nomination Committee, the Senior Independent Director takes responsibility for an orderly succession process for the Chairman, and leads the annual appraisal of the Chairman's performance. The Senior Independent Director is also available to shareholders to discuss any concerns they may have.

Management of Conflicts of Interest

No Director has a service contract with the Company although Directors are issued with letters of appointment upon appointment. The Directors' interests in contractual arrangements with the Company are as shown in note 21 to the financial statements and the Directors' Remuneration Report. No Directors had any other interest in contracts with the Company during the period or subsequently. 

The Board has a procedure in place to deal with a situation where a Director has a conflict of interest, as required by the Companies Act 2006. As part of this process, the Directors are required to disclose other positions held and all other conflict situations that may need to be authorised either in relation to the Director concerned or his or her connected persons. The Board considers each Director's situation and decides whether to approve any conflict, taking into consideration what is in the best interests of the Company and whether the Director's ability to act in accordance with their wider duties is affected. Each Director is required to notify the Company Secretary of any potential or actual conflict situations that will need authorising by the Board. Authorisations given by the Board are reviewed at each Board meeting. All proposed significant external appointments are also required to be approved, in advance, by the Chairman and then communicated to other Directors for information.

The Company has a policy of conducting its business in an honest and ethical manner. The Company takes a zero tolerance approach to bribery and corruption and has procedures in place that are proportionate to the Company's circumstances to prevent them. The Manager also adopts a group-wide zero tolerance approach and has its own detailed policy and procedures in place to prevent bribery and corruption. Copies of the Manager's anti-bribery and corruption policies are available on its website.

In relation to the corporate offence of failing to prevent tax evasion, it is the Company's policy to conduct all business in an honest and ethical manner. The Company takes a zero-tolerance approach to facilitation of tax evasion whether under UK law or under the law of any foreign country and is committed to acting professionally, fairly and with integrity in all its business dealings and relationships. 

Substantial Interests

The Board has been advised that the following shareholders owned 3% or more of the issued Ordinary share capital of the Company at 31 December 2019:

Shareholder	No. of Ordinary shares held	% held
Rathbones	14,871,734	11.5
Aberdeen Standard Retail Plans A	9,982,352	7.7
Hargreaves Lansdown A	9,368,396	7.2
Interactive Investor A	8,617,351	6.7
Charles Stanley	6,889,060	5.3
Investec Wealth & Management	6,367,342	4.9
Smith & Williamson Wealth Management	4,943,980	3.8

^A   Non-beneficial interests

There have been no significant changes notified in respect of the above holdings between 31 December 2019 and 5 March 2020.

Corporate Governance

The Company is committed to high standards of corporate governance. The Board is accountable to the Company's shareholders for good governance and this statement describes how the Company has applied the principles identified in the UK Corporate Governance Code as published in July 2018 (the "UK Code"), which is available on the Financial Reporting Council's (the "FRC") website: frc.org.uk.

The Board has also considered the principles and provisions of the AIC Code of Corporate Governance as published in February 2019 (the "AIC Code").  The AIC Code addresses the principles and provisions set out in the UK Code, as well as setting out additional provisions on issues that are of specific relevance to the Company. The AIC Code is available on the AIC's website: theaic.co.uk.

The Board considers that reporting against the principles and provisions of the AIC Code, which has been endorsed by the FRC provides more relevant information to shareholders.

The Board confirms that, during the year, the Company complied with the principles and provisions of the AIC Code and the relevant provisions of the UK Code, except as set out below.

The UK Code includes provisions relating to:

-  interaction with the workforce (provisions 2, 5 and 6);

-  the role and responsibility of the chief executive (provisions 9 and 14);

-  previous experience of the chairman of a remuneration committee (provision 32); and

-  executive directors' remuneration (provisions 33 and 36 to 40).

The Board considers that these provisions are not relevant to the position of the Company, being an externally managed investment company. In particular, all of the Company's day-to-day management and administrative functions are outsourced to third parties. As a result, the Company has no executive directors, employees or internal operations. The Company has therefore not reported further in respect of these provisions. 

The full text of the Company's Corporate Governance Statement can be found on the Company's website, murray-intl.co.uk. 

Directors have attended Board and Committee meetings during the year ended 31 December 2019 as follows (with their eligibility to attend the relevant meeting in brackets):

	Board	Other Board	Nom Com	Audit Com	MEC/ Rem
K J Carter A	6 (6)	1 (2)	3 (3)	n/a	1 (1)
C. Binyon	6 (6)	2 (2)	3 (3)	3 (3)	2 (2)
M Campbell	5 (6)	2 (2)	3 (3)	3 (3)	2 (2)
P W Dunscombe	6 (6)	2 (2)	3 (3)	3 (3)	2 (2)
D Hardie	6 (6)	2 (2)	3 (3)	3 (3)	2 (2)
A Mackesy	6 (6)	2 (2)	3 (3)	3 (3)	2 (2)

^A Dr Carter is not a member of either the Audit and Risk Committee or the Remuneration Committee but attended all Committee meetings by invitation

Board Committees

 

Terms of Reference

The terms of reference of all the Board Committees may be found on the Company's website murray-intl.co.uk and copies are available from the Company Secretary upon request. The terms of reference are reviewed and re-assessed by the Board for their adequacy on an annual basis.

Audit and Risk Committee

The Report of the Audit and Risk Committee is on pages 59 to 61 of the published Annual Report for the year ended 31 December 2019.

Management Engagement Committee ("MEC")

The MEC comprises all of the Directors. Dr Carter is the Chairman. The Committee reviews the performance of the Manager and its compliance with the terms of the management and secretarial agreement. The terms and conditions of the Manager's appointment, including an evaluation of fees, are reviewed by the Committee on an annual basis. The Committee believes that the continuing appointment of the Manager on the terms that have been agreed is in the interests of shareholders as a whole.

Nomination Committee

All appointments to the Board of Directors are considered by the Nomination Committee which comprises the entire Board and is chaired by Dr Carter. The Board's overriding priority in appointing new Directors to the Board is to identify the candidate with the best range of skills and experience to complement existing Directors. The Board also recognises the benefits of diversity and its policy on diversity is referred to in the Strategic Report on page 27 of the published Annual Report for the year ended 31 December 2019.  When Board positions become available as a result of retirement or resignation, the Company ensures that a diverse group of candidates is considered.

The Board's policy on tenure is that continuity and experience are considered to add significantly to the strength of the Board. The Board also takes the view that independence is not necessarily compromised by length of tenure on the Board.  However, in compliance with the provisions of the AIC Code, it is expected that Directors will serve in accordance with the time limits laid down by the AIC Code.  It is the policy of the Board that the Chairman of the Company should retire once he or she has served as a director for nine years in line with current best practice of the Financial Reporting Council. However there could be circumstances where it might be appropriate to ask a chair to stay on for a limited period and the reasons for the extension will be fully explained to shareholders and a timetable for the departure of the Chair clearly set out. Dr Carter was appointed to the Board in 2009, became Chairman in 2011 and has now served more than nine years as a Director.  The Directors have carefully reviewed the position of Dr Carter and are satisfied that he continues to remain fully independent of the Manager.  Furthermore, the Directors are pleased that Dr Carter has agreed to remain as Chairman in order to ensure continuity ahead of his retirement and they are satisfied that there is a clear timetable for Dr Carter's retirement which will be at the conclusion of the AGM in 2021. Therefore the Directors fully support Dr Carter's proposed re-election at the forthcoming AGM and urge the shareholders to do the same.

Mr Dunscombe will retire from the Board with effect from the conclusion of the business at the AGM to be held in April 2020.  Accordingly, the Company has conducted a search for a new independent non executive Director using the services of Korn Ferry, an independent external recruitment agent that has no other connections with the Company.  A key requirement of the recruitment process was to ensure the continuity of the Board's open and inclusive culture, policies and practices which are judged to be essential to the future success of the Company. Having reviewed a long list of potential candidates and interviewed a short list, the search process culminated in the decision to appoint Mr Simon Fraser to the Board with effect from 1 May 2020.

The Committee has put in place the necessary procedures to conduct, on an annual basis, an appraisal of the Chairman of the Board, Directors' individual self evaluation and a performance evaluation of the Board as a whole. An external evaluation was undertaken in 2018 by Stephenson & Co. an independent external board evaluation service provider that does not have any other connections with the Company.  In 2019 questionnaires covering the Board, individual Directors, the Chairman and the Audit and Risk Committee Chairman were completed.  The Chairman then met each Director individually to review their responses.  This evaluation highlighted certain areas of further focus such as continuing professional development which will be addressed with input where necessary from the Company's advisors. Overall, the Committee has concluded that the Board has a relevant balance of experience and knowledge of investment markets, legal regulation and financial accounting and continues to work in a collegiate and effective manner. 

In accordance with Principle 23 of the AIC's Code of Corporate Governance which recommends that all directors of investment companies should be subject to annual re-election by shareholders, all the members of the Board, with the exception of Mr Dunscombe, will retire at the forthcoming Annual General Meeting and will offer themselves for re-election.  In conjunction with the evaluation feedback, the Committee has reviewed each of the proposed reappointments and concluded that each of the Directors has the requisite high level and range of business and financial experience and recommends their re-election at the forthcoming AGM.  Details of the contributions provided by each Director during the year are disclosed on pages 45 to 47 of the published Annual Report for the year ended 31 December 2019 .

Remuneration Committee

The level of fees payable to Directors is considered by the Remuneration Committee which comprises the entire Board excluding Dr Carter and which is chaired by Mr Hardie.

The Company's remuneration policy is to set remuneration at a level to attract individuals of a calibre appropriate to the Company's future development. Further information on remuneration is disclosed in the Directors' Remuneration Report on pages 56 to 58 of the published Annual Report for the year ended 31 December 2019.

Going Concern

The Directors have undertaken a robust review of the Company's viability (refer to statement on page 27 of the published Annual Report for the year ended 31 December 2019) and ability to continue as a going concern. The Company's assets consist of a diverse portfolio of listed equity shares and bonds. The equities and a majority of the bond portfolio are, in most circumstances, realisable within a very short timescale.

The Company has a £50 million loan facility with RBSI which is due to mature in May 2020.  The Directors are currently reviewing options to replace the facility. However, at this stage it is too early to confirm that the facility will be renewed. If acceptable terms are available, the Company expects to continue to access a similarly sized level of gearing. However, should the Board decide not to replace the facility any maturing debt would be repaid through the proceeds of equity and/or bond sales.

The Directors are mindful of the principal risks and uncertainties disclosed on pages 25 and 26 of the published Annual Report for the year ended 31 December 2019 and have reviewed forecasts detailing revenue and liabilities.  The Directors believe that the Company has adequate financial resources to continue its operational existence for the foreseeable future and at least 12 months from the date of this Annual Report. Accordingly, the Directors continue to adopt the going concern basis in preparing these financial statements.

