CCPE.L Regulatory News (CCPE)

19 MARCH 2021

FOR IMMEDIATE RELEASE

RELEASED BY BNP PARIBAS SECURITIES SERVICES S.C.A., JERSEY BRANCH FINAL RESULTS ANNOUNCEMENT

THE BOARD OF DIRECTORS OF CVC CREDIT PARTNERS EUROPEAN OPPORTUNITIES LIMITED ANNOUNCE FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2020

SUMMARY

Key performance indicators summary

As at 31 December 2020, the Company's Euro and Sterling NAV per share was €0.9657 and £1.0299 respectively and Euro and Sterling share price (bid price)1 was €0.9000 and £0.9440 respectively, representing a 6.80% discount and 8.34% discount to NAV. The Company's2 ongoing charges ratio increased to 1.54% for the year ended 31 December 2020 (revised ongoing charges 31 December 2019: 1.41%3). The Company paid total dividends during the year of €0.04875 per Euro Share and £0.04875 per Sterling Share.

Further information in respect of the Company's key performance indicators, some of which the Board considers to be its APMs, can be found in the Financial Highlights and Performance Summary section in the Annual Financial Report, within the Executive Report and within the Useful Information for Shareholders.

Significant events during the year ended 31 December 2020

Refer below for details regarding significant events during the year.

Purpose

The Company is an investment company, and its scope is restricted to that activity. In that context, the Company's purpose is to provide investors with sustainable long-term returns by investing in a diversified portfolio of principally European corporate debt. In fulfilling the Company's purpose, the Board seeks to consider the views of all stakeholders and is mindful of the impact that the Company has on the society in which it operates.

Investment objective, policy and strategy

The Company's investment objective is to provide shareholders with regular income returns and capital appreciation from a diversified portfolio of predominantly sub-investment grade debt instruments. The Company's investment policy is to invest predominantly in debt instruments issued by companies domiciled in, or with material operations in Western Europe across various industries. The Company's investments are focused on the senior secured obligations of such companies, but investments are also made across the capital structure of such borrowers. Refer below for the Company's full investment objective and policy.

Going concern and viability

The Directors consider it appropriate to adopt the going concern basis in preparing the financial statements and have a reasonable expectation that the Company will continue to be viable for a period of at least three years from the date of this report. Refer below for further details.

Investment Vehicle Manager's Report

Refer below for the Investment Vehicle Manager's Report.

Directors' remuneration, Directors' Report and Report of the Audit Committee

There have been no changes to Directors' remuneration during the year. Refer below for details of the Directors' current remuneration. Refer below for the Directors' Report and for the Report of the Audit Committee.

Financial statements

The Company's full financial results can be found in the accompanying financial statements below.

1 - Source: Bloomberg

2 - The Company's ongoing charges are considered to be APMs which are calculated according to the methodology outlined below and differ to the ongoing costs disclosed within the Company's KIDs which follows the methodology prescribed by EU rules. For example, the ongoing costs disclosed in the Company's KIDs include interest expense and are based on average ongoing charges over the past three years whereas the ongoing charges ratio disclosed in this report do not include interest expense and are based on ongoing charges incurred during the year ended 2020 only. The Company's most current KIDs and an accompanying explanatory note reconciling the two different ratios are available on the Company's website (www.ccpeol.com/news-documents).

3 - Refer below for details of the revised ongoing charges methodology.

strategic report

chairman's statement

Introduction

I am pleased to have the opportunity to report to you on the Company's performance in respect of the year ended 31 December 2020, and to provide some necessary context given the global dislocation of economic activity that ensued, and continues to reverberate, as a consequence of the COVID-19 pandemic.

In pure performance terms, NAV total returns for the Euro and Sterling share classes issued by the Company for the year ended 31 December 2020 were 1.71% and 2.80% respectively, which represents a solid performance and is reflective of the Investment Vehicle Manager's successful active approach to portfolio construction and sub-strategy allocation. Allocations to the Company's two sub-strategies, being performing credit and credit opportunities, ended the period at 42.1% (61.3% at 31 December 2019) and 57.9% (38.7% at 31 December 2019). The Investment Vehicle Manager's report, with which the Board agrees, appears below and provides fulsome detail on the performance of the Company during 2020.

Performance in Context

2020 will be remembered for many generally negative reasons, first and foremost being the human tragedy wrought throughout the world by the pervasive and complex challenges posed by the SARS-CoV-2 virus and the COVID-19 disease that it causes. Further, the impact of the virus on global supply chains, and the severe curtailment of economic activity made necessary in order to seek to limit virus spread, have presented existential challenges to businesses both large and small, and the economic livelihoods and wellbeing of untold millions of people. It seems extraordinary, then, to note that many classes of risk assets, and particularly the riskiest assets, i.e. equities, have delivered the best annual returns for many years. Much credit for global equity performance goes to the powerful performance of disruptive technology business at the expense of more traditional sectors, and within that lie many idiosyncratic stories of success and failure, but underpinning the apparent tech equity euphoria (memories of 1999/2000 anyone?) lies an apparent unlimited willingness of the part of developed market central banks to underwrite equity risk as a by-product of doing "whatever it takes" to seek to protect domestic economic activity from COVID-19 effects. The inevitable effect of this policy has been to free investors from the shackles of "risk vs return" and allow them to focus purely on relative perceived return performance looking out into the future. In leveraged finance, this has meant that riskier credits have performed much better than their less risky counterparts, and yields across all rated sub-investment grade credit have tightened to levels lower than those that existed at the beginning of 2020. Within this framework, the Company's performance has been pleasing, in particular the performance of the credit opportunities sub-sector, which delivered returns of 9.80% in H2/20 as a result of the opportunities presented to reposition the portfolio during the sharp volatility of Q2/20.

Current Market Conditions and Outlook

When I provided my statement accompanying the Company's interim results to 30 June 2020, I noted that "It is hard to see how central banks might go about meaningfully withdrawing the current levels of stimulus and support without creating "cliff edge" risks for their economies, particularly noting the current acceleration of COVID-19 prevalence in Europe, so our base case is that the status quo will be maintained in the short to medium term, providing ongoing support to credit markets." Our base case remains unchanged. As I write this, the debate amongst economic commentators appears to be focussed on the medium-term inflationary consequences of this strategy, with the discussion sharpened by US President Joe Biden signing into law a US$1.9 trillion economic stimulus package and the messages so far from the US Federal Reserve suggest that they are willing to allow the economy to "run hot" for some time to rebuild GDP and bring down unemployment. The story in Europe is little different, with the European Central Bank accelerating asset purchases, although the failure to properly manage the rollout of COVID-19 vaccines seems likely to delay economic recovery beyond other developed markets, particularly as a number of European countries appear to be continuing to struggle to bring virus spread under control. Nevertheless (and with a word of caution that there is much that can still go wrong economically with COVID-19 and its effects) 2021 looks set to be a year in which all developed markets and major emerging markets will grow their GDP significantly as global vaccine supply becomes more established and diversified, and levels of infection shrink concurrently. Take this alongside existing ultra-accommodative monetary policy and inevitable delays in filling budgetary deficits through fiscal tightening, and it is reasonable to foresee leveraged finance default rates remaining at multi-year lows and yields continuing to tighten, offering opportunities for capital gains within the Investment Vehicle at the expense of cash yield. The Investment Vehicle Manager is well positioned to take advantage of these market dynamics to deliver positive returns to the Company.

Corporate Activities & Liquidity

Investors will recall that the Company's directors decided, in response to the sharp market selloff in Q2/20, to adjust the terms of the Company's tender programme so as to enable the Company to react nimbly to major underlying changes in leveraged finance market liquidity by constraining the maximum level of shares that would be repurchased in any one quarter. Pleasingly, the adjusted provisions did not need to be brought into use, as market liquidity remained comfortable throughout 2020, but the Board has resolved to retain the revised flexibility granted to it in 2020 should future unforeseeable events serve to materially constrain market liquidity. In all other respects, the Company will propose that its tender programme terms and format will remain unchanged for 2021/2022.

Dividend Level

The Company made changes to its dividend level during 2020 to reflect the enhanced level of market risk evident during Q2/20, and also to reflect improving conditions during the latter part of the year. The current policy reflects a yield of approximately 4.5% to both the Company's Euro and Sterling share classes. The Company is currently conducting a review of dividend level with the Investment Vehicle Manager, with a key focus being the determination of a stable level of dividends that can comfortably be declared without recourse to capital for a forward-looking period of 12 months. The results of this review will be available during Q2/21 and any necessary announcement will be made at that time.

Corporate Governance and Social Responsibility Considerations

The Board has been particularly active during 2020 in this area, in particular in coming to grips with the alignment of necessary investor transparency with the nature of the asset class in which it invests. Investors will appreciate that it is a far more straightforward process for holders of equity in publicly listed companies to secure detailed and reliable social responsibility metrics than it is for investors such as the Company who hold non-voting debt positions in private, albeit economically substantial, issuers. We have engaged extensively with the Investment Vehicle Manager, with our consultants, BSR, and latterly with the European Leveraged Finance Association, to seek to secure access to the data that we need in order to properly inform our investors. Further information on this mission is set out below. Alongside this, there are two further developments to report:

1. In order to support the community in which the Company conducts its governance and operational activity, a substantial multi-year commitment has been made to support the Jersey National Park, a charity which "aims to protect, conserve and enhance the natural beauty, wildlife and cultural heritage within its 2,145 designated hectares so that it can be appreciated and enjoyed by all who spend time in it, now and in the future." Full details of the charity can be found at https://jerseynationalpark.com/.

2. The Board has resolved to further develop its policy on gender diversity such that the composition of the board of directors should be consistent with the recommendations of the Hampton-Alexander Review. It is the board's firm intention that this policy position will be satisfied by the end of 2021 at the latest, noting that necessary interview processes are presently curtailed in their effectiveness as a result of COVID-19 restrictions. Further details appear in the report of the Chair of the Nomination Committee elsewhere in this report.

In closing, I would like to take the opportunity to give special thanks to my co-directors, the portfolio management team at the Investment Vehicle Manager, our advisors and investment bankers for their support, responsiveness and wise counsel in circumstances where much work has needed to be conducted through unfamiliar media. The fact that there has been no material disruption of workflows, reporting and operational activities owes much to the preparedness and hard work put in by everyone involved.

Richard Boléat

Chairman

18 March 2021

Executive REPORT

This Executive Report is designed to provide information about the Company's business and results for the year ended 31 December 2020. It should be read in conjunction with the Chairman's Statement and the Investment Vehicle Manager's report which gives a detailed review of investment activities for the year and an outlook for the future.

Corporate summary

The Company is a closed-ended investment company limited by shares, registered and incorporated in Jersey under the Companies (Jersey) Law 1991 on 20 March 2013, with registration number 112635. The Company's Share capital consists of Euro Shares and Sterling Shares which are denominated in Euro and Sterling respectively. The Company's Euro Shares and Sterling Shares are listed on the Official List of the UK Listing Authority and admitted to trading on the Main Market of the London Stock Exchange. The Company also has two Management Shares in issue, which are unlisted. Details of the shares in issue are detailed below.

The Company is self-managed and the Directors have invested the net proceeds from share issues into Compartment A of an existing European credit opportunities investment vehicle, CVC European Credit Opportunities S.à r.l. (the "Investment Vehicle"), managed by CVC Credit Partners Investment Management Limited (the "Investment Vehicle Manager").

The Company is a member of the AIC and is regulated by the Jersey Financial Services Commission.

Significant events during the year ended 31 December 2020

Sale of treasury shares

The Company completed the following sale of Euro and Sterling treasury shares during the period. All treasury shares were sold at a premium to the relevant published NAV.

Contractual quarterly tenders

The Company completed the following tenders under its Contractual Quarterly Tender mechanism during the period. All of the shares tendered were transferred into the Company's name and held in treasury.

On 13 November 2020, the Company announced that it had received tender applications in respect of the December 2020 tender for 4,804,474 Euro Shares and 23,256,443 Sterling Shares. Refer to note 16 for details regarding the settlement of the December 2020 tender.

A description of the contractual quarterly tender mechanism can be found below.

Due to the COVID-19 pandemic, the Board considered it prudent to include additional powers in respect of the Contractual Quarterly Tenders June 2020 to March 2021 that would allow the Board to:

· Reduce the maximum number of shares that may be tendered for purchase in any quarter below the current limit of 24.99% of the shares in issue at the relevant tender record date;

· Alter the timetable or any part thereof prospectively in respect of any quarter or quarters at any time; and

· Suspend any Contractual Quarterly Tender or the completion of any Contractual Quarterly tender for one or more quarters at any time.

These additional powers were put forward for, and received, shareholder approval at the AGM on 1 May 2020. The Board intends to only use these powers when it considers it appropriate and in response to the developing situation in connection with the COVID-19 pandemic. The Board has not exercised these additional powers to date.

Voluntary conversions

Following requests made by shareholders, the Company converted a total of 750,810 Euro Shares into 619,959 Sterling Shares and 7,152,706 Sterling Shares into 8,474,131 Euro Shares under the monthly conversion facility during the year ended 31 December 2020.

Dividend target

As disclosed in the Company's Annual Financial Report for the period ended 31 December 2019, the stated target annual dividend was around €0.05500 per Euro Share and £0.05500 per Sterling Share. As at 31 December 2019, the Company reset the medium-term total return target of the Company to 8% and noted that it would be considering the significant differences in both value and timing terms of the cash returns flowing from the performing credit and credit opportunities asset pools and whether it makes sense to more accurately match future dividend distributions to those cash flows.

On 24 April 2020, the Company announced that the impact of COVID-19 on markets as a whole, and leveraged credit markets in particular, had confirmed the Board's view (expressed in its Annual Financial Report for the year ended 31 December 2019) that it was desirable to reassess the Company's dividend distribution basis. As a result, the Board determined to reset the annual dividend to €0.04 per Euro Share and £0.04 per Sterling Share. However, when market conditions allowed, it would seek to restore the annual dividend to the previous level. The Company's previously stated medium term total return target of 8% remains unchanged.

On 25 September 2020, in light of more supportive market conditions, the Company announced an increase in the level of its annual dividend to €0.04500 per Euro Share and £0.04500 per Sterling Share.

Purpose

The Company is an investment company, and its scope is restricted to that activity. In that context, the Company's purpose is to provide investors with sustainable long-term returns by investing in a diversified portfolio of principally European corporate debt. In fulfilling the Company's purpose, the Board seeks to consider the views of all stakeholders and is mindful of the impact that the Company has on wider society.

Investment Objective

The Company's investment objective is to provide shareholders with regular income returns and capital appreciation from a diversified portfolio of predominantly sub-investment grade European corporate debt instruments.

Investment Policy

The Company's investment policy is to invest predominantly in debt instruments issued by companies domiciled, or with material operations, in Western Europe across various industries.

The Company's investments are focused on the senior secured obligations of such companies, but investments are also made across the capital structure of such borrowers.

The investment policy of the Investment Vehicle is subject to the following Investment Limits:

· A minimum of 50% of the Investment Vehicle's gross assets will be invested in senior secured obligations (which, for the purposes of this investment limit will include cash and cash equivalents).

· A minimum of 60% of the Investment Vehicle's gross assets will be invested in obligations of companies/borrowers domiciled, or with material operations, in Western Europe.

· A maximum of 7.5% of the Investment Vehicle's gross assets will be invested at any given time in obligations of a single borrower subject to a single exception at any one time permitting investment of up to 15% in order to participate in a loan to a single borrower, provided the exposure is sold down to a maximum of 7.5% within 12 months of acquisition.

· A maximum of 7.5% of the Investment Vehicle's gross assets will be invested in credit loan obligation securities.

· A maximum of 25% of the Investment Vehicle's gross assets will be invested in CVC Capital Portfolio Company debt obligations calculated as invested cost as a percentage of the Investment Vehicle's gross assets.

The Investment Vehicle is permitted to borrow up to an amount equal to 100% of the NAV of the Investment Vehicle at the time of borrowing. The Investment Vehicle's borrowings as a percentage of the Investment Vehicle's NAV as at 31 December 2020 stood at 27.67% (31 December 2019: 21.62%).

General

The investment objective and investment policy of the Investment Vehicle are consistent with the investment objective and investment policy of the Company. In the event that changes are made to the investment objective or investment policy of the Company or of the Investment Vehicle (including the investment limits and/or the borrowing limit), the Directors will seek Shareholder approval for changes which are either (a) material in their own right or, (b) when viewed as a whole, together with previous non-material changes, constitute a material change from the published investment objective or policy of the Company.

Company borrowing limit

The Company may borrow up to 15% of the NAV of the Company for the sole purpose of purchasing or redeeming its own shares otherwise than pursuant to Contractual Quarterly Tenders. As at 31 December 2020, the Company did not have any borrowings (31 December 2019: no borrowings).

Investment strategy and approach

The Company has given effect to its investment policy by subscribing for Preferred Equity Certificates, (the "PEC's"), Series 4 and 5, issued by the Investment Vehicle. Series 4 and 5 PECs are denominated in Euro and Sterling respectively and are income distributing.

The Investment Vehicle Manager's investment strategy for the Investment Vehicle is to make investments across approximately 40 to 60 companies based on detailed fundamental analysis of the operations and market position of each company and its capital structure.

The Investment Vehicle Manager invests in the debt of larger companies and invests in companies with a minimum EBITDA of €50 million or currency equivalent at the time of investment. The Investment Vehicle Manager believes that the debt of larger companies offers a number of differentiating characteristics relative to the broader market:

(i) larger, more defensive market positions;

(ii) access to broader management talent;

(iii) multinational operations which may reduce individual customer, sector or geographic risk and provide diverse cashflow;

(iv) levers such as working capital and capital expenditure which can be managed in the event of a slowdown in economic growth; and

(v) wider access to both debt and equity capital markets.

Based on the market opportunity, the Investment Vehicle Manager invests in a range of different credit instruments across the capital structure of target companies (including, but not limited to, senior secured, second lien and mezzanine loans and senior secured, unsecured and subordinated bonds). Assets are sourced in both the new issue and secondary markets, using the sourcing networks of the Investment Vehicle Manager and in certain circumstances the CVC Group more broadly. The Investment Vehicle Manager's access to deals is supported by the network of contacts and relationships of its leadership team and investment professionals, as well as the strong positioning of the CVC Group in the European leveraged finance markets. CVC Capital Portfolio Companies are one of the largest sponsor-led issuers of leveraged loan deals in Europe1.

Each investment considered by the Investment Vehicle Manager is built around an investment thesis and generally falls into one of two categories:

1. Performing Credit; and

2. Credit Opportunities.

The Investment Vehicle Manager analyses the risk of credit loss for each investment on the basis it will be held to maturity but takes an active approach to the sale of investments once the investment thesis has been realised.

Further information in respect of the Investment Vehicle portfolio and performance as at 31 December 2020 can be found in the Investment Vehicle Manager's report below.

KPIs

The Board meets regularly to review performance and risk against a number of key measures. With the exception of dividends, the Company considers the below KPIs to be Alternative Performance Measures. Further details of these can be found below.

NAV total return

The Board regularly reviews and compares the NAV and share price of the Company. The Directors regard the Company's NAV total return as being the overall measure of value delivered to shareholders over the long-term.

Total return reflects both NAV growth of the Company and also dividends paid to shareholders.

The NAV total return for Euro Shares and Sterling Shares has increased by 37.30% and 45.20% respectively from IPO. The Euro Shares and Sterling Shares NAV total return for the year ended 31 December 2020 was 1.71% (2019: 1.56%) and 2.80% (2019: 3.07%) respectively. Please refer to the Financial Highlights and Performance Summary in the Annual Financial Report for the Euro Shares and Sterling Shares NAV total return analysis. The divergence in NAV per share performance between share classes principally derives from the risk-free rate differential between Euro and Sterling.

Dividend

The Company's present annual dividend level is €0.04500 and £0.04500 per Euro Share and Sterling Share respectively. During 2020, Shareholders received total dividends of €0.04875 and £0.04875 (2019: €0.05500 and £0.05500) per Euro Share and Sterling Share respectively. Please refer below for the Company's dividend history from inception.

Ongoing charges2

The Board reviews and compares the Company's operating expenses against budget on a monthly basis and performs an analysis of deviations.

The Company's ongoing charges for the year ended 31 December 2020 were 1.54% (revised ongoing charges 31 December 2019: 1.41%3). The above ongoing charges figure includes the Company's pro-rata share of the Investment Vehicle management fee, custodian and administration expenses and other general expenses but excludes interest costs and performance fees. The ongoing charges for the Company's Euro and Sterling share classes individually are approximate to each other and therefore, the Company has chosen to disclose one ongoing charges figure.

In line with the recommended methodology for the calculation of an Ongoing Charge figure published by the AIC (and most recently updated in October 2020), the Board has also chosen to disclose an ongoing charges figure inclusive of the Investment Vehicle's performance fee. For the year ended 31 December 2020, the ongoing charges plus performance fee ratio was 1.61% for the Company's Euro Shares and 1.55% for the Company's Sterling Shares.

Premium/discount

The Directors review the trading prices of the Company's Euro Shares and Sterling Shares and compare them against their respective NAVs to assess volatility in the discount or premium of the share prices to their NAVs. As at 31 December 2020, the Company's discount to NAV per Euro Share was 6.80% (2019: 4.62% discount) and discount to NAV per Sterling Share was 8.34% (2019: 6.78% discount) respectively. Please refer to the Financial Highlights and Performance Summary in the Annual Financial Report for NAV and share price analysis.

Please refer below for further information on the calculation methodology applied to these KPIs.

Other measures

In addition to the above KPIs, the Board meets regularly to review the performance and risk against the below other measures:

Diversification

The Directors review the geographical, industry, asset and currency diversification of the underlying Investment Vehicle to ensure that holdings are in line with the prospectus and also to monitor the diversification risk of the underlying portfolio. Please refer to the Investment Vehicle Manager's Report for analysis of the Investment Vehicle portfolio and note 8 for further details regarding the Investment Vehicle's risk diversification policies.

Default rates in Europe and US

The Directors regularly discuss historic and emerging default risk in Europe and the US with the Investment Vehicle Manager to help assess and understand the performance and prospective performance of the Company. Performance of the Company may be affected by the default or perceived credit impairment of investments held by the Investment Vehicle. A withdrawal of investment capital, an economic downturn and/or rising interest rates could severely disrupt the European and US markets which could impact the ability of issuers to repay principal and interest and could adversely affect the value of the Company's investment in the Investment Vehicle and by extension, the Company's NAV and/or the market price of the Company's Shares. The Directors hold monthly discussions with representatives of the Investment Vehicle Manager to assist in monitoring the above indicator.

Life of the Company

The Company has an indefinite life. In accordance with the Articles, the Directors are required to propose an Ordinary Resolution that the Company continues its business as a closed-ended investment company (the "Continuation Resolution") if the following occur:

(i) the Company NAV falls below €75 million; or

(ii) the Directors are required to convene "class closure meetings" for all classes of shares in issue. A class closure meeting is required if a share class is delisted for any reason, or, if in any rolling 12 month period, the average daily closing market price (as derived from the market data published by Bloomberg or any successor market data service thereto) of any class of shares during such 12 month period is 10% or more below the average NAV per share (calculated inclusive of current year income).

If a Continuation Resolution is not passed, the Directors are required to put forward proposals within six months for the reconstruction or reorganisation of the Company to the shareholders for their approval.

These proposals may or may not involve winding up the Company and, accordingly, failure to pass the Continuation Resolution will not necessarily result in the winding up of the Company. A failure to pass a Continuation Resolution may result in the redemption by the Company of its entire holding of PECs.

Going concern

Under the Listing Rules, the AIC Code and applicable regulations, the Directors are required to satisfy themselves that it is reasonable to assume that the Company is a going concern from the date of approval of the financial statements.

In making this assessment, the Directors have reviewed the Company's budget and cash flow forecast for the next 12 months from the date of approval of the financial statements. On the basis of this review, and after making due enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least 12 months to 18 March 2022, being the period of assessment covered by the Directors. The Directors are also satisfied that no material uncertainties exist that cast significant doubt over the Company's ability to continue as a going concern. In making this assessment, the Board have considered the impact that COVID-19 may have on the Company. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Viability Statement

Under the AIC Code, the Directors are required to make a Viability Statement which explains how they have assessed the prospects of the Company, over what period they have done so and why they consider that period to be appropriate, taking into account the Company's current financial position and principal risks. The principal risks faced by the Company are described below.

The prospects of the Company are driven by its investment objectives, investment policy and investment strategy as summarised below, and also by the conditions existing in the markets in which the Company's ordinary shares trade and in which the Investment Vehicle invests and financial markets generally.

In assessing the prospects of the Company, the Directors have, in addition to taking into account the principal risks facing the Company, taken into account the Company's current financial position. Their assessment has included a robust process encompassing an examination of the:

(i) Investment Vehicle Manager's view of the investment opportunity and the conditions existing in the markets in which the Investment Vehicle is exposed and financial markets generally, including scenario analysis, stress tests and volatility and return comparisons;

(ii) liquidity and fundamental prospects of the underlying positions of the Investment Vehicle;

(iii) extent to which the Company directly or indirectly uses gearing;

(iv) liquidity of the PECs in which the Company invests; and

(v) impact on the Company's viability under scenarios stemming from the application of the Contractual Quarterly Tender facility.

Based on the results of their assessment of the above processes, and in the absence of any unforeseen circumstances, the Directors have concluded that a period of three years from the date of this statement is an appropriate period over which to assess the prospects of the Company as the principal risks, mitigating controls and investment strategy and policy are not expected to materially change over this period. This period reflects the effect of significant redemption requests received from shareholders under the Contractual Quarterly Tender mechanism, coupled with no further issuances of ordinary shares by the Company, before a Continuation Resolution would be proposed as a result of the NAV falling below €75 million. 

The Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due within at least this period of assessment. The Directors are also of the opinion that given the information available to them at the date of these financial statements, the Company will be able to continue to conduct its commercial activities in a manner consistent with its investment objectives for the foreseeable future.

Social and environmental responsibility

The Board acknowledges that the Company, in addition to utilising financial capital, is also a user of social capital, particularly in Jersey, the jurisdiction in which the Company operates. The Board further acknowledges that the Company has an environmental footprint that is in addition to and distinct from that of the Investment Vehicle and its portfolio companies. The Directors have considered the Company's use of social capital and the environmental impact of the operation of the Company upon wider society and in response has commenced a programme of support in favour of the Jersey National Park as further described above and below.

Modern slavery

The Company would not fall into the scope of the UK Modern Slavery Act 2015 (as the Company does not have any turnover derived from goods and services) if it was incorporated in the UK. Furthermore, as a closed-ended investment company, the Company has a non-complex structure, no employees and its supply chain is considered to be low risk given that suppliers are typically professional advisers based in either the Channel Islands or the UK. Based on these factors, the Board have considered that it is not necessary for the Company to make a slavery and human trafficking statement.

Climate-related financial disclosures

The Company has been a formal supporter of the Task Force for Climate Related Financial Disclosures' ("TCFD") recommendations since 2018. The Company believes that climate change will have material impacts on the financial performance of companies in which the Investment Vehicle Manager invests and on the universe of companies in which the Investment Vehicle Manager may invest.

The Company is at the beginning of its TCFD implementation journey and it expects full implementation to be achieved through a multi-year process of collaboration with the Investment Vehicle Manager.

The Company plans to report on progress in this regard twice a year - through its Half Year and Annual Financial Reports.

Governance

The Company has integrated climate-related risks into its governance structure. During the past 12 months the Board has:

· commenced a climate-specific dialogue with the Investment Vehicle Manager with the aim, over time, of achieving full compliance with the TCFD's recommendations;

· added climate change as an item for Directors' continued professional development in-line with the Board's belief that climate-related risks and opportunities are key developments in the credit industry that the Directors should keep up-to-date with;

· included climate as a priority agenda topic in regular discussions with the Investment Vehicle Manager at each quarterly board meeting with a view to exchanging climate-related views and increasing mutual awareness of climate-related issues. It is intended that this dialogue and any workstreams that it generates will facilitate continual enhancement, year-on-year, of the Company's climate-related disclosures;

· received climate-related policy and regulation updates from independent specialists to ensure the Company's early compliance with changes in regulations and to remain cognisant of best practice guidance.

Strategy

The Company's climate-related risks and opportunities are closely linked to those of the Investment Vehicle. Therefore, the Company has been engaging with the Investment Vehicle Manager in order to better understand and monitor climate-related risks and opportunities. It started by reviewing the Investment Vehicle Manager's ESG policies and understanding the extent to which the Investment Vehicle Manager is integrating climatic and ESG considerations into its due diligence and decision-making processes.

The Investment Vehicle Manager's policies mandate that the investment management team includes ESG considerations in the investment process, where possible, before making an investment. ESG and responsible investing factors are considered at the following stages:

· Investment selection - Consider high level and material ESG and responsible investing issues as part of the overall due diligence process.

· Investment paper - Seek to include analysis on material ESG and responsible investing considerations, if applicable and relevant, based on the due diligence around those issues. Such due diligence may include a review of environmental and social reports, site visits, management interviews, and discussions with key stakeholders.

Following an investment, the investment team will seek to monitor ESG and responsible investing considerations on an ongoing basis.

· Portfolio review - Investment analysts seek to include commentary on material ESG and responsible investing risks as part of their regular portfolio monitoring reporting to the investment committee of the Investment Vehicle Manager. The compliance team assists by providing an overview of potentially adverse ESG-related news for individual issuers. Where relevant, such reports aim to focus on whether any of the ESG and/or responsible investing risks identified are likely to have a material adverse effect on the value of the investment.

The Company plans to continue its collaboration with the Investment Vehicle Manager and to encourage the Investment Vehicle Manager to collaborate with sponsors with a view to facilitating continual improvement in the quantity and quality of the Company's climate-related disclosures.

Risk Management

In mid-2020, the Company shared guidance and resources with the Investment Vehicle Manager. This included a discussion framework outlining a top-down approach to identify and better manage and disclose climate-related risks and opportunities at a sector level throughout the investment portfolio.

Metrics & Targets

The Company is working toward reporting and disclosing the proportional operational (Scope 1 and 2) greenhouse gas emissions of the investee companies that comprise the Investment Vehicle investment portfolio along with metrics that evidence an intention to reduce these emissions. The Company recognizes the importance of value chain (Scope 3) emissions; however due to the higher complexity of quantifying Scope 3, the Company will initially prioritise Scope 1 and 2.

Given the type and structure of the Company, the Company's own impact is minimal.

During the year the Company engaged in an exercise to examine the climate-related disclosures of the sponsors of the issues represented within the investment portfolio of the Investment Vehicle. The Board determined that the PRI provided the most effective platform from which the Company could draw the most relevant climate-related data. From an examination of that data the Company can disclose that issuers comprising 39% of the value of the investment vehicle portfolio (excluding cash) have committed to abide by the PRI's six principles of responsible investing. Applying a proprietary scoring system to the climate-related disclosures of these sponsors has allowed the Company to measure, on a look-through basis, its' compliance with the principles of responsible investing as prescribed by the PRI. The Company will keep these measures under review and expects to see increasing compliance between reporting periods. Should this not occur the Company will seek explanations, the results of which will be fed back to the Investment Vehicle Manager for incorporation into their decision-making processes.

Looking forward

The approach described above covers the assets of the Investment Vehicle. The Company recognises that enhancements to this approach will be needed in areas where the data to conduct the necessary analysis is currently limited, or where the tools available remain in a nascent stage of development. These are challenges the Company is working to resolve and progress over time will be reported in the Company's Annual and Half Year Financial Reports. In response to these challenges, the Company has laid out the following steps to take its commitment to TCFD recommendations further:

· The Company has identified investors' initiatives (e.g., Climate Action 100+, UK and US SIF, PRI's Transition Pathway Initiative, ELFA's Industry ESG Factsheets) to be important avenues to increase its understanding and deepen its risk mitigation strategy.

· The Company will continue to work with the Investment Vehicle Manager and specialist firms as needed to establish metrics to measure the climate-related risks and opportunities in the portfolio (e.g., initially Scope 1 and 2 greenhouse gas emissions data of portfolio companies) and will request semi-annual reporting on these metrics in the Investment Vehicle Manager report contained in the Company's Half Year and Annual Financial Reports.

Future strategy

The Board continues to believe that the investment strategy and policy adopted by the Investment Vehicle is appropriate for and is capable of meeting the Company's objectives.

The overall strategy remains unchanged and it is the Board's assessment that the Investment Vehicle Manager's resources are appropriate to properly manage the Investment Vehicle's portfolio in the current and anticipated investment environment.

Please refer to the Investment Vehicle Manager's report for detail regarding performance of the Investment Vehicle's investments and the main trends and factors likely to affect the future development, performance and position of those investments.

This Strategic Report was approved by the Board of Directors on 18 March 2021 and signed on its behalf by:

Richard Boléat Mark Tucker

Chairman Audit Committee Chairman

1 - Source: S&P LCD, for the period between January 2017 and March 2021.

2 - The Company's ongoing charges are considered to be APMs which are calculated according to the methodology outlined below and differ to the ongoing costs disclosed within the Company's KIDs which follows the methodology prescribed by EU rules. For example, the ongoing costs disclosed in the Company's KIDs include interest expense and are based on average ongoing charges over the past three years whereas the ongoing charges ratio disclosed in this report do not include interest expense and are based on ongoing charges incurred during the year ended 2020 only. The Company's most current KIDs and an accompanying explanatory note reconciling the two different ratios are available on the Company's website (www.ccpeol.com/news-documents).

3 - Refer below for details of the revised ongoing charges methodology.

Principal risks and uncertainties

When considering the total return of the Company, the Directors take account of the risk which has been taken in order to achieve that return. The Directors have carried out a robust assessment of the principal risks facing the Company including those which would threaten its business model, future performance, solvency or liquidity. An overview of the principal risks and uncertainties is set out below:

The Company may be exposed to additional risks not disclosed above or within the Annual Financial Report as they are not considered by the Board to be principal or emerging risks. The Company assesses risks, and the mitigation thereof, on an ongoing basis and as part of its formal business risk assessment process. 

Section 172(1) Statement

Through adopting the AIC Code, the Board acknowledges its duty to comply with section 172 of the UK Companies Act 2006 to act in a way that promotes the success of the Company for the benefit of its members as a whole, having regard to (amongst other things):

a) the consequences of any decision in the long-term;

b) the interests of the Company's employees;

c) the need to foster business relationships with suppliers, customers and others;

d) the impact on community and environment;

e) the maintaining of reputation for high standards of business conduct; and

f) acting fairly as between members of the company

The Board considers this duty to be inherent within the culture the Company and a part of its decision-making process.

Information on how the Board has engaged with its stakeholders and promoted the success of the Company, through the decisions it has taken during the year, whilst having regard to the above, is outlined below.

The principal decisions section below outlines decisions taken during the year which the Board believes has the greatest impact on the Company's long-term success. The Board considers the factors outlined under section 172 and the wider interests of stakeholders as a whole in all decisions it takes on behalf of the Company.

Stakeholder engagement

Principal decisions

Employee engagement

The Company has no employees.

Business relationships

The Board considers its business relationships with stakeholders to be important to the ongoing success of the Company and is proactive in fostering these relationships. For details on the nature of these relationships and how the Company fosters relationships with its stakeholders, refer to the stakeholder engagement section above. The Board also considers the impact principal decisions have on its stakeholders, which is detailed in the principal decisions section above.

Board members

All the Directors are independent and non-executive.

CHAIRMAN

Richard Michael Boléat, aged 57. Appointed 20 March 2013.

Directors

INVESTMENT VEHICLE MANAGER'S REPORT

Summary

2020 was a volatile year where the European leveraged loan market experienced one of its steepest one month declines ever, followed by a gradual recovery throughout the remainder of the year. The recovery started with the higher quality segment, whilst lower rated loans took slightly longer to recover but were boosted by progress on the vaccine side towards the end of the year.

The portfolio was cautiously positioned at the opening of the year. Given the opportunity set in the market created by the sell-off, the Investment Vehicle Manager increased its allocation to opportunistic credit whilst keeping a focus on core income.

Looking into 2021 and beyond, the Investment Vehicle Manager believes that the credit opportunities segment of the portfolio is well positioned to deliver further upside from existing levels, whilst core income will remain a key income generator.

Portfolio

As at 31 December 2020 the Investment Vehicle portfolio was invested in-line with investment policy, was diversified with 106 issuers1 (of which a range of 40 - 60 typically represent the core drivers of performance) (31 December 2019: 83) across 24 (31 December 2019: 29) different industries and 13 (31 December 2019: 13) different countries, and had exposure of no more than 3.1% (31 December 2019: 2.7%) to any single issuer.

Portfolio Statistics2

1 Excludes 23 (31 December 2019: 23) structured finance positions.

2 Note: all metrics exclude cash unless otherwise stated.

3 Average market price of the portfolio weighted against the size of each position.

Performance

The Euro Shares and Sterling Shares NAV total returns for 2020 were 1.71% (31 December 2019: 1.56%) and 2.80% (31 December 2019: 3.07%) respectively.

By strategy: (i) The Core Income segment of the portfolio delivered 2.0% to gross4 portfolio performance; and (ii) the Credit Opportunities segment of the portfolio delivered a gross 1.6%4 return, which equates to a 2.8% gross portfolio performance contribution based on a 59% average allocation of the portfolio.

The Credit Suisse Western European Leveraged Loan Index, hedged to EUR, was up 2.38% for 2020, as compared to being up 5.03% for the year ended 31 December 2019. The Credit Suisse Western European High Yield Index, hedged to EUR, was up 1.95% for 2020, as compared to being up 11.05% for the year ended 31 December 2019.

4 Excluding management and performance fees.

Market Review

2020 started off on the same strong tone as the end of 2019. We saw considerable supply of new issues in January and the first half of February, and this was all well absorbed by the market as demand for sub-investment grade credit remained strong. We saw some softness in the market in the second half of February as COVID-19 started to spread to Europe. As we went into lockdown in most European countries, March experienced one of the steepest one month sell offs ever seen in the European leveraged loan market. The average bid price on the S&P European Leveraged Loan Index ("S&P ELLI") bottomed at 78.92 on 24 March.5

On the back of the pandemic and resulting sell-off in global equity and credit markets, we saw decisive action from central banks and governments to counter the financial impact of the pandemic and European leveraged loan markets bounced back sharply. By the end of December, the average bid price on the S&P ELLI was back at 97.55.5

Default rates in the European leveraged loan market were below the worst-case scenario that was feared back in March. Based on principal amount, the default rate was 2.57%, while by issuer count, the default rate was 4.50%5. This lower than feared default rate was partially the result of the policies enacted by central banks and governments. Functioning capital markets also helped issuers raise liquidity to get through the pandemic. A prime example of this is the cruise operator Carnival which raised more than $10bn6 in 2020 across equity and credit capital markets.

The CLO market, still the largest buyer of European leveraged loans, of course also suffered from the pandemic and issuance came to a halt towards the end in March. However, this market came back to life in Q4 2020 as €7.4bn was raised from 22 deals.5

The new issue market for European leveraged loans was down 21% year-on-year5 as mergers and acquisitions ("M&A") processes stalled amid the uncertainty created by the global pandemic. We saw M&A rebound in Q4 2020, as visibility on the outlook improved and progress was being made on the vaccine side. This didn't immediately lead to a surge in loan supply as initially most transactions were smaller add-ons. The due diligence processes for the larger transactions typically takes longer and we would anticipate this financing to be raised in early 2021.

The combination of strong demand for loans from opportunistic funds, SMA's and a resurgent CLO market, in combination with a lack of supply as well as better than feared fundamentals meant that the S&P ELLI returned 2.38% for 2020, despite a -14.94% sell off in March.5

Portfolio Overview

As COVID-19 took hold of global markets in February 2020, the Investment Vehicle Manager proactively reduced exposure in those industries and geographies that were expected to be materially affected, and those names where a downgrade to CCC was a concern. Capital was held in cash or the core income book was rotated into (i) more defensive sectors (such as Telecommunications, Media & Technology, and Healthcare), (ii) higher rated names and (iii) selective new issue where pricing and structure reflected the news flow, in order to have a more stable base whilst generating decent income. As of December close, performing credit (including cash) was at 42.1% of the portfolio with a weighted average price of 97.9, trading at a YTM of 4.5%, delivering 4.4% cash yield to the portfolio.

As a result of the pandemic and the overall sell-off in the European loan and high yield markets, the Investment Vehicle Manager increased its allocation to credit opportunities during the year. As of December close, credit opportunities was 57.9% of the portfolio, trading at a weighted average price of 89.9 and a YTM of 8.8%, whilst delivering a 6.6% cash yield to the portfolio.

Across the entire portfolio, as of December month end, the weighted average market price was 93.6, trading at a YTM of 7.0%, and delivering 6.6% cash yield (on a levered basis) versus a weighted average price of 94.7, YTM of 6.6% and cash yield of 5.7% as of December 2019. Floating rate instruments comprised 83.5% of the portfolio. Senior Secured 83.8%. The portfolio had a cash position of 4.4% (including leverage) with leverage at 1.3x assets.

Despite the material sell-off in the portfolio in February and March, the portfolio managed to generate a positive return both on a gross and net basis in 2020. There remains good convexity in the credit opportunities part of the portfolio, which we believe should be well positioned to generate some capital upside.

Conclusion and Outlook

We believe that credit in general is well positioned to perform well in 2021. There is strong demand for sub-investment grade credit, whilst positive developments on the vaccine side are anticipated to result in a bounce-back in economic growth, thereby keeping default rates manageable. European default rates in 2020 were roughly in line with historic averages, as a result of the fiscal and monetary stimulus enacted by governments and central banks in a response to the COVID-19 pandemic. We anticipate this stimulus to remain in place until vaccination programmes result in herd immunity which will allow economies to gradually re-open completely.

The Investment Vehicle Manager's focus will remain on actively identifying opportunistic investments that can create both income and capital upside, while actively looking for relative value opportunities to trade the performing credit portfolio.

Sources

5 LCD, an offering of S&P Global Market Intelligence - January 2021

6 Financial Times - 19 November 2020

CVC Credit Partners Investment Management Limited

Investment Vehicle Manager

Pieter Staelens

Managing Director, Portfolio Manager

18 March 2021

Past performance is not indicative of future results. There can be no assurance that the Investment Vehicle will be able to implement its investment strategy, achieve its investment objective or avoid substantial losses.

The indices referred to herein (including the Credit Suisse Western European HY Index hedged to Euro and the Credit Suisse Western ELLI hedged to Euro) are widely recognised, unmanaged indices of market activity and have been included as general indicators of market performance. The Credit Suisse Western European HY Index is a market cap weighted benchmark index designed as an objective proxy for the investable universe of the Western European high yield debt market. The Credit Suisse Western European Leveraged Loan indices are designed to mirror the investable universe of the Western European leveraged loan market. There are significant differences between the types of investments made or expected to be made by the Investment Vehicle and the investments covered by the indices, and the methodology for calculating returns. For example, the Credit Suisse Western European HY Index does not take transaction costs (bid-offer spreads) into account and for the month during which a coupon is paid, the cash flow is reinvested at a fixed money-market rate until the end of the month. Additionally, the Credit Suisse Western ELLI assumes that coupon payments are reinvested into an index at the beginning of each period. In contrast, the Investment Vehicle Manager may have discretion whether to reinvest such payments during any relevant investment period. It should not be assumed that the Investment Vehicle will invest in any specific equity or debt investments, such as those that comprise the indices, nor should it be understood that there will be a correlation between the Investment Vehicle's returns and those of the indices. It should not be assumed that correlations to the indices based on historical returns will persist in the future. No representation is made that the Investment Vehicle will replicate the performance of any of the indices. The indices are included for general, background informational purposes only and recipients should use their own judgment to appropriately weight or discount their relevance to the Investment Vehicle.

DIRECTORS' REPORT

The Directors present the Annual Financial Report for the Company for the year ended 31 December 2020. The results for the year are set out in these accounts.

Dividend Policy

The Company's dividend policy is to generate consistent income distributions to shareholders, at levels consistent with prevailing market conditions. This policy is currently implemented by way of annual dividends of €0.04500 / £0.04500 per Euro / Sterling share paid quarterly. The Company announced and paid four quarterly dividends totalling €0.04875 and £0.04875 (2019: €0.05500 and £0.05500) per Euro Share and Sterling Share respectively in 2020 which equates to a dividend yield based on year-end bid share price of 5.42% and 5.16% (2019: 5.76% and 5.60%) respectively.

Share capital and voting rights

The Company has two classes of ordinary shares, being Euro Shares and Sterling Shares. The Company held the following number of shares in treasury as at 31 December 2020:

20,598,771 Euro Shares (31 December 2019: 6,368,590 Euro Shares)

174,947,441 Sterling Shares (31 December 2019: 50,107,138 Sterling Shares)

Excluding shares held in treasury, the Company had the following number of shares in issue as at 31 December 2020:

124,768,754 Euro Shares (31 December 2019: 131,275,614 Euro Shares)

194,829,202 Sterling Shares (31 December 2019: 326,202,252 Sterling Shares)

Each Euro Share holds 1 voting right, and each Sterling Share holds 1.17 voting rights. As at 31 December 2020, the total number of voting rights of the Euro Shares of no par value is 124,768,754 (35.37%) and of the Sterling Shares is 227,950,166 (64.63%). The total number of voting rights in the Company is 352,718,920.

Borrowing limits

The Company does not have any external borrowings. The Directors may, if they feel it is in the best interests of the Company, borrow funds subject to the appropriate resolutions of shareholders. The Investment Vehicle holds external loans and borrowings as disclosed in note 7.

Acquisition of own shares

The Board has the authority to purchase its own shares under the terms and conditions of the Contractual Quarterly Tender facility as summarised in note 12. Details of the shares tendered and repurchased during the year are given in the Strategic Report above.

To assist the Company to minimise the discount at which the Shares trade relative to the net asset value per Share as well as reduce the volatility and increase liquidity in the Shares on 1 May 2020 the Company renewed the general authority to purchase in the market up to 14.99% of the Shares in issue as at 1 May 2020. This authority expires on the date of the 2021 AGM. During the year the Company did not purchase any shares in the market.

The Directors will seek renewal of these authorities from Shareholders at the Company's AGM on 22 April 2021.

Director interests

As at 31 December 2020 and the date of approval of the annual financial report directors held the following shares in the Company:

No Director has any interest in any contract to which the Company is a party.

Shareholders' interests

As at 31 December 2020, the Company had been notified in accordance with Chapter 5 of the DTRs (which covers the acquisition and disposal of major shareholdings and voting rights), of the following shareholders that had an interest of greater than 5% in the Company's issued share capital.

Between 31 December 2020 and 18 March 2021, the Company received the following notifications:

Disclosures required under LR 9.8.4R

The Financial Conduct Authority's Listing Rule 9.8.4R requires that the Company includes certain information relating to arrangements made between a controlling shareholder and the Company, waivers of Director's fees, and long-term incentive schemes in force. The Directors confirm that there are no disclosures to be made in this regard.

Events after the reporting date

The NAV total return of the Euro Shares and Sterling Shares since 1 January 2021 to 5 March 2021 has increased by 3.49% and 3.61% respectively. The Directors are not aware of any other matters that might have a significant effect on the Company in subsequent financial periods not already disclosed in this report or the attached financial statements under note 16.

Statement as to disclosure of information to the auditor

The Directors who held office at the date of approval of this Directors' Report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditors are unaware and that they have taken the steps that they ought to have taken as Directors to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Fair, balanced and understandable

In assessing the overall fairness, balance and understandability of the Annual Financial Report and Financial Statements the Board has performed a comprehensive review to ensure consistency and overall balance.

AGM

The Company will hold the 2021 AGM on 22 April 2021. The notice and details of the resolutions being proposed will be circulated in a separate letter and will be available shortly afterwards on the Company's website https://www.ccpeol.com/news-documents.

All resolutions proposed at the 2020 AGM held on 1 May 2020 were passed without significant votes cast against any of the resolutions.

Corporate Governance Statement- Compliance with the AIC Code

The Company has a premium listing on the London Stock Exchange and is therefore required to report on how the principles of the UK Corporate Governance Code (the "UK Code") have been applied. Being an investment company, a number of the provisions of the UK Code are not applicable as the Company has no executive directors or internal operations.

The Board has considered the principles and provisions of the AIC Code. The AIC Code addresses all 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 Board considers that reporting against the principles and provisions of the AIC Code, which has been endorsed by the Financial Reporting Council and the Jersey Financial Services Commission, provides more information to stakeholders. The AIC Code is available on the AIC website www.theaic.co.uk. It includes an explanation of how the AIC Code adapts the principles and provisions set out in the UK Code to make them relevant to investment companies.

The Company has complied with all the principles and relevant provisions of the AIC Code during the year ended 31 December 2020.

As the Company is self-managed, provisions pertaining to the relationship with managers are not applicable to the Company. As the Company is not newly incorporated nor appointed any new directors during the year under the review, provisions pertaining to new companies and appointment of directors are not applicable.

Set out below is where stakeholders can find further information within the Annual Financial Report about how the Company has complied with the various Principles and Provisions of the AIC Code.

1 As the Company is self-managed, provisions pertaining to the relationship with managers are not applicable to the Company. As the Company is not newly incorporated nor appointed any new directors during the year under the review, provisions pertaining to new companies and appointment of directors are not applicable.

This Directors' Report was approved by the Board of Directors on 18 March 2021 and signed on its behalf by:

Richard Boléat Mark Tucker

Chairman Audit Committee Chairman

board and committees

Culture

The Company's culture is one of openness, transparency and inclusivity. Respect for the opinions of its diverse stakeholders features foremost as does its desire to implement its operations in a sustainable way, conducive to the long-term success of the Company.

The Board

The Board consists of four non-executive directors:

· Richard Boleat (Chairman);

· Mark Tucker (Audit Committee Chairman and Senior Independent Director);

· Stephanie Carbonneil (Nomination and Remuneration Committee Chair); and

· David Wood (non-executive Director).

All of the Directors are independent of the Investment Vehicle Manager. Please refer above for the biographies and dates of appointment for each Director.

Mark Tucker is the Senior Independent Director. In this role, he provides support to the Chairman and serves as an alternate contact point for stakeholders.

Directors' appointment, retirement and rotation

Directors have agreed letters of appointment with the Company. No Director has a service contract with the Company and Directors' appointments may be terminated at any time by one month's written notice with no compensation payable at termination upon leaving office for whatever reason.

Subject to the Articles, Directors may be appointed by the Board. In compliance with the AIC Code, the Board has resolved that all Directors will stand for re-election at each AGM, including the forthcoming AGM to be held on 22 April 2021.

Board diversity

The Board has due regard for the benefits of experience and diversity in its membership, including gender, and strives to meet the right balance of individuals who have the knowledge and skillset to aid the effective functioning of the Board and maximise shareholder returns while mitigating the risk exposure of the Company.

The Board supports the recommendations of the Women on Boards Davies Review and latterly, the Hampton-Alexander Review on FTSE Women Leaders, Improving gender balance in FTSE Leadership (the "Hampton-Alexander Review"). In particular, the Board supports the Hampton-Alexander Review's objective of improving women's representation in leadership positions. As a self-managed fund, the Company does not have executive management nor employees and therefore, the Board's principal focus is on improving gender diversity within its own Board composition.

At the time of this report, female representation on the Board is 25%, consisting of one female Director and three male Directors. This is below the current target of 33% set out in the Hampton-Alexander Review. Whilst the Company's own policy is not to set prescriptive diversity metrics and to fill vacancies by the most qualified candidates, the Board also recognises that gender diversity is of material importance to both its own shareholders and that of wider society and therefore, considers the target specified by the Hampton-Alexander Review as a positive step to achieving a more diverse boardroom which is of material benefit to all stakeholders.

The Board is therefore aligned with the Hampton-Alexander review and committed to further enhancing the gender diversity, and diversity more generally, of the Board when vacancies arise. In 2023, the Company will reach its 10th anniversary since listing. In the lead up to that time, the Board will be actively implementing its succession plan in line with the expectations of the AIC Code. This provides a natural timeframe for the Board move further towards achieving a greater diversity of composition, including gender.

Committees

The Board has established two committees, namely the Audit Committee and the Nomination and Remuneration Committee. Items relevant to a management engagement committee were considered by the Board as a whole.

Audit Committee

The Audit Committee membership comprises all of the Directors. The Chairman of the Board is a member of this Committee (but he does not chair it) which is considered appropriate given that he is a Fellow of the Institute of Chartered Accountants in England and Wales and also has extensive knowledge of the financial services industry.

The report on the role and activities of this Committee and its relationship with the external auditor is set out in the Report of the Audit Committee.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee membership comprises Stephanie Carbonneil and David Wood.

Board and Committees evaluation

The Nomination and Remuneration Committee undertook an internal evaluation which comprised of questionnaires and discussions between the Chairman and each Director in respect of their individual performance and the Senior Independent Director and the Chairman in respect of the Chairman's performance. The results of this evaluation were positive and a number of limited recommendations were made to further enhance the governance practices of the Company.

The evaluation considered the balance of skills, experience, independence, knowledge, diversity (including gender), how the Board works together as a unit and other factors relevant to its effectiveness. The evaluation also considered the Board's and committee performance, constitution and terms of reference to ensure that they are operating effectively. It is intended that the evaluation will be externally facilitated on a bi-annual basis with the next external evaluation envisaged to take place at the end of 2021.

Director Remuneration

In November 2020, the Nomination and Remuneration Committee undertook its annual review of the fees paid to the Directors and compared these with the fees paid by reasonably comparable listed companies. The committee concluded that the fees should remain unchanged.

Tenure and succession policy

The Board regularly and critically examines and evaluates its membership and that of its committees, and its succession requirements. In doing so the Board takes into consideration: each member's continued satisfactory performance; gender diversity; diversity of social and ethnic background; diversity of thought and previous experience; and continued prepossession of the skills identified by the Board as being essential to the Company's long-term success.

In addition, the Board recognises that to carry out its duties successfully and for the benefit of the Company's long-term success and its stakeholders, corporate knowledge of the type that is acquired over time, is beneficial to the Company and its stakeholders. It is against this backdrop that the policy adopted by the Company does not include fixed terms of service for non-executive directors, including the position of Chairman.

Whilst the Board does not include fixed terms of service for non-executive directors, appointments are made with the expectation that a non-executive director will commit to serve a minimum three-year term. At the same time, the Board shares the view of the AIC that long periods of service pose an independence risk to each Director's own independence. With this in mind, the Board therefore intends to regularly refresh the Board and committees' membership by appointing new members in line with an effective succession plan.

In making board appointments and developing a succession plan, the Board takes into consideration the above factors which are aligned with the principles, provisions and spirit of the AIC Code and will ensure that any appointments to the board follow a formal, rigorous and transparent procedure. This is with ultimate consideration to ensuring that the Board and all committees have an appropriate mix of skills and experience to best serve the Company.

As noted in the 2019 Annual Report, it was the intention of the Chairman and the Senior Independent Director to directly seek the views of major shareholders on the matter of board tenure during the course of 2020. When contacted, no major shareholders expressed concerns or comments on the Company's current board tenure or board tenure policy.

In 2023, the Company will reach its 10th anniversary since listing. In the lead up to that time, the Board will be actively implementing its succession plan in line with the expectations of the AIC Code. This provides a natural timeframe for the Board move further towards achieving a greater diversity of composition, including gender.

The Chairman and the Senior Independent Director will continue to raise the topic with major shareholders going forward.

Board meetings

As a self-managed investment company, the Board is responsible for all decision making. The Board meets periodically throughout the year. The Investment Vehicle Manager, together with the Company Secretary, also ensure that all Directors receive, in a timely manner, all relevant management, regulatory and financial information relating to the Company and the Investment Vehicle portfolio. Directors unable to attend a Board meeting are provided with the Board papers and can discuss issues arising in the meeting with the Chairman or another Director.

The Board applies its primary focus to the following:

- investment performance, ensuring that the investment objective and strategy of the Company are met;

- ensuring investment holdings are in line with the Company's prospectus;

- reviewing and monitoring financial risk management and operating cash flows, including cash flow forecasts and budgets for the Company; and

- reviewing and monitoring of the key risks to which the Company is exposed as set out in the Strategic Report.

At each relevant meeting the Board undertakes reviews of key investment and financial data, transactions and performance comparisons, share price and NAV performance, marketing and shareholder communication strategies, peer group information and industry issues. The Board holds regular discussions with the Investment Vehicle Manager to discuss performance of the Investment Vehicle portfolio, whilst considering ways in which future share price and overall performance can be enhanced.

The Board considers whether the investment policy continues to meet the Company's objectives. The Board believes that the overall strategy of the Company remains appropriate.

Attendance at scheduled meetings of the Board and its committees

* The Board has formed a committee of any one Jersey based director to approve routine matters associated with the administration of the monthly share conversion and quarterly tender.

** Mr Boléat and Mr Tucker are not members of the Nomination and Remuneration Committee but were invited to attend these meetings as Board members.

Monitoring and evaluation of service providers

The Board reviews the performance of the Company's third-party service providers together with their anti-bribery and corruption policies to ensure that they comply with the Corruption (Jersey) Law 2006, the Bribery Act 2010, the Criminal Finances Act 2017 and ensure their continued competitiveness and effectiveness and ensure that performance is satisfactory and in accordance with the terms and conditions of the respective appointments.

As part of the Board's ongoing evaluation of third-party service providers, it considers and reviews on a periodic basis contractual arrangements with the major service suppliers of the Company.

The Directors have adopted a procedure whereby they are required to report any potential acts of bribery and corruption in respect of the Company that come to their attention to the Company's Compliance Officer.

Shareholder communications

An analysis of the substantial shareholders of the Company's shares is provided to the Board on a quarterly basis.

The Board views shareholder relations and communications as a high priority and the Board aims to have a thorough understanding of the views of shareholders. The Chairman and the Senior Independent Director are available for discussion about governance and strategy with major shareholders and they communicate shareholders' expressed views to the Board. Shareholders wishing to communicate with the Chairman, or the Senior Independent Director, may do so by any conventional means. The Directors welcome the views of all shareholders and place considerable importance upon them.

The main method of communication with shareholders is through the half-year and annual financial reports which aim to give shareholders a clear and transparent understanding of the Company's objectives, strategy and results. This information is supplemented by the publication of monthly fact sheets, and the weekly estimated and monthly NAV of the Company's Euro Shares and Sterling Shares on the London Stock Exchange, via a Regulatory Information Service.

The Company's website (www.ccpeol.com) is regularly updated with monthly fact sheets and provides further information about the Company, including the Company's financial reports and announcements. The maintenance and integrity of the Company's website is the responsibility of the Directors. Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Board believes that the AGM provides an appropriate forum for investors to communicate with the Board, and encourages participation. The AGM will be attended by at least the Chairman of the Company and the Chairman of the Audit Committee.

The Board has also instigated a programme of quarterly investor calls, to allow investors and other interested parties to receive an update on the previous quarter's performance and market conditions. It also provides a forum for questions to be posed to the Chairman and representatives of the Investment Vehicle Manager.

Financial risk management objectives and policies

The Board is responsible for the Company's system of risk management and internal control and meets regularly in the form of periodic Board meetings to assess the effectiveness of such controls in managing and mitigating risk.

The Board confirms that it has reviewed the effectiveness of the Company's system of risk management and internal control for the year ended 31 December 2020, and to the date of approval of this Annual Financial Report. The Board has taken into consideration the Financial Reporting Council (FRC)'s, "Guidance on Risk Management, Internal Control and Related Financial and Business Reporting" to ensure that the Company's system of risk management and internal control is designed and operated effectively, in line with best practice guidance provided by the FRC.

The key financial risks that the Directors believe the Company is exposed to include credit risk, liquidity risk, market risk, interest rate risk, valuation risk and foreign currency risk. Please refer to note 8 for reference to financial risk management disclosures, which explains in further detail the above risk exposures and the policies and procedures in place to monitor and mitigate these risks.

The Company has appointed BNP Paribas Securities Services S.C.A. to act as administrator. The Administrator has established an internal control framework to provide reasonable but not absolute assurance on the effectiveness of the internal controls operated on behalf of its clients. The effectiveness of these controls are assessed by the compliance and risk department of the Administrator on an on-going basis and by periodic review by external parties. The Company's Compliance Officer presents an assessment of their review to the Board in line with the compliance monitoring programme on a quarterly basis which has revealed no matters of concern.

AIFMD REPORT

The Company (which is a non-EU AIF for the purposes of the AIFM Directive and related regimes in EEA member states) is a self-managed fund and therefore acts as the deemed AIFM of the Company. The Company is authorised as an Alternative Investment Fund Services Business as defined under Article 2(11) of the Financial Services (Jersey) Law 1998 and as such, fulfils the role of Alternative Investment Fund Manager.

In 2014, the Company registered with the Jersey Financial Services Commission, being the Company's competent regulatory authority, as a self-managed non-EU Alternative Investment Fund (AIF), and has registered with the UK Financial Conduct Authority, under the relevant NPPRs.

In 2015, the Company registered with the Finnish Financial Supervisory Authority, Belgium Financial Services and Markets Authority, Danish Finanstilsynet, Luxembourg Commission de Surveillance du Secteur Finacier and Swedish Finansinspektionen, under the relevant NPPRs of each jurisdiction.

In 2017, the Company registered with Central Bank of Ireland, under the relevant NPPR.

As the Company is non-EU domiciled, no depositary has been appointed in line with the AIFM Directive, however BNP Paribas Securities Services S.C.A., Jersey Branch has been appointed to act as custodian.

Information relating to the current risk profile of the Company and the risk management systems employed by the Company to manage those risks, as required under paragraph 4(c) of Article 23 of the AIFM Directive, is set out in note 8 - financial risk management. Please refer above for the Board's assessment of the principal risks and uncertainties facing the Company.

Table of AIFM remuneration

The total fees paid to the Board by the Company are disclosed within the Directors' remuneration report and disclosed in note 6.

Article 22(2)(e) and 22(2)(f) of the AIFM Directive is not deemed applicable as the AIFM has no staff. No other remuneration costs have been incurred with the exception of those costs incurred by the Board as referenced above.

REPORT OF THE AUDIT COMMITTEE

It is my pleasure to present this report describing the activities of the Audit Committee in respect of the 2020 financial year.

Membership

The Board appointed Audit Committee operates within clearly defined Terms of Reference. They can be found under the "News & Documents" tab of the Company's website (at www.ccpeol.com).

The Audit Committee comprises all of the Directors. All of the Audit Committee's members have recent and relevant financial experience and one is a Fellow of the Institute of Chartered Accountants in England and Wales. The Audit Committee has competence relevant to the sector in which the Company operates.

During the year, the Audit Committee formally convened on four occasions. The members' attendance record can be found above.

Role of the Audit Committee

The main role of the Audit Committee is to protect the interests of the Company's shareholders regarding the integrity of the half-yearly financial report and the annual financial report of the Company and manage the Company's relationship with the external auditor.

The Audit Committee's key duties are:

- to review and monitor the fairness and balance of the financial statements of the Company including its half-year financial report and annual financial report to shareholders, reviewing any significant financial reporting issues and judgements which they contain;

- to advise the Board on whether the Committee believes that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, position, business model and strategy;

- to identify and disclose those risks considered by the Audit Committee to be significant to their financial reporting process;

- to consider and make recommendations to the Board in relation to the appointment, re-appointment and removal of the external auditor and to negotiate their remuneration and terms of engagement on permissible audit and non-audit work;

- to meet regularly with the external auditor in order to review their proposed audit programme of work and the subsequent Audit Report and to assess the effectiveness of the audit process and the level of fees paid in respect of permissible audit and non-audit work; and

- to annually assess the external auditor's independence, objectivity, effectiveness, resources and expertise.

In addition to the workstreams that stem from the roles of the Audit Committee as described above, the Audit Committee was also instrumental in a number of other areas during the year including, assisting the Company in expanding its social and environmental responsibilities by overseeing the formalisation of the Company's relationship with the Jersey National Park and leading in discussions with the Investment Vehicle Manager of the risks faced by the Company that are climate-change related. Disclosures on these activities appear within the Strategic Report. The Committee was also instrumental in an exercise to support the Board in making its Viability Statement which appears within the Strategic Report.

Significant risks

The Audit Committee view the below as significant risks:

Title to and the existence of the Company's investments

Procedures to confirm the Company's title to and the existence of the Company's investments are embedded within the Company's share issuance, monthly conversation and quarterly tender processes, accordingly title to and existence of the Company's investments are confirmed by the Board regularly.

Valuation of Investments

The risk of misstatement due to errors in the valuation of the Company's investments is an issue of significance to the Audit Committee. This risk is mitigated by regular Board meetings in which a review of the valuation of the Company's investments is included. Additionally, the Audit Committee regularly interviews representatives of the Investment Vehicle Manager in order to gain assurances as to the continued appropriateness of the valuation methodology.

External audit process

The Audit Committee met formally with the external auditor prior to the commencement of the audit and agreed an audit plan that would adopt a risk-based approach. The Audit Committee and the external auditor agreed that a significant portion of the Audit effort would include an examination of revenue recognition with respect to investment income and an examination of the procedures in place at the Administrator and at the Investment Vehicle Manager in respect of the valuation and existence of the Company's investments and the underlying portfolio assets respectively.

Upon completion of the audit the Audit Committee discussed with the external auditor the effectiveness of the audit and concluded that the audit had been effective on the grounds that:

- The audit plan had been met;

- The external auditor had demonstrated a good understanding of the Company's business;

- No risks to audit quality had been identified;

- The external auditor demonstrated a robustness of process and perceptiveness in handling key accounting issues and judgements; and

- All issues that arose during the audit were satisfactorily resolved.

Additionally, procedures employed by the external auditors, described above, are viewed by the Audit Committee as being appropriate and sufficiently robust for the Audit Committee to gain sufficient assurance as to the effectiveness of the audit.

The audit committee reviewed the FRC's Audit Quality Inspection report on the Auditor published in July 2020 and are pleased to note that no significant issues were identified.

Non-audit services

The Company has adopted a policy such that the provision of non-audit services by the Company's external auditors is considered and approved by the Audit Committee on a case-by-case basis, taking into account relevant law, regulation, the Ethical Standard 2019 and other applicable professional requirements.

The following factors are assessed when considering the provision of non-audit services by the Auditors:

- Threats to independence and objectivity resulting from the provision of such services and any safeguards in place to eliminate or reduce these threats to a level where they would not compromise the external auditor's independence and objectivity;

- The nature of the non-audit services;

- Whether the skills and experience of the audit firm makes it the most suitable supplier of the non-audit service; and

- The fees incurred, or to be incurred, for non-audit services both for individual services and in aggregate, relative to the audit fee, including special terms and conditions (for example, contingent fee arrangements).

During the course of the year the Auditor was engaged to conduct a review of the Company's half-yearly financial report for the six months ended 30 June 2020 period.

The fees for the year-end audit were €73,289 (£63,300) (2019: €64,782 (£58,500)). Fees for non-audit services were €11,364 (£10,100) (2019: €11,178 (£9,800)) for the review of the half year report, €nil (2019: €7,413 (£6,500)) for compliance with the reporting fund regime and €nil (2019: €15,967 (£14,000)) for the provision of regulatory advice. In addition, the Company paid €33,481 (£29,250) (2019: €nil (£nil)) to the Auditor in respect of reporting accountant services which were provided in a previous period.

Auditor independence

The Audit Committee undertakes an annual assessment of the independence of the Auditor prior to the commencement of the audit, this includes:

- Discussing with the Auditor the threats to their independence and the safeguards applied to mitigate such threats;

- Considering all of the relationships between the Company and the Auditor;

- Reviewing and confirming no relationships between the Company and the Auditor which could impact independence and objectivity;

- Reviewing the level of fees paid by the Company in proportion to the overall fee income of the firm, office and partner; and

- Reviewing the Auditor's policies and processes for maintaining independence and monitoring compliance with relevant requirements.

Based on the above criteria the Audit Committee was satisfied as to the independence of the Auditor during the year ended 31 December 2020 and throughout the course of the audit.

Auditor appointment

The Company's current external auditor is Ernst & Young LLP, who were appointed on 19 August 2013. During the year under review, Denise Davidson replaced Sarah Williams as lead audit partner.

The Audit Committee considers the reappointment of the external auditor, including the rotation of the audit engagement partner, each year. The external auditor is required to rotate the audit engagement partner responsible for the Company audit every five years. The current audit engagement partner was appointed by the Auditor prior to the commencement of the Company's 2020 half year review.

The Committee reviews a number of factors when considering proposing the re-appointment/appointment of an auditor including:

- Effectiveness and quality of the previous audit (if applicable);

- Independence;

- Qualification, expertise and resources; and

- Consideration as to whether it would be appropriate to recommend an external audit tender be conducted earlier than the maximum best practice ten-year period.

After considering the above the Audit Committee provided the Board with its recommendation to the shareholders on the reappointment of Ernst & Young LLP as external auditor for the year ending 31 December 2021.

Accordingly, a resolution proposing the reappointment of Ernst & Young LLP as the Company's Auditor will be put to shareholders at the AGM. There are no contractual obligations restricting the Committee's choice of external auditor and the Company does not indemnify its external auditor.

Internal controls

The Board is responsible for ensuring that suitable systems of risk management and internal control are implemented by the third-party service providers to the Company. The Directors have reviewed the BNP Paribas Securities Services ISAE 3402 report (Report on the description of controls placed in operation, their design and operating effectiveness for the period from 1 October 2019 to 30 September 2020) on Fund Administration and are pleased to note that no significant issues were identified.

In accordance with the FRC's Internal Control: Guidance to Directors, and the FRC's Guidance on Audit Committees, the Board confirms that there is an on-going process for identifying, evaluating and managing the significant internal control risks faced by the Company.

As the Company does not have any employees it does not have a "whistle blowing" policy in place. The Company delegates its day-to-day administrative operations to third-party providers who are monitored by the Board and who report on their policies and procedures to the Board. Accordingly, the Board believes an internal audit function is not required.

I welcome feedback from all shareholders as to the form and content of this annual report.

For and on behalf of the Audit Committee,

Mark Tucker

Audit Committee Chairman

18 March 2021

Directors' Statement of Responsibilities

The Directors are responsible for preparing the Annual Financial Report and financial statements in accordance with applicable Jersey law and International Financial Reporting Standards as adopted by the European Union (IFRS).

Jersey Law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company at the end of the year and of the profit or loss of the Company for that year.

In preparing these financial statements, the Directors should:

· select suitable accounting policies and apply them consistently;

· make judgments and estimates that are reasonable;

· state whether applicable 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 proper accounting records that 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 (Jersey) Law 1991. 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.

The Directors confirm to the best of their knowledge that:

· the financial statements, which have been prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

· the Strategic Report includes 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 they face.

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, position, business model and strategy.

Richard Boléat Mark Tucker

Chairman Audit Committee Chairman

18 March 2021 18 March 2021

directors' Remuneration report

Table of Directors' Remuneration

No other remuneration or compensation was paid or is payable by the Company during the period to any of the Directors. There has been no change to the Company's remuneration policy as detailed below.

The Company has no employees. Accordingly, there are no differences in policy on the remuneration of Directors and the remuneration of employees.

Remuneration policy

The determination of the Directors' fees is a matter for the Board. The Board considers the remuneration policy annually to ensure that it remains appropriately positioned. As part of this process, Directors review the fees paid to the boards of directors of similar companies. No Director is involved in decisions relating to their own remuneration.

Directors are remunerated in the form of fees, payable quarterly in advance. No Director has any entitlement to a pension, and the Company has not awarded any share options or performance incentives to any of the Directors.

Directors are authorised to claim reasonable expenses from the Company in relation to the performance of their duties.

The Company's policy is that the fees payable to the Directors should reflect the time spent by the Board on the Company's affairs and the responsibilities borne by the Directors and should be sufficient to enable high calibre candidates to be recruited. The policy is for the Chairman of the Board and Chair of Committees to be paid a higher fee than the other Directors in recognition of their more onerous roles and more time spent. The Board may amend the level of remuneration paid within the limits of the Company's Articles of Association.

The Company's Articles of Association limit the aggregate fees payable to the Directors to a total of €500,000 per annum.

Statement of consideration of shareholder views

An ordinary resolution to ratify the Directors' remuneration report will be proposed at the Annual General Meeting on 22 April 2021.

Stephanie Carbonneil

Nomination and Remuneration Committee Chair

18 March 2021

independent auditor's report to the MEMBERS of cvc credit partners european opportunities limited

Opinion

We have audited the financial statements of CVC Credit Partners European Opportunities Limited (the "Company") for the year ended 31 December 2020 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Net Assets, the Statement of Cash Flows, and the related notes 1 to 17, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards as adopted by the European Union.

In our opinion, the financial statements:

► give a true and fair view of the state of the Company's affairs as at 31 December 2020 and of its loss for the year then ended;

► have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union; and

► have been properly prepared in accordance with the requirements of the Companies (Jersey) Law 1991.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements, including the UK FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included:

· Ascertaining that the going concern assessment covers a period of twelve months to 18 March 2022 from the date of approval of the financial statements.

· Reviewing the cash flow and revenue forecasts which support the Directors' assessment of going concern. This involved challenging the sensitivities and assumptions used in the forecasts, including the impact of the COVID-19 pandemic.

· Reviewing management's stress testing in relation to cash flows and tender redemptions and assessed whether the assumptions utilised were appropriate; including validating static data assumptions used, that could have a material impact, by agreeing these to supporting documentation where possible.

· Holding discussions with the Directors' and Administrator to determine whether, in their opinion, there is any material uncertainty regarding the Company's ability to pay liabilities and commitments as they fall due and challenging this assessment through our audit procedures over the assessment of the Company's liquidity.

· Considering whether the Directors' assessment of going concern, including the impact of the COVID-19 pandemic, as included in the Annual Report is consistent with the disclosure in the viability statement.

· Assessed whether the subsequent events identified impact the Company's ability to continue as a going concern.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of 12 months from when the financial statements are authorised for issue.

In relation to the Company's reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the directors' statement in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company's ability to continue as a going concern.

Overview of our audit approach

An overview of the scope of our audit

Tailoring the scope

Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for the Company. This enables us to form an opinion on the financial statements. We take into account size, risk profile, the organisation of the Company and effectiveness of controls, including controls and changes in the business environment when assessing the level of work to be performed.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.

Our application of materiality

We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and in forming our audit opinion.

Materiality

The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our audit procedures.

We determined materiality for the Company to be €3.4 million (2019: €5.4 million), which is 1% (2019: 1%) of the net assets attributable to shareholders. We believe that the net assets attributable to shareholders are the most important financial metric on which shareholders would judge the performance of the Company.

Performance materiality

The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.

On the basis of our risk assessments, together with our assessment of the Company's overall control environment, our judgement was that performance materiality was 75% (2019: 75%) of our planning materiality, namely €2.6m (2019: €4.0m). We have set performance materiality at this percentage based on our understanding of the entity and past experiences with the audit.

Reporting threshold

An amount below which identified misstatements are considered as being clearly trivial.

We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of €0.2m (2019: €0.3m), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.

We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other relevant qualitative considerations in forming our opinion.

Other information

The other information comprises the information included in the annual report set out above and below, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.

We have nothing to report in this regard.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Companies (Jersey) Law 1991 requires us to report to you if, in our opinion:

► proper accounting records have not been kept by the Company, or proper returns adequate for our audit have not been received from branches not visited by us; or

► the financial statements are not in agreement with the Company's accounting records and returns; or

► we have not received all the information and explanations we require for our audit.

Corporate Governance Statement

The Listing Rules require us to review the directors' statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Company's compliance with the provisions of the UK Corporate Governance Code specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit:

► Directors' statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out above;

► Directors' explanation as to its assessment of the Company's prospects, the period this assessment covers and why the period is appropriate set out above;

► Directors' statement on fair, balanced and understandable set out above;

► Board's confirmation that it has carried out a robust assessment of the emerging and principal risks set out above;

► The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out above; and;

► The section describing the work of the audit committee set out above.

Responsibilities of directors

As explained more fully in the Directors' Statement of Responsibilities set out above, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the Company and management.

► We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are International Financial Reporting Standards as adopted by the European Union, the Companies (Jersey) Law 1991, UK Corporate Governance Code (taken in the context of the AIC Code), and the Listing Rules.

► We understood how the Company is complying with those frameworks by making enquiries with the Directors including the Chair of the Audit Committee. We corroborated our understanding through our review of board minutes and board papers provided to the Audit Committee.

► We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur by considering the key risks impacting the financial statements. We identified fraud risks in relation to inappropriate revenue recognition with respect to investment income and risk of management override in relation to inappropriate journal entries. Our audit procedures stated above in the 'Key audit matters section' of this Auditor's report, including test of journal entries, were performed to address this identified fraud risk;

► Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved journal entry testing, with a focus on manual journals, journals posted around the year end date and other focused testing procedures.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the Company's members, as a body, in accordance with Article 113A of the Companies (Jersey) Law 1991. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Denise Davidson

for and on behalf of Ernst & Young LLP

London

18 March 2021

Statement of comprehensive income

For the year from 1 January 2020 to 31 December 2020

All items in the above statement are derived from continuing operations.

The Company has no items of other comprehensive income, and therefore the decrease in net assets attributable to ordinary shareholders from operations for the year is also the total comprehensive loss.

The notes below form an integral part of these financial statements.

statement of financial position

As at 31 December 2020

The financial statements below were approved by the Board of Directors on 18 March 2021 and signed on its behalf by:

Richard Boléat Mark Tucker

Chairman Audit Committee Chairman

The notes below form an integral part of these financial statements.

statement of changes in net assets

For the year ended 31 December 2020

For the year ended 31 December 2019

The notes below form an integral part of these financial statements.

statement of cash flows

For the year ended 31 December 2020

1 Includes cash receipts relating to income distributions of €21,114,461 (2019: €31,094,502), interest income of €2,925 (2019: €1,333) and tender fee income of €1,550,442 (2019: €446,411).

2 Cash flows arising from purchases and redemption of financial assets above does not include subscriptions and redemptions arising from conversion of €(8,093,584) (2019: €(5,848,686)) and €8,164,745 (2019: €5,953,452) respectively as these transactions have no associated cash flow.

3 Cash flows arising from issuance and redemption of ordinary shares above does not include subscriptions and redemptions arising from conversion of €(8,093,584) (2019: €(5,848,686)) and €8,164,745 (2019: €5,953,452) respectively as these transactions have no associated cash flow.

The notes below form an integral part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

1. General information

The Company was incorporated on 20 March 2013 and is registered in Jersey as a closed-ended Investment Company. Euro Shares and Sterling Shares were admitted to the Official List of the UK Listing Authority and admitted to trading on the Main Market of the London Stock Exchange on 25 June 2013.

The Company's registered address is IFC1, The Esplanade, St Helier, Jersey, JE1 4BP.

2. Accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to the years presented.

2.1 Basis of preparation

(a) Statement of Compliance

The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union which comprise standards and interpretations approved by the International Accounting Standards Board (IASB) together with the interpretations of the International Accounting Standards and Standing Interpretations Committee as approved by the International Accounting Standards Committee (IASC) which remain in effect. The financial statements give a true and fair view of the Company's affairs and comply with the requirements of the Companies (Jersey) Law 1991.

The liquidity method of presentation is followed in the Statement of Financial Position. Please refer to note 8.2 for maturity profiles.

(b) Basis of measurement

These financial statements have been prepared on the historical cost basis except for the revaluation of financial assets held at fair value through profit or loss and ordinary shares that are held at amortised cost, being the amount they can be redeemed at.

(c) Functional and presentation currency

The Company's functional currency is the Euro, which is the currency of the primary economic environment in which it operates. The Company's performance is evaluated and its liquidity is managed in Euros. Therefore the Euro is considered as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. The financial statements are presented in Euros, except where otherwise indicated, and are rounded to the nearest Euro.

(d) Critical accounting estimates and judgements

The preparation of financial statements in conformity with IFRS requires the Company to make judgements, estimates and assumptions that affect items reported in the Statement of Financial Position and Statement of Comprehensive Income and the disclosure of contingent liabilities at the date of the financial statements. It also requires management to exercise its judgement in the process of applying the Company's accounting policies.

Although these judgements, estimates and assumptions are based on best knowledge of current facts, circumstances and, to some extent, future events and actions, the actual results may ultimately differ from those estimates, possibly significantly. Valuation of financial assets is considered a significant estimate and is monitored by the Audit Committee to ensure that judgements, estimates and assumptions made and methodologies applied are appropriate and in accordance with IFRS 13. Please refer to note 2.4(c) for details regarding fair value estimation of financial assets and note 7 for IFRS 13 disclosures.

As outlined above in note 2.1(c) the Directors have used their judgement to determine that the Company's presentational and functional currency is Euro.

(e) New standards, amendments and interpretations

Definition of material (amendments to IAS 1 and IAS 8)

The International Accounting Standards Board has redefined its definition of material, issued practical guidance on applying the concept of materiality and issued proposals focused on the application of materiality to disclosure of other accounting policies. The amendments do not have a material impact on the Company's financial statements.

Several other amendments and interpretations apply for the first time in 2020, but these do not have an impact on the financial statements.

(f) Standards, amendments and interpretations issued but not yet effective

Standards that become effective in future accounting periods and have not been adopted by the Company:

As the Company does not participate in insurance contracts in the normal course of its business, the Directors believe that the application of this standard will not have an impact on the Company's financial statements.

A number of amendments and interpretations to existing standards have been issued, but are not yet effective, that are not relevant to the Company's operations. The Directors believe that the application of these amendments and interpretations will not impact the Company's financial statements when they become effective.

2.2 Going concern

The Directors have reviewed the Company's budget and cash flow forecast for the next 12 months from the date of approval of the financial statements. On the basis of this review, and after making due enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least 12 months to 18 March 2022, being the period of assessment covered by the Directors. The Directors are also satisfied that no material uncertainties exist that cast significant doubt over the Company's ability to continue as a going concern. In making this assessment, the Board have considered the impact that COVID-19 may have on the Company. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

2.3 Foreign currency translations

Transactions in foreign currencies are translated to Euro at the foreign exchange rate on the transaction date. Monetary assets and liabilities denominated in foreign currencies at the Statement of Financial Position date are translated to Euro at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the Statement of Comprehensive Income.

2.4 Financial instruments

Financial assets

(a) Classification

The Company classifies its investments as financial assets held at fair value through profit or loss. These financial assets do not possess contractual terms which give rise to cash flows on specified dates that are solely payments of principal and interest and therefore these financial assets default to this classification. Financial assets also include cash and cash equivalents as well as other receivables which are measured at amortised cost.

(b) Recognition, measurement and derecognition

Purchases and sales of investments are recognised on the trade date - the date on which the Company commits to purchase or sell the investment. Financial assets at fair value through profit or loss are measured initially and subsequently at fair value. Transaction costs are expensed as incurred and movements in fair value are recorded in the Statement of Comprehensive Income.

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or the Company has transferred substantially all risks and rewards of ownership.

(c) Fair value estimation

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company holds PECs issued by the Investment Vehicle. These investments are not listed or quoted on any securities exchange and are not traded regularly and, on this basis, no active market exists.

(d) Valuation process

The Company relies on the board of the Investment Vehicle making fair value estimates of an equivalent basis to those that would be made under IFRS. As at 31 December 2020, the Directors reviewed documentary evidence of the valuation of Investment Vehicle investments and scrutinised fair value estimates used to gain assurances as to the appropriateness and robustness of the valuation methodology applied by the Investment Vehicle to its underlying portfolio assets and hence to the Company investments in the Investment Vehicle. Being satisfied by the appropriateness and robustness of the valuation methodology applied by the Investment Vehicle, the Directors then incorporated those fair value estimates into the Company's Statement of Financial Position without adjustment.

The Directors interviewed representatives of the Investment Vehicle Manager in order to verify how the PECs are valued and the composition of the NAV of the PECs as of the date of the Statement of Financial Position.

The Directors are in regular communications with the Investment Vehicle Manager and receive monthly performance reports from the Investment Vehicle Manager in respect of the Investment Vehicle and its underlying investments, which are presented to the Directors by the Investment Vehicle Manager and discussed by these parties.

The Directors consider the impact of general credit conditions on the valuation of both the PECs and Investment Vehicle portfolio, as well as specific credit events in the European corporate environment. The Directors also analyse the Investment Vehicle portfolio in terms of both investment mix and fair value hierarchy.

Financial Liabilities

(a) Classification

As disclosed in note 2.7, the Company classifies its ordinary shares as financial liabilities held at amortised cost. Financial liabilities also include payables excluding accruals which are also held at amortised cost.

(b) Recognition, measurement and derecognition

Financial liabilities are recognised initially at fair value plus any directly attributable incremental costs of acquisition or issue and are subsequently carried at amortised cost. Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled or expires.

Ordinary shares are carried at amortised cost being the carrying amount of ordinary share value at which investors have the opportunity to partially tender their shareholding in accordance with the Company's Quarterly Contractual Tender facility.

2.5 Operating expenses, placing programme costs and share issue costs

Operating expenses, placing programme costs and share issue costs are recognised on an accruals basis and are recognised in the Statement of Comprehensive Income.

2.6 Dividends payable

Dividends are recognised as finance costs in the Statement of Comprehensive Income on the date they are paid to shareholders.

2.7 Ordinary shares

In accordance with IAS 32 - Financial Instruments: Presentation, the ordinary shares are classified as a financial liability rather than equity due to the redemption mechanism of the ordinary shares, in addition to there being two share classes which have different characteristics. Please refer to note 12 for further details.

2.8 Management shares

The management shares are non-redeemable and the most subordinate share class. Therefore, management shares are classified as equity. Please refer to note 11 for further detail.

2.9 Investment income

Investment income primarily relates to quarterly income distributions received from the Investment Vehicle based on income returns and capital appreciation from a diversified portfolio of sub-investment grade debt instruments. The Company is entitled to receive income distributions every quarter, which will equate to not less than 75% of the net income of the Company's investment in the Investment Vehicle. Investment income also includes bank interest income that the Company receives from cash amounts held on deposit. Investment income is recognised in the Statement of Comprehensive Income when the Company's right to such income is established.

2.10 Cash and cash equivalents

Cash and cash equivalents include cash in hand and deposits held at call with banks. Cash equivalents are short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

2.11 Segmental reporting

The Directors view the operations of the Company as one operating segment, being the investment business. All significant operating decisions are based upon analysis of the Company's investments as one segment. The financial results from this segment are equivalent to the financial results of the Company as a whole, which are evaluated regularly by the chief operating decision-maker (the Board with insight from the Investment Vehicle Manager).

2.12 Contingent liabilities and provisions

A contingent liability is a possible obligation depending on whether some uncertain future event occurs; or a present obligation but payment is not probable or the amount cannot be measured reliably. A provision is recognised when:

- the Company has a present legal or constructive obligation as a result of past events;

- it is probable that an outflow of resources will be required to settle the obligation; and

- the amount has been reliably estimated.

2.13 Taxation

Profits arising in the Company for the 2020 year of assessment will be subject to Jersey tax at the standard corporate income tax rate of 0% (2019: 0%).

2.14 Capital risk management

The Board defines capital as financial resources available to the Company. The Company's capital as at 31 December 2020 comprises its net assets attributable to shareholders at a total of €344,540,247 (2019: €537,324,231).

The Company's objectives when managing capital are to:

- safeguard the Company's ability to continue as a going concern;

- provide returns for shareholders; and

- maintain an optimal capital structure to minimise the cost of capital.

The Board monitors the capital adequacy of the Company on an on-going basis and the Company's objectives regarding capital management have been met.

Under the Code of Practice for Alternative Investment Funds and AIF Services Business, the Company, as a self-managed AIF is required to have an initial capital of at least €300,000. With the exception of the aforementioned, the Company has no other internally or externally imposed capital requirements.

3. Investment income

Tender fee income

The tender price pursuant to the Contractual Quarterly Tender facility is calculated based on the NAV per share (calculated as at the final business day in each quarter or such other date as the Directors in their absolute discretion may determine from time to time) less €0.01 or £0.01 per share respectively (being 1% of the original placing price of €1.00 and £1.00 per share (the "Original Placing Price")), which is retained by the Company. The Company recognises retained redemption proceeds of 1% and the administration fee as tender fee income.

During the year, 14,580,181 Euro Shares and 124,840,303 Sterling Shares have been tendered by shareholders which generated tender fee income of €1,550,442 (2019: €446,411). Refer to note 12 for further details on the Contractual Quarterly Tender facility.

4. Operating expenses

Non-audit fees paid to the Auditor

Non-audit fees paid to the Auditor relate to interim review services amounting to €11,364 (2019: €11,178), compliance with the reporting fund regime amounting to €nil (2019: €7,413) and provision of regulatory advice amounting to €nil (2019: €15,967). The Company also paid €33,481 (2019: €nil) to the Auditor in respect of reporting accountant services which were provided in a previous period. This amount has been included within finance costs (refer to note 5).

Advisor fees

The Investment Vehicle Manager agreed to provide the services of Mr. Justin Atkinson to assist with the marketing and promotion of the Company's shares. The Investment Vehicle Manager recharges the Company for Mr. Atkinson's cost. During the year, Advisor fees incurred were €117,488 (2019: €188,765).

Trustee fees

Trustee fees relate to fees paid to the trustee of the Trust which facilitates the conversion of treasury shares as further described in note 12. As the Trust was not engaged to convert treasury shares during the year ended 31 December 2020, the Trust did not earn any commission fee income for providing such services. As such, the Board agreed to settle the expenses of the Trust, being trustee fees of £10,425 (€11,730) (2019: £nil (€nil)) which were paid to BNP Paribas Jersey Trust Corporation Limited during the year.

5. Finance costs

Placing programme costs

On 29 March 2019, the Company published a prospectus in respect of a 12-month placing programme for up to 500 million placing shares, being new ordinary shares (to be denominated as either Euro Shares, Sterling Shares and/or US Dollar Shares) and/or C shares (to be denominated as either Euro C Shares, Sterling C Shares and/or US Dollar C shares).

During the year, the Company incurred placing programme fees of €33,481 (2019: €303,108), which represents reporting accountant services. No further placing programme fees have been accrued.

Share issue costs

The costs of the sale of treasury shares and placing of new ordinary shares have been expensed in the Statement of Comprehensive Income and amounted to a total of €3,524 (2019: €336,348).

Dividends paid

Refer to note 12 for further information on dividends paid.

6. Directors' fees and interests

During the year ended 31 December 2020, the Directors of the Company were remunerated for their services as follows:

Richard Boléat (Chairman) - £65,000 (2019: £65,000) per annum

Mark Tucker - £43,750 (2019: £43,750) per annum

David Wood - £42,500 (2019: £42,500) per annum

Stephanie Carbonneil - £42,500 (2019: £42,500) per annum

In addition, Mark Tucker, in his capacity as the Chairman of the Audit Committee receives an additional £6,250 (2019: £6,250) for his services in this role and Stephanie Carbonneil, in her capacity as Chair of the Nomination and Remuneration committee, receives an additional £5,000 (2019: nil) for her services in this role.

Total Directors fees paid during the year can be found in note 4 and details of the shares held by each Director at the date of approval of this report can be found above.

No pension contributions were payable in respect of any of the Directors. The Company has no employees.

Richard Boléat acts as the enforcer of the CCPEOL Purpose Trust. Please refer to note 15 for further detail.

7. Financial assets held at fair value through profit or loss

The PECs are valued taking into consideration a range of factors including the audited NAV of the Investment Vehicle as well as available financial and trading information of the Investment Vehicle and of its underlying portfolio; the price of recent transactions of PECs redeemed and advice received from the Investment Vehicle Manager; and such other factors as the Directors, in their sole discretion, deem relevant in considering a positive or negative adjustment to the valuation.

As at the year ended 31 December 2020, the Company held 123,587,333.61 Euro and 193,056,156.64 Sterling PECs (2019: 130,144,171.50 Euro and 324,425,319.07 Sterling PECs). Please refer below for reconciliation of PECs from 1 January 2019 (excluding PEC's awaiting settlement):

Fair value hierarchy

IFRS 13 requires an analysis of investments valued at fair value based on the reliability and significance of information used to measure their fair value.

The Company categorises its financial assets and financial liabilities according to the following fair value hierarchy detailed in IFRS 13, that reflects the significance of the inputs used in determining their fair values:

Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.

Level 2: Valuation techniques based on observable inputs, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable variable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

1 - As disclosed in note 2.7, the Company classifies its ordinary shares as financial liabilities held at amortised cost. Please note for disclosure purposes only, ordinary shares have been disclosed at fair value using the quoted price in accordance with IFRS 13.

The fair value of investments is assessed on an ongoing basis by the Board.

Level 3 reconciliation

The following table shows a reconciliation of all movements in the fair value of financial assets held at fair value through profit or loss categorised within Level 3 between the beginning and the end of the reporting period.

During 2020, there were no reclassifications between levels of the fair value hierarchy.

During 2019, there were no reclassifications between levels of the fair value hierarchy.

Quantitative information of significant unobservable inputs - Level 3 - PECs

The Board believes that it is appropriate to measure the PECs at the NAV of the investments held at the Investment Vehicle, adjusted for discount for lack of liquidity if necessary. The Board has concluded that no adjustment was necessary in the current year (2019: none).

The net asset value of the Investment Vehicle attributable to each PEC unit is €1.0793 (2019: €1.1778).

Sensitivity analysis to significant changes in unobservable inputs within Level 3 hierarchy - Level 3 - PECs

The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 31 December 2020 and comparative are as shown below:

As at 31 December 2020

As at 31 December 2019

Investment Vehicle portfolio

Listed equity securities and corporate bonds

The fair values of listed equity securities and corporate bonds at the reporting date are based on quoted market prices or binding dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs. The listed equity securities and corporate bonds are included within Level 1 of the hierarchy.

Unlisted equities, warrants and debt securities

For all other financial instruments, fair value is determined using valuation techniques.

The Investment Vehicle invests in some unlisted equities, warrants, corporate bonds and other debt securities. When these instruments are not measured at the quoted price in an active market they are valued using observable inputs, initially sourcing broker quotes from a number of sources and, where this data does not yield a reliable market price, utilising appropriate valuation techniques such as recently executed transaction prices in securities of the issuer or comparable issuers. Adjustments are made to the valuations when necessary to recognise differences in the instrument's terms. To the extent that these inputs are observable, the Investment Vehicle classifies the fair value of these investments as Level 2.

The Compartment invests in unlisted corporate debt, managed CLOs including asset backed securities. These investments are generally not quoted in an active market and may be subject to restrictions on redemptions such as lock up periods. Transactions in these assets do not occur on a regular basis. Investments in these debt securities are valued based on a combination of a third-party pricing service, an appraisal of the performance of the issuing company and utilising appropriate valuation techniques such as counterparty marks and recently executed transaction prices in securities of the issuer or comparable issuers. The Investment Vehicle has classified the fair value of these investments as Level 3 for this financial year.

Forward currency contracts

Foreign currency forward contracts are recognised as contractual commitments on a trade date basis and are carried at fair value based on quotes obtained from an independent source (e.g. Bloomberg). Foreign currency forward contracts are commitments to either purchase or sell a designated currency at a future date for a specified price and are settled in cash. Foreign currency forward contracts are valued by reference to the forward price at which a new contract of the same size and remaining maturity could be undertaken at the valuation date. For these financial instruments, significant inputs are market observable and are included within Level 2.

Valuation process for Level 3 investments

Valuations are the responsibility of the board of the Investment Vehicle, who have engaged the Investment Vehicle Services Manager, the Investment Vehicle Manager and the independent service provider to independently value the assets on a monthly basis, and perform a price challenge process. Following the completion of the price challenge process, the Investment Vehicle Manager presents the valuation of the assets to the Board on a monthly basis, including a discussion on the assumptions used and significant fair value changes during the year.

Investments in CLOs are primarily valued based on the bid price as provided by the third-party pricing service, and may be amended following consideration of the Net Asset Value published by the administrator of the CLOs. Furthermore, such a Net Asset Value is adjusted when necessary, to reflect the effect of the time passed since the calculation date, liquidity risk, limitations on redemptions and other factors. Depending on the fair value level of a CLOs assets and liabilities and on the adjustments needed to the Net Asset Value published by that CLO, the Investment Vehicle classifies the fair value of these investments as Level 3.

Investments in debt securities for which there are a limited number of broker quotes and for which no other evidence of liquidity exists and investments in unlisted equity and private equity companies that are not quoted in an active market are classified as Level 3. For debt securities with a limited number of broker quotes, these are then valued by considering in detail the limited broker quotes available for evidence of outliers (which may skew the average) which, if existent, are then removed, and then by calculating the average of the remaining quotes. For debt securities and unlisted equity or private equity companies for which there are no broker quotes, the Investment Vehicle Manager produces a pricing memorandum for the Investment Vehicle drawing on the International Private Equity Valuation guidelines, which is discussed, reviewed and accepted by the Board and the independent service provider.

If the Investment Vehicle Manager and the independent service provider have difficulty in establishing an agreed upon valuation for an asset, they will discuss and agree alternative valuation methods.

The following tables below, detail the investment holding of the Company at the Investment Vehicle level, categorising these assets according to the fair value hierarchy in accordance with IFRS 13 and detailing the quantitative information of significant unobservable inputs of the Level 3 investments held. The below disclosure has been included to provide an insight to shareholders, of the asset class mix held by the Investment Vehicle portfolio. It is important to note that as at 31 December 2020, the Company held a 58.71% (2019: 66.17%) interest in the net assets of the Investment Vehicle. This disclosure has not been apportioned according to the Company's PEC holding, as the Board believes to do so would be misleading and not an accurate representation of the Company's investment in the Investment Vehicle.

The below information regarding the financial assets at fair value through profit or loss for the Investment Vehicle has been included for information purposes only.

Transfers between Level 2 and Level 3 - (for Investment Vehicle)

Due to COVID-19, asset prices in sectors such as leisure, gaming, transport and retail saw material weakness throughout the year. However, there was a partial recovery towards the end of the year as a result of vaccine announcements.

In general, markets have still been active and liquid.

Aside from the obvious impacts of COVID-19 on the above sectors, there have not been any new or additional risks arising to those that would already have been considered and monitored by the Investment Vehicle Manager.

During 2020, following further developments in the liquidity of certain debt securities, investments of the Compartment with a market value of EUR 50.2 million as at 31 December 2020 were reclassified from Level 2 to Level 3 (31 December 2019: EUR 38.8 million) and EUR 9.5 million were reclassified from Level 1 to Level 3 (31 December 2019: EUR Nil). There were also investments reclassified from Level 3 to Level 2 having a market value of EUR 32.9 million as at 31 December 2020 (31 December 2019: EUR 17.5 million).

Level 3 reconciliation - (for Investment Vehicle)

The following table shows a reconciliation of all movements in the fair value of financial instruments categorised within Level 3 between the beginning and the end of the reporting year.