Martin Currie Global Portfolio Trust Regulatory News (MNP)

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

Legal Entity Identifier: 549300RKB85NFVSTBM94

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ANNUAL FINANCIAL RESULTS - YEAR TO 31 JANUARY 2023

The financial information set out below does not constitute the Company's statutory accounts for the years ended 31 January 2023 or 2022 but is derived from those accounts. Statutory accounts for 2022 have been delivered to the Registrar of Companies and those for 2023 will be delivered following the Company's annual general meeting. 

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

The unedited full text of those parts of the annual report and accounts for the year ended 31 January 2023 which are required to be published are set out on the following pages.

The annual general meeting of the Company will be held on 1 June 2023. The notice of meeting will shortly be issued to shareholders and a copy can be downloaded on the Company's website (www.martincurrieglobal.com).

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

FINANCIAL HIGHLIGHTS

Highlights

- Strong performance in the final quarter of the financial year

- Reduction in management fees

- Ongoing focus on the quality growth strategy of the Company

- Maintained annual dividend

Key data1

Past performance is not a guide to future returns. All returns are total returns unless otherwise stated.

Source: Martin Currie Investment Management.

1 Total return is the combined effect of the rise and fall in the share price, net asset value or benchmark together with any dividend paid. See the annual report and accounts for more details on Alternative Performance Measures.

2 The net asset value per share total return is calculated using the cum income net asset value with dividends reinvested on the ex-dividend date. This is an Alternative Performance Measure, please see the annual report and accounts for more details.

3 The benchmark with effect from 1 February 2020 is the MSCI All Country World index. Prior to this, the benchmark was the FTSE World index to 31 January 2020. Prior to this, the benchmark was the FTSE All-Share to 31 May 2011.

4 Ongoing charges (as a percentage of shareholders' funds) are calculated using average net assets over the period. The ongoing charges figure has been calculated in line with the Association of Investment Companies ('AIC') recommended methodology. This is an Alternative Performance Measure, see the annual report and accounts for more details.

5 For details of calculation, refer to note 5 in the annual report and accounts.

Three year performance

· +12.8% Net Asset Value total return over the three year period.

· +6.5% Share price total return over the three year period.

· +30.5% Benchmark total return over the three year period.

CHAIRMAN'S STATEMENT

Dear Shareholder

Investment performance

The 12 months covered by our financial year to 31 January 2023 were turbulent. We started February 2022 with concern about the fallout from the pandemic, its effect on trade and inflation along with a legacy of high debt. This was rapidly overtaken by the Russian invasion of Ukraine, which affected the prices of energy and other commodities. The prospect of a period of high and prolonged inflation led central banks in most parts of the world to increase interest rates which had hitherto generally been kept at a very low level to counter the after-effects of the global financial crisis a decade previously. The approach to setting interest rates in the current environment is a delicate balancing act between controlling inflation while not unnecessarily choking economic growth. The high level of uncertainty led to volatile equity markets. This was a difficult period for our portfolio manager's investment style in particular and, as a result, your Company's NAV total return was -8.8%.

Negative returns are naturally disappointing. The portfolio manager has remained true to an investment philosophy focused on companies selected for their potential for long-term growth, backed by a firm focus on ESG credentials and which we believe will generate strong returns over the long term.

Income and dividends

Net revenue earnings per share for the period amounted to 2.16 pence. The Company has paid three interim dividends of 0.9 pence per share and will pay a fourth interim dividend of 1.5 pence per share on 28 April 2023 to shareholders on the register on 11 April 2023. The total dividends with respect to the year to 31 January 2023 will be 4.2 pence per share, maintaining the same total dividend as the previous year.

Capital growth is the primary focus of the investment manager and the investment strategy is not constrained by any income target. Nevertheless, the Board recognises that dividends are important for many shareholders and hence continues to maintain its dividend in line with historic levels. In 2022 shareholders approved changes to the Company's Articles of Association to permit the distribution of realised capital gains and it has substantial distributable reserves. The Board has again used these alongside revenue earnings to maintain the dividend, while not impinging on the investment manager's approach to managing the portfolio.

At each Annual General Meeting ('AGM') since 2019, shareholders have been asked to approve the Company's dividend policy. The primary purpose of adopting a formal dividend policy was to allow the Company to continue to pay four quarterly interim dividends each year. Following a review by the Board we have expanded the dividend policy this year, principally to reaffirm our commitment to pay quarterly dividends and to confirm an intention at least to maintain the level of dividend each year, subject to market conditions and the Company's financial position and outlook. A detailed explanation of the revised dividend policy is set out in the description of AGM resolutions in the annual report and accounts.

ESG leadership and promoting the Company's shares

Martin Currie Global Portfolio Trust is recognised as a leader in ESG investing and has been awarded the highest possible 'Five Globes' from Morningstar. It is also rated in the top 1% of over 7,000 funds in Morningstar's global large cap category for ESG1. The portfolio manager's focus remains on investing in the highest quality companies that are expected to generate sustainable returns over the long term and, as described in this report, ESG analysis is at the core of the investment strategy. We believe that this distinctive approach to investing is important in stimulating demand for shares in a crowded market and against a background of increasing focus on the environment and on social and governance issues. The manager has remained very active in promoting the Company, including regular meetings with major shareholders, a wide variety of online activity designed to encourage investors to go to our website and regular press coverage of the portfolio manager's distinctive investment style.

Our website at www.martincurrieglobal.com is a comprehensive source of information and includes regular portfolio manager updates and outlook videos, monthly performance factsheets and independent research reports. I recommend that you subscribe for regular email updates that will keep you abreast of the news on your Company.

A key element of our approach to making the Company attractive to investors is our zero discount policy under which the Company buys back and issues shares with the objective of providing shareholders, in normal market conditions, with:

• assurance that the share price is aligned with the prevailing NAV per share; and

• liquidity so that investors can buy or sell as many shares as they wish at a price which is not significantly different from the NAV.

During the year under review, the Company bought back 10,510,850 shares which were placed in Treasury. No shares were issued, reflecting the difficult market conditions which we have experienced over the last year. While the Company has quite a high proportion of shares in Treasury, market sentiment can change rapidly and the Board believes that it is appropriate to be able to reissue shares in response to demand quickly and at low cost subject to shareholders' annual approval to disapply pre-emption rights. Shares would only be issued when we believe this to be in the best interests of existing shareholders and at a premium to the prevailing NAV at the time of issue. The Board remains committed to our zero discount policy and it continues to achieve its aims, with the share price generally remaining close to NAV.

The Board

I joined the Board in April 2013 and, having served ten years as a director, will stand down after this year's AGM. My fellow directors have decided to appoint Christopher Metcalfe to take the chair when I stand down. Christopher has extensive experience in global equity fund management and I am confident that I leave the Board in highly capable hands. 

Mindful of the size of the Company and its cost base, the Board has decided not to recruit a further director for the time being and will continue with four non-executive directors.

Reduced management fees

As reported at the half-year stage, the reduction in NAV as a result of market movements and share buybacks led the Board to be concerned that the ongoing charges ratio was increasing. We agreed with the manager that, with effect from 1 July 2022, the investment management fee would be amended to 0.45% of net assets2 per annum. Previously, the investment management fee was 0.5% per annum for the first £300m of the Company's net assets2 and 0.35% for net assets2 in excess of £300m. Furthermore, with effect from 1 July 2022, there will no longer be a separate company secretarial fee2. At the financial year-end net assets2 of circa £250m, the combined effect of the cut in ad valorem fee and removing the company secretarial fee amounts to a reduction of approximately 14% in annual fees and results in a simpler cost structure. The Board is confident that the new structure provides a competitive ongoing charge and contributes positively to increasing shareholder value. We would like to thank the AIFM for a helpful and constructive approach to this change.