Accountability and Audit

Each Director confirms that, so far as he or she is aware, there is no relevant audit information of which the Company's auditor is unaware, and he or she has taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Independent Auditor

Ernst & Young LLP and its associated audit firms ("EY") has been auditor to the Company since its launch in 1907 and will not be able to audit the Company from 2021.  Therefore, in accordance with regulatory requirements the Board conducted a tender for audit services during the year, which culminated in a decision to recommend to shareholders the appointment of BDO LLP as independent auditor to the Company with effect from the AGM on 24 April 2020. BDO LLP has expressed its willingness to become the Company's auditor and a Resolution to appoint BDO LLP as the Company's auditor will be put to the forthcoming Annual General Meeting, along with a separate Resolution to authorise the Directors to fix the auditor's remuneration.

Internal Controls and Risk Management

Details of the financial risk management policies and objectives relative to the use of financial instruments by the Company are set out in note 18 to the financial statements. The Board of Directors is ultimately responsible for the Company's system of internal control and for reviewing its effectiveness. Following the Financial Reporting Council's publication of "Guidance on Risk Management, Internal Controls and Related Financial and Business Reporting" (the "FRC Guidance"), the Directors confirm that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the Company. This process has been in place for the full year under review and up to the date of approval of the financial statements, and this process is regularly reviewed by the Board and accords with the relevant sections of the FRC Guidance.

The design, implementation and maintenance of controls and procedures to safeguard the assets of the Company and to manage its affairs properly extends to operational and compliance controls and risk management. The Board has prepared its own risk register which identifies potential risks relating to strategy, investment management, shareholders, marketing, gearing, regulatory and financial obligations, third party service providers and the Board.  The Board considers the potential cause and possible impact of these risks as well as reviewing the controls in place to mitigate these potential risks. A risk is rated by having a likelihood and an impact rating and the residual risk is plotted on a "heat map" and is reviewed at least twice a year.

The Board has reviewed the effectiveness of the system of internal control and, in particular, it has reviewed the process for identifying and evaluating the significant risks faced by the Company and the policies and procedures by which these risks are managed.

The Directors have delegated the investment management of the Company's assets to ASFML within overall guidelines and this embraces implementation of the system of internal control, including financial, operational and compliance controls and risk management. Internal control systems are monitored and supported by ASFML's internal audit function which undertakes periodic examination of business processes, including compliance with the terms of the management agreement, and ensures that recommendations to improve controls are implemented.

Risks are identified and documented through a risk management framework by each function within the Manager's activities. Risk is considered in the context of the FRC Guidance and includes financial, regulatory, market, operational and reputational risk. This helps the Manager's internal audit risk assessment model to identify those functions for review. Any relevant weaknesses identified through internal audit's review are reported to the Board and timetables are agreed for implementing improvements to systems, processes and controls. The implementation of any remedial action required is monitored and feedback provided to the Board.

The key components designed to provide effective internal control for the year under review and up to the date of this Report are outlined below:

-  the Manager prepares forecasts and management accounts which allow the Board to assess the Company's activities and review its investment performance;

-  the Board and Manager have agreed clearly defined investment criteria;

-  there are specified levels of authority and exposure limits. Reports on these issues, including performance statistics and investment valuations, are regularly submitted to the Board. The Manager's investment process and financial analysis of the companies concerned include detailed appraisal and due diligence;

-  as a matter of course the internal audit and compliance departments of ASFML continually review the Manager's operations;

-  written agreements are in place which specifically define the roles and responsibilities of the Manager and other third party service providers and monitoring reports are received from these providers when required;

-  the Board has considered the need for an internal audit function but, because of the compliance and internal control systems in place at the Manager, has decided to place reliance on the Manager's systems and internal audit procedures; and

-  twice a year, at its Board meetings, the Board carries out an assessment of internal controls by considering documentation from the Manager, including its internal audit and compliance functions and taking account of events since the relevant period end.

In addition, the Manager ensures that clearly documented contractual arrangements exist in respect of any activities that have been delegated to external professional organisations.  The Board meets annually with representatives from BNY Mellon and reviews a control report covering the activities of the depositary and custodian. 

Representatives from the Internal Audit Department of the Manager report six monthly to the Audit and Risk Committee of the Company and have direct access to the Directors at any time.

The Board has reviewed the effectiveness of the Manager's system of internal control including its annual internal controls report prepared in accordance with the International Auditing and Assurance Standards Board's International Standard on Assurances Engagements ("ISAE") 3402, "Assurance Reports on Controls at a Service Organisation". The Board has also reviewed the Manager's process for identifying and evaluating the significant risks faced by the Company and the policies and procedures by which these risks are managed.  The internal control systems are designed to meet the Company's particular needs and the risks to which it is exposed. Accordingly, the internal control systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and, by their nature, can provide reasonable but not absolute assurance against material misstatement or loss.

Discount Management Policy and Special Business at Annual General Meeting

 

Issue of Shares

In terms of the Companies Act 2006 (the "Act"), the Directors may not allot shares unless so authorised by the shareholders. Resolution 12 in the Notice of Annual General Meeting which will be proposed as an Ordinary Resolution will, if passed, give the Directors the necessary authority to allot shares up to an aggregate nominal amount of £3,235,300 (equivalent to 12,941,200 Ordinary shares or 10% of the Company's existing issued share capital at 5 March 2020, the latest practicable date prior to the publication of this Annual Report). Such authority will expire on the date of the 2021 Annual General Meeting or on 30 June 2021, whichever is earlier. This means that the authority will have to be renewed at the next Annual General Meeting.

When shares are to be allotted for cash, Section 561 of the Act provides that existing shareholders have pre-emption rights and that the new shares must be offered first to such shareholders in proportion to their existing holding of shares. However, shareholders can, by special resolution, authorise the Directors to allot shares otherwise than by a pro rata issue to existing shareholders. Special Resolution 13 will, if passed, also give the Directors power to allot for cash equity securities up to an aggregate nominal amount of £3,235,300 (equivalent to 12,941,200 Ordinary shares or 10% of the Company's existing issued share capital at 5 March 2020, the latest practicable date prior to the publication of this Annual Report), as if Section 561 of the Act does not apply. This is the same nominal amount of share capital which the Directors are seeking the authority to allot pursuant to Resolution 12. This authority will also expire on the date of the 2021 Annual General Meeting or on 30 June 2021, whichever is earlier. This authority will not be used in connection with a rights issue by the Company.

The Directors intend to use the authority given by Resolutions 12 and 13 to allot shares and disapply pre-emption rights only in circumstances where this will be clearly beneficial to shareholders as a whole. Accordingly, issues will only be made where shares can be issued at a premium of 0.5% or more to NAV and there will never be any dilution for existing shareholders.  The issue proceeds will be available for investment in line with the Company's investment policy. No issue of shares will be made which would effectively alter the control of the Company without the prior approval of shareholders in general meeting. Resolution 13 will also disapply pre-emption rights on the sale of Treasury shares as envisaged above. Once again, the pre-emption rights would only be disapplied where the Treasury shares are sold at a premium to NAV of not less than 0.5%.

Share Buybacks

At the Annual General Meeting held on 25 April 2019, shareholders approved the renewal of the authority permitting the Company to repurchase its Ordinary shares.

The Directors wish to renew the authority given by shareholders at the last Annual General Meeting. The principal aim of a share buyback facility is to enhance shareholder value by acquiring shares at a discount to NAV, as and when the Directors consider this to be appropriate. The purchase of shares, when they are trading at a discount to NAV per share, should result in an increase in the NAV per share for the remaining shareholders. This authority, if conferred, will only be exercised if to do so would result in an increase in the NAV per share for the remaining shareholders and if it is in the best interests of shareholders generally. Any purchase of shares will be made within guidelines established from time to time by the Board. It is proposed to seek shareholder authority to renew this facility for another year at the Annual General Meeting.

Under the Listing Rules, the maximum price that may be paid on the exercise of this authority must not be more than the higher of (i) an amount equal to 105% of the average of the middle market quotations for a share taken from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which the share is purchased; and (ii) the higher of the last independent trade and the current highest independent bid on the trading venue where the purchase is carried out. The minimum price which may be paid is 25p per share.

It is currently proposed that any purchase of shares by the Company will be made from the capital reserve of the Company. The purchase price will normally be paid out of the cash balances held by the Company from time to time.

Special Resolution 14 will permit the Company to buy back shares and any shares bought back by the Company may be cancelled or held as Treasury shares. The benefit of the ability to hold Treasury shares is that such shares may be resold. This should give the Company greater flexibility in managing its share capital and improve liquidity in its shares. The Company would only sell on Treasury shares at a premium to NAV. When shares are held in Treasury, all voting rights are suspended and no distribution (either by way of dividend or by way of a winding up) is permitted in respect of Treasury shares. If the Directors believe that there is no likelihood of re-selling shares bought back, such shares would be cancelled.

Special Resolution 14 in the Notice of Annual General Meeting will renew the authority to purchase in the market a maximum of 14.99% of shares in issue at the date of the Annual General Meeting (amounting to 19,398,859 Ordinary shares as at 5 March 2020). Such authority will expire on the date of the 2021 Annual General Meeting or on 30 June 2021, whichever is earlier. This means in effect that the authority will have to be renewed at the next Annual General Meeting or earlier if the authority has been exhausted.

Investment Objective/Benchmark

As explained in detail in the Chairman's Statement on page 8 of the published Annual Report for the year ended 31 December 2019, the Directors are proposing Ordinary Resolution 15, to adopt a new performance reference index and amend the Investment Objective. It is now proposed to change the Investment Objective to read "The aim of the Company is to achieve an above average dividend yield, with long term growth in dividends and capital ahead of inflation, by investing principally in global equities" .  The proposed new reference index is the FTSE All World TR Index (the "Reference Index") and whilst it is accepted that the constituents of the Reference Index do not closely match those of the Company's portfolio and so performance comparisons will continue to diverge, this index should resemble the portfolio more closely than the present Benchmark and is more widely recognised.

Recommendation

The Directors consider that the authorities granted above are in the best interests of the shareholders taken as a whole and recommend that all shareholders vote in favour of the resolutions, as the Directors intend to in respect of their own beneficial holdings of Ordinary shares amounting in aggregate to 86,312 shares, representing approximately 0.1% of the Company's issued share capital as at 5 March 2020.

The UK Stewardship Code and Proxy Voting

Responsibility for actively monitoring the activities of portfolio companies has been delegated by the Board to the AIFM which has sub-delegated that authority to the Manager.

The Manager is a tier 1 signatory of the UK Stewardship Code which aims to enhance the quality of engagement by investors with investee companies in order to improve their socially responsible performance and the long term investment return to shareholders.

