EP GLOBAL OPPORTUNITIES TRUST PLC
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2013
The full Annual Report and Financial Statements can be accessed via the
Company's website at www.epgot.com or by contacting the Company Secretary by
telephone on 0131 270 3800.
HIGHLIGHTS
* At 31 December 2013, our net asset value per share was 233.6p, giving a total
return for the twelve months of 29.9 per cent.
* Our net asset value total return since launch just over ten years ago on
15 December 2003 was 164.5 per cent.
* Our revenue return was 2.7p per share. The Board is pleased to recommend a
dividend of 2.7p per share.
* The share price closed the year at 230.0p which was a discount of
1.5 per cent to the net asset value per share.
* We continued our policy of buying in shares with a view to maintaining the
share price at close to the net asset value per share. During 2013, we bought
in 1.9 million shares at a cost of £3.8 million.
* The ongoing charges ratio was 1.1 per cent in 2013.
* During 2013 we renewed the £10 million borrowing facility with Scotiabank
Europe plc. At the year end, the equivalent of £3.7 million in Japanese yen had
been drawn down, which represented 3.3 per cent of Shareholders' funds.
FINANCIAL SUMMARY
Results for year 31 December 31 December Change
2013 2012
Shareholders' funds £112,580,000 £91,766,000 22.7%
Net asset value per ordinary
share ("NAV") 233.6p 183.1p 27.6%
Share price 230.0p 175.5p 31.1%
Share price discount to NAV 1.5% 4.2%
Revenue return per ordinary 2.7p 3.9p (30.8)%
share*
Dividend per ordinary share 2.7p** 3.9p (30.8)%
* Based on the weighted average number of shares in issue during the year
excluding own shares held in treasury.
** Proposed final dividend for the year.
Year to Year to
31 December 2013 31 December 2012
Ordinary share Ordinary share
Year's high/low
Share price - high 230.0p 181.8p
- low 175.5p 152.0p
NAV - high 234.9p 190.4p
- low 186.3p 158.6p
Share price discount to NAV
- high 0.7% 1.9%
- low 7.4% 10.0%
Cost of running the Company
Ongoing charges* 1.1% 1.1%
* Based on total expenses, excluding finance costs and certain non-recurring
items for the year and average monthly net asset value.
PORTFOLIO OF INVESTMENTS
as at 31 December 2013
% of
Net
Company Sector Country Valuation Assets
£'000
Equity investments
20 largest equity investments
PostNL Industrials Netherlands 4,054 3.6
Terex Industrials United States 3,774 3.3
Sumitomo Mitsui Financials Japan 3,689 3.3
Bridgestone Consumer Goods Japan 3,578 3.2
KDDI Telecommunications Japan 3,355 3.0
Microsoft Technology United States 3,333 3.0
Vodafone Telecommunications United 3,233 2.9
Kingdom
Indra Sistemas Technology Spain 3,210 2.9
A.P. Moller-Maersk Industrials Denmark 3,183 2.8
Piaggio Consumer Goods Italy 3,150 2.8
Google Technology United States 3,100 2.7
Tyco International Industrials United States 3,087 2.7
Qualcomm Technology United States 3,084 2.7
Panasonic Consumer Goods Japan 2,931 2.6
Dainippon Screen Technology Japan 2,924 2.6
BG Oil & Gas United 2,906 2.6
Kingdom
Intesa Sanpaulo Financials Italy 2,903 2.6
SanDisk Technology United States 2,881 2.6
Genting Singapore Consumer Services Singapore 2,872 2.5
Toyota Consumer Goods Japan 2,835 2.5
Total - 20 largest equity investments 64,082 56.9
Other equity investments
Sugi Consumer Services Japan 2,826 2.5
Mitsubishi Industrials Japan 2,820 2.5
Hutchison Whampoa Industrials Hong Kong 2,809 2.5
ABB Industrials Switzerland 2,806 2.5
Osram Licht Consumer Goods Germany 2,798 2.5
Fresenius Medical Care Health Care Germany 2,778 2.5
ENI Oil & Gas Italy 2,748 2.4
Yamaha Motor Consumer Goods Japan 2,679 2.4
DBS Financials Singapore 2,650 2.3
Japan Tobacco Consumer Goods Japan 2,625 2.3
HSBC Financials United 2,443 2.2
Kingdom
Orange Telecommunications France 2,351 2.1
Misawa Homes Consumer Goods Japan 2,316 2.1
Swire Pacific Industrials Hong Kong 2,305 2.0
KPN Telecommunications Netherlands 2,287 2.0
Samsung Electronics Consumer Goods South Korea 2,278 2.0
Toshiba Industrials Japan 2,262 2.0
Gazprom Oil & Gas Russia 2,225 2.0
Edinburgh Partners Financials - unlisted United 1,450 1.3
Kingdom
Bank Mandiri Financials Indonesia 1,278 1.1
Edinburgh Partners Financials - OEIC Ireland 1,217 1.1
Prospect Fund
AstraZeneca Health Care United 863 0.8
Kingdom
Prince Frog Consumer Goods China 547 0.5
International
Total - 43 equity investments 115,443 102.5
Cash less net liabilities (2,863) (2.5)
Net assets 112,580 100.0
The geographic distribution is based on each investment's principal stock
exchange listing, except in instances where this would not give a proper
indication of where its activities predominate.
Of the ten largest portfolio investments as at 31 December 2013, the valuations
at the previous year end, 31 December 2012, were Microsoft £2,726,000; Indra
Sistemas £2,608,000; Sumitomo Mitsui £2,585,000; Bridgestone £2,476,000;
A.P. Moller-Maersk £2,450,000; and Vodafone £2,107,000. PostNL, Terex, KDDI and
Piaggio were new purchases in the year ended 31 December 2013.
DISTRIBUTION OF INVESTMENTS
as at 31 December 2013 (& of investments)
% of
Sector distribution investments
Industrials 23.3
Consumer Goods 22.3
Technology 16.1
Financials 11.3
Telecommunications 9.8
Oil & Gas 6.7
Consumer Services 4.9
Health Care 3.2
Financials (unlisted) 1.3
Financials (OEIC) 1.1
100.0
% of
Geographical distribution investments
Europe 30.9
Japan 30.2
United States 16.6
Asia Pacific 12.7
United Kingdom 9.6
100.0
The figures detailed in the geographical distribution table represent the
Company's exposure to these countries or regional areas.
The geographic distribution is based on each investment's principal stock
exchange listing, except in instances where this would not give a proper
indication of where its activities predominate.
STRATEGIC REPORT
The Strategic Report has been prepared in accordance with Section 414A of the
Companies Act 2006 (the "Act"). Its purpose is to inform members of the Company
and help them assess how the Directors have performed their legal duty under
Section 172 of the Act to promote the success of the Company.
CHAIRMAN'S STATEMENT
Results
At 31 December 2013, our net asset value per share ("NAV") was 233.6p, giving a
total return for the twelve months of 29.9 per cent. This is an excellent
result both in absolute terms and relative to the FTSE All-World Index, which
had a total return of 21.0 per cent. The total return for the FTSE All-Share
Index was 20.8 per cent. Your Board has never set a formal benchmark against
which we measure the investment performance of the Company. This is to give our
Investment Manager, Edinburgh Partners, complete discretion to invest only in
shares that its research shows to represent good value without consideration of
the constituents of any index. We believe that this will give a better
long-term investment performance. Your Company has now been in existence for
ten years, having been launched on 15 December 2003. The NAV total return since
then to the end of 2013 was 164.5 per cent. It is encouraging to note that,
over the same period, the sterling total return for the FTSE All-World Index
was 135.8 per cent and for the FTSE All-Share Index was 138.1 per cent.
The share price closed the year at 230.0p, an increase of 31.1 per cent over
the price at the end of 2012. At the year end, the share price was at a
discount of 1.5 per cent to the NAV. We continued our policy of buying in
shares with a view to maintaining the share price at close to the NAV. During
the year, we bought in 1.9 million shares and virtually all these buy ins were
done in the first half of the year. In the second half of the year, demand for
the shares increased in line with the strong investment performance. As a
result, we only bought in 25,000 shares while maintaining the share price close
to NAV.
Our heavy weighting in Japanese shares was a major factor in the investment
performance. The Japanese equity market suffered in the aftermath of the
tsunami in early 2011. However, our Investment Manager's conviction about the
exceptional value available in many Japanese shares was finally rewarded in
2013. Indeed, the level of investment in Japan was increased in the early part
of the year, funded by reducing the investment in the UK and in the rest of
Asia. We also benefitted from placing greater emphasis on companies in the US
and Continental Europe than those in the UK and other Asian markets.
In the second half of the year, we started to take some profits in Japan as a
number of share prices had risen to levels that no longer represented good
value. The money raised was reinvested in Continental Europe where many shares
still offered value. By the year end, the percentage held in Europe ex UK was
slightly greater than the amount held in Japan. The distribution by
geographical sector is detailed above.
Stock market performance
Equity markets started 2013 on a strong note with the upward momentum
continuing until the second half of May. Concerns that the US Federal Reserve
was considering reducing the size of its quantitative easing, the stimulative
financial policy of buying in US government bonds, combined with fears of a
less robust Chinese economy led to profit taking. Bond and equity markets came
under pressure and Asian and other emerging markets were particularly affected.
Overall, the setback in equity markets was relatively brief but many individual
country indices fell by 10 per cent or more. By late June 2013, share prices
began to recover, helped by comments from the US Federal Reserve that any
reduction in quantitative easing would be delayed. Continental European markets
were particularly firm in the latter half of the year as concerns about the
euro began to dissipate and bond yields in southern European countries fell
back from crisis levels.