AGM

I am pleased to be able to invite all shareholders to attend our AGM in person at the offices of Franklin Templeton, 5 Morrison Street, Edinburgh EH3 8BH on Thursday 1 June 2023 at 11.00 am. We do recognise that some shareholders may be unable to come to the AGM and if you have any questions about the annual report, the investment portfolio or any other matter relevant to the Company, please write to me either via email at ftcosec@franklintempleton.com or by post to The Company Secretary, Martin Currie Global Portfolio Trust plc, 5 Morrison Street Edinburgh EH3 8BH. If you are unable to attend, I urge you to submit your proxy votes in good time for the meeting, following the instructions enclosed with the proxy form.

Outlook

The outlook for economies around the world remains very difficult, with inflation at levels not seen for a generation. Uncertainty is also driven by geopolitical events, in particular the continuing Ukraine-Russia conflict and tension between China and the USA. Against this challenging background, there are some tentative signs of recovery. At the time of writing, inflation has fallen back from the very high levels triggered by the initial reaction to the conflict in Ukraine while China has apparently abandoned its zero-Covid policy. The crucial point will be governments' and central banks' ability to negotiate the balance of trying to control inflation by raising interest rates while not triggering a prolonged recession.

Continued volatility in share prices remains inevitable. While markets seek to anticipate future circumstances, current events in the news are likely to trigger sharp moves in share prices, as witnessed by the recent reaction to problems in the banking sector.

This year we did not achieve our KPIs relating to investment returns but it was reassuring to note a marked improvement in performance towards the end of our financial year and into the first quarter of 2023. Successful investment relies on taking a long-term view and it is important to look beyond volatility and remain consistent to our objective. Our portfolio manager will continue to concentrate on a focused list of investments, researched in depth and selected for their long-term growth prospects and sustainable credentials. We remain of the view that over the longer term our portfolio manager's consistent approach and strategy will deliver attractive returns to investors.

Keep in touch

The Company's website at www.martincurrieglobal.com is a comprehensive source of information and includes regular portfolio manager updates and outlook videos, monthly performance factsheets and independent research reports. I recommend that you subscribe for regular email updates that will keep you abreast of the news on your Company.

I thank you for your continued support. Please contact me if you have any questions regarding your Company by email at: ftcosec@franklintempleton.com.

Gillian Watson

Chairman

6 April 2023

1Morningstar, 31 December 2021 ©2021 Morningstar, Inc. All rights reserved. The information herein is not represented or warranted to be accurate, complete or timely.

Past performance is no guarantee of future results.

2For the purposes of calculating management fees, current period net income is excluded from the calculation of net assets. The Company secretarial fee for the year to 31 January 2022 was £56,000 plus VAT.

MANAGER'S REVIEW

Review of financial year ended 31 January 2023

2022 was a significant year for financial markets, with large movements both in equities and bond markets, and poor performance in both of these asset classes. There were many extreme developments in geopolitics, inflation, monetary policies, and financial markets.

The financial year to the end of January 2023 was a disappointing year for us, with marked underperformance by some of the stocks that we held and of the portfolio as a whole.

During the year, inflation increased significantly as demand for goods and services accelerated post the pandemic lockdowns, whilst shortages and production bottlenecks kept the supply-side constrained. This led to a flare up in frictional inflation, which was exacerbated by the Russian invasion of Ukraine. In these circumstances it was very difficult for central banks, economists, strategists, and market participants to predict inflation accurately. Consumer Price Indices moved to above 10% in many regions across

developed markets. This is a level that was not seen since the early 1980's or 1970's in some instances, and a level significantly above the c.2% targeted by main central banks such as the US Federal Reserve (the 'Fed') and the European Central Bank ('ECB'). Central banks went into a rapid series of interest rate hikes to try to tackle the inflation flare up, with the Fed moving from rates of 0.25% at the start of our financial year, to 4.75% on 1 February 2023, the day after the end of the year. This was a rapid 450bps increase in 12 months, with increments of 75bps on four consecutive occasions throughout the year. The significant shift in monetary policies was unexpected, and led to a significant sell-off in both equities and bond markets, with rapid negative returns of a magnitude not seen since the early part of the 20th century.

In periods of rising interest rates markets can deviate from fundamentals for some time, selling off companies with long duration of growth and compounding cash flows, such as the companies that we hold in our portfolio. In periods of rising interest rates, the market

tends to favour short-duration assets, such as Value stocks to which the Company has no exposure. This therefore led to a style-leadership shift that was detrimental to the portfolio, contributing to the underperformance during the year.

In the early part of 2022, we also had the tragic invasion of Ukraine by Russia. The resultant inflation led by energy and commodity prices, caused a flight towards defence-exposed stocks, and "defensive" parts of the market. The Company holds no energy and no defence stocks, has little exposure to commodities-related stocks, and has an underweight to defensive sectors such as food producers and pharmaceuticals companies.

During 2022, China went into periodic lockdowns to tackle the risk of the Omicron variant of Covid-19. This led to a negative impact on China's economic activity, and further amplified bottlenecks in supply chains and production around the world. This exacerbated the frictional inflation that we mention above. The Company has, directly or indirectly, exposure to the Chinese economic cycle through companies in the Industrials, Construction, Technology and Consumer space; this also contributed further to the underperformance of the portfolio. The NAV total return for the financial year was -8.8%, compared with a return of +2.9% for the benchmark index.

Some of the headwinds to performance in 2022 have been rapidly turning into tailwinds for the Company's performance in the past 2-3 months, as China suddenly and unexpectedly u-turned on its zero-Covid policy, and reopened its economy. This provided support to stocks exposed to China, notably in the Luxury Goods and Industrials sectors. With China being the second largest economy globally, a reopening has the potential to support global economic momentum, and therefore could reduce the fears of recession that the market has been focusing on in the latter part of 2022. As a result, more cyclical ends of the market, including the Technology sector, experienced a significant rebound in the last 3 months of our financial year. With the Company being sizeably exposed to China-related

stocks and to the Technology sector, the performance has been very strongly positive, with the NAV total return being up by 12.9% in the 3 months to the end of January, compared with a benchmark return of 3.7%.

The elevated market volatility that we have seen in 2022, and so far in 2023, highlights the difficulty in timing the market, and therefore the importance for investors to remain invested in stock markets for the long term. The (in our view) over amplified fears of recession during 2022 would have also led to some investors missing the significant market rally seen in late 2022 and early 2023, as China will likely provide a more supportive backdrop for the global economic cycle than many were predicting for 2023. This also highlights why we manage our shareholders' assets on a long-term time horizon of 5-10 years, and position the portfolio in companies that can perform through the economic cycle rather than trying to time the cycle, which experience has shown is very difficult to achieve consistently.

Despite the underperformance experienced in 2022, we have continued to focus on companies with strong long-term fundamentals. We have maintained our conviction in most of the stocks which we have held, and so have made only limited changes to the list of stocks in the portfolio.

We continue to focus on companies that are exposed to industries with high barriers to entry, that have:

• dominant market positions

• strong pricing power

• low disruption risk

• exposure to structural growth opportunities

• high returns on invested capital with strong cash flows and solid balance sheets

• quality management

• sustainable business models and

• good valuation support.