Relations with Shareholders

The Directors place a great deal of importance on communication with shareholders. The Annual Report is widely distributed to other parties who have an interest in the Company's performance. Shareholders and investors may obtain up to date information on the Company through the Manager's freephone information service and the Company's website (murray-intl.co.uk). The Company responds to letters from shareholders on a wide range of issues.

The Board's policy is to communicate directly with shareholders and their representative bodies without the involvement of the Standard Life Aberdeen Group (either the Company Secretary or the Manager) in situations where direct communication is required and usually a representative from the Board meets with major shareholders on an annual basis in order to gauge their views.

In addition to the formal annual general meeting, the Board seeks regular engagement with the Company's major shareholders through roadshow meetings undertaken in conjunction with the Manager and Broker as well as private meetings, in order to understand their views on governance and performance against the company's investment objective and investment policy.  The results of these meetings are formally reported back to the Board at the regular quarterly Board meetings and discussed.

By order of the Board of Murray International Trust PLC

Aberdeen Asset Management PLC

Secretary

1 George Street,

Edinburgh EH2 2LL

5 March 2020

6.  FINANCIAL HIGHLIGHTS

	31 December 2019	31 December 2018	% change
Total assets less current liabilities (before deducting prior charges)	£1,738.8m	£1,604.3m	+8.4
Equity shareholders' funds (Net Assets)	£1,539.1m	£1,419.6m	+8.4
Market capitalisation	£1,629.6m	£1,450.6m	+12.3
Net Asset Value per Ordinary share	1,190.0p	1,107.8p	+7.4
Share price - Ordinary share (mid market)	1,260.0p	1,132.0p	+11.3
Premium to Net Asset Value per Ordinary share{A}	5.9%	2.2%
Gearing (ratio of borrowings less cash to shareholders' funds)
Net gearing{A}	11.3%	12.5%
Dividends and earnings per Ordinary share
Revenue return per share	54.1p	49.6p	+9.1
Dividends per share{B}	53.5p	51.5p	+3.9
Dividend cover (including proposed final dividend){A}	1.01	0.96
Revenue reserves{C}	£75.7m	£73.6m
Operating costs
Ongoing charges ratio{A}	0.61%	0.69%
{A}   Considered to be an Alternative Performance Measure as defined on pages 95 and 96 of the published Annual Report for the year ended 31 December 2019 .
{B}   The figure for dividends per share reflects the years to which their declaration relates (see note 8 on page 81 of the published Annual Report for the year ended 31 December 2019) and assuming approval of the final dividend of 17.5p (2018 - 17.0p).
{C}   The revenue reserve figure does not take account of the third interim and final dividends amounting to £15,520,000 and £22,647,000 respectively (2018 - £14,736,000 and £21,904,000).

Performance (total return)

	1 year	3 year	5 year	10 year
	% return	% return	% return	% return
Share price{AB}	+16.5	+20.5	+53.8	+149.7
Net asset value per Ordinary share{A}	+12.4	+19.2	+54.2	+135.9
Reference Index{C}	+22.3	+34.4	+81.2	+198.2
Benchmark{D}	+21.1	+29.5	+67.0	+165.8
{A} Considered to be an Alternative Performance Measure (see page 95 of the published Annual Report for the year ended 31 December 2019 for more details).
{B} Mid to mid.
{C} FTSE All World Index.
{D} 40% FTSE World UK Index and 60% FTSE World ex UK Index.
Source: Aberdeen Standard Investments, Morningstar & Lipper

7.  STATEMENT OF DIRECTORS' RESPONSIBILITIES

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 elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to:

-  select suitable accounting policies and then apply them consistently;

-  make judgments and accounting estimates that are reasonable and prudent; and,

-  state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements.

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 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.

Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and Statement of Corporate Governance that comply with that law and those regulations.

The financial statements are published on murray-intl.co.uk which is a website maintained by the Company's Manager. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the Directors confirms that to the best of his or her knowledge:

-  the financial statements, prepared in accordance with the applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Company;

-  the Strategic Report and Directors' Report include a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that the Company faces; and

-  that in the opinion of the Board, the Annual Report and Financial Statements taken as a whole, is fair, balanced and understandable and it provides the information necessary to assess the Company's performance, business model and strategy.

For Murray International Trust PLC

Kevin Carter,

Chairman

5 March 2020

8.  STATEMENT OF COMPREHENSIVE INCOME

		Year ended 31 December 2019			Year ended 31 December 2018
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Gains/(losses) on investments	10	-	109,664	109,664	-	(175,349)	(175,349)
Income	3	82,417	-	82,417	77,105	-	77,105
Investment management fees	4	(2,139)	(4,991)	(7,130)	(2,495)	(5,820)	(8,315)
Currency (losses)/gains		-	(147)	(147)	-	284	284
Other expenses	5	(2,109)	-	(2,109)	(1,963)	(18)	(1,981)
		_______	_______	_______	_______	_______	_______
Net return before finance costs and taxation		78,169	104,526	182,695	72,647	(180,903)	(108,256)
Finance costs	6	(1,283)	(2,994)	(4,277)	(1,210)	(2,822)	(4,032)
		_______	_______	_______	_______	_______	_______
Return before taxation		76,886	101,532	178,418	71,437	(183,725)	(112,288)
Taxation	7	(7,138)	1,517	(5,621)	(7,868)	1,619	(6,249)
		_______	_______	_______	_______	_______	_______
Return attributable to equity shareholders		69,748	103,049	172,797	63,569	(182,106)	(118,537)
		_______	_______	_______	_______	_______	_______
Return per Ordinary share (pence)	9	54.1	80.0	134.1	49.6	(142.2)	(92.6)
		_______	_______	_______	_______	_______	_______
The "Total" column of this statement represents the profit and loss account of the Company. There is no other comprehensive income and therefore the return after taxation is also the total comprehensive income for the year. The 'Revenue' and 'Capital' columns represent supplementary information prepared under guidance issued by the Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing operations.
The accompanying notes are an integral part of these financial statements.

9.  STATEMENT OF FINANCIAL POSITION

		As at	As at
		31 December 2019	31 December 2018
	Notes	£'000	£'000
Non-current assets
Investments at fair value through profit or loss	10	1,701,573	1,585,166
Current assets
Debtors	11	14,780	14,519
Cash and short term deposits		30,040	7,627
		_______	_______
		44,820	22,146
		_______	_______
Creditors: amounts falling due within one year
Bank loans	12,13	(50,000)	(15,000)
Other creditors	12	(7,634)	(3,048)
		_______	_______
		(57,634)	(18,048)
		_______	_______
Net current (liabilities)/assets		(12,814)	4,098
		_______	_______
Total assets less current liabilities		1,688,759	1,589,264
Creditors: amounts falling due after more than one year
Bank loans	12,13	(149,704)	(169,676)
		_______	_______
Net assets		1,539,055	1,419,588
		_______	_______
Capital and reserves
Called-up share capital	14	32,333	32,137
Share premium account		361,989	351,666
Capital redemption reserve		8,230	8,230
Capital reserve	15	1,060,756	953,992
Revenue reserve		75,747	73,563
		_______	_______
Equity shareholders' funds		1,539,055	1,419,588
		_______	_______
Net asset value per Ordinary share (pence)	16	1,190.0	1,107.8
		_______	_______

10.  STATEMENT OF CHANGES IN EQUITY

			Share	Capital
		Share	premium	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2018		32,137	351,666	8,230	953,992	73,563	1,419,588
Return after taxation		-	-	-	103,049	69,748	172,797
Dividends paid	8	-	-	-	-	(67,564)	(67,564)
Issue of shares from Treasury	14	-	1,046	-	3,715	-	4,761
Issue of new shares	14	196	9,277	-	-	-	9,473
		_______	______	______	_______	______	_______
Balance at 31 December 2019		32,333	361,989	8,230	1,060,756	75,747	1,539,055
		_______	______	______	_______	______	_______
For the year ended 31 December 2018
			Share	Capital
		Share	premium	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2017		32,137	350,681	8,230	1,132,829	75,252	1,599,129
Return after taxation		-	-	-	(182,106)	63,569	(118,537)
Dividends paid	8	-	-	-	-	(65,258)	(65,258)
Issue of shares from Treasury	14	-	985	-	3,269	-	4,254
		_______	______	______	_______	______	_______
Balance at 31 December 2018		32,137	351,666	8,230	953,992	73,563	1,419,588
		_______	______	______	_______	______	_______

11.  STATEMENT OF CASH FLOWS

		Year ended	Year ended
		31 December 2019	31 December 2018
	Notes	£'000	£'000
Net return before finance costs and taxation		182,695	(108,256)
Decrease in accrued expenses		(229)	(58)
Overseas withholding tax		(6,400)	(6,288)
Interest income		(27)	(5)
Dividend income		(61,249)	(55,906)
Fixed interest income		(21,141)	(21,194)
Fixed interest income received		21,516	20,432
Dividends received		60,461	55,557
Interest received		27	5
Interest paid		(4,183)	(4,104)
(Gains)/losses on investments		(109,664)	175,349
Currency losses/(gains)		147	(284)
(Increase)/decrease in other debtors		(10)	21
Corporation tax paid		(541)	(898)
		________	________
Net cash inflow from operating activities		61,402	54,371
Investing activities
Purchases of investments		(159,028)	(114,399)
Sales of investments		158,516	124,079
		________	________
Net cash (used in)/from investing activities		(512)	9,680
Financing activities
Equity dividends paid	8	(67,564)	(65,258)
Issue of Ordinary shares	14	9,473	-
Issue of Ordinary shares from Treasury	14	4,761	4,254
Loan repayment		(15,000)	(60,000)
Loan drawdown		30,000	60,000
		________	________
Net cash used in financing activities		(38,330)	(61,004)
		________	________
Increase in cash		22,560	3,047
		________	________
Analysis of changes in cash during the year
Opening balance		7,627	4,296
Effect of exchange rate fluctuations on cash held		(147)	284
Increase in cash as above		22,560	3,047
		________	________
Closing balances		30,040	7,627
		________	________

12.  NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2019
1.	Principal activity
	The Company is a closed-end investment company, registered in Scotland No SC006705, with its Ordinary shares being listed on the London Stock Exchange.

2.	Accounting policies
	(a)	Basis of preparation. The financial statements have been prepared in accordance with Financial Reporting Standard 102 and with the AIC's Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in October 2019. The financial statements are prepared in sterling which is the functional currency of the Company and rounded to the nearest £'000. They have also been prepared on a going concern basis and on the assumption that approval as an investment trust will continue to be granted.
		The Directors have, at the time of approving the financial statements, a reasonable expectation that approval as an investment trust will continue to be granted and that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements. Further detail is included in the Directors' Report (unaudited) on page 52 of the published Annual Report for the year ended 31 December 2019 .
		Significant accounting judgements, estimates and assumptions. The preparation of financial statements requires the use of certain significant accounting judgements, estimates and assumptions which requires management to exercise its judgement in the process of applying the accounting policies and are continually evaluated. The areas requiring most significant judgement and assumption in the financial statements is the determination of the fair value hierarchy classification of quoted preference shares and bonds which have been assessed as being Level 2 due to them not being considered to trade in active markets and also the determination of whether special dividends received are considered to be revenue or capital in nature. The Directors do not consider there to be any significant estimates within the financial statements.
	(b)	Income. Dividends receivable on equity shares are treated as revenue for the year on an ex-dividend basis. Where no ex-dividend date is available dividends are recognised on their due date. Provision is made for any dividends not expected to be received. Special dividends are credited to capital or revenue, according to their circumstances.
		In some jurisdictions, investment income and capital gains are subject to withholding tax deducted at the source of the income. The Company presents the withholding tax separately from the gross investment income in the Statement of Comprehensive Income under taxation.
		The fixed returns on debt securities are recognised on a time apportionment basis so as to reflect the effective yield on the debt securities.
		Interest receivable from cash and short-term deposits is accrued to the end of the year.
	(c)	Expenses. All expenses are accounted for on an accruals basis and are charged to the Statement of Comprehensive Income. Expenses are charged against revenue except as follows:
		-   transaction costs on the acquisition or disposal of investments are charged against capital in the Statement of Comprehensive Income; and
		-   expenses are treated as a capital item in the Statement of Comprehensive Income and ultimately recognised in the capital reserve where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect the investment management fee has been allocated 30% to revenue and 70% to the capital reserve to reflect the Company's investment policy and prospective income and capital growth.
	(d)	Taxation. The tax expense represents the sum of tax currently payable and deferred tax. Any tax payable is based on the taxable profit for the year. Taxable profit differs from net return as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that were applicable at the Statement of Financial Position date.
		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 tax in the future or right to pay less tax in the future have occurred at the Statement of Financial Position date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the financial statements which are capable of reversal in one or more subsequent periods. Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws enacted or substantively enacted at the Statement of Financial Position date.
		Due to the Company's status as an investment trust company and the intention to continue meeting the conditions required to obtain approval 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.
		The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue within the Statement of Comprehensive Income on the same basis as the particular item to which it relates using the Company's effective rate of tax for the year, based on the marginal basis.
	(e)	Investments. The Company has chosen to apply the recognition and measurement provisions of IAS 39 Financial Instruments: Recognition and Measurement (as adopted for use in the EU) and investments have been designated upon initial recognition at fair value through profit or loss. This is done because all investments are considered to form part of a group of financial assets which is evaluated on a fair value basis, in accordance with the Company's documented investment strategy, and information about the grouping is provided internally on that basis.
		Investments are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require delivery within the timeframe established by the market concerned, and are measured at fair value. For listed investments, the valuation of investments at the year end is deemed to be bid market prices or closing prices for SETS (London Stock Exchange's electronic trading service) stocks sourced from the London Stock Exchange.
		Gains and losses arising from changes in fair value are treated in net profit or loss for the period as a capital item in the Statement of Comprehensive Income and are ultimately recognised in the capital reserve.
	(f)	Cash and cash equivalents. Cash comprises cash in hand and demand deposits. Cash equivalents includes bank overdrafts repayable on demand and short term, highly liquid investments, that are readily convertible to known amounts of cash and that are subject to an insignificant risk of change in value.
	(g)	Short-term debtors and creditors. Both short-term debtors and creditors are measured at amortised cost and not subject to interest charges.
	(h)	Borrowings. Borrowings, which comprise interest bearing bank loans are recognised initially at the fair value of the consideration received, net of any issue expenses, and subsequently at amortised cost using the effective interest method. The finance costs of such borrowings are accounted for on an accruals basis using the effective interest rate method and are charged 30% to revenue and 70% to capital in the Statement of Comprehensive Income to reflect the Company's investment policy and prospective income and capital growth.
	(i)	Nature and purpose of reserves
		Called-up share capital. The Ordinary share capital on the Statement of Financial Position relates to the number of shares in issue. This reserve is not distributable.
		Share premium account. The balance classified as share premium includes the premium above nominal value from the proceeds on issue of any equity share capital comprising Ordinary shares of 25p. This reserve is not distributable.
		Capital redemption reserve. The capital redemption reserve arose when Ordinary shares were cancelled, at which point an amount equal to the par value of the Ordinary share capital was transferred from the share capital account to the capital redemption reserve. This reserve is not distributable.
		Capital reserve . This reserve reflects any gains or losses on investments realised in the period along with any movement in the fair value of investments held that have been recognised in the Statement of Comprehensive Income. These include gains and losses from foreign currency exchange differences. Additionally, expenses, including finance costs, are charged to this reserve in accordance with (c) and (f) above. This reserve is not distributable except for the purpose of funding share buybacks to the extent that gains are deemed realised.
		When the Company purchases its Ordinary shares to be held in treasury, the amount of the consideration paid, which includes directly attributable costs, is recognised as a deduction from the capital reserve. Should these shares be sold subsequently, the amount received is recognised as an increase in equity, and the resulting surplus on the transaction is transferred to the share premium account or where a deficit on the transaction then it is transferred from the capital reserve.
		Revenue reserve. This reserve reflects all income and costs which are recognised in the revenue column of the Statement of Comprehensive Income. The revenue reserve represents the amount of the Company's reserves distributable by way of dividend.
	(j)	Foreign currency. Assets and liabilities in foreign currencies are translated at the rates of exchange ruling on the Statement of Financial Position date. Transactions involving foreign currencies are converted at the rate ruling on the date of the transaction. Gains and losses on dividends receivable are recognised in the Statement of Comprehensive Income and are reflected in the revenue reserve. Gains and losses on the realisation of foreign currencies are recognised in the Statement of Comprehensive Income and are then transferred to the capital reserve.
	(k)	Segmental reporting. The Directors are of the opinion that the Company is engaged in a single segment of business activity, being investment business. Consequently, no business segmental analysis is provided.
	(l)	Dividends payable. Dividends payable to equity shareholders are recognised in the financial statements when they have been approved by shareholders and become a liability of the Company. Interim dividends are recognised in the financial statements in the period in which they are paid.

3.	Income
		2019	2018
		£'000	£'000
	Income from investments (all listed)
	UK dividend income	9,123	9,651
	Overseas dividends	52,126	46,255
	Overseas interest	21,141	21,194
		________	________
		82,390	77,100
		________	________
	Other income
	Deposit interest	24	5
	Interest on corporation tax reclaim	3	-
		________	________
	Total income	82,417	77,105
		________	________

4.	Investment management fees
		2019			2018
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
	Investment management fees	2,139	4,991	7,130	2,495	5,820	8,315
		________	______	______	________	______	_____
	The Company has an agreement with Aberdeen Standard Fund Managers Limited ("ASFML") for the provision of investment management, secretarial, accounting and administration and promotional activity services.
	The annual management fee is charged on net assets (i.e. excluding borrowings for investment purposes) averaged over the six previous quarters ("Net Assets"), on a tiered basis. With effect from 1 January 2019 the annual management fee has been charged at 0.5% of Net Assets up to £1,200 million and 0.425% of Net Assets above £1,200 million. Previously, the annual management fee was charged at 0.575% of Net Assets up to £1,200 million, 0.5% of Net Assets between £1,200 million and £1,400 million, and 0.425% of Net Assets above £1,400 million. A fee of 1.5% per annum is chargeable on the value of any unlisted investments. The investment management fee is chargeable 30% against revenue and 70% against realised capital reserves. During the year £7,130,000 (2018 - £8,315,000) of investment management fees was payable to the Manager, with a balance of £1,799,000 (2018 - £2,055,000) being due at the year end.
	Included within the management fee arrangements is a secretarial fee of £100,000 per annum which is chargeable 100% to revenue. During the year £100,000 (2018 - £100,000) of secretarial fees was payable to the Manager, with a balance of £25,000 (2018 - £25,000) being payable to ASFML at the year end.
	No fees are charged in the case of investments managed or advised by the Standard Life Aberdeen Group. The management agreement may be terminated by either party on the expiry of six months' written notice. On termination the Manager is entitled to receive fees which would otherwise have been due up to that date.

5.	Other expenses
		2019	2018
		£'000	£'000
	Promotional activities{A}	394	425
	Registrars' fees	147	121
	Directors' remuneration	184	184
	Irrecoverable VAT	60	56
	Secretarial fees{B}	100	100
	Auditor's fees for:
	- Statutory audit	35	28
	- Other assurance services	-	2
	Administrative expenses{C}	1,189	1,065
		________	________
		2,109	1,981
		________	________
	{A}   In 2019 £394,000 (2018 - £425,000) was payable to ASFML to cover promotional activities during the year. At the year end £100,000 (2018 - £106,000) was due to ASFML.
	{B}   Details of the fee basis are contained in note 4 above.
	{C}   Includes bank charges and custody fees of £682,000 (2018 - £593,000), depositary fees of £149,000 (2018 - £146,000), stock exchange fees of £80,000 (2018 - £81,000) and printing, postage and stationery costs of £78,000 (2018 - £83,000).

6.	Finance costs
		2019			2018
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
	Bank loans	1,283	2,994	4,277	1,210	2,822	4,032
		________	______	________	________	________	______

7.	Taxation
			2019			2018
			Revenue	Capital	Total	Revenue	Capital	Total
			£'000	£'000	£'000	£'000	£'000	£'000
	(a)	Total tax charge
		Analysis for the year
		Current UK tax	1,892	-	1,892	1,921	-	1,921
		Double taxation relief	(1,224)	-	(1,224)	(1,006)	-	(1,006)
		Corporation tax prior year adjustment	(453)	-	(453)	-	-	-
		Tax relief to capital	1,517	(1,517)	-	1,645	(1,645)	-
		Irrecoverable overseas tax suffered	7,104	-	7,104	6,611	-	6,611
		Overseas tax reclaimable	(1,698)	-	(1,698)	(1,303)	26	(1,277)
			________	______	______	________	________	________
		Total tax charge for the year	7,138	(1,517)	5,621	7,868	(1,619)	6,249
			________	______	______	________	________	________
	(b)	Factors affecting the tax charge for the year
		The UK corporation tax rate is 19% (2018 - 19%). The tax assessed for the year is lower than the corporation tax rate. The differences are explained below:
			2019			2018
			Revenue	Capital	Total	Revenue	Capital	Total
			£'000	£'000	£'000	£'000	£'000	£'000
		Return before taxation	76,886	101,532	178,418	71,437	(183,725)	(112,288)
			________	______	______	________	________	________
		Return multiplied by the effective standard rate of corporation tax of 19% (2018 - 19%)	14,608	19,291	33,899	13,573	(34,907)	(21,334)
		Effects of:
		Non taxable UK dividend income	(1,733)	-	(1,733)	(1,834)	-	(1,834)
		(Gains)/losses on investments not taxable	-	(20,836)	(20,836)	-	33,316	33,316
		Currency losses/(gains) not taxable	-	28	28	-	(54)	(54)
		Non taxable overseas dividends	(9,467)	-	(9,467)	(8,173)	-	(8,173)
		Irrecoverable overseas tax suffered	7,104	-	7,104	6,611	-	6,611
		Overseas tax reclaimable	(1,698)	-	(1,698)	(1,303)	26	(1,277)
		Double taxation relief	(1,224)	-	(1,224)	(1,006)	-	(1,006)
		Corporation tax prior year adjustment	(453)	-	(453)	-	-	-
		Expenses not deductible for tax purposes	1	-	1	-	-	-
			________	______	______	________	________	________
		Total tax charge for the year	7,138	(1,517)	5,621	7,868	(1,619)	6,249
			________	______	______	________	________	________
		The Company has not provided for deferred tax on chargeable gains or losses arising on the revaluation or disposal of investments as it is exempt from corporation tax on these items because of its status as an investment trust company.
		The Company has not recognised a deferred tax asset (2018 - same) arising as a result of there being no excess management expenses (2018 - same) to be utilised in future periods.

8.	Ordinary dividends on equity shares
		2019	2018
		£'000	£'000
	Amounts recognised as distributions paid during the year:
	Third interim for 2018 of 11.5p (2017 - 11.0p)	14,736	14,057
	Final dividend for 2018 of 17.0p (2017 - 17.0p)	21,904	21,729
	First interim for 2019 of 12.0p (2018 - 11.5p)	15,462	14,736
	Second interim for 2019 of 12.0p (2018 - 11.5p)	15,462	14,736
		________	________
		67,564	65,258
		________	________
	A third interim dividend was declared on 26 November 2019 with an ex date of 2 January 2020. This dividend of 12.0p was paid on 19 February 2020 and has not been included as a liability in these financial statements. The proposed final dividend for 2019 is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
	Set out below are the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of Sections 1158-1159 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the year is £69,748,000 (2018 - £63,569,000).
		2019	2018
		£'000	£'000
	Three interim dividends for 2019 of 12.0p (2018 - 11.5p)	46,444	44,208
	Proposed final dividend for 2019 of 17.5p (2018 - 17.0p)	22,647	21,904
		________	________
		69,091	66,112
		________	________
	The amount reflected above for the cost of the proposed final dividend for 2019 is based on 129,412,003 Ordinary shares, being the number of Ordinary shares in issue at the date of this Report.

9.	Return per Ordinary share
		2019		2018
		£'000	p	£'000	p
	Returns are based on the following figures:
	Revenue return	69,748	54.1	63,569	49.6
	Capital return	103,049	80.0	(182,106)	(142.2)
		________	________	________	________
	Total return	172,797	134.1	(118,537)	(92.6)
		________	________	________	________
	Weighted average number of Ordinary shares		128,850,295		128,039,138
			________		________

10.	Investments at fair value through profit or loss
		2019	2018
		'000	'000
	Opening book cost	1,225,730	1,190,598
	Opening investment holdings gains	359,436	569,301
		________	________
	Opening fair value	1,585,166	1,759,899
	Analysis of transactions made during the year
	Purchases at cost	164,010	114,399
	Sales proceeds received	(158,516)	(115,071)
	Gains/(losses) on investments	109,664	(175,349)
	Accretion of fixed income book cost	1,249	1,288
		________	________
	Closing fair value	1,701,573	1,585,166
		________	________
	Closing book cost	1,276,337	1,225,730
	Closing investment gains	425,236	359,436
		________	________
	Closing fair value	1,701,573	1,585,166
		________	________
	The Company received £158,516,000 (2018 - £115,071,000) from investments sold in the period. The book cost of these investments when they were purchased was £114,652,000 (2018 - £80,555,000). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.
		2019	2018
	The portfolio valuation	'000	'000
	Listed on stock exchanges:
	United Kingdom:
	- equities	127,902	161,681
	- preference shares	7,677	6,721
	Overseas:
	- equities	1,305,160	1,160,004
	- fixed income	260,834	256,760
		________	________
	Total	1,701,573	1,585,166
		________	________
	Transaction costs. During the year expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains/(losses) on investments in the Statement of Comprehensive Income. The total costs were as follows:
		2019	2018
		'000	'000
	Purchases	172	88
	Sales	132	105
		________	________
		304	193
		________	________
	The above transaction costs are calculated in line with the AIC SORP. The transaction costs in the Company's Key Information Document are calculated on a different basis and in line with the PRIIPs regulations.

11.	Debtors: amounts falling due within one year
		2019	2018
		£'000	£'000
	Corporation tax refund	93	-
	Overseas withholding tax	3,385	2,302
	Other debtors	56	46
	Accrued income	11,246	12,171
		________	________
		14,780	14,519
		________	________
	None of the above amounts are overdue or impaired.

12.	Creditors
		2019	2018
		£'000	£'000
	Amounts falling due within one year:
	Bank loans (note 13)	50,000	15,000
	Corporation tax payable	-	233
	Amounts due to brokers	4,982	-
	Accruals	2,652	2,815
		________	________
		57,634	18,048
		________	________
		2019	2018
		£'000	£'000
	Amounts falling due after more than one year:
	Bank loans (note 13)	149,704	169,676
		________	________
	All financial liabilities are measured at amortised cost.

13.	Bank loans
			2019	2018
			£'000	£'000
	Unsecured bank loans repayable within one year:
	-	£15,000,000 at 1.467% - 16 May 2019	-	15,000
	-	£50,000,000 at 2.4975% - 13 May 2020	50,000	-
	Unsecured bank loans repayable in more than one year but no more than five years:
	-	£50,000,000 at 2.4975% - 13 May 2020	-	50,000
	-	£60,000,000 at 1.714% - 31 May 2022	59,855	59,795
	-	£60,000,000 at 2.328% - 31 May 2023	59,908	59,881
	-	£30,000,000 at 2.25% - 16 May 2024	29,941	-
			________	________
			199,704	184,676
			________	________
	During 2019 the Company entered into a new £30,000,000 loan facility agreement with The Royal Bank of Scotland plc ("RBSI"), due on 16 May 2024, incurring an arrangement fee of £67,500. This expense will be amortised over the life of the loan.
	The terms of these loans permit early repayment at the borrower's option which may give rise to additional amounts being either payable or repayable in respect of fluctuations in interest rates since drawdown. Since the Directors currently have no intention of repaying the loans early, then no such charges are included in the cash flows used to determine their effective interest rate.
	The Company currently has four fixed rate term loan facilities with RBSI, all of which are fully drawn down and have maturity dates of 13 May 2020, 31 May 2022, 31 May 2023 and 16 May 2024 respectively. Financial covenants contained within the relevant loan agreements provide, inter alia, that borrowings shall at no time exceed 40% of net assets and that the net assets must exceed £600 million. At 31 December 2019 net assets were £1,539,055,000 and borrowings were 13.0% thereof. The Company has complied with all financial covenants throughout the year.

14.	Share capital
		2019		2018
		Number	£'000	Number	£'000
	Allotted, called up and fully paid Ordinary shares of 25p each:
	Balance brought forward	128,143,545	32,036	127,785,880	31,946
	Ordinary shares issued from Treasury in the year	406,531	101	357,665	90
	Ordinary shares issued in the year	781,927	196	-	-
		________	________	________	________
	Balance carried forward	129,332,003	32,333	128,143,545	32,036
		________	________	________	________
	Treasury shares:
	Balance brought forward	406,531	101	764,196	191
	Ordinary shares issued from Treasury in the year	(406,531)	(101)	(357,665)	(90)
		________	________	________	________
	Balance carried forward	-	-	406,531	101
		________	________	________	________
	At 31 December 2019, shares held in Treasury represented 0% (2018 - 0.3%) of the Company's total issued share capital.
	During the year 406,531 (2018 - 357,665) Ordinary shares were issued from Treasury and 781,927 (2018 - nil) new Ordinary shares were issued. All these shares were issued at a premium to net asset value, enhancing net assets per share for existing shareholders. The issue prices ranged from 1164p to 1243p (2018 - 1170p to 1254p). The issue of Ordinary shares from Treasury raised a total of £4,761,000 (2018 - £4,254,000) net of expenses and the issue of new Ordinary shares raised £9,473,000 (2018 - £nil) net of expenses. Following the year end a further 80,000 new Ordinary shares were issued at prices ranging from 1238p to 1254p raising £999,000, net of expenses.
	On a winding up of the Company, any surplus assets available after payment of all debts and satisfaction of all liabilities of the Company shall be applied in repaying the Ordinary shareholders the amounts paid up on such shares. Any surplus shall be divided among the holders of Ordinary shares according to the amount paid up on such shares respectively.
	Voting rights. In accordance with the Articles of Association of the Company, on a show of hands, every member (or duly appointed proxy) present at a general meeting of the Company has one vote; and, on a poll, every member present in person or by proxy shall have one vote for every 25p nominal amount of Ordinary shares held.

15.	Capital reserve
		2019	2018
		£'000	£'000
	At 31 December 2018	953,992	1,132,829
	Movement in fair value gains	109,664	(175,349)
	Capital expenses (including taxation)	(6,468)	(7,041)
	Issue of shares from Treasury	3,715	3,269
	Currency (losses)/gains	(147)	284
		________	________
	At 31 December 2019	1,060,756	953,992
		________	________
	Included in the total above are investment holdings gains at the year end of £425,236,000 (2018 - £359,436,000).

16.	Net asset value per share
	The net asset value per share and the net asset value attributable to the Ordinary shares, at the year end calculated in accordance with the Articles of Association and FRS 102 were as follows:
		As at	As at
		31 December 2019	31 December 2018
	Attributable net assets (£'000)	1,539,055	1,419,588
	Number of Ordinary shares in issue (excluding Treasury)	129,332,003	128,143,545
	Net asset value per share (pence)	1,190.0	1,107.8

17.	Analysis of changes in net debt
		At				At
		31 December	Currency	Cash	Non-cash	31 December
		2018	differences	flows	movements	2019
		£'000	£'000	£'000	£'000	£'000
	Cash and short term deposits	7,627	(147)	22,560	-	30,040
	Debt due within one year	(15,000)	-	15,000	(50,000)	(50,000)
	Debt due after more than one year	(169,676)	-	(30,000)	49,972	(149,704)
		________	________	_______	________	________
		(177,049)	(147)	7,560	(28)	(169,664)
		________	________	_______	________	________
		At				At
		31 December	Currency	Cash	Non-cash	31 December
		2017	differences	flows	movements	2018
		£'000	£'000	£'000	£'000	£'000
	Cash and short term deposits	4,296	284	3,047	-	7,627
	Debt due within one year	(60,000)	-	60,000	(15,000)	(15,000)
	Debt due after more than one year	(124,735)	-	(60,000)	15,059	(169,676)
		________	________	_______	________	________
		(180,439)	284	3,047	59	(177,049)
		________	________	_______	________	________
	A statement reconciling the movement in net funds to the net cash flow has not been presented as there are no differences from the above analysis.

18.	Financial instruments and risk management. The Company's investment activities expose it to various types of financial risk associated with the financial instruments and markets in which it invests. The Company's financial instruments comprise listed equities and debt securities, cash balances, loans and debtors and creditors that arise directly from its operations; for example, in respect of sales and purchases awaiting settlement, and debtors for accrued income. The Company may enter into derivative transactions for the purpose of managing market risks arising from the Company's activities in the form of swap contracts, forward foreign currency contracts, futures and options.
	The Board has delegated the risk management function to Aberdeen Standard Fund Managers Limited ("ASFML") under the terms of its management agreement with ASFML (further details of which are included in the Directors' Report). The Board regularly reviews and agrees policies for managing each of the key financial risks identified with the Manager. The types of risk and the Manager's approach to the management of each type of risk, are summarised below. Such approach has been applied throughout the year and has not changed since the previous accounting period. The numerical disclosures exclude short-term debtors and creditors.
	Risk management framework. The directors of ASFML collectively assume responsibility for ASFML's obligations under the AIFMD including reviewing investment performance and monitoring the Company's risk profile during the year.
	ASFML is a fully integrated member of the Standard Life Aberdeen Group, which provides a variety of services and support to ASFML in the conduct of its business activities, including in the oversight of the risk management framework for the Company. The AIFM has delegated the day to day administration of the investment policy to Aberdeen Asset Managers Limited, which is responsible for ensuring that the Company is managed within the terms of its investment guidelines and the limits set out in its pre-investment disclosures to investors (details of which can be found on the Company's website). The AIFM has retained responsibility for monitoring and oversight of investment performance, product risk and regulatory and operational risk for the Company.
	The Manager conducts its risk oversight function through the operation of the Group's risk management processes and systems which are embedded within the Group's operations. The Group's Risk Division supports management in the identification and mitigation of risks and provides independent monitoring of the business. The Division includes Compliance, Business Risk, Market Risk, Risk Management and Legal. The team is headed up by the Group's Head of Risk, who reports to the Chief Executive Officers of the Group. The Risk Division achieves its objective through embedding the Risk Management Framework throughout the organisation using the Group's operational risk management system ("SHIELD").
	The Group's Internal Audit Department is independent of the Risk Division and reports directly to the Group's Chief Executive Officers and to the Audit Committee of the Group's Board of Directors. The Internal Audit Department is responsible for providing an independent assessment of the Group's control environment.
	The Group's corporate governance structure is supported by several committees to assist the board of directors of Standard Life Aberdeen plc, its subsidiaries and the Company to fulfil their roles and responsibilities. The Group's Risk Division is represented on all committees, with the exception of those committees that deal with investment recommendations. The specific goals and guidelines on the functioning of those committees are described on the committees' terms of reference.
	Risk management. The main risks the Company faces from its financial instruments are (i) market risk (comprising interest rate risk, foreign currency risk and price risk), (ii) liquidity risk and (iii) credit risk.
	(i)	Market risk. The fair value and 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, foreign currency risk and price risk.
		Interest rate risk. Interest rate risk is the risk that interest rate movements will affect:
		- the fair value of the investments in fixed interest rate securities; and
		- the level of income receivable on cash deposits;
		Management of the risk . 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 reviews the values of the fixed interest rate securities on a regular basis.
		The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis. Borrowings comprise fixed rate facilities, which are used to finance opportunities at low rates. Current bank covenant guidelines are detailed in note 13 on pages 83 and 84 of the published Annual Report for the year ended 31 December 2019 .
		Interest risk profile. The interest rate risk profile of the portfolio of financial assets and liabilities at the Statement of Financial Position date was as follows:
				Weighted
				average
				period for				Weighted
				which				average								Non-
				rate is fixed				interest rate			Fixed rate		Floating rate			interest bearing
		At 31 December 2019		Years				%			£'000		£'000			£'000
		Assets
		Sterling		-				-			7,677		12,122			127,902
		US Dollar		20.84				6.83			78,934		-			408,012
		Other		6.04				7.80			181,900		17,918			897,148
											________		________			________
		Total assets									268,511		30,040			1,433,062
											________		________			________
		Liabilities
		Bank loans		2.49				2.17			(199,704)		-			-
											________		________			________
		Total liabilities									(199,704)		-			-
											________		________			________
				Weighted
				average
				period for				Weighted
				which				average								Non-
				rate is fixed				interest rate			Fixed rate		Floating rate			interest bearing
		At 31 December 2018		Years				%			£'000		£'000			£'000
		Assets
		Sterling		-				-			6,721		7,587			161,681
		US Dollar		22.96				6.59			83,281		30			376,712
		Other		7.07				7.87			173,479		10			783,292
											________		________			________
		Total assets									263,481		7,627			1,321,685
											________		________			________
		Liabilities
		Bank loans		2.94				2.12			(184,676)		-			-
											________		________			________
		Total liabilities									(184,676)		-			-
											________		________			________
		The weighted average interest rate is based on the current yield of each asset, weighted by its market value. The weighted average interest rate on bank loans is based on the interest rate payable, weighted by the total value of the loans. The maturity dates of the Company's loans are shown in note 13 to the financial statements.
		The fixed rate assets represents quoted preference shares and bonds.
		The floating rate assets consist of cash deposits on call earning interest at prevailing market rates.
		The non-interest bearing assets represent the equity element of the portfolio.
		Short-term debtors and creditors have been excluded from the above tables as they are not considered to be exposed to interest rate risk.
		Interest rate sensitivity. The sensitivity analyses below have 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 100 basis points higher or lower (based on the current parameter used by the Manager's Investment Risk Department on risk assessment) and all other variables were held constant, the Company's:
		-   revenue return for the year ended 31 December 2019 would increase/decrease by £300,000 (2018 - increase/decrease by £76,000). This is mainly attributable to the Company's exposure to interest rates on its floating rate cash balances. These figures have been calculated based on cash positions at each year end.
		-  capital return would decrease/increase by £13,260,000 (2018 - increase/decrease by £13,307,000). This is also mainly attributable to the Company's exposure to interest rates on cash balances and its fixed interest portfolio. These figures have been calculated using VAR (value at risk) analysis based on cash and fixed interest portfolio positions at each year end.
		Foreign currency risk. A significant proportion of the Company's investment portfolio is invested overseas whose values are subject to fluctuation due to changes in foreign exchange rates. In addition, the impact of changes in foreign exchange rates upon the profits of investment holdings can result, indirectly, in changes in their valuations. Consequently the Statement of Financial Position can be affected by movements in exchange rates.
		Management of the risk. It is not the Company's policy to hedge this risk on a continuing basis but the Company may, from time to time, match specific overseas investment with foreign currency borrowings. The Manager seeks, when deemed appropriate, to manage exposure to currency movements on borrowings by using forward foreign currency contracts as a hedge against potential foreign currency movements. At 31 December 2019 the Company did not have any forward foreign currency contracts (2018 - none).
		The revenue account is subject to currency fluctuation arising on overseas income. The Company does not hedge this currency risk.
		Currency risk exposure . Currency risk exposure (excluding fixed interest securities) by currency of denomination:
			31 December 2019								31 December 2018
			UK and								UK and
			overseas			Net			Total		overseas			Net		Total
			equity			monetary			currency		equity			monetary		currency
			investments			assets{A}			exposure		investments			assets{A}		exposure
			£'000			£'000			£'000		£'000			£'000		£'000
		US Dollar	408,012			-			408,012		376,712			30		376,742
		Taiwan Dollar	163,804			16,633			180,437		123,126			9		123,135
		Mexican Peso	107,860			-			107,860		89,876			-		89,876
		Indonesian Rupiah	86,559			(4,982)			81,577		63,481			-		63,481
		Singapore Dollar	70,903			-			70,903		49,702			-		49,702
		Swiss Franc	66,861			-			66,861		58,841			-		58,841
		Canadian Dollar	61,776			-			61,776		42,723			-		42,723
		Euro	53,409			-			53,409		51,806			-		51,806
		Swedish Krone	53,189			-			53,189		37,899			-		37,899
		Thailand Baht	52,884			-			52,884		46,204			-		46,204
		New Zealand Dollar	26,645			-			26,645		22,619			-		22,619
		Malaysian Ringgit	25,112			-			25,112		49,357			-		49,357
		Norwegian Krone	20,282			-			20,282		-			-		-
		Indian Rupee	19,114			2			19,116		-			1		1
		Brazilian Real	17,834			1,283			19,117		12,125			-		12,125
		Australian Dollar	16,579			-			16,579		12,796			-		12,796
		Japanese Yen	15,710			-			15,710		60,367			-		60,367
		Hong Kong Dollar	15,706			-			15,706		36,711			-		36,711
		Polish Zloty	14,015			-			14,015		15,947			-		15,947
		South African Rand	8,906			-			8,906		9,712			-		9,712
			1,305,160			12,936			1,318,096		1,160,004			40		1,160,044
		Sterling	127,902			(187,582)			(59,680)		161,681			(177,089)		(15,408)
			________			________			______		________			________		________
		Total	1,433,062			(174,646)			1,258,416		1,321,685			(177,049)		1,144,636
			________			________			______		________			________		________
		{A} Reflects cash, short term deposits and bank borrowings.
		The asset allocation between specific markets can vary from time to time based on the Manager's opinion of the attractiveness of the individual markets.
		Foreign currency sensitivity . The following table details the Company's sensitivity to a 10% decrease (in the context of a 10% increase the figures below should all be read as negative) in sterling against the major foreign currencies in which the Company has exposure (based on exposure >5% of total exposure). The sensitivity analysis includes foreign currency denominated monetary items and adjusts their translation at the year end for a 10% change in foreign currency rates.
												2019				2018
												Capital{A}				Capital{A}
												£'000				£'000
		US Dollar										40,801				37,671
		Taiwan Dollar										18,044				12,313
		Mexican Peso										10,786				8,988
		Indonesian Rupiah										8,158				-
		Singapore Dollar										7,090				-
		Swiss Franc										6,686				-
												________				________
		Total										91,565				58,972
												________				________
		{A} Represents equity exposures to the relevant currencies.
		Price risk . Other price risks (ie changes in market prices other than those arising from interest rate or currency risk) may affect the value of the quoted investments. The Company's stated objective is to achieve a total return greater than its benchmark by investing predominantly in equities worldwide.
		Management of the risk. 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 and the stock selection process, as detailed on page 17 of the published Annual Report for the year ended 31 December 2019 , both act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. The investments held by the Company are listed on various stock exchanges worldwide.
		Price risk sensitivity . If market prices at the Statement of Financial Position date had been 10% higher or lower while all other variables remained constant, the return attributable to Ordinary shareholders for the year ended 31 December 2019 would have increased/decreased by £143,306,000 (2018 - increase/decrease of £132,169,000) and equity would have increased/decreased by the same amount.
	(ii)	Liquidity risk. This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities as they fall due in line with the maturity profile analysed below.
					Within		Within			Within	Within	Within			More
					1 year		1-2 years			2-3 years	3-4 years	4-5 years			than 5 years		Total
		At 31 December 2019			£'000		£'000			£'000	£'000	£'000			£'000		£'000
		Bank loans			50,000		-			60,000	60,000	30,000			-		200,000
		Interest cash flows on bank loans			3,117		3,100			2,585	1,371	337			-		10,510
		Cash flows on other creditors			7,634		-			-	-	-			-		7,634
					_______		_______			_______	_______	_______			_______		_______
					60,751		3,100			62,585	61,371	30,337			-		218,144
					_______		_______			_______	_______	_______			_______		_______
					Within		Within			Within	Within	Within			More
					1 year		1-2 years			2-3 years	3-4 years	4-5 years			than 5 years		Total
		At 31 December 2018			£'000		£'000			£'000	£'000	£'000			£'000		£'000
		Bank loans			15,000		50,000			-	60,000	60,000			-		185,000
		Interest cash flows on bank loans			3,776		3,061			2,425	1,910	697			-		11,869
		Cash flows on other creditors			2,815		-			-	-	-			-		2,815
					_______		_______			_______	_______	_______			_______		_______
					21,591		53,061			2,425	61,910	60,697			-		199,684
					_______		_______			_______	_______	_______			_______		_______
		Management of the risk. 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. Short-term flexibility is achieved through the use of loan and overdraft facilities (note 13).
	(iii)	Credit risk. This is failure of the counterparty to a transaction to discharge its obligations under that transaction that could result in the Company suffering a loss.
		Management of the risk
		-   where the Manager makes an investment in a bond, corporate or otherwise, the credit ratings of the issuer are taken into account so as to manage the risk to the Company of default;
		-   investments in quoted bonds are made across a variety of industry sectors and geographic markets so as to avoid concentrations of credit risk;
		-   transactions involving derivatives are entered into only with investment banks, the credit rating of which is taken into account so as to minimise the risk to the Company of default;
		-   investment transactions are carried out with a number of brokers, whose credit-standing is reviewed periodically by the Manager, and limits are set on the amount that may be due from any one broker;
		-   the risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the daily review of failed trade reports. In addition, both stock and cash reconciliations to the custodian's records are performed daily to ensure discrepancies are investigated in a timely manner. The Manager's Compliance department carries out periodic reviews of the custodian's operations and reports its finding to the Manager's Risk Management Committee;
		-   cash is held only with reputable banks with acceptable credit quality. It is the Manager's policy to trade only with A- and above (Long Term rated) and A-1/P-1 (Short Term rated) counterparties.
		Credit risk exposure. In summary, compared to the amounts in the Statement of Financial Position, the maximum exposure to credit risk at 31 December 2019 was as follows:
				2019								2018
				Balance					Maximum			Balance				Maximum
				Sheet					exposure			Sheet				exposure
				£'000					£'000			£'000				£'000
		Non-current assets
		Quoted preference shares and bonds at fair value through profit or loss		268,511					268,511			263,481				263,481
		Current assets
		Corporation tax refund		93					93			-				-
		Current taxation		3,385					3,385			2,302				2,302
		Other debtors		56					56			46				46
		Accrued income		11,246					11,246			12,171				12,171
		Cash and short term deposits		30,040					30,040			7,627				7,627
				_________					________			_________				_________
				313,331					313,331			285,627				285,627
				_________					_________			_________				_________
		None of the Company's financial assets is secured by collateral or other credit enhancements.
		Credit ratings. The table below provides a credit rating profile using Moodys credit ratings for the quoted preference shares and bonds at 31 December 2019 and 31 December 2018:
											2019				2018
											£'000				£'000
		A3									30,680				24,114
		Ba1									20,607				-
		Ba2									29,036				29,662
		Baa2									50,782				60,256
		Ba3									12,951				11,557
		Baa3									58,179				72,079
		Non-rated									66,276				65,813
											_________				_________
											268,511				263,481
											_________				_________
		At 31 December 2019 Moodys credit ratings agency did not provide a rating for Ecuador bonds, Indian bonds, Turkish bonds and Irredeemable preference shares (2018 - Ecuador bonds, Indian bonds, Turkish bonds and Irredeemable preference shares) held by the Company and were accordingly categorised as non-rated in the table above. Whilst a substantial proportion of the fixed interest portfolio does not have a rating provided by Moodys, the Manager undertakes an ongoing review of their suitability for inclusion within the portfolio as set out in "Investment Process" and "Delivering the Investment Policy" on pages 17 and 18 of the published Annual Report for the year ended 31 December 2019 .
		Fair values of financial assets and financial liabilities. The fair value of borrowings has been calculated at £201,026,000 as at 31 December 2019 (2018 - £185,877,000) compared to a carrying amount in the financial statements of £199,704,000 (2018 - £184,676,000) (note 12). The fair value of each loan is determined by aggregating the expected future cash flows for that loan discounted at a rate comprising the borrower's margin plus an average of market rates applicable to loans of a similar period of time and currency. The carrying value of all other assets and liabilities is an approximation of fair value.

19.	Fair value hierarchy. FRS 102 requires an entity 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 classifications:
	Level 1:   unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the measurement date.
	Level 2:   inputs other than quoted prices included in Level 1 that are observable (ie developed using market data) for the asset or liability, either directly or indirectly.
	Level 3:   inputs are unobservable (ie for which market data is unavailable) for the asset or liability.
	The financial assets and liabilities measured at fair value in the Statement of Financial Position are grouped into the fair value hierarchy at the reporting date as follows:
				Level 1	Level 2	Level 3	Total
	As at 31 December 2019		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	1,433,062	-	-	1,433,062
	Quoted preference shares		b)	-	7,677	-	7,677
	Quoted bonds		b)	-	260,834	-	260,834
				_________	_________	_________	_________
	Total			1,433,062	268,511	-	1,701,573
				_________	_________	_________	_________
				Level 1	Level 2	Level 3	Total
	As at 31 December 2018		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	1,321,685	-	-	1,321,685
	Quoted preference shares		b)	-	6,721	-	6,721
	Quoted bonds		b)	-	256,760	-	256,760
				_________	_________	_________	_________
	Total			1,321,685	263,481	-	1,585,166
				_________	_________	_________	_________
	a)	Quoted equities. The fair value of the Company's investments in quoted equities has been determined by reference to their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on recognised stock exchanges.
	b)	Quoted preference shares and bonds. The fair value of the Company's investments in quoted preference shares and bonds has been determined by reference to their quoted bid prices at the reporting date. Investments categorised as Level 2 are not considered to trade in active markets.

20.	Capital management policies and procedures. The investment objective of the Company is to achieve a total return greater than its benchmark by investing predominantly in equities worldwide.
	The capital of the Company consists of bank borrowings and equity, comprising issued capital, reserves and retained earnings. The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance.
	The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes:
	-   the planned level of gearing which takes into account the Investment Manager's views on the market;
	-   the level of equity shares in issue; and
	-   the extent to which revenue in excess of that which is required to be distributed should be retained.
	The Company's objectives, policies and processes for managing capital are unchanged from the preceding accounting period.
	Details of the Company's gearing facilities and financial covenants are detailed in note 13 of the financial statements. The Company does not have any other externally imposed capital requirements.

21.	Related party transactions
	Directors' fees and interests. Fees payable during the year to the Directors and their interests in shares of the Company are disclosed within the Directors' Remuneration Report on page 58 of the published Annual Report for the year ended 31 December 2019 .
	Transactions with the Manager. The Company has agreements with ASFML for the provision of management, secretarial, accounting and administration services and promotional activities. Details of transactions during the year and balances outstanding at the year end are disclosed in notes 4 and 5.
	In the opinion of the Directors on the basis of shareholdings advised to them, the Company has no immediate or ultimate controlling party.

The Annual Financial Report Announcement is not the Company's statutory accounts. The above results for the year ended 31 December 2019 are an abridged version of the Company's full Annual Report and financial statements, which have been approved and audited with an unqualified report. The 2018 and 2019 statutory accounts received unqualified reports from the Company's auditors and did not include any reference to matters to which the auditor drew attention by way of emphasis without qualifying the reports, and did not contain a statement under s.498 of the Companies Act 2006. The financial information for 2018 is derived from the statutory accounts for 2018 which have been delivered to the Registrar of Companies. The 2019 financial statements will be filed with the Registrar of Companies in due course.

The Annual Report will be posted to shareholders in March 2020 and additional copies will be available from the registered office of the Company and on the Company's website, murray-intl.co.uk*

The Annual General Meeting will be held at 12.30 pm on 24 April 2020 at 12.30 p.m. at The Mermaid Conference Centre, Puddle Dock, Blackfriars, London EC4V 3DB.

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise and may be affected by exchange rate movements.  Investors may not get back the amount they originally invested.

*Neither the content of the Company's website nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.

For Murray International Trust PLC

Aberdeen Asset Management PLC, Secretaries

5 March 2020

ALTERNATIVE PERFORMANCE MEASURES
Alternative performance measures are numerical measures of the Company's current, historical or future performance, financial position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company's applicable financial framework includes FRS 102 and the AIC SORP. The Directors assess the Company's performance against a range of criteria which are viewed as particularly relevant for closed-end investment companies.
Total return. Total return is considered to be an alternative performance measure. NAV and share price total returns show how the NAV and share price has performed over a period of time in percentage terms, taking into account both capital returns and dividends paid to shareholders. NAV total return involves investing the net dividend in the NAV of the Company with debt at fair value on the date on which that dividend goes ex-dividend. Share price total return involves reinvesting the net dividend in the share price of the Company on the date on which that dividend goes ex-dividend.
The tables below provide information relating to the NAV and share price of the Company on the dividend reinvestment dates during the years ended 31 December 2019 and 31 December 2018.
	Dividend		Share
Year ended 31 December 2019	rate	NAV	price
31 December 2018	N/A	1,107.81p	1,132.00p
3 January 2019	11.50p	1,104.62p	1,120.00p
4 April 2019	17.00p	1,151.42p	1,172.00p
4 July 2019	12.00p	1,210.10p	1,172.00p
3 October 2019	12.00p	1,163.80p	1,150.00p
31 December 2019	N/A	1,190.00p	1,260.00p
		________	________
Total return		+12.4%	+16.5%
		________	________
	Dividend		Share
Year ended 31 December 2018	rate	NAV	price
31 December 2017	N/A	1,251.41p	1,268.00p
4 January 2018	11.00p	1,260.30p	1,284.00p
5 April 2018	17.00p	1,142.88p	1,190.00p
5 July 2018	11.50p	1,122.32p	1,134.00p
4 October 2018	11.50p	1,140.61p	1,110.00p
31 December 2018	N/A	1,107.81p	1,132.00p
		________	________
Total return		-7.5%	-6.8%
		________	________
Dividend cover. Revenue return per share of 54.1p (31 December 2018 - 49.6p) divided by total dividends per share of 53.5p (31 December 2018 - 51.5p) expressed as a ratio.
Net gearing. Net gearing measures the total borrowings of £199,704,000 (31 December 2018 - £184,676,000) less cash and cash equivalents of £25,058,000 (31 December 2018 - £7,627,000) divided by shareholders' funds of £1,539,055,000 (31 December 2018 - £1,419,588,000), expressed as a percentage. Under AIC reporting guidance cash and cash equivalents includes net amounts due to brokers at the year end of £4,982,000 (31 December 2018 - £nil) as well as cash and short term deposits of £30,040,000 (31 December 2018 - £7,627,000).
Premium to net asset value per Ordinary share. The difference between the share price of 1,260.00p (31 December 2018 - 1,132.00p) and the net asset value per Ordinary share of 1,190.00p (31 December 2018 - 1,107.81p) expressed as a percentage of the net asset value per Ordinary share.
Ongoing charges. Ongoing charges is considered to be an alternative performance measure. The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of investment management fees and administrative expenses and expressed as a percentage of the average net asset values with debt at fair value throughout the year.
		2019	2018
Investment management fees (£'000)		7,130	8,315
Administrative expenses (£'000)		2,109	1,981
Less: non-recurring charges{A} (£'000)		(96)	(65)
		________	________
Ongoing charges (£'000)		9,143	10,231
		________	________
Average net assets (£'000)		1,499,807	1,475,433
		________	________
Ongoing charges ratio		0.61%	0.69%
		________	________
{A} Professional services comprising new director recruitment costs and legal fees considered unlikely to recur.
The ongoing charges ratio provided in the Company's Key Information Document is calculated in line with the PRIIPs regulations, which includes amongst other things, the cost of borrowings and transaction costs.

TEN LARGEST INVESTMENTS

As at 31 December 2019

Taiwan Semiconductor Manufacturing		Aeroporto del Sureste ADS
Taiwan Semiconductor Manufacturing is one of the largest integrated circuit manufacturers in the world. The company is involved in component design, manufacturing, assembly, testing and mass production of integrated circuits.		Grupo Aeroporto del Sureste operates airports in Mexico. The company holds long-term concessions to manage airports in leading tourist resorts and major cities.
Taiwan Mobile		CME Group
Taiwan Mobile is the leading provider of cellular telecommunications services in Taiwan. Although predominantly a wireless network operator, the company also sells and leases cellular telephony equipment.		Based in Chicago, USA CME Group operates a derivatives exchange that trades futures contracts and options, interest rates, stock indexes, foreign exchange and commodities.
Roche Holdings		Vale do Rio Doce
Roche Holdings develops and manufactures pharmaceutical and diagnostic products. The company produces prescription drugs for a variety of medical conditions.		Vale is one of the world's largest, fully-integrated, natural resources companies. Based in Brazil, the company mines for precious metals and numerous other minerals.
Verizon Communications		Philip Morris International
Verizon Communications is an integrated telecommunications company based in New York that provides wire line voice and data services, wireless services, internet services and published directory information.		Spun out from the Altria Group in 2008, Philip Morris International is one of the world's leading global tobacco companies. It manufactures and sells leading recognisable brands such as Marlboro, Parliament and Virginia Slims.
Total		Unilever Indonesia
Total is a fully integrated international energy company involved in exploration, production, refining, transportation and marketing of oil and natural gas. The company also operates a chemical division which produces a number of materials.		Unilever Indonesia manufactures soaps, detergents, margarine, oil and cosmetics. The company also produces dairy based foods, ice cream and tea beverages.

List of Investments

		Valuation	Total	Valuation
		2019	assets{A}	2018{B}
Company	Country	£'000	%	£'000
Taiwan Semiconductor Manufacturing	Taiwan	83,350	4.8	68,971
Aeroporto del Sureste ADS	Mexico	77,863	4.5	65,021
Taiwan Mobile	Taiwan	56,406	3.2	54,155
CME Group	USA	51,495	3.0	47,264
Roche Holdings	Switzerland	48,953	2.8	38,765
Vale do Rio Doce{C}	Brazil & USA	47,137	2.7	47,326
Verizon Communications	USA	46,311	2.7	44,135
Philip Morris International	USA	44,925	2.6	36,693
Total	France	41,662	2.4	41,451
Unilever Indonesia	Indonesia	39,966	2.3	43,333
Top ten investments		538,068	31.0
Oversea-Chinese Bank	Singapore	36,849	2.1	19,425
Banco Bradesco	Brazil	36,563	2.1	34,951
British American Tobacco{D}	UK	35,547	2.0	43,953
Sociedad Quimica Y Minera de Chile	Chile	35,271	2.0	52,558
Singapore Telecommunications	Singapore	34,054	2.0	30,277
Intel Corporation	USA	31,604	1.8	25,805
Royal Dutch Shell	UK	30,457	1.8	31,824
Kimberly Clark de Mexico	Mexico	29,996	1.7	24,855
Samsung Electronics	Korea	29,289	1.7	16,866
Telus	Canada	29,234	1.7	25,996
Top twenty investments		866,932	49.9
Siam Commercial Bank	Thailand	27,557	1.6	22,451
Epiroc	Sweden	26,974	1.6	20,771
Auckland International Airport	New Zealand	26,645	1.5	22,619
Atlas Copco	Sweden	26,216	1.5	17,128
Telekomunikasi	Indonesia	25,904	1.5	-
Pepsico	USA	25,782	1.5	21,683
Tesco Lotus Retail Growth	Thailand	25,327	1.5	23,753
Public Bank	Malaysia	25,112	1.4	32,904
BHP Group	Australia	24,875	1.4	26,426
Telefonica Brasil	Brazil	24,520	1.4	21,263
Top thirty investments		1,125,844	64.8
Schlumberger	USA	24,264	1.4	17,030
GlobalWafers	Taiwan	24,048	1.4	-
Standard Chartered	UK	23,815	1.4	20,368
Johnson & Johnson	USA	22,009	1.2	20,267
Indocement Tunggal Prakarsa	Indonesia	20,690	1.2	20,148
Telenor	Norway	20,282	1.2	-
Castrol India	India	19,114	1.1	-
Republic of South Africa 7% 28/02/31	South Africa	18,260	1.0	17,939
Novartis	Switzerland	17,907	1.0	20,076
Wilson & Sons	Brazil	17,834	1.0	12,125
Top forty investments		1,334,067	76.7
Coca-Cola Amatil	Australia	16,579	1.0	12,796
Nutrien	Canada	16,484	0.9	16,727
TC Energy	Canada	16,057	0.9	-
Japan Tobacco	Japan	15,710	0.9	17,414
Swire Pacific 'B'	Hong Kong	15,706	0.9	18,140
America Movil Sab De 6.45% 05/12/22	Mexico	15,515	0.9	10,628
Republic of Indonesia 6.125% 15/05/28	Indonesia	15,306	0.9	14,353
United Mexican States 5.75% 05/03/26	Mexico	15,165	0.9	13,486
Petroleos Mexicanos 6.75% 21/09/47	Mexico	15,126	0.9	12,985
Republic of Indonesia 7% 15/05/22	Indonesia	14,409	0.8	13,818
Top fifty investments		1,490,124	85.7
Bank Pekao	Poland	14,015	0.8	15,947
Vodafone Group	UK	13,208	0.8	13,761
Republic of Dominica 6.85% 27/01/45	Dominican Republic	12,951	0.8	11,557
Alfa 6.875% 25/03/44	Mexico	12,827	0.7	10,786
Federal Republic of Brazil 10% 01/01/23	Brazil	12,518	0.7	12,734
Bayer	Germany	11,746	0.7	10,355
Republic of Indonesia 8.375% 15/03/34	Indonesia	11,627	0.7	10,972
Ultrapar Participacoes	Brazil	9,451	0.5	10,623
Republic of Ecuador 7.95% 20/06/24	Ecuador	9,298	0.5	8,995
MTN	South Africa	8,906	0.5	9,712
Top sixty investments		1,606,671	92.4
Republic of Turkey 8% 12/03/25	Turkey	8,687	0.5	8,088
Federal Republic of Brazil 10% 01/01/25	Brazil	8,628	0.5	8,452
Republic of Turkey 9% 24/07/24	Turkey	8,569	0.5	8,081
Petroleos Mexicanos 5.5% 27/06/44	Mexico	8,125	0.5	7,144
HDFC Bank 7.95% 21/09/26	India	8,050	0.5	7,994
Federal Republic of Brazil 10% 01/01/21	Brazil	7,890	0.4	8,476
Power Finance Corp 7.63% 14/08/26	India	7,595	0.4	8,234
Housing Dev Finance Corp 8.43% 04/03/25	India	5,485	0.3	5,561
Power Finance Corp 8.2% 10/03/25	India	5,283	0.3	5,674
Republic of Indonesia 10% 15/02/28	Indonesia	4,800	0.3	4,564
Top seventy investments		1,679,783	96.6
ICICI Bank 7.6% 07/10/23	India	4,795	0.3	4,977
ICICI Bank 7.42% 27/06/24	India	4,678	0.3	4,961
Republic of Indonesia 9.5% 15/07/23	Indonesia	4,640	0.3	4,487
Santander 10.375% Non Cum Pref	UK	3,841	0.2	3,473
General Accident 7.875% Cum Irred Pref	UK	3,836	0.2	3,248
Total investments		1,701,573	97.9
Net current assets{A}		37,186	2.1
Total assets{E}		1,738,759	100.0
{A}   Excluding bank loans.
{B}   The 2018 column denotes the Company's holding at 31 December 2018.
{C}   Holding comprises equity and fixed income securities split £26,529,000 (2018 - £27,574,000) and £20,608,000 (2018 - £19,752,000).
{D}   The 2018 holding comprises UK and Malaysia securities split £27,500,000 and £16,453,000. BAT Malaysia was sold during 2019.
{E}   See definition on page 103 of the published Annual Report for the year ended 31 December 2019 .

 

END

 

 

FR SSUFAIESSEDD