The best performing major market in local currency terms was Japan, where the
Topix Index was up 54.4 per cent. However, a weak yen reduced this to a gain of
24.7 per cent when adjusted into sterling. This is similar to the 24.0 per cent
sterling return achieved by the FTSE All-World Europe ex UK Index. The US S&P
Composite Index provided an even greater total return of 29.9 per cent when
measured in sterling. By contrast, the FTSE All-World Asia ex Japan Index
struggled to recover its losses of May and June and achieved a sterling total
return of only 1.3 per cent for the year.
Gearing
We continue to maintain a modest amount of potential gearing with a
multi-currency facility in place to borrow up to £10 million. At the year end,
we had drawn down the equivalent of £3.7 million in Japanese yen, which
represented 3.3 per cent of Shareholders' funds.
Revenue account and dividend
The revenue per share for the year was 2.7p. This compares with 3.9p per share
in the previous year. This decline in income is a result of reducing holdings
in some higher yielding shares that had performed well but had become expensive
and replacing them with shares of companies with more cyclical growth, which
are more attractively valued but have lower yields. We have always taken the
view that we want the selection of shares held to be based entirely on where
our Investment Manager finds the best value rather than on achieving a
particular level of dividend. Had we continued to hold the higher yielding
shares, the capital gain achieved would have been lower.
The Board is recommending a dividend of 2.7p per share compared to 3.9p last
year. Subject to approval by Shareholders at the Annual General Meeting, the
dividend will be paid on 30 May 2014.
The Board
Richard Burns will retire from your Board at this year's Annual General
Meeting. He has served as a Director since the launch of the Company. His many
years of investment experience and, in particular, his understanding of
investment trusts due to being on a number of investment trust boards and
having managed a trust himself, have been of immense value to the Board. I have
greatly appreciated his input and advice. It is the Board's intention to
appoint a new Director in due course. The Board's policy on the appointment of
Directors is explained in the corporate governance statement in the full Annual
Report and Financial Statements.
Re-issue of shares held in treasury
Shares that are bought back under the Company's buy back policy, as detailed
above in the Results section, are placed into treasury with a view to being
reissued at a later date. As at the date of this report, 16,306,917 shares are
held in treasury.
Under the Listing Rules, an investment company can sell treasury shares at a
price that is at a discount to the NAV if this is approved by the Shareholders.
Your Board has carefully considered the conditions for selling treasury shares
and the benefits that this can provide to Shareholders. The Board is therefore
proposing a resolution at the forthcoming Annual General Meeting that would
allow the Company to issue shares held in treasury at a weighted average
discount of not more than 2 per cent to the prevailing NAV. In addition, any
sales of treasury shares would not result in a dilution of the Company's NAV,
as at the date of the issue, of greater than 0.2 per cent in aggregate between
annual general meetings. The Board believes that this should help improve
liquidity in the Company's shares and that the effect of dilution on existing
Shareholders' interests would be minimal.
Changes to the Annual Report
You will note that there have been some changes to your Company's Annual Report
this year. These are the result of new narrative reporting requirements that
have now come into effect. There is now a Strategic Report, which contains many
of the disclosures previously contained within the Business Review section of
the Directors' Report, and a new Directors' Remuneration Report. In relation to
the latter, Shareholders will be asked to vote on both the Directors'
Remuneration Policy and the Directors' Remuneration Report at the forthcoming
Annual General Meeting.
Alternative Investment Fund Managers' Directive ("AIFMD")
AIFMD was conceived to address a perceived regulatory gap to protect investors
and intended to provide a harmonised regulatory and supervisory framework
throughout the European Union for regulating Alternative Investment Funds.
Although it was principally aimed at private equity and hedge funds, investment
trusts are also required to comply.
AIFMD was implemented by the UK on 22 July 2013, with existing investment
companies, such as EP Global Opportunities Trust plc, having until 22 July 2014
to comply fully with the requirements. The Company is in the process of making
the necessary arrangements to comply with this legislation. This will include
the appointment of a depositary, in addition to having a custodian, to provide
additional security over the Company's assets.
Outlook
The financial markets ended the year on a firm note, as the outlook for
economic growth had become increasingly positive. The optimism was tempered
somewhat by concerns about a moderating rate of growth in China and the level
of debt in some Chinese financial companies. A setback in equity prices in
early 2014 was a reminder that there remain considerable imbalances in the
global economy.
After such good gains in share prices in the developed markets, many shares are
looking expensive and so are vulnerable to profit taking. However, we believe
it is still possible to identify shares that represent good long-term value.
Your Company remains fully invested with a small amount of gearing in place.
Teddy Tulloch
Chairman
7 March 2014
INVESTMENT MANAGER'S REPORT
The Company's net asset value total return per share for 2013 was 29.9 per cent.
The rise in global equity markets paralleled the shift in sentiment away
from fears of financial collapse towards signs of returning economic stability
and growth.
We had considered for some time that investor attention would eventually turn
away from the problems of the past and begin to consider the future economic
outlook. For this to occur it was necessary that the financial system was
viewed as both sufficiently robust to support recovery and underpinned by the
authorities such that it could weather potential upsets. The Cypriot banking
crisis of early 2013 was a test case for market confidence. Despite losses for
depositors and bondholders and the initiation of capital controls, the European
banking system did not suffer from the levels of volatility witnessed in
previous years when capital or sovereign debt fears were elevated.
As the concerns over the future stability of the euro receded, share prices in
Europe generally began to recover and the premium being paid for those
companies perceived to be the `safest' began to diminish. Conversely, companies
which were viewed as either more cyclical, such as the Danish shipping company,
A.P. Moller-Maersk, or threatened as a consequence of being based in one of the
peripheral economies, such as Indra Sistemas, the Spanish IT company, performed
very strongly.
In Japan, where the Company has a significant exposure, the stockmarket rally,
fuelled by Mr Abe's election as Prime Minister in late 2012, continued apace.
Companies that had been squeezed almost out of existence by a severely
uncompetitive exchange rate began to reveal some of their underlying profit
potential, as the yen was devalued. Whilst the rise in share prices produced by
the expectation of improved profits was partially offset by the impact of the
currency decline, the total return in sterling terms to the Company was still
very positive.
In last year's Annual Report, we highlighted Panasonic as an example of a
company severely affected by the strong yen, reporting that the company had
been forced to write off yen 355 billion in impairments and charges. It is
pleasing to report that, since then, the Panasonic holding has been one of the
strongest performers in the Company's portfolio. Management has moved
aggressively to dispose of unprofitable businesses and has continued to improve
the efficiency of retained businesses. The combination of the current
restructuring and the historic changes, whose impact had been hidden by the
adverse exchange rate, had resulted in an out-of-favour company with huge
underlying potential. Whilst some of this undervaluation has been realised by
the 134 per cent appreciation in its share price in local currency over the
period, we consider that it is still not yet expensive.
Whilst the appreciation in our Japanese holdings caused some positions such as
Seven and I and Fujitsu to be trimmed or sold, we did find additional
opportunities during the year. One such opportunity was the telecoms company,
KDDI, which has been slowly enhancing its fixed line telecommunication and
content capability. Historically, fixed line telecommunication has been a drag
on profitability and, as such, investor attention tended to focus on the mobile
only companies within the telecoms sector. However, in the 4G world where
browsing and content is critical, it is the fixed line carriers with fibre
capability who will increasingly hold the dominant positions. KDDI is the only
significant fixed line content and mobile telecoms company in Japan and is,
therefore, exceptionally well placed competitively. Although the share price
has been strong, the ability of KDDI to provide content, fixed and mobile
bundled offerings provides it with substantial advantages for the future which
are not yet fully reflected in its share price.
On a similar theme, the Dutch telecoms company, KPN, was added to the portfolio
after the attempt by American Movil to acquire the company failed. The share
price fell sharply to a point where the ability to offer a full range of
services, combined with the restructuring of the business, was not fully
recognised. Additionally, regulation in Europe is in a state of flux, and the
EU recognises that infrastructure provision has been hampered by the lack of
investment and scale, a direct result of the regulatory framework. It is highly
likely that we will see rationalisation within the European telecoms sector and
that this will extend to the subscale fixed and mobile carriers, just as it has
already between the cable companies.
The Company had invested in the Chinese childcare products company, Prince Frog
International. The share price performed strongly during 2013 and moved beyond
a valuation justified by our view of its growth prospects. As a consequence we
progressively reduced our holding. As we were selling our final tranche of
shares an aggressive short-selling asset manager published a report questioning
the company's historic revenue accounting. The company rebutted the
allegations, but the share price fell sharply, leaving us with a small residual
position at the year end which has since been sold.
Our US exposure remains relatively low and it decreased over the year with the
sales of Cisco Systems, Applied Materials and Illinois Tool Works, all of which
had performed well. Our basic stance remains the same. Whilst we can still find
some undervalued stocks in most cases our analysis highlights that only with an
unprecedented sustaining of historically peak operating margins, could
companies be considered reasonable value. This assumption is very dangerous and
it is rare that peak operating margins can be maintained. Thus, whilst US
equities continued to perform well during 2013, we do not believe this will
continue indefinitely.
Another area worth highlighting is that of emerging markets. For a number of
years we have struggled to find undervalued stocks in emerging markets. To a
degree this is still the case, but with recent falls, some value is beginning
to emerge. Our approach has been to initiate positions where appropriate but
with very tight limits on the acquisition price. In this regard, we have begun
to purchase Bank Mandiri. This is an Indonesian bank that the Company had
previously invested in when sentiment had been extremely negative following
the Asian banking crisis of the late 1990s. The investment case is slightly
different this time. Rather than being about investing in an underappreciated
turn-round stock, on this occasion it is about investing in a bank where
investor sentiment is negative over fears that the US Federal Reserve tapering
programme will drain investor liquidity from Asian markets.
In summary, our view is that markets are now at least fairly valued and, in the
case of the US, substantially more than fairly valued. On the other hand, we
expect that in developed markets short-term interest rates will stay low for
some considerable time and that, as a consequence, we will see a prolonged
period of low but stable economic growth. We therefore expect that equities
will continue to provide reasonable returns and our principal fear is that
share prices could run too far ahead. In previous periods when this has
happened, we have been very comfortable in raising the Company's liquidity
level and we would anticipate doing this again should valuations overshoot.
Dr Sandy Nairn
Edinburgh Partners
7 March 2014
OTHER STATUTORY INFORMATION
Objective
The investment objective of the Company is to provide Shareholders with an
attractive real long-term total return by investing globally in undervalued
securities. The portfolio is managed without reference to the composition of
any stock market index.
Strategy and business model
Investment policy
The Company invests in a focused portfolio of approximately 30 to 40 securities
of issuers throughout the world, predominantly in quoted equities. The Company
may also invest in unquoted securities, which are not anticipated to exceed
10 per cent of the Company's total assets at the time of investment (excluding
shares held in Edinburgh Partners). No investment in the Company's portfolio
may exceed 15 per cent of the Company's total assets at the time of investment.
The Company has the ability to invest in other investment companies or funds
but will invest no more than 15 per cent of its gross assets in other listed
investment companies (including investment trusts).
The Company may also invest a substantial portion of its assets in debt
instruments, cash or cash equivalents when the Investment Manager believes
market or economic conditions make equity investment unattractive or while
seeking appropriate investment opportunities for the portfolio or to maintain
liquidity. In addition, the Company may purchase derivatives for the purposes
of efficient portfolio management.
It is intended that, from time to time, when deemed appropriate, the Company
will borrow for investment purposes up to the equivalent of 25 per cent of its
total assets. By contrast, the Company's portfolio may from time to time have
substantial holdings of debt instruments, cash or short-term deposits.
The investment objective and policy are intended to distinguish the Company
from other investment vehicles which have relatively narrow investment
objectives and which are thus constrained in their decision making and asset
allocation. The objective and policy allow the Company to be constrained in its
investment selection only by valuation and to be pragmatic in portfolio
construction by only investing in securities which the Investment Manager
considers to be undervalued on an absolute basis.
Investment strategy
The Company's portfolio is managed without reference to any stock market index.
Investments are selected for the portfolio only after extensive research by the
Investment Manager. The process through which an equity must pass in order to
be included in the portfolio is rigorous. Only a security where the Investment
Manager believes that the price will be significantly higher in the future will
pass the selection process. The key to successful stock selection is to
identify the long-term value of a company's shares and to have the patience to
hold the shares until that value is appreciated by other investors. Identifying
long-term value involves detailed analysis of a company's earning prospects
over a five-year time horizon. Further details of the investment strategy can
be found in the Chairman's Statement and the Investment Manager's Report above.
The Company's Investment Manager is Edinburgh Partners which is an independent
specialist investment manager focusing exclusively on achieving returns for
investors based on global investment analysis of the highest quality. The
Edinburgh Partners investment team includes experienced investment
professionals with strong investment performance records who believe rigorous
fundamental research allied to patience is the basis of long-term investment
success. Each of the investment professionals has specific responsibilities for
sector and regional research in addition to their fund management role. Details
of the Investment Management Agreement are set out below.
Business and status of the Company
The Company is registered as a public limited company and is an investment
company within the terms of section 833 of the Act. The Company has received
approval from HM Revenue & Customs ("HMRC") as an authorised investment trust
under sections 1158 and 1159 of the Corporation Tax Act 2010. This approval is
subject to there being no subsequent enquiry under corporation tax self
assessment and to there being no subsequent serious breaches of the
regulations.
The Company has been approved as an investment trust for all years since its
inception in 2003. In the opinion of the Directors, the Company is directing
its affairs so as to enable it to continue to qualify for such approval.
The Company's shares are listed on the premium segment of the Official List of
the UK Listing Authority and traded on the main market of the London Stock
Exchange.
Portfolio analysis
A detailed review of how the Company's assets have been invested is contained
in the Investment Manager's Report above. A list of all the Company's
investments is contained in the Portfolio of Investments above. At
31 December 2013, the Company held 43 investments, excluding cash and other net
assets, with the largest representing 3.6 per cent of net assets, thus ensuring
that the Company has a suitable spread of investment risk. A sector and geographical
distribution of investments is shown above.
Results and dividend
The results for the year are set out in the Income Statement and in the
Reconciliation of Movements in Shareholders' Funds below.
For the year ended 31 December 2013, the net revenue return attributable to
Shareholders was £1.3 million (2012: £2.1 million) and the net capital return
attributable to Shareholders was £25.2 million (2012: £6.6 million). Total
Shareholders' funds increased by 22.7% to £112.6 million (2012: £91.8 million).
A final dividend for the year ended 31 December 2013 of 2.7p per ordinary share
(2012: 3.9p) has been recommended by the Board. Subject to Shareholder
approval, this dividend will be payable on 30 May 2014 to Shareholders on the
register at the close of business on 9 May 2014. The ex-dividend date will be
7 May 2014.
Key performance indicators
At each Board meeting, the Directors consider a number of performance measures
to assess the Company's success in achieving its objective. The key performance
indicators used to measure progress and performance of the Company over time
are established industry measures and are as follows:
Net asset value
In the year to 31 December 2013, the net asset value per share increased by
27.6 per cent from 183.1p to 233.6p. After taking account of dividends paid in
the year of 3.9p, the net asset value total return was 29.9 per cent. This
compares with the total return of 21.0 per cent from the FTSE All-World Index,
adjusted to sterling.
The net asset value total return since the launch of the Company on 15 December
2003 to 31 December 2013 was 164.5 per cent. This was an outperformance against
the total return of 135.8 per cent from the FTSE All-World Index, adjusted to
sterling.
Share price
In the year to 31 December 2013, the Company's share price increased by
31.1 per cent from 175.5p to 230.0p. The share price total return, taking
account of the 3.9p dividend paid in the year, was 33.6 per cent.
Share price discount to net asset value per share
The share price discount to net asset value per share narrowed from
4.2 per cent to 1.5 per cent in the year to 31 December 2013.
Revenue return per ordinary share
There was a decrease in the revenue per share in the year to 31 December 2013
of 30.8 per cent from 3.9p to 2.7p.
Dividend per ordinary share
The Directors are recommending a final dividend of 2.7p per ordinary share.
This represents a 30.8 per cent decrease on the prior year dividend of 3.9p. As
detailed in the Chairman's Statement above, the Board has always taken the view
that the investments to be held in the portfolio should be entirely on where
the Investment Manager finds the best value rather than on achieving a
particular level of dividend.
Ongoing charges
The ongoing charges ratio was 1.1 per cent (2012: 1.1 per cent) in the year to
31 December 2013.
The longer-term records of the key performance indicators are shown in the
Performance Record below.
Investment Management Agreement
The Company's investments are managed by Edinburgh Partners under an Investment
Management Agreement dated 16 April 2008, as amended pursuant to the terms of a
letter of agreement between the Company and Edinburgh Partners dated
3 February 2011. The Investment Manager receives a management fee of
0.75 per cent per annum (payable quarterly in arrears) of the average month-end
market capitalisation up to £100 million and 0.65 per cent of the average month-end
market capitalisation above this figure of the issued ordinary shares
(excluding treasury shares) during the relevant calendar quarter, plus an
administration fee (£120,000 for the year ended 31 December 2013) payable
quarterly in arrears and adjusted annually in line with changes in the Retail
Price Index. The administration fee now incorporates a number of costs
previously paid directly by the Company to an external service provider. The
Company also pays the Investment Manager £25,000 per annum in respect of
marketing related services.
The Company has an investment in the Edinburgh Partners Prospect Fund which is
managed by Edinburgh Partners, as detailed above and below. In respect of the
Company's investment in the Edinburgh Partners Prospect Fund, no investment
management fee was charged by Edinburgh Partners to the Edinburgh Partners
Prospect Fund during the year ended 31 December 2013.
The Investment Management Agreement may be terminated by either party giving
twelve months' written notice. No additional compensation is payable to
Edinburgh Partners on the termination of the Investment Management Agreement
other than the fees payable during the notice period.
Continuing appointment of the Investment Manager
The Board keeps the performance of the Investment Manager under continual
review. The Board, through delegation to the Audit and Management Engagement
Committee (the "Committee"), has considered the performance of the Investment
Manager and the terms of its engagement. It is the opinion of the Directors
that the continuing appointment of Edinburgh Partners on the terms agreed is in
the interests of Shareholders as a whole. This is because the investment
performance since the launch of the Company is good relative to that of the
markets in which the Company invests and because the remuneration of the
Investment Manager is fair both in absolute terms and compared to that of
managers of comparable investment companies. The Directors believe that by
paying the investment management fee calculated on a market capitalisation
basis, rather than a percentage of assets basis, the interests of the
Investment Manager are more closely aligned with those of Shareholders.
Principal risks and uncertainties
The Board considers that the following are the principal risks associated with
investing in the Company: investment and strategy risk, discount volatility
risk, market risk, liquidity risk, credit risk, interest rate risk, foreign
currency risk, gearing risk, regulatory risk, operational risk and financial
risk. An explanation of these risks and how they are managed and the policy and
practice with regards to financial instruments are contained in note 19 below.
The Board, through delegation to the Committee, undertakes an annual assessment
and review of all the risks stated above and in note 19 of the Financial
Statements below, together with a review of any new risks which may have arisen
during the year. These risks are formalised within the Company's risk
assessment matrix.
Main trends and future development
A review of the main features of the year ended 31 December 2013 and the
outlook for the coming year can be found in the Chairman's Statement and the
Investment Manager's Report above. The Board's main focus is on the investment
return and approach, attention is paid to the integrity and success of the
investment approach and on factors which may have an impact on this approach.
The Company's Financial Statements have been prepared in compliance with
Financial Reporting Standard ("FRS") 102 as detailed in the Notes to the
Financial Statements below.
Human rights, employees and community issues
The Board recognises the requirement under Section 414C of the Act to detail
information about human rights, employees and community issues; including
information about any policies it has in relation to these matters and the
effectiveness of these policies. These requirements do not apply to the Company
as it has no employees, all the Directors are non-executive and it has
outsourced all its functions to third party service providers; the Company has
therefore not reported further in respect of these provisions.
Gender diversity
The Board of Directors of the Company comprised of four male Directors during,
and at the end of, the year to 31 December 2013.
Social, environmental and ethical policy
The Company seeks to invest in companies that are well managed, with high
standards of corporate governance. The Board believes this creates the proper
conditions to enhance long-term value for Shareholders. The Company adopts a
positive approach to corporate governance and engagement with companies in
which it invests.
In pursuit of the above objective, the Board believes that proxy voting is an
important part of the corporate governance process and considers seriously its
obligation to manage the voting rights of companies in which it is invested,
for which it has delegated responsibility to the Investment Manager. It is the
policy of the Company to vote, as far as is practicable, at all shareholder
meetings of investee companies. The Company follows the relevant applicable
regulatory and legislative requirements in the UK, with the guiding principles
being to make proxy voting decisions which favour proposals that will lead to
maximising Shareholder value while avoiding any conflicts of interest. To this
end, voting decisions are taken on a case-by-case basis, with the key issues on
which the Investment Manager focuses being corporate governance, including
disclosure and transparency, board composition and independence, control
structures, remuneration and social and environmental issues.
The day-to-day management of the Company's business has been delegated to the
Company's Investment Manager, Edinburgh Partners, which has an Environmental,
SRI and Corporate Governance ("ESG") policy in place. The ESG policy statement,
which can be found on the website at www.edinburghpartners.com, describes the
manner in which the principles of the UK Stewardship Code are incorporated
within the investment process.
The assessment of the quality of investee companies in relation to
environmental considerations, socially responsible investment and corporate
governance is embedded in the Investment Manager's stock selection process.
Teddy Tulloch
Chairman
7 March 2014
EXTRACTS FROM THE DIRECTORS' REPORT
Share capital
At 31 December 2013, the Company's issued share capital comprised 64,509,642
ordinary shares, of which 16,306,917 ordinary shares were held in treasury.
At general meetings of the Company, one vote is attached to each ordinary share
in issue. Own shares held in treasury do not carry voting rights. The total
voting rights of the Company at 31 December 2013 were 48,202,725 ordinary
shares.
Issue of shares
On 11 October 2005, the Company applied for a block listing of 1,300,000
ordinary shares. As at 31 December 2013, and at the date of this report a
balance of 745,830 shares may be issued under this block listing.
No shares were issued during the year.
Purchase of shares
During the year ended 31 December 2013, the Company purchased in the market
1,925,000 ordinary shares (with a nominal value of £19,250) for treasury, at a
total cost of £3,786,000. This represented 2.98 per cent of the issued share
capital at 31 December 2012. During the year ended 31 December 2013, no shares
were purchased for cancellation.
The total number of own shares held in treasury as at 31 December 2013,
including those shares bought back in prior accounting periods, totalled
16,306,917 ordinary shares. The Board has not set a limit on the number of
shares that can be held in treasury at any one time. The maximum number of own
shares held in treasury during the year was 16,306,917 ordinary shares (with a
nominal value of £163,069) representing 25.28 per cent of the issued share
capital at the time they were held in treasury.
Sale of shares from treasury
No shares were sold from treasury during the year ended 31 December 2013.
Going concern
The Company's business activities, together with the factors likely to affect
its future development, performance and position, are set out in the Strategic
Report above. In addition, notes 19 and 20 to the Financial Statements include
the Company's objectives, policies and processes for managing its capital; its
financial risk management objectives; details of its financial instruments; and
its risk exposure. The Company's principal risks are investment and strategy
risk, discount volatility risk, market risk, liquidity risk, credit risk,
interest rate risk, foreign currency risk, gearing risk, regulatory risk,
operational risk and financial risk. The Company's assets consist principally
of a diversified portfolio of listed equity shares, which in most circumstances
are realisable within a short period of time and exceed its liabilities by a
significant amount. The Company has a £10 million secured multi-currency
revolving credit facility with Scotiabank Europe PLC. As at 31 December 2013,
£3.7 million had been drawn down under this facility, as detailed in note 12
below.
After due consideration, the Directors have concluded that the Company has
adequate resources to continue in operational existence for the foreseeable
future. For this reason, they have adopted the going concern basis in preparing
the Financial Statements.
MANAGEMENT REPORT AND STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RELATION TO
THE ANNUAL REPORT AND FINANCIAL STATEMENTS
Management report
Listed companies are required by the Financial Conduct Authority's Disclosure
and Transparency Rules (the "Rules") to include a management report within
their annual report and financial statements.
The information required to be included in the management report for the
purpose of these Rules is included in the Strategic Report, including the
Chairman's Statement and the Investment Manager's Report, above. Therefore no
separate management report has been included.
Statement of Directors' responsibilities in relation to the Annual Report and
Financial Statements
The Directors are responsible for preparing the Annual Report, the Directors'
Remuneration Report and Financial Statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare Financial Statements for each
financial period. Under that law, they have elected to prepare the Financial
Statements in accordance with UK Accounting Standards. Under company law, the
Directors must not approve the Financial Statements unless they are satisfied
that they give a true and fair view of the state of affairs of the Company and
of the profit or loss of the Company for that period.
In preparing these Financial Statements, the Directors are required to:
● select suitable accounting policies and then apply them consistently;
● make judgements and estimates that are reasonable and prudent;
● state whether applicable UK Accounting Standards have been followed, subject
to any material departures disclosed and explained in the Financial Statements;
and
● prepare the Financial Statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that its Financial Statements comply with the Act and
include the information required by the Listing Rules of the Financial Conduct
Authority. They have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Company and to prevent
and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing a Strategic Report, Directors' Report, Directors' Remuneration Report
and Corporate Governance Statement that comply with that law and those
regulations.
The Directors, to the best of their knowledge, state that:
● the Financial Statements, prepared in accordance with UK Accounting
Standards, give a true and fair view of the assets, liabilities, financial
position and profit of the Company;
● the Strategic Report and the Directors' Report include a fair review of the
development and performance of the business and the position of the Company
together with a description of the principal risks and uncertainties that it
faces; and
● the Annual Report and Financial Statements, taken as a whole, are fair,
balanced and understandable and provide the information necessary for
Shareholders to assess the Company's performance, business model and strategy.
The Directors confirm that, so far as they are each aware, there is no relevant
audit information of which the Company's Auditor is unaware; and each Director
has taken all the steps that ought to have been taken as a Director to make
himself aware of any relevant audit information and to establish that the
Company's Auditor is aware of that information.
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.
On behalf of the Board
Teddy Tulloch
Chairman
7 March 2014
NON-STATUTORY ACCOUNTS
The financial information set out below does not constitute the Company's
statutory accounts for the years ended 31 December 2012 and 31 December 2013
but is derived from those accounts. Statutory accounts for the year ended
31 December 2012 have been delivered to the Registrar of Companies, and those for
the year ended 31 December 2013 will be delivered in due course. The Auditor
has reported on those accounts; their report was (i) unqualified, (ii) did not
include a reference to any matters to which the Auditor drew attention by way
of emphasis without qualifying their report and (iii) did not contain a
statement under Section 498 (2) or (3) of the Act. The text of the Auditor's
report can be found in the Company's full Annual Report and Financial
Statements at www.epgot.com.
INCOME STATEMENT
for the year ended 31 December 2013
2013 2012
Revenue Capital Revenue Revenue Capital Total
Note £'000 £'000 £'000 £'000 £'000 £'000
Gains on investments 8 - 24,716 24,716 - 6,089 6,089
at fair value
Foreign exchange - 448 448 - 487 487
gains on capital
items
Income 2 2,711 - 2,711 3,379 - 3,379
Investment management 3 (757) - (757) (660) - (660)
fee
Other expenses 4 (391) - (391) (351) - (351)
Net return before 1,563 25,164 26,727 2,368 6,576 8,944
finance costs and
taxation
Finance costs
Interest payable and (77) - (77) (97) - (97)
related charges
Net return before 1,486 25,164 26,650 2,271 6,576 8,847
taxation
Taxation 5 (154) - (154) (189) - (189)
Net return after 1,332 25,164 26,496 2,082 6,576 8,658
taxation
pence pence pence pence pence pence
Return per ordinary 7 2.7 51.7 54.4 3.9 12.3 16.2
share
All revenue and capital items in the above statement derive from continuing
operations.
The total column of this statement is the profit and loss account of the
Company. The revenue and capital columns are prepared under guidance published
by the AIC.
A separate Statement of Other Comprehensive Income has not been prepared as all
such gains and losses are included in the Income Statement.
Dividend information
A final dividend for the year ended 31 December 2013 of 2.7p per ordinary share
(2012: 3.9p) has been recommended by the Board. Subject to Shareholder
approval, this dividend will be payable on 30 May 2014 to Shareholders on the
register at the close of business on 9 May 2014. The ex-dividend date will be
7 May 2014. Based on 48,202,725 ordinary shares, being the number of ordinary
shares in issue (excluding shares held in treasury) on 7 March 2014, the date
of this report, the total dividend payment will amount to £1,301,000. Dividends
are accounted for in the period in which they are paid. Further information on
dividend distributions can be found in note 6 of these Financial Statements.
The notes form part of these Financial Statements.
BALANCE SHEET
as at 31 December 2013
2013 2012
Note £'000 £'000
Fixed asset investments
Investments at fair value through 8 115,443 94,466
profit or loss
Current assets
Debtors 10 121 214
Cash at bank and short-term deposits 1,079 2,165
1,200 2,379
Creditors - amounts falling due within
one year
Creditors 11 372 769
Loans 12 3,691 4,310
4,063 5,079
Net current liabilities (2,863) (2,700)
Net assets 112,580 91,766
Capital and reserves
Called-up share capital 13 645 645
Capital redemption reserve 14 14
Special reserve 68,829 72,615
Capital reserve 40,376 15,212
Revenue reserve 2,716 3,280
Total Shareholders' funds 112,580 91,766
pence pence
Net asset value per ordinary share 15 233.6 183.1
These Financial Statements were approved and authorised for issue by the Board
of Directors of EP Global Opportunities Trust plc on 7 March 2014 and were
signed on its behalf by:
Teddy Tulloch
Chairman
Registered in Scotland No. 259207
The notes form part of these Financial Statements.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the year ended 31 December 2013
Capital
Share redemption Special Capital Revenue
capital reserve reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
Year ended 31 December 2013
At 31 December 2012 645 14 72,615 15,212 3,280 91,766
Share purchases for treasury - - (3,786) - - (3,786)
Net return after taxation - - - 25,164 1,332 26,496
for the year
Dividends paid - - - - (1,896) (1,896)
At 31 December 2013 645 14 68,829 40,376 2,716 112,580
Year ended 31 December 2012
At 31 December 2011 645 14 82,321 8,636 3,476 95,092
Share purchases for treasury - - (9,706) - - (9,706)
Net return after taxation - - - 6,576 2,082 8,658
for the year
Dividends paid - - - - (2,278) (2,278)
At 31 December 2012 645 14 72,615 15,212 3,280 91,766
The notes form part of these Financial Statements.
CASH FLOW STATEMENT
for the year ended 31 December 2013
2013 2012
Note £'000 £'000
Operating activities
Investment income received 2,811 3,472
Investment management fees paid (719) (667)
Administration fees paid (111) (78)
Other expenses paid (280) (225)
Net cash inflow from operating activities 16 (1,701) 2,502
Servicing of finance (79) (94)
Taxation (154) (192)
Capital expenditure and financial investment
Purchases of investments (49,800) (35,857)
Sales of investments 53,571 46,690
Exchange (losses)/gains on settlement (42) 78
Net cash inflow from investing activities 3,729 10,911
Net cash inflow before equity dividend and 5,197 13,127
financing
Equity dividend paid 6 (1,896) (2,278)
Financing
Shares purchased for treasury (4,259) (9,476)
Net cash outflow from financing (4,259) (9,476)
(Decrease)/increase in cash 17 (958) 1,373
The notes form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
1. Accounting policies
Statement of compliance
EP Global Opportunities Trust plc is a company incorporated in Scotland. The
Company is registered as a public limited company and is an investment company
within the terms of section 833 of the Act. The registered office is detailed
below. The nature of the Company's operations and its principal activities are
set out in the Strategic Report above.
The Company's Financial Statements have been prepared in compliance with
Financial Reporting Standard ("FRS") 102 as it applies to the Financial
Statements of the Company for the year ended 31 December 2013.
On 19 June 2013, the Company invested £1.0 million in Edinburgh Partners
Prospect Fund ("Prospect Fund"), a sub fund of Edinburgh Partners Opportunities
Fund plc, an Irish domiciled open-ended investment company, which is authorised
by the Central Bank of Ireland and registered in the UK with the Financial
Conduct Authority. The Prospect Fund is managed by the Company's Investment
Manager, Edinburgh Partners, and has an investment objective to provide an
attractive real long-term total return by investing globally in undervalued
securities. The Prospect Fund will invest in companies primarily outwith the
largest 500 companies by market capitalisation of the MSCI All Countries World
Index. Investing in the Prospect Fund will allow the Company to gain access to
a diversified range of companies globally with a lower market capitalisation
than the Company would consider investing in directly. The Company's
investment, at the time of purchase, 31 December 2013 and the date of this
report, represents a 52 per cent shareholding in the Prospect Fund.
Based on the Company's accounting policies adopted for the year ended
31 December 2012, the investment in the Prospect Fund would represent a
controlling interest and would require consolidation within the Company's
financial statements. The Company has early adopted FRS 102, which was issued
in March 2013. FRS 102 provides an exemption to consolidate the controlling
interest where the controlling interest represents an investment held
exclusively with a view to subsequent resale as part of an investment
portfolio. As a consequence of the early adoption of FRS 102, as at 31 December
2013, the investment in the Prospect Fund is held in the Company's portfolio of
investments and is measured at fair value with changes in fair value recognised
in the Income Statement.
The Company transitioned to FRS 102 as at 1 January 2013. The transition to FRS
102 has had no impact on the previous reported financial position and financial
performance.
The Financial Statements are prepared on a going concern basis and in
accordance with the Act and with the AIC Statement of Recommended Practice
issued in January 2009 relating to the Financial Statements of Investment Trust
Companies and Venture Capital Trusts ("SORP"). Where presentational guidance
set out in the SORP is consistent with FRS 102, the Directors have sought to
prepare the Financial Statements on a consistent basis compliant with the
recommendations of the SORP. All of the Company's activities are continuing.
Segmental reporting
The Directors are of the opinion that the Company is engaged in a single
segment of business, being investment business. The Company primarily invests
in listed companies.
Income recognition
Dividend and other investment income is included as revenue on the ex-dividend
date, the date the Company's right to receive payment is established. Deposit
interest and underwriting commission receivable is included on an accruals
basis.
Dividends are accounted for on the basis of income actually receivable, without
adjustment for the tax credit attaching to the dividends. Dividends from overseas
companies are shown gross of withholding tax.
Management expenses and finance costs
All management expenses and finance costs are accounted for on an accruals
basis. All operating expenses and finance costs are charged through the revenue
account in the Income Statement except costs that are incidental to the
acquisition or disposal of investments, which are charged to the capital
account in the Income Statement. Finance costs are debited using the effective
interest rate method. Transaction costs are included within the gains and
losses on investment sales, as disclosed in the Income Statement.
Investments
The Company has chosen to early adopt in full the provisions of Sections 11 and
12 in FRS 102 relating to financial instruments and represents a change to the
previous accounting policy. However, as all the financial instruments held by
the Company are considered to be `Basic Financial Instruments' as defined in
Section 11 of FRS 102, the Company does not hold any complex financial
instruments and therefore there is no impact on the Financial Statements and
accounting treatments as a result.
All investments held by the Company are classified as `fair value through
profit or loss'. Investments are initially recognised at cost, being the fair
value of the consideration given.
After initial recognition, investments are measured at fair value, with changes
in the fair value of investments and impairment of investments recognised in
the Income Statement and allocated to capital. Realised gains and losses on
investments sold are calculated as the difference between sales proceeds and
cost.
For investments actively traded in organised financial markets, fair value is
generally determined by reference to Stock Exchange quoted market bid prices at
the close of business on the Balance Sheet date, without adjustment for
transaction costs necessary to realise the asset. Unlisted investments will be
valued by the Directors at fair value, using the guidelines on valuation
published by the International Private Equity and Venture Capital Association
("IPEVC Valuation Guidelines"). This represents the Directors' view of the
amount for which an asset could be exchanged between knowledgeable willing
parties in an arm's length transaction. This does not assume that the
underlying business is saleable at the reporting date or that its current
shareholders have any intention to sell their holding in the near future.
Foreign currency
The Financial Statements have been prepared in sterling, rounded to the nearest
£'000, which is the functional and reporting currency of the Company. Sterling
is the currency of the primary economic environment in which the Company
operates.
Transactions denominated in foreign currencies are converted to sterling at the
actual exchange rate as at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies at the year end are reported at
the rate of exchange at the Balance Sheet date. Any gain or loss arising from a
change in exchange rate subsequent to the date of the transaction is included
as an exchange gain or loss in the capital reserve or the revenue account
depending on whether the gain or loss is of a capital or revenue nature.
Taxation
The charge for taxation is based on the net revenue for the year and takes into
account taxation deferred or accelerated because of timing differences between
the treatment of certain items for accounting and taxation purposes. Full
provision for deferred taxation is made under the liability method, without
discounting, on all timing differences between taxable profits and total
comprehensive income that have arisen but not been reversed by the Balance
Sheet date, unless such provision is not permitted by FRS 102. Deferred tax
assets are only recognised if it is considered more likely than not that there
will be suitable profits from which the future reversal of the underlying
timing differences be deducted. Timing differences are differences arising
between the Company's taxable profits and its results as stated in the
Financial Statements which are capable of reversal in one or more subsequent
periods.
Cash and cash equivalents
Cash and cash equivalents in the Balance Sheet comprise cash at bank and
short-term deposits with an original maturity date of three months or less.
Short-term debtors and creditors
Debtors and creditors with no stated interest rate and receivable within one
year are recorded at transaction price. Any losses arising from impairment are
recognised in the Income Statement in other operating expenses.
Dividends payable to Shareholders
Final dividends are recognised as a liability in the period in which they have
been approved by Shareholders in a general meeting. Interim dividends are
recognised as a liability in the period in which they have been declared and
paid.
Loans
All interest-bearing loans and borrowings which are basic financial instruments
are initially recognised at the sterling present value of cash payable to the
bank (including interest). After initial recognition they are measured at
amortised cost using the effective interest rate method, less impairment. The
effective interest rate amortisation is included in finance revenue in the
Income Statement. Loans are revalued to the sterling equivalent using exchange
rates at the appropriate date, with the gain or loss being recognised in the
capital reserve.
Borrowings that are payable within one year shall be measured at the
undiscounted amount of the cash or other consideration expected to be paid.
Own shares held in treasury
From time to time the Company buys back shares and holds them in treasury for
potential sale at a later date or for cancellation. The consideration paid and
received for these shares is accounted for in Shareholders' funds and, in
accordance with the SORP, the cost has been allocated to the Company's special
reserve. The cost of shares re-issued from treasury is calculated by taking the
average cost of shares held in treasury at the time of re-issue. Any difference
between the proceeds from shares sold from treasury and the average cost is
taken to share premium.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires the Company to make
judgements, estimates and assumptions that affect amounts reported for assets
and liabilities as at the Balance Sheet date and the amounts reported for
revenues and expenses during the year. The nature of estimation means that the
actual outcomes could differ from those estimates, possibly significantly. The
judgements relate to the unlisted investment where there is no appropriate
market price.
Reserves
Capital reserve
The following are accounted for in this reserve:
• gains and losses on the realisation of investments;
• realised exchange differences of a capital nature;
• net movement arising from changes in the fair value of investments that can
be readily converted to cash without accepting adverse terms; and
• expenses, together with related taxation effect, charged to this account in
accordance with the above policies.
Share premium
This reserve records the amount above the nominal value received for shares
sold, less transaction costs.
Special reserve
The special reserve was created by a reduction in the share premium account by
order of the High Court. It can be used for the repurchase of the Company's
ordinary shares.
In accordance with the SORP, the consideration paid for shares bought into and
held in treasury is shown as a deduction from the special reserve.
Capital redemption reserve
The capital redemption reserve accounts for amounts by which the issued capital
is diminished through the repurchase of the Company's own shares.
2. Income
2013 2012
£'000 £'000
Income from investments
UK net dividend income* 588 802
Overseas dividend income 2,122 2,571
Liquidity fund income 1 6
2,711 3,379
Total income comprises
Dividends 2,711 3,379
2,711 3,379
* Includes income of £214,000 (2012: £214,000) from the unlisted investment in
Edinburgh Partners.
3. Investment management fee
2013 2012
£'000 £'000
Investment management fee 757 660
The investment management fee is paid quarterly in arrears, at the rate of
0.75 per cent per annum of the market capitalisation of the issued ordinary shares
(excluding treasury shares) of the Company up to £100,000,000 and at a rate of
0.65 per cent per annum of the market capitalisation which exceeds this amount.
At 31 December 2013, there was £202,000 outstanding (2012: £164,000).
In addition, the Investment Manager received an administration fee of £120,000
as detailed in note 4 (2012: £79,000). At 31 December 2013, there was £30,000
outstanding (2012: £20,000). The administration fee now incorporates a number
of costs previously paid directly by the Company to an external service
provider.
In addition to the investment management fee, in the year ended 31 December 2013,
the Investment Manager received £25,000 (2012: £25,000) for marketing
related services. At 31 December 2013, there was £6,000 outstanding
(2012: £6,000) in relation to marketing related services. This cost is included in
other expenses as detailed in note 4 of these Financial Statements.
4. Other expenses
2013 2012
£'000 £'000
Administration fees 120 79
Auditor's remuneration (excluding VAT) for:
Audit 18 18
Taxation services - Advisory 6 6
Directors' remuneration 73 89
Other 174 159
391 351
5. Taxation
a) Analysis of charge in year
2013 2012
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Current tax
Overseas tax suffered 154 - 154 189 - 189
154 - 154 189 - 189
b) The current taxation charge for the year ended 31 December 2013 is lower
than the theoretical rate of corporation tax in the UK of 23.25 per cent
(2012: 24.5 per cent)(NB The standard rate of corporation tax was 24 per cent
from 1 April 2012 and 23 per cent from 1 April 2013. Previously it had been
26 per cent from 1 April 2011). The differences are explained below:
2013 2012
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Net return before 1,486 25,164 26,650 2,271 6,576 8,847
taxation
Theoretical tax at UK 346 5,851 6,197 556 1,611 2,167
corporation tax rate of
23.25 per cent (2012:
24.5 per cent)
Effects of:
- UK dividends that are (137) - (137) (196) - (196)
not taxable
- Foreign dividends that (433) - (433) (523) - (523)
are not taxable
- Non-taxable investment - (5,851) (5,851) - (1,611) (1,611)
(gains)/losses
- Unrelieved excess 224 - 224 163 - 163
expenses
- Disallowable expenses (1) - (1) - - -
- Double tax relief 1 - 1 - - -
- Overseas tax suffered 154 - 154 189 - 189
154 - 154 189 - 189
At 31 December 2013, the Company had unrelieved losses of £2,272,000
(31 December 2012: £1,275,000). It is unlikely that the Company will generate
sufficient taxable income in the future to use these expenses to reduce future
tax charges and therefore no deferred tax asset has been recognised.
In addition, due to the Company's status as an investment trust and the
intention to continue meeting the conditions required to obtain approval as an
investment trust in the foreseeable future, the Company has not provided
deferred tax on any capital gains and losses arising on the revaluation or
disposal of investments.
6. Dividends
2013 2012
£'000 £'000
Declared and paid
2012 final dividend of 3.9p per ordinary share paid in May
2013
(2011: final dividend of 4.2p paid in May 2012) 1,896 2,278
1,896 2,278
Net revenue return after taxation 1,332 2,082
Proposed
2013 final dividend of 2.7p (2012: final dividend of 3.9p) 1,301 1,937
per ordinary share
1,301 1,937
The Directors recommend a final dividend for the year of 2.7p per ordinary
share (2012: final dividend of 3.9p). Subject to approval by Shareholders at
the Annual General Meeting to be held on 16 April 2014, this dividend will be
payable on 30 May 2014 to Shareholders on the register at the close of business
on 9 May 2014. The ex-dividend date will be 7 May 2014. Based on 48,202,725
ordinary shares, being the number of ordinary shares in issue (excluding shares
held in treasury) at 7 March 2014, the date of this report, the total dividend
payment will amount to £1,301,000.
7. Return per ordinary share
2013 2012
Net Ordinary Per Net Ordinary Per
return shares* share return shares* share
£'000 pence £'000 pence
Revenue return after 1,332 48,688,710 2.7 2,082 53,395,020 3.9
taxation
Capital return after 25,164 48,688,710 51.7 6,576 53,395,020 12.3
taxation
Total return 26,496 48,688,710 54.4 8,658 53,395,020 16.2
* Weighted average number of ordinary shares, excluding shares held in
treasury, in issue during the year.
8. Investments
2013 2012
£'000 £'000
Listed investments 113,993 93,016
Unlisted investments 1,450 1,450
115,443 94,466
2013 2012
Unlisted Listed Total Total
£'000 £'000 £'000 £'000
Analysis of investment portfolio
movements
Opening book cost 214 94,756 94,970 107,756
Opening investment holding gains/ 1,236 (1,740) (504) (9,206)
(losses)
Opening valuation 1,450 93,016 94,466 98,550
Movements in the year:
Purchases at cost - 49,832 49,832 35,850
Sales - proceeds - (53,571) (53,571) (46,023)
- realised gains/(losses) on sales - 10,619 10,619 (2,613)
Increase in investment holding gains - 14,097 14,097 8,702
Closing valuation 1,450 113,993 115,443 94,466
Closing book cost 214 101,636 101,850 94,970
Closing investment holding gains/ 1,236 12,357 13,593 (504)
(losses)
Closing valuation 1,450 113,993 115,443 94,466
Within the listed investments detailed above, there is included the Company's
investment in the Edinburgh Partners Prospect Fund, a sub-fund of an Irish
domiciled open-ended investment company listed on the Dublin Stock Exchange as
detailed in note 1, which was valued at £1,217,000 at 31 December 2013. At
30 September 2013, the most recent year end of the Edinburgh Partners Prospect
Fund, the aggregate amount of capital and reserves was US$3,425,000. The profit
from 18 June 2013, the launch date of the Edinburgh Partners Prospect Fund, to
30 September 2013 was US$300,000.
The unlisted investment detailed above is the 71,294 (2012: 71,294) shares in
Edinburgh Partners.
2013 2012
Unlisted Listed Total Total
£'000 £'000 £'000 £'000
Analysis of capital gains and losses
Realised gains/(losses) on sales - 10,619 10,619 (2,613)
Increase in investment holding gains - 14,097 14,097 8,702
Gains on investments - 24,716 24,716 6,089
Fair value hierarchy
In accordance with FRS 102, the Company must disclose the fair value hierarchy
of financial instruments.
All of the Company's financial instruments fall into level a, being valued at
quoted prices in active markets, except its investment in Edinburgh Partners
Limited which falls into level c and is fair valued using an unquoted price
that is derived from inputs that are not based on observable market data by
using recognised valuation methodologies, in accordance with IPEVC Valuation
Guidelines. A reconciliation of the fair value movements of level c investments
is shown in the unlisted column of the table above.
Transaction costs
During the year the Company incurred transaction costs of £82,000 (2012: £59,000)
and £71,000 (2012: £64,000) on purchases and sales of investments respectively.
These amounts are included in gains on investments at fair value, as disclosed
in the Income Statement above.
9. Significant holdings
The Company had no holdings of 3 per cent or more of the share capital of any
portfolio companies.
10. Debtors
2013 2012
£'000 £'000
Dividends receivable 87 187
Prepayments and accrued income 25 16
Taxation recoverable 9 11
121 214
11. Creditors: amounts falling due within one year
2013 2012
£'000 £'000
Due to brokers 32 -
Other creditors and accruals 340 769
372 769
12. Loans
2013 2012
£'000 £'000
Revolving credit facility - Japanese yen 3,691 2,526
- US dollar - 1,784
3,691 4,310
The Company has a £10,000,000 secured multi-currency revolving credit facility
with Scotiabank Europe PLC. As at 31 December 2013 £3,691,000 (2012: £4,310,000)
had been drawn down under this facility. Interest on any amounts
drawn down under this facility were chargeable at a margin of 1.10 (2012: 1.10)
per cent per annum above the British Bankers' Association Interest Settlement
Rate at the time of draw down.
The principal financial covenants of the facility are that the adjusted asset
coverage shall not be less than 4:1 and net assets shall not fall below
£25,000,000. The Company has entered into a security deed with Scotiabank Europe
PLC, whereby Scotiabank Europe PLC has a full title guarantee and continuing
security to the assets of the Company for the discharge of its liabilities. The
financial covenants were met in the year ended 31 December 2013. The facility
was extended for a further year on 10 January 2014 at a margin of 0.85 per cent
per annum above the British Bankers' Association Interest Settlement Rate at
the time of draw down.
13. Share capital
Number Number
of shares 2013 of shares 2012
Ordinary 1p £'000 Ordinary 1p £'000
Allotted, called up and fully
paid:
At 1 January 64,509,642 645 64,509,642 645
At 31 December 64,509,642 645 64,509,642 645
Duration of the Company
The Company does not have a termination date or the requirement for any
periodic continuation vote.
14. Own shares held in treasury
Details of own shares purchased for and sold from treasury are shown below:
2013 2012
Number of Number of
shares shares
At 1 January 14,381,917 8,541,917
Shares purchased for treasury 1,925,000 5,840,000
At 31 December 16,306,917 14,381,917
During the year ended 31 December 2013, 1,925,000 shares (2012: 5,840,000) were
purchased for treasury at a cost of £3,786,000 (2012: £9,706,000). No shares
were sold from treasury (2012: nil).
15. Net asset value per ordinary share
The net asset value per ordinary share, calculated in accordance with the
Articles of Association, is as follows:
2013 2012
pence pence
Ordinary share 233.6 183.1
The net asset value per ordinary share is based on net assets of £112,580,000
(2012: £91,766,000) and on 48,202,725 (2012: 50,127,725) ordinary shares, being
the number of ordinary shares, excluding shares held in treasury, in issue at
the year end.
16. Reconciliation of net return before finance costs and taxation to net cash
inflow from operating activities
2013 2012
£'000 £'000
Net return before finance costs and taxation 26,727 8,944
Net (gains) on capital items (25,164) (6,576)
Increase in creditors 47 37
Decrease in debtors and accrued income 91 97
Net cash inflow from operating activities 1,701 2,502
17. Reconciliation of net cash flow to movement in net debt
2013 2012
£'000 £'000
(Decrease)/increase in cash for the year (958) 1,373
Realised exchange gains 491 409
(467) 1,782
Net debt at 1 January (2,145) (3,927)
Net debt at 31 December (2,612) (2,145)
At Exchange At
1 January Cash (losses)/ 31 December
2013 flows gains 2013
£'000 £'000 £'000 £'000
Cash at bank 2,165 (958) (128) 1,079
Loans (4,310) - 619 (3,691)
(2,145) (958) 491 (2,612)
At Exchange At
1 January Cash (losses)/ 31 December
2012 flows gains 2012
£'000 £'000 £'000 £'000
Cash at bank 908 1,373 (116) 2,165
Loans (4,835) - 525 (4,310)
(3,927) 1,373 409 (2,145)
18. Analysis of financial assets and liabilities
Interest rate and currency profile
The interest rate and currency profile of the Company's financial assets and
liabilities were:
2013 2012
Cash Cash
No flow No flow
interest interest interest interest
rate rate risk rate rate risk
exposure exposure Total exposure exposure Total
£'000 £'000 £'000 £'000 £'000 £'000
Equity shares
US dollar 22,701 - 22,701 22,233 - 22,233
Japanese yen 34,839 - 34,839 21,947 - 21,947
Euro 26,279 - 26,279 13,817 - 13,817
Sterling 10,895 - 10,895 12,207 - 12,207
Hong Kong dollar 5,661 - 5,661 9,595 - 9,595
Singapore dollar 5,522 - 5,522 6,830 - 6,830
South Korean won 2,278 - 2,278 2,915 - 2,915
Swiss franc 2,807 - 2,807 2,472 - 2,472
Danish krone 3,183 - 3,183 2,450 - 2,450
Indonesian rupee 1,278 - 1,278 - - -
Cash at bank and
short-term deposits
US dollar - 1,044 1,044 - 56 56
Sterling - 35 35 - 2,109 2,109
Debtors
US dollar - - - 2 - 2
Japanese yen 38 - 38 74 - 74
Euro 5 - 5 7 - 7
Sterling 74 - 74 86 - 86
Singapore dollar - - - 41 - 41
Norwegian krone 4 - 4 4 - 4
Short-term creditors
US dollar - - - (6) - (6)
Japanese yen (10) - (10) (7) - (7)
Sterling (330) - (330) (756) - (756)
Indonesian rupee (32) - (32) - - -
Loans
US dollar - - - - (1,784) (1,784)
Japanese yen - (3,691) (3,691) - (2,526) (2,526)
115,192 (2,612) 112,580 93,911 (2,145) 91,766
At 31 December 2013, the Company had no financial liabilities other than the
short-term creditors and loans as stated above (2012: £nil). All financial
assets and liabilities of the Company are held at fair value.
19. Risk analysis
Risks
The principal risks the Company faces are:
- Investment and strategy risk
- Discount volatility risk
- Market risk
- Liquidity risk
- Credit risk
- Interest rate risk
- Foreign currency risk
- Gearing risk
- Regulatory risk
- Operational risk
- Financial risk
The Investment Manager monitors the financial risks affecting the Company on an
ongoing basis within the policies and guidelines determined by the Board. The
Directors receive financial information, which is used to identify and monitor
risk, quarterly. The Company may enter into derivative contracts to manage risk
but has not done so to date. A description of the principal risks the Company
faces is detailed below.
Investment and strategy risk
There can be no guarantee that the objective of the Company will be achieved.
The Investment Manager meets regularly with the Board to discuss the portfolio
performance and strategy. The Board receives quarterly reports from the
Investment Manager detailing all portfolio transactions and any other
significant changes in the market or stock outlooks.
Discount volatility risk
The Board recognises that it is in the long-term interests of Shareholders to
reduce discount volatility and believes that the prime driver of discounts over
the longer term is investment performance. The Company is permitted to employ
gearing, a process whereby funds are borrowed principally for the purpose of
purchasing securities should the Board feel that it is appropriate to do so.
The use of gearing can magnify discount volatility.
The Board actively monitors the discount at which the Company's shares trade,
and is committed to using its powers to allot or repurchase the Company's
ordinary shares with a view to maintaining the middle market price at which
the shares trade at close to the net asset value most recently published by
the Company (taking into account the effect on the net asset value per
ordinary share of any rights to which the shares are trading ex-dividend).
The Board's commitment to allot or repurchase ordinary shares is subject to it
being satisfied that any offer to allot or purchase shares is in the best
interests of Shareholders of the Company as a whole, the Board having the
requisite authority pursuant to the Articles of Association and relevant
legislation to allot or purchase shares, and all other applicable legislative
and regulatory provisions.
During the year ended 31 December 2013 the Company bought back 1,925,000
(2012: 5,840,000) ordinary shares into treasury.
During the year ended 31 December 2013 the Company sold nil (2012: nil)
ordinary shares from treasury.
Market risk
The Company is exposed to market risk due to fluctuations in the market prices
of its investments. Market risk arises mainly from uncertainty about future
prices of financial instruments used in the Company's business. It represents
the potential loss the Company might suffer through holding market positions in
the face of price movements. The Investment Manager monitors the prices of
financial instruments held by the Company on an ongoing basis.
The Investment Manager actively monitors market and economic data and reports
to the Board, which considers investment policy on a regular basis. The net
asset value per ordinary share of the Company is issued daily to the London
Stock Exchange and is also available on the Company's website www.epgot.com.
Details of the Company's investment portfolio as at 31 December 2013 are
disclosed above.
If the investment portfolio valuation fell by 1 per cent from the amount
detailed in the Financial Statements as at 31 December 2013 it would have the
effect, with all other variables held constant, of reducing the total return
before taxation and therefore net assets by £1,154,000 (2012: £945,000). An
increase of 1 per cent in the investment portfolio valuation would have an
equal and opposite effect on the total return before taxation and net assets.
Liquidity risk
The Company's policy with regard to liquidity is to ensure continuity of
funding. Short-term flexibility is achieved through cash management.
The Company's assets comprise mainly of readily realisable securities which can
be sold freely to meet funding requirements if necessary. Securities listed on
a recognised stock exchange have been valued at bid prices and exchange rates
ruling at the close of business on 31 December 2013. In certain circumstances,
the market prices at which investments are valued may not represent the
realisable value of those investments, taking into account both the size of the
Company's holding and the frequency with which such investments are traded.
Credit risk
Credit risk is the risk of financial loss to the Company if the contractual
party to a financial instrument fails to meet its contractual obligations.
The carrying amounts of financial assets best represent the maximum credit risk
exposure at the Balance Sheet date. The Company's listed investments are held
on its behalf by The Bank of New York Mellon acting as the Company's custodian.
Bankruptcy or insolvency of the custodian may cause the Company's rights with
respect to securities held by the custodian to be delayed. The Board monitors
the Company's risk by reviewing the custodian's internal controls reports.
Investment transactions are carried out with a large number of brokers whose
creditworthiness is reviewed by the Investment Manager. Transactions are
ordinarily undertaken on a delivery versus payment basis whereby the Company's
custodian bank ensures that the counterparty to any transaction entered into by
the Company has delivered on its obligations before any transfer of cash or
securities away from the Company is completed.
Cash is only held at banks and in money market funds that have been identified
by the Board as reputable and of high credit quality.
The maximum exposure to credit risk as at 31 December 2013 was £116,643,000
(2012: £96,845,000). The calculation is based on the Company's credit risk
exposure as at 31 December 2013 and this may not be representative of the
year as a whole.
None of the Company's assets are past due or impaired.
Interest rate risk
The Company's assets and liabilities, excluding short-term debtors and
creditors, may comprise financial instruments which include investments in
fixed interest securities.
Details of the Company's interest rate exposure as at 31 December 2013 are
disclosed in note 18 of these Financial Statements.
The majority of the Company's assets were non-interest bearing as at
31 December 2013. Surplus cash is invested in liquidity funds.
The Company has a £10,000,000 secured multi-currency revolving credit facility
with Scotiabank Europe PLC. As at 31 December 2013, £3,691,000 (2012: £ 4,310,000)
had been drawn down incurring an average interest rate of 1.2512 (2012: 1.4164)
per cent per annum.
If interest rates had reduced by 0.25 per cent (2012: 0.25 per cent) from those
obtained as at 31 December 2013 it would have the effect, with all other
variables held constant, of increasing the total return before taxation and
therefore net assets on an annualised basis by £7,000 (2012: increasing the
total return before taxation and net assets by £5,000 on an annualised basis).
If there had been an increase in interest rates of 0.25 per cent
(2012: 0.25 per cent) there would have been an equal and opposite effect in the
total return before taxation and net assets. The calculations are based on cash at
bank, short-term deposits and the revolving credit facility as at
31 December 2013 and these may not be representative of the year as a whole.
The maturity profile of the Company's financial liabilities is as follows:
As at As at
31 December 31 December
2013 2012
£'000 £'000
In one year or less 3,691 4,323
In more than one, but not more than two years - -
In more than two, but not more than five years - -
3,691 4,323
Foreign currency risk
The base currency of the Company is sterling. The international nature of the
Company's investment activities gives rise to a currency risk which is inherent
in the performance of its overseas investments. The Company's overseas income
is also subject to currency fluctuations.
It is not the Company's policy to hedge this risk on a continuous basis.
Details of the Company's foreign currency risk exposure as at 31 December 2013
are disclosed in note 18 of these Financial Statements.
If sterling had strengthened by 1 per cent against all other currencies on
31 December 2013, with all other variables held constant, it would have the
effect of reducing the total return before taxation and net assets by £1,019,000
(2012: £781,000). If sterling had weakened by 1 per cent against all other
currencies there would have been an equal and opposite effect on the total
return before taxation and net assets.
Gearing risk
Gearing is used to enhance long-term returns to Shareholders. The Company is
permitted to employ gearing should the Board feel it appropriate to do so up
to a maximum of 25 per cent of total assets.
The use of gearing is likely to lead to volatility in the net asset value per
ordinary share, meaning that a relatively small movement either down or up in
the value of the Company's total investments may result in a magnified movement
in the same direction of the net asset value per ordinary share. The greater
the level of gearing, the greater the level of risk and likely fluctuation in
the share price.
The Company's gearing, which is a secured multi-currency revolving credit
facility, is disclosed in note 12 above. At the year end the Company's gearing
was 3.3 per cent (2012: 4.7 per cent).
As a result of entering into this facility, the Company is exposed to interest
rate risk due to fluctuations in the prevailing market rates.
Regulatory risk
Failure to qualify under the terms of sections 1158 and 1159 of the Corporation
Tax Act 2010 may lead to the Company being subject to capital gains tax. A
breach of the rules of the UK Listing Authority may result in censure by the
Financial Conduct Authority and/or the Company's suspension from listing.
The Board has agreed service levels with the Company Secretary and Investment
Manager which include active and regular review of compliance with these
requirements. These checks are reviewed at each Board Meeting.
Operational risk
There are a number of operational risks associated with the fact that third
parties undertake the Company's administration and custody. The main risk is
that third parties may fail to ensure that statutory requirements such as
Companies Act and UK Listing Authority requirements are met.
The Board regularly receives and reviews management information on third
parties which the Company Secretary compiles. In addition, each of the third
parties provides a copy of its report on internal controls
(ISAE 3402, SSAE 16, SAS 70 or equivalent) to the Board each year.
Financial risk
Inappropriate accounting policies or failure to comply with current or new
accounting standards may lead to a breach of regulations.
The Investment Manager employs independent administrators to prepare all
financial statements and meets with the independent auditor at least once a
year to discuss all financial matters including appropriate accounting polices.
The Company is a member of the AIC, a trade body intended to promote investment
trusts which also develops best practice for all of its members.
The Board undertakes an annual assessment and review of all the risks stated
above together with a review of any new risks which may have arisen during the
year. These risks are formalised within the Company's risk assessment matrix.
20. Capital management policies
The Company's objective is to provide Shareholders with an attractive real
long-term total return by investing globally in undervalued securities. The
portfolio is managed without reference to the comparison of any stock market
index. In pursuing this objective, the Board has a responsibility for ensuring
the Company's ability to continue as a going concern. This involves the ability
to: issue and buyback share capital within limits set by the Shareholders in
general meeting; borrow monies in the short and long term; and pay dividends to
Shareholders out of current year revenue earnings as well as out of brought
forward revenue reserves.
The Company's capital comprises:
2013 2012
£'000 £'000
Called-up share capital 645 645
Capital redemption reserve 14 14
Special reserve 68,829 72,615
Capital reserve 40,376 15,212
Revenue reserve 2,716 3,280
Total Shareholders' funds 112,580 91,766
The Company's objectives for managing capital are the same as the previous year
and have been complied with throughout the year.
21. Transactions with the Investment Manager
Information with respect to transactions with the Investment Manager is
provided in note 3 of these Financial Statements and in the Strategic Report
above.
Information with respect to income received on the unlisted investment held by
the Company in Edinburgh Partners is provided in note 2 of these Financial
Statements.
PERFORMANCE RECORD
Net
asset Share Revenue
value price Share price return Dividend
per per discount to per per Ongoing
Shareholders' ordinary ordinary net asset ordinary ordinary charges
funds share share value share share ratio(3)
Year ended
31 December
2004(1) £26.1m 116.4p 110.5p 5.1% 0.6p 0.4p 1.7%(4)
2005 £52.2m 156.2p 154.5p 1.1% 1.1p 0.8p 1.5%(4)
2006 £58.8m 172.8p 170.0p 1.6% 2.1p 1.8p 1.2%(4)
2007 £57.7m 177.2p 160.0p 9.7% 2.7p 2.3p 1.1%(4)
2008 £46.4m 150.4p 132.5p 11.9% 3.9p 3.1p 1.1%(4)
2009 £50.7m 175.9p 172.0p 2.2% 2.7p 2.4p 1.0%(4,5)
2010 £51.6m 188.2p 186.8p 0.7% 3.2p 2.8p 1.3%(4)
2011 £95.1m 169.9p 167.0p 1.7% 5.0p 4.2p 0.8%(6)
2012 £91.8m 183.1p 175.5p 4.2% 3.9p 3.9p 1.1%
2013 £112.6m 233.6p 230.0p 1.5% 2.7p 2.7p(2) 1.1%
(1) Period 13 November 2003 to 31 December 2004. The Company commenced operations
on the admission of its shares to listing on the London Stock exchange on
15 December 2003.
(2) Proposed final dividend for the year
(3) Ongoing charges based on total expenses, excluding finance costs and certain
non-recurring items for the average monthly net asset value.
(4) Total expense ratio based on total expenses for the year and average monthly
net asset value.
(5) Total expense ratio 1.3 per cent in 2009 excluding VAT refund.
(6) The total expense ratio would have been 1.0 per cent if investment management
fees of £236,000 had not been waived as a consequence of the merger with
Anglo & Overseas Plc.
ANNUAL GENERAL MEETING
The Company's Annual General Meeting will be held at The Caledonian Hotel,
Princes Street, Edinburgh EH1 2AB on Wednesday, 16 April 2014 at 12.00 noon.
DIRECTORS
Teddy Tulloch (Chairman)
Richard Burns
David Hough
Giles Weaver
All of the Directors are non-executive and independent of the Investment
Manager.
INVESTMENT MANAGER
Edinburgh Partners Limited
27-31 Melville Street
Edinburgh
EH3 7JF
National Storage Mechanism
A copy of the full Annual Report and Financial Statements will shortly be
submitted to the National Storage Mechanism ("NSM") and will be available for
inspection at the NSM, which is situated at: www.morningstar.co.uk/uk/NSM
Enquiries:
Sandy Nairn
Kenneth Greig
Edinburgh Partners Limited
Tel: 0131 270 3800
The Company's registered office address is:
27-31 Melville Street
Edinburgh
EH3 7JF
END
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on this announcement (or any other website) is
incorporated into, or forms part of, this announcement.