Valuation discipline remains core to our approach, and with the use of a high discount rate in our valuation methodology, we have been anticipating interest rates returning to more normal levels all along, even when rates were close to 0%, or at times below zero. This makes us confident that we have been using a conservative interest rate assumption when valuing companies in the portfolio. Valuation discipline is important during all phases of an economic cycle, but even more important when we are going through a period of rising interest rates. We wish to highlight to shareholders that our disciplined, consistent and conservative approach to valuing investment opportunities in stock markets should reassure them.

Key stock contributors and detractors

Linde performed well in the uncertain economic environment as their ability to increase prices to offset and even exceed inflationary pressures came to the fore. The new CEO also elaborated more on the company's strategy, notably seizing opportunities from changing legislation in the US, describing the Inflation Reduction Act as "accelerating the clean energy transition". Linde sees around $30bn of incremental investment opportunities in decarbonising and in new markets such as blue and green hydrogen, nitrogen, oxygen, hydrogen storage, CO2 capture and transportation.

CSL, the Australian blood-plasma biotech company, performed strongly in 2022. Through the second half of the year, news flow on

collections and therefore plasma supply has turned incrementally positive. This has resulted in not only revenue growth but also margin expansion as the collection centres, which have a high proportion fixed costs, are better utilised. The good news is compounded by early indications that new collection centre software can dramatically increase yield by up to 30%.

Ferrari performed well in the year. In June the luxury sportscar maker hosted investors in Maranello at its first Capital Markets Day

since 2018. New CEO Benedetto Vigna used the occasion to set out its strategy, sustainability and financial targets for the next five years. Investors seemed to be satisfied with the company's focus on the electrification agenda.

Ferrari plans to shift the mix of models from 0% to 40% EV by 2030 with the first EV model to be unveiled in 2025. Further, in September, Ferrari launched the Purosangue, the company's first foray into the SUV market, a particularly important segment of the

Chinese market. Orders of the Purosangue to date have been well beyond management's initial expectations.

Adidas underperformed materially in 2022, with a mixture of transitory external factors causing problems, compounded with some poor execution. The transparency on the underlying health of the brand has been complicated by Covid, supply chain disruption and Vietnamese factory closures which have proved difficult for management to navigate. Adidas was then forced to terminate its contract with the artist Ye in October. Whilst we believe this was the proper course of action, the Yeezy issues were compounded by the company's failure to disclose the highly profitable nature of those sales, which leaves a significant gap in expected profitability of the

group. On this basis and with the CEO resigning prior to this news, we exited the stock.

Conviction in Tencent weakened throughout 2022, due to a lack of visibility on the regulatory front, and an ever-growing geopolitical risk. Despite the crackdown easing towards the end of the year, we do not see the regulatory uncertainty substantially lifted over the

longer term. In a bear case, one could foresee an ongoing request by the Chinese political establishment for tech giants including Tencent to fund the common prosperity initiative that President Xi Jinping has made one of his primary policy focuses. As it was

difficult to quantify the downside risk, we exited the stock.

Farfetch performed very poorly throughout 2022 with exposure to a number of negative themes. The company held a Capital Markets

Day in December, where they laid out the profitability of a recent deal and other recently announced new business, disclosing for the

first time a significantly lower level of profitability than had been anticipated and greater dependence on the brand platform. With

real challenges to reach profitable growth, we exited the stock.

Portfolio Activity

In March we exited the position in JD.com, which came into the portfolio as a result of Tencent's divestment being distributed in shares. In April we exited the position in TSMC, in favour of ASML. We believe that ASML is better positioned to benefit from the onshoring trend that we are seeing and are likely to continue to see in semiconductor production sites, with plants under construction in the US, approved for construction in Japan, and the EU being likely to follow suit in the next few years.

In October we entered into a position in Croda, while exiting positions in Adidas and Tencent as described above. Croda is a stock where we have growing conviction, as the company has continued to reposition its portfolio, disposing of their PTIC business, and making two important acquisitions, Avanti Lipid Systems and Iberchem. These changes make the company more focused, with stronger growth potential going forward.

In November we entered positions in Nike and Zoetis. We acquired shares in Nike following an update to our forecasts following weak trading. We assess the stock as having a positive risk-reward profile, despite headwinds related to inventory overhangs in the US and China in the sports apparel segment. With the company having issued a profit warning with third quarter results, we took advantage of the share price weakness. 

We believe that the company has the potential to recover beyond 2023 and to get back on track with its growth and ROIC. We continue to like Nike's market share dominance in the US and globally and its strategic push to the direct to consumer channel, into key categories like womenswear where they are under-represented and Jordan where they are able to create more choice for the consumer.

We entered into a position in Zoetis following a 12% fall in the share price on release of the financial results. We believe that this was an over-reaction to results where there will be limited change to consensus estimates, at c.2% and mostly related to currency exchange rates in our view. Zoetis is the market leading pure-play on the structural growth in animal medicines. The industry enjoys relatively high barriers to entry and a sticky customer base of veterinarians and livestock farmers. Zoetis has market leading breadth in its portfolio and geographic reach in its sales force. It is also a R&D leader in the animal health space. This gives the firm the ability to gain market share through developing superior drugs in markets that are too small and fragmented for larger players to be interested.

ESG engagements

Engagement has continued to be an important ongoing focal point for us throughout the year. We are pleased that the Company has retained its top-rating of five Morningstar Globes for Sustainability even under the new, more stringent, methodology that they have applied.

Ahead of COP27 which took place in Egypt at the end of last year UNEP, the UN Environmental Programme, produced its seventeenth edition of the Emissions Gap report (www.unep.org/resources/emissions-gap-report-2022). This set out the continuing gap between current commitments from governments (nationally determined contributions or NDCs), pointing to a temperature rise of 2.6°C and the goals of the Paris Agreement to limit the rise to well below 2°C. As such this framed a renewed call for additional policy measures to support the transition to a lower carbon economy.

We continue to engage with companies to understand how they are managing and mitigating potential risks as well as embracing some of the opportunities presented by this transition. There is an increasing focus from regulators for companies to provide clarity to investors on their transition plans - notably in Europe and the UK - but we are also seeing moves for the SEC in the US to enhance climate disclosures. Our expectation is for companies to set targets based on science and we continue to see progress in this with just over 50% of your portfolio having set science-based targets by the year end and a further 16% committed to do so in the next two years.

Engagement topics split for 2022:

Carbon data (as at Jan 31 2023):

Notes: Data as at 31 January 2023.

Source: MSCI.

Scope 1 are direct emissions from energy sources owned/controlled by a company.

Scope 2 are indirect emissions from the generation of energy purchased by a company.

Weighted average carbon intensity: tons CO2e/$M sales.

Coverage: Proportion of companies for which data is available.

Outlook

Key risks to watch out for in 2023

The challenges that we face as investment managers are summarised in the ten key risks that we have identified:

Monetary policies risk - over-tightening in interest rates creates a higher potential risk of policy mistakes for markets and

economies.

Fiscal policies risk - lack of follow-through in stated infrastructure spending programs could put more downside risk to

economic momentum.

Persistence in inflation - given the difficulty of predicting frictional inflation, risk of stronger and longer lasting inflation could fuel a need for more tightening in monetary policies.

Pandemic relapse risk - localised lockdowns could create further disruptions in supply chains and bottlenecks, which could create shortages and further fuel the frictional inflation.

Corporate margin pressure - more persistent and more elevated inflation could lead to more corporate margins pressure for

companies lacking pricing power.

Market volatility and Style leadership volatility - shifting expectations in monetary policies could lead to ongoing volatility in

markets, and in style leadership between Growth and Value styles.

Lower long-term growth - growing indebtedness is likely to lead to ongoing low long-term growth in our view, with more scarcity in growth opportunities.

Higher taxation - given higher indebtedness, there is a high likelihood of higher tax rates, both for households and for

corporates.

Geopolitical risks flare ups - the Russia-Ukraine conflict will be an ongoing risk, with the risk of the conflict escalating or broadening. Other geopolitical hotspots to watch out for are China-Taiwan, North Korea, Iran-Israel, and China-rest of the world. Some of these geopolitical risks will be military, others will materialise into technological conflicts, such as China-US.

Climate disasters risk - climate change related disasters are likely to continue to take their toll on various regions, with risk of negative impact on societies, but also on corporates in terms of risk to productive capacities and to assets in general.

Geopolitical risks will continue to contribute to volatility

The Russia-Ukraine conflict shows no sign of an early resolution and there is the risk of further escalation. The ongoing energy supply risk for Europe and the effects on commodity prices are likely to continue to have ramifications for inflation and economies around the world. On the other hand, a resolution to this conflict could be an important driver of a risk-on rally - particularly in European equities.

The China-Taiwan geopolitical risk is likely to remain for years to come. This is also spilling over into technological conflicts with the US administration. This will clearly have implications for corporates exposed to these regulatory changes. North Korea also continues to have the potential to destabilise its region and the wider world, as does Iran.

There is a tendency to rising nationalism in periods of economic challenge. In particular we are concerned about tensions between the US and Europe leading to increased protectionism which would damage economic growth.

All eyes to remain on inflation

Equity investors' focus in 2023 is likely to remain on inflation and its impact on monetary policy. Whilst we have started to see some

undershooting in inflation numbers compared with expectations recently, there is a risk that current elevated inflation levels will persist. With current pressure largely related to supply chain disruptions and production bottlenecks, there is a good likelihood that inflation rates could be in the process of peaking.

However, this could be derailed by high wage inflation, which is a particular challenge in the US. This could lead to a risk of inflation turning more structural in the US, with a knock-on effect to other markets.

See chart of Headline CPI inflation on a monthly basis in the annual report and accounts.

Extraneous risks to the inflation outlook include (i) further partial lockdowns in China disrupting supply chains and (ii) the continuing effect of the Ukraine/Russia conflict on energy and food supplies. In summary, inflation remains difficult to forecast.

Macro-economic outlook pointing to sharp slowdown particularly in Europe

With leading indicators continuing to deteriorate, we believe that 2023 will be a year of low economic growth at the global level and in particular in the US. A key determinant of the global economic cycle will be the Chinese economy, which is now the second largest in the world. The sudden and unexpected u-turn by China on its zero-Covid policy and the reopening of its economy could lead to a rapid improvement in the Chinese leading indicators in the months to come. Europe is particularly challenged and we maintain a high probability of stagflation. Europe's economic momentum will in significant part be influenced by China. There could therefore be a chance of improvement as China reopens. However, any renewed risk of energy rationing as we approach the winter of 2023/24 could put further downward pressure on economic activity in the second half of the year.

Central banks will be playing a game of chicken in 2023

Central banks were clear in 2022 that they were focused on inflation - they effectively moved from whatever it takes to prop up growth to whatever it takes to reduce inflation. During the course of 2023, if inflation overshoots expectations interest rates will likely need to further adjust upwards. Conversely, if inflation undershoots and concerns of a recession increase then monetary policy expectations will adjust downwards. The recent turmoil in the banking sector could also result in lower interest rates than would have been the case. We could therefore have a scenario in 2023 where central banks tolerate somewhat higher inflation in order not to push economies into recession. One sure prediction for 2023 is that the word "pivot" will be used aplenty. Anticipation of monetary policies pivoting will drive volatility and will generate a healthy bull-bear debate in markets. We expect policy expectations to continue to be the dominant driver of share price returns in 2023.

See the Global 10-year bond yields chart in the annual report and accounts.

Earnings growth lacklustre

Earnings momentum turned negative from early 2022, driven by the tragic Russian invasion of Ukraine and the Chinese regional lockdowns. Economic leading indicators have been deteriorating since then, which in turn led to earnings momentum shifting negative rapidly. We believe that earnings revisions are likely to remain negative in the current year. Our top down growth estimates imply -1% for MSCI World, 0% for MSCI North America, and -5% for MSCI Europe, with MSCI Asia at +2%, all of which are noticeably lower than consensus forecasts. We therefore expect downward revisions in consensus estimates and downgrades in the cyclical parts of the market. In this environment it is critical to continue to focus on companies with resilient earnings and pricing power that can protect their margins from the ongoing higher inflationary pressures.

Valuation levels are more supportive

With equity markets having sold off significantly during 2022, equity valuations are now more supportive across the US, EU and Global equity markets in our view. On a relative basis for developed markets, we see more valuation support in European vs US equity markets but against this the risks are higher for Europe. Asian equity valuations also show good support in our view, although there are again also some geopolitical risks in that region.

See the Schiller P/E chart in the annual report and accounts.

Mid-term opportunities still abound for long-term investors

Despite the many uncertainties that we highlight in the market outlook, we find opportunities as long-term investors to be exposed to businesses that generate high returns and have attractive structural growth opportunities. These businesses are likely to be able to navigate the difficult near term economic cycle headwinds, and should be able to come out of any market slowdown in a stronger position than many of their competitors.

In particular, we highlight that in a market where growth will be scarce, or indeed at risk of being negative for some areas such as Europe, we believe that there are good opportunities for structural growth across the three mega-trends that we have identified:

· Demographic Changes

· Future of Technology

· Resource Scarcity

As long-term investors, we believe that there are opportunities to capture some secular trends and structural growth opportunities, through exposures to themes that have supportive trends.

Specifically, the eight mid-term thematic opportunities that we have identified previously still represent an important source of

structural growth in our view. These eight opportunities are:

(i) Green and alternative energy investment is an important focal point as more governments focus on decarbonising their economies, whilst the alternative energy sources have been an important geopolitical imperative for Europe since the Russian invasion of Ukraine. We see this as a long-term structural theme.

(ii) Greener infrastructure is an area of focus on decarbonisation, notably focusing on reducing the carbon footprint of buildings, which are an important source of carbon emissions.

(iii) Electric transportation is an important thematic opportunity as part of the drive to reduce carbon emissions. In this field, we see opportunities both in high-speed railway infrastructure, and in the development of infrastructure for electric vehicles.

(iv) Healthcare infrastructure is an important field of infrastructure-related thematic opportunity, as governments focus on the need to upgrade post the pandemic crisis. At the same time, with an ageing population in many regions the need for more bespoke healthcare and targeted therapies, and the use of genomics to achieve such developments, are interesting areas of opportunity.

(v) The upgrade cycle in 5G telephony is an important opportunity, as countries focus to make their economies more productive, with an upgrade in telecommunications infrastructure being a way to achieve this.

(vi) Cloud computing trends in the mid-term are also very supportive, as more businesses migrate their presence online, creating more demand for cloud services. Related to this theme, as more corporates migrate their presence online, there is an increased need to invest in cyber security.

(vii) Robotics and automation, and in particular Artificial Intelligence, is an important area of structural growth opportunity. Following the pandemic corporates are realising the need to make their production lines more robust, and their supply chains more resilient. Increased investment in robotics and automation is the way to do so. Trends towards onshoring or nearshoring of production bases will also accelerate this thematic trend.

(viii) Finally, nascent but promising and fast growing opportunities exist in the metaverse and quantum computing fields. Notably, we believe that, given the sizable investments that big tech companies are channelling into this area, there are opportunities in the enablers of the metaverse.

All in all, there are sizeable infrastructure and capital expenditure drivers across these eight areas, which bring some interesting opportunities to capture areas of structural growth through companies exposed to these themes.

An ever more disruptive decade continues to affirm itself in 2023 and beyond

With the ongoing focus on investing for a transitioning world towards net-zero, innovation rates are likely to continue to increase and, with this, disruption risk to traditional businesses is likely to continue to rise. For long-term investors, this opens up interesting areas of opportunity. However, it also highlights the need to be vigilant in terms of disruption risk on established business models, and to ensure that disruption risk is assessed in a detailed and structured analytical approach. Equally important is the ability for companies to remain innovative, both to fend off competitive pressures and to stay ahead of the disruptive trends that could challenge their market positioning.

Overall, we continue to focus on companies:

• with resilient earnings growth profiles, given the ongoing risks of earnings downgrades,

• exposed to structural growth themes, given the lower growth environment,

• with strong pricing power, given the ongoing elevated inflationary pressures weighing on corporate margins,

• with solid balance sheets, to withstand the potential risk of an economic hard landing.

Zehrid Osmani

Portfolio Manager, Martin Currie Global Portfolio Trust plc

Head of Global Long-Term Unconstrained Equities,

Martin Currie

6 April 2023

PORTFOLIO SUMMARY

By sector

By asset class

Portfolio distribution by region

Portfolio holdings as at 31 January 2023

As at 31 January 2023 the largest 10 holdings accounted for 46.9% of the portfolio (46.4% as at 31 January 2022).

Largest 10 holdings in detail

Linde

Materials, United States

US-listed industrial-gases manufacturer Praxair, a subsidiary of Linde, holds leadership throughout the Americas. In the current

macroeconomic environment, it is out of favour with investors, but the execution of the business has been very strong in recent years.

Pricing power has been masked by currency headwinds. Praxair management has continued to invest through this period and this has had some impact on group ROIC. Although revenue growth is correlated to global industrial production, the structure of client contracts using "take-or-pay" and "facility fees" means that revenues are relatively cushioned during economic downturns. Further, the merger has accelerated a strategy of focusing on less economically sensitive customers in the healthcare and food and beverage sectors.

ResMed

Healthcare, United States

The company is a global leader in the development of medical devices and cloud-based software applications that diagnose, treat, and manage respiratory disorders including sleep disordered breathing (more commonly known as sleep apnea), asthma and chronic obstructive pulmonary disorder (COPD). The company has a very attractive long-term revenue growth outlook. It is estimated that more than 424 million individuals globally have moderate to severe sleep apnea, with the percentage diagnosed below 15% and the percentage treated by ResMed below 3%, despite the company being market leader. The combined potential patient base including asthma and COPD numbers is in excess of 1 billion globally.

Microsoft

Information Technology, United States

US software company Microsoft, best known for its Windows operating system, the Xbox gaming console and cloud computing service Azure, is in a prime position to benefit from a new 'golden era' of investment in technology. IT investment is becoming crucial for every aspect of corporate life - infrastructure, marketing, sales and commerce - and Microsoft stands to capture a significant share of this double-digit-growing expenditure. Furthermore, a progressive move towards a subscription-based model is improving the company's pricing power and its competitive position in the market.

ASML Holding

Information Technology, Netherlands

The semiconductor equipment company enjoys a very strong market position and close relationships with customers. In addition the company is benefiting from the trend of on-shoring of semiconductor production. The Dutch company is critical in enabling innovation and development in the semiconductor industry. This backdrop, coupled with strong structural growth in semiconductor volume, gives the company a very attractive long-term growth and profitability outlook.

Moncler

Consumer Discretionary, Italy

Is the undisputed global leader in super premium down jackets and has a rich heritage and strategic focus on long-term sustainable and responsible growth. The market is aware that the business is still expanding its distribution and that the total available market is very large relative to its current revenues (20% of total luxury and personal goods is apparel). However, the market seems focused on short-term concerns around trade and a slowdown in China, and seems to be missing the attractive long-term growth opportunity and the management's exemplary execution within the category. We believe that the structural growth potential of the company is compelling, and its ability to continue to innovate remains strong.

Nvidia

Information Technology, United States

The company designs graphics processing units for gaming and professional markets. We see long-term upside optionality in several secular growth areas, including Gaming, Cloud, AI and Autonomous Vehicles. The growth is driven by the long-term structural trends in gaming and more importantly in data centres.

VISA

Information Technology, United States

VISA is a classic compounder, boosted by the secular shift away from cash/physical sales towards digital/online commerce. The company's ROIC is highly attractive as the network model provides structural operating leverage, but with low requirements for capital expenditures. The electronic payments space is seeing ongoing disruption, but VISA's prime competitive position ensures that they can face these challenges from a position of strength.

L'Oreal

Consumer Staples, France

Based in France, L'Oreal is number one in global beauty (in 2021 by revenue*), outgrowing a market which grows 3-5% annually.

The company's R&D, marketing capability, logistics platform and global expertise in the space gives us conviction in the sustainability of this outperformance. Thanks to sensible capital allocation, L'Oreal has a long history of value creation through bolt-on acquisitions. Further to this, the balance sheet is highly under-utilised, giving significant opportunity to further beat expectations.

*Source company reports, August 2022. Based on 2021 beauty sales from the 10 leading global beauty companies.

Ferrari

Consumer Discretionary, Italy

The Italian sports car manufacturer provides a unique play on the global growth of high-net-worth individuals and their passion for speed. It has enviable pricing power, with huge scope for average selling prices to increase through greater use of the Special Series and Icona platforms - already a sizeable premium to other luxury car manufacturers. Growth potential is further enhanced by electrification as they launch new hybrid and electric models.

CSL

Healthcare, Australia

The Australian blood-plasma company has a long history of high and sustainable returns, driven by cost efficiency in a largely consolidated market with high barriers to entry. Persistent industry supply/demand tightness is allowing CSL to capture an outsized share of growth through its superior collection infrastructure. Meanwhile, visibility of the next phase of growth and sustained returns appear promising, as waste products from the core operations are successfully re-purposed into specialty drugs, for example, Haegarda for hereditary angioedema. Existing molecules are also turned to new treatment areas such as Transplant, all at substantial incremental margins.

Key Performance Indicators and Performance

The Board uses certain key performance indicators ('KPIs') to monitor and assess its performance in achieving the Company's objectives. The Board have made no changes to the KPI targets in the financial year to 31 January 2023.

1. Net asset value performance relative to benchmark

The Board assessed the net asset value total return compared to the benchmark. It is measured on a financial year basis and assessed over a rolling three year period. The benchmark with effect from 1 February 2020 is the MSCI All Country World index. Prior to this, the benchmark was the FTSE World index.

The KPI was not achieved for the period. The return of the Company was 12.8% and the benchmark 30.5% for the three years to 31

January 2023.

2. Performance against the Company's peers

The Board monitors the share price total return performance versus all competitor funds within the AIC Global sector over a rolling three year period.

The share price total return for the Company was 6.5% over the three years to 31 January 2023 which ranked 10 out of 14 in the AIC Global sector.

3. Ongoing charges

The Board monitors ongoing charges on a regular basis to ensure that it meets its target by maintaining cost discipline and its focus on value adding activities. The KPI was met for the year at 0.61%. The ongoing charges figure has been calculated in line with the Association of Investment Companies ('AIC') recommended methodology.

Principal and emerging risks and uncertainties

Risk and mitigation

The Company's business model is longstanding and resilient to most of the short-term operational uncertainties that it faces. The Board believes that these are effectively mitigated by the internal controls established by the Board and by the AIFM and their combined oversight of the investment manager, as described in the table below. Its principal risks and uncertainties are therefore largely driven by the inherent uncertainties of investing in global equity markets. The Board's process seeks to mitigate known risks and to identify new risks as they emerge.

However, it is recognised that the likelihood and timing of crystallisation of some risks, known and unknown, cannot be predicted and the Board then relies on professional management, effective systems and communication to mitigate and respond to them as and when they arise.

Operational and management risks are regularly monitored by the AIFM and by the Board at Board meetings. As part of its annual strategy meeting the Board carries out a robust assessment of the principal and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity.

The Board's planned mitigation measures for the principal and emerging risks are described below.

The Board notes that the dominant global macroeconomic risks are geo-political tensions, inflation, and climate transition as well as continuing fallout from the Covid-19 pandemic. These are however considered to be risks that have an impact on the identified principal and emerging risks and are therefore considered and managed in that context. With regard to Covid-19, in most of the world restrictions on social contact and travel have been reduced or removed completely. While there remains a risk of further outbreaks, the Board has concluded that the recent pandemic no longer represents a principal risk for the Company. Nevertheless, the recent pandemic has highlighted the ability of virulent diseases to travel rapidly around the world and the Board and AIFM will manage the risk by continuing to ensure that the Company and its key suppliers have effective contingency plans in place.

On the basis of its continual and ongoing assessment of the principal and emerging risks facing the Company, and given its current position, the Board is confident that the Company will be able to continue in operation and meet its liabilities as they fall due. The Board believes that the processes of internal control that the Company has adopted and oversight by the AIFM continue to be effective.

Going concern status

The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's statement, Manager's review, Strategic report and the Report of the directors. The financial position of the Company as at 31 January 2023 is shown in the statement of financial position. The statement of cash flow of the Company is included in this announcement. Note 17 sets out the Company's risk management policies, including those covering market risk, liquidity risk and credit risk. In accordance with the 2019 AIC Code of Corporate Governance and the 2018 UK Corporate Governance Code, the Directors have undertaken a rigorous review of the Company's ability to continue as a going concern. The Company's assets

consist of a diverse portfolio of listed equity shares which, in most circumstances, are realisable within a very short timescale. The Directors are mindful of the principal and emerging risks and uncertainties.

They have reviewed revenue forecasts for the next two financial years, including liabilities arising from the loan facility, and believe that the Company has adequate financial resources to continue its operational existence for the period to 31 January 2025, which is at least 12 months from the date on which the financial statements are authorised for issue. Accordingly, the Directors continue to adopt the going concern basis in preparing these financial statements.

Viability statement

The Company's business model is designed to deliver long-term returns to its shareholders through investment in large and liquid stocks in global equity markets. Its plans are therefore based on having no fixed or limited life provided that global equity markets continue to operate normally. The Board has assessed the Company's viability over a three year period in accordance with provision 31 of the UK Corporate Governance Code as it believes that this is an appropriate period over which it does not expect there to be any significant change to the principal risks and adequacy of the mitigating controls in place. The Board considers that this reflects the minimum period which should be considered in the context of the Company's long-term objective but one which is limited by the inherent and increasing uncertainties involved in assessment over a longer period.

In making this assessment the Directors have considered the following factors:

• the principal and emerging risks and uncertainties and the mitigating actions, including specifically the current geopolitical and economic environment;

• the mitigation measures which key service providers including the manager have in place to maintain operational resilience;

• the challenges posed by climate change;

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

• the level of income forecast to be generated by the Company and the liquidity of the Company's portfolio;

• the low level of fixed costs relative to the Company's liquid assets;

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

• the quantity of debt, the fixed interest rate on the debt and the ability of the Company to make payments of interest and repayments of principal on its debt on their due dates.

Based on the results of their analysis and the Company's processes for monitoring each of the factors set out above, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over at least the next three years.

Responsibility statement

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

· the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

· the Report of the directors, Strategic report and Manager's review include a fair, balanced and understandable review of the development and performance of the business and the position of the Company, together with a description of the principal risks and the uncertainties that it faces; and

· the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy.

The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (and applicable law).

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair

view of the state of affairs of the Company and of the profit or loss of the Company for that period.

In preparing these financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and accounting estimates that are reasonable and prudent;

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

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements and the Directors' remuneration report comply with the Companies Act 2006.

They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The financial statements are published on the Company's website (www.martincurrieglobal.com) which is maintained by the investment manager. The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

This responsibility statement was approved by the Board of Directors on 6 April 2023 and is signed on its behalf by the Chairman, Gillian Watson.

STATEMENT OF COMPREHENSIVE INCOME

The total columns of this statement are the profit and loss accounts of the Company.

The revenue and capital items are presented in accordance with the Association of Investment Companies ('AIC') Statement of Recommended Practice 2021.

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

No operations were acquired or discontinued in the year.

The notes below form part of these financial statements.

There is no other comprehensive income and therefore the return attributable to shareholders is also the total comprehensive income for the period.

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

STATEMENT OF FINANCIAL POSITION

The notes below form part of these financial statements. 

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

The financial statements were approved by the Board of directors on 6 April 2023 and signed on its behalf by Gillian Watson, Chairman.

STATEMENT OF CHANGES IN EQUITY

The notes below form part of these financial statements. 

STATEMENT OF CASH FLOW

Analysis of debt

The notes below form part of these financial statements. 

NOTES TO THE FINANCIAL STATEMENTS

Note 1: Accounting policies

a) For the reporting period, the Company is applying FRS 102 Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), which forms part of the Generally Accepted Accounting Practice ('UK GAAP') issued by the Financial Reporting Council ('FRC').

The Company's assets consist of a diverse portfolio of listed equity shares which, in most circumstances, are realisable within a very short timescale. The Directors are mindful of the principal and emerging risks and uncertainties including those related to geopolitical risks and climate considerations.

They have reviewed revenue forecasts for the next two financial years, including liabilities arising from the loan facility, and believe that the Company has adequate financial resources to continue its operational existence for the period to 31 January 2025, which is at least 12 months from the date the financial statements are authorised for issue. Accordingly, the Directors continue to adopt the going concern basis in preparing these financial statements.

These financial statements have been prepared in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, FRS102 issued by the FRC and the revised Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (SORP) issued by the AIC in July 2022.

Functional currency - the Company is required to identify a functional currency, being the currency in which the Company predominately operates. The Board has determined that sterling is the Company's functional currency, which is also the currency in which these financial statements are prepared. This is also the currency in which all expenses and dividends are paid.

The Directors have considered the impact of climate change on the value of the listed investments that the Company holds. In the view of the Directors, as the portfolio consists of listed equities, their market prices should reflect the impact, if any, of climate change and accordingly no adjustment has been made to take account of climate change in the valuation of the portfolio in these financial statements.

b) Income from investments (other than capital dividends), including taxes deducted at source, is included in revenue by reference to the date on which the investment is quoted ex-dividend, or where no ex-dividend date is quoted, when the Company's right to receive payment is established. UK investment income is stated net of the relevant tax credit. Overseas dividends include any taxes deducted at source. Special dividends are credited to capital or revenue, according to the circumstances. Stock dividends are treated as unfranked investment income; any excess in value of the shares received over the amount of the cash dividend is recognised as a capital item in the statement of comprehensive income.

c) Interest receivable and payable, investment management fees and other expenses are measured on an accruals basis.

d) The investment management fee and finance costs in relation to debt are recognised four-fifths as a capital item and one-fifth as a revenue item in the statement of comprehensive income in accordance with the Board's expected long-term split of returns in the form of capital gains and revenue, respectively. Finance costs relate to interest and fees on bank loans and overdrafts. All other expenses are charged to revenue except where they directly relate to the acquisition or disposal of an investment, in which case, they are treated as described in (f) below. Full details of the investment management fee are included in the Report of the directors in the annual report and accounts.

e) Investments - investments have been classified upon initial recognition at fair value through profit or loss. Investments are recognised and derecognised at trade date where a purchase or sale is under a contract whose terms require delivery within the time frame established by the market concerned, and are initially measured at fair value. Subsequent to initial recognition, investments are valued at fair value. For listed investments, this is deemed to be bid market prices. Gains and losses arising from changes in fair value are included in net profit or loss for the year as a capital item in the statement of comprehensive income and are ultimately recognised in the capital reserve.

f) Transaction costs incurred on the purchase and disposal of investments are recognised as a capital item in the statement of comprehensive income.

g) Monetary assets and liabilities expressed in foreign currencies are translated into sterling at rates of exchange ruling at the date of the statement of financial position.

Non-monetary items expressed in foreign currencies held at fair value are translated into sterling at rates of exchange ruling at the date the fair value is measured. Transactions in foreign currency are converted to sterling at the rate ruling at the date of the transaction. Exchange gains and losses are taken to the income statement as a capital or revenue item depending on the nature of the underlying item.

h) Cash and cash equivalents comprise cash and demand deposits which are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value.

i) Dividends payable - under FRS102 dividends should not be accrued in the financial statements unless they have been approved by shareholders before the statement of financial position date. Dividends to equity shareholders are recognised in the statement of changes in equity when the shareholder's right to receive the payment is established. In the case of the fourth interim dividend, this would be the ex-dividend date of 6 April 2023.

j) Called up ordinary share capital - represents the nominal value of the issued share capital including shares held in Treasury. This reserve is non-distributable.

The share premium account - when shares held in Treasury are reissued, the excess of the sales proceeds over the weighted average price of repurchase is allocated to the share premium account. This reserve is non-distributable.

The capital redemption reserve - represents the nominal value of the shares bought back and cancelled. This reserve is non-distributable.

The special distributable reserve - created through the cancellation and reclassification of the share premium account in 1999 and 2004. Prior to 1 February 2021, the costs of share buybacks and the proceeds of shares re-issued from Treasury up to the original cost of repurchase, calculated by applying the weighted average price of shares held in Treasury, were allocated to the special distributable reserve. Following the Board's decision to simplify the Company's reserves, the balance of the special distributable reserve of £74,260,000 was transferred in full to the capital reserve on 16 June 2022 (see statement of changes in equity for more details on the movement in reserves). Thus, the balance of this reserve as at 31 January 2023 is nil.

The capital reserve - gains or losses on realisation of investments and changes in fair values of investments are transferred to the capital reserve. Any changes in fair values of investments that are not readily convertible to cash are treated as unrealised gains or losses within the capital reserve. The capital element of the investment management fee and relevant finance costs are charged to this reserve. Any associated tax relief is also credited to this reserve.

With effect from 16 June 2022, the accounting policy has been updated following the passing of Resolution 18 at the Company's AGM, whereby the new Articles of Association were adopted which allow the realised portion of the capital reserve to be distributable by way of dividend in addition to continuing to be available for distribution by way of share buybacks.

The consolidation of the special distributable reserve and the capital reserve has had no impact on the Company's cash or net assets.

The revenue reserve - represents net revenue earned that has not been distributed to shareholders. This reserve is fully

distributable.

k) Taxation - the charge for taxation is based upon the revenue for the year and is allocated according to the marginal basis between revenue and capital using the Company's effective rate of corporation tax for the accounting period.

l) Deferred taxation - deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date where transactions or events that result in an obligation to pay more or a right to pay less tax in future have occurred at the statement of financial position date measured on an undiscounted basis and based on enacted tax rates. This is subject to deferred tax assets being recognised only if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying temporary differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the accounts which are capable of reversal in one or more subsequent periods. Due to the Company's status as an investment trust, and the intention to continue meeting the conditions required to obtain approval as an investment trust in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.

m) Stock lending income (now discontinued) is received net of associated costs and recognised in revenue as earned.

n) Estimates - estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. There have been no significant judgements, estimates or assumptions for the year.

o) Bank loans are classified as financial liabilities at amortised cost. Interest payable on the bank loan is accounted for on an accrual basis in the statement of comprehensive income.

There were no capital dividends received during the year ended 31 January 2023 (2022: £nil).

Note 3: Other expenses

All expenses detailed above include VAT where applicable.

1During the year to 31 January 2022 the Company changed administrators and Martin Currie Investment Management paid an additional audit fee in relation to

this change of £3,000 plus VAT. During the year to 31 January 2023 the audit fee has been adjusted for inflation and an additional £2,500 plus VAT to reflect the

change in scope as a result of the revised ISA 315 requirements.

2With effect from 1 July 2022, the AIFM ceased charging a separate company secretarial fee.

Note 4: Taxation on ordinary activities

The corporation tax rate was 19.00% (2022: 19.00%). The tax charge for the year differs from the charge resulting from applying the standard rate of corporation tax in the UK. The differences are explained below.

As at 31 January 2023, the Company had unutilised management expenses of £44 million (2022: £42 million) carried forward. Due to the Company's status as an investment trust and the intention to continue to meet the conditions required to obtain approval for that status in the foreseeable future, the Company has not provided deferred tax on capital gains and losses arising on the revaluation or disposal of investments.

Note 5: Returns per share

Note 6: Dividends

Revenue return per share for the year ended 31 January 2023 is 2.16p (2022: 1.36p), refer to note 5 for details of calculation.

The fourth interim dividend for the year ended 31 January 2022 and the first interim dividend for the year ended 31 January 2023 have been allocated to the special distributable reserve. The second and third interim dividends for the year ended 31 January 2023 have been allocated to the revenue reserve. (2022: The fourth interim dividend for the year ended 31 January 2021 and the first interim dividend for the year ended 31 January 2022 were allocated to the revenue reserve. The second and third interim dividends for the year ended 31 January 2022 were allocated to the special distributable reserve).

Set out below are the total dividends paid/payable in respect of the financial year which forms the basis on which the requirements of s1158-1159 of the Corporation Taxes Act 2010 are considered.

Note 7: Investments at fair value through profit or loss

The Company received £71,467,000 (2022: £40,248,000) from investments sold in the year. The book cost of these investments when they were purchased was £67,894,000 (2022: £30,180,000).

The transaction costs in acquiring investments during the year were £52,000 (2022: £52,000). For disposals, transaction costs were £37,000 (2022: £20,000).

Note 8: Trade receivables

Note 9: Cash and cash equivalents

Note 10: Trade payables

1For details please see narrative below Note 11.

Note 11: Payables - amounts falling due after more than one year

On 23 November 2020, the Company entered into an unsecured three year £30 million sterling term loan facility agreement with The Royal Bank of Scotland International Limited at a fixed interest rate of 1.181%. This facility was fully drawn down on 24 November 2020 and matures on 24 November 2023. Due to its maturity in less than one year, this credit facility has been reclassified as a current liability.

The facility agreement contains covenants that the adjusted investment portfolio value at each month end should not be less than £120 million, the gross borrowings should not exceed 30% of the Company's adjusted investment portfolio value and the portfolio must contain at least 22 eligible investments.

The facility is shown at amortised cost.

Finance costs are charged to capital (80%) and revenue (20%) in accordance with the Company's accounting policies.

Note 12: Ordinary shares of 5p

For the financial year to 31 January 2023, the net proceeds received for shares issued from Treasury less payments made for shares bought back to Treasury was

 -£32,848,000 (2022: the net proceeds received for shares issued from Treasury less payments made for shares bought back to Treasury was £8,007,000).

Between 1 February 2023 and 31 March 2023, 1,738,928 Ordinary shares of 5p were bought back to Treasury and no Ordinary shares of 5p were issued from Treasury.

Note 13: Capital reserves

1Refer to Note 1(j): Accounting policies for details on the consolidation of reserves. Prior to the consolidation, the balance of the special distributable reserve was reduced by £2,037,000, the amount of the dividends paid during the period. The realised capital reserve is distributable by way of dividend and by way of share buybacks. The unrealised investment holding gains is non-distributable.

The above split in capital reserve is shown in accordance with provisions of the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts 2022'.

Note 14: Net asset value per share

Note 15: Related party transactions

With the exception of the investment management and secretarial fees (as set out in the annual report and accounts), and Directors' shareholdings (as set out in the annual report and accounts), there have been no related party transactions during the year, or in the prior year.

The amounts payable for Directors' fees as at 31 January 2023 are £14,478 (2022: £14,000).

Note 16: Financial instruments

The Company's financial instruments comprise securities and other investments, cash balances, receivables and payables that arise directly from its operations; for example, in respect of sales and purchases awaiting settlement, and receivables for accrued income.

The Company also has the ability to enter into derivative transactions in the form of forward foreign currency contracts, futures and options, for the purpose of managing currency and market risks arising from the Company's activities.

The main risks the Company faces from its financial instruments are (a) market price risk (comprising (i) interest rate risk, (ii) currency risk and (iii) other price risk), (b) liquidity risk and (c) credit risk.

The Board regularly reviews and agrees policies for managing each of these risks. The AIFM's policies for managing these risks are summarised below and have been applied throughout the year. The numerical disclosures exclude short-term receivables and payables, other than for currency disclosures.

(a) Market price risk

The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - interest rate risk, currency risk and other price risk.

(i) Market risk arising from interest rate risk

Interest rate movements may affect the level of income receivable on cash deposits.

The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment and borrowing decisions.

The Board imposes borrowing limits to ensure that gearing levels are appropriate and reviews these on a regular basis. Borrowings may comprise fixed rate, revolving, and uncommitted facilities. The total borrowings will not exceed 20% of the net assets of the Company at the time of drawdown. On 23 November 2020, the Company entered into a £30 million sterling term loan facility agreement. The facility was fully drawn down on 24 November 2020 and the term loan is shown at amortised cost.

Interest risk profile

The interest rate risk profile of the Company at the reporting date was as follows:

Interest rate sensitivity

The sensitivity analysis below has been determined based on the exposure to interest rates for non-derivative instruments at the statement of financial position date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have floating rates.

If interest rates had been 2% (2022: 0.75%) higher or lower and all other variables were held constant, the Company's profit for the year ended 31 January 2023 would increase/decrease by £25,000 (2022: increase/decrease by £49,000).

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

An interest rate variation of 2% is used at 31 January 2023 as the Bank of England has increased the Bank Rate to 3.5% as of the year-end date, while market expectations are that this will reach to 5% during the second half of 2023.

(ii) Market risk arising from foreign currency risk

A significant proportion of the Company's investment portfolio is invested in overseas securities and the statement of financial position can be significantly affected by movements in foreign exchange rates. It is not currently the Company's policy to hedge this risk.

The revenue account is subject to currency fluctuation arising on overseas income.

Foreign currency risk profile

Foreign currency risk exposure by currency of denomination:

The asset allocation between specific markets can vary from time to time based on the portfolio manager's opinion of the attractiveness of the individual stocks.

Foreign currency sensitivity

At 31 January 2023, if sterling had strengthened by 5% in relation to all currencies, with all other variables held constant, total net assets and total return on ordinary activities would have decreased by the amounts shown below. A 5% weakening of sterling against all currencies, with all other variables held constant, would have had an equal but opposite effect on the financial statement amounts. The level of change is considered to be a reasonable illustration based on the volatility of exchange rates during the year.

(iii) Market risk arising from other price risk

Other price risks (i.e. changes in market prices other than those arising from interest rate or currency risk) may affect the value of the quoted investments.

It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular country or sector. The allocation of assets to international markets as detailed above, and the stock selection process both act to reduce market risk. The investment manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. All investments held by the Company are listed on various stock exchanges worldwide.

Other price risk sensitivity

If market prices at the statement of financial position date had been 30% (2022: 30%) higher or lower while all other variables remained constant, the return attributable to Ordinary shareholders at the year ended 31 January 2023 would have increased/decreased by £83,300,000 (2022: increase/decrease of £101,900,000) and capital reserves would have increased/decreased by the same amount. This level of change is considered to be reasonably possible based on observation of market conditions and historic trends.

(b) Liquidity risk

This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.

Liquidity risk is not considered to be significant as the Company's assets comprise mainly readily realisable securities, which can be sold to meet funding commitments if necessary.

(c) Credit risk

This is the risk of failure of the counterparty to a transaction to discharge its obligations under that transaction that could result in the Company suffering a loss.

The risk is managed as follows:

• investment transactions are carried out with a large number of brokers, whose credit ratings are reviewed periodically by the portfolio manager, and limits are set on the amount that may be due from any one broker; and

• cash is held only with reputable banks with high-quality external credit ratings.

The maximum credit risk exposure as at 31 January 2023 was £3,027,000 (2022: £6,749,000). This was due to trade receivables and cash as per notes 8 and 9.

Fair values of financial assets and financial liabilities

All financial assets and liabilities of the Company are included in the statement of financial position at fair value or a reasonable approximation of fair value with no material difference in the carrying amount.

Note 17: Capital management policies and procedures

The Company's capital management objectives are:

• to ensure that the Company will be able to continue as a going concern;

• to maximise the return to its equity shareholders through an appropriate balance of equity capital and debt; and

• to limit gearing to 20% of net assets at time of drawdown.

The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes the nature and planned level of gearing, which takes account of the portfolio manager's views on the market and the extent to which revenue in excess of that which is required to be distributed under the investment trust rules should be retained.

The capital of the Company consists of the equity reserves as shown on the equity section of the statement of financial position and the bank loan as disclosed in the liabilities section.

Under FRS 102, the Company is required to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy shall have the following levels:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2: other significant observable inputs (including quoted prices for similar investments, interest rates, prepayments, credit risk, etc);

• Level 3: significant unobservable input (including the Company's own assumptions in determining the fair value of investments).

The financial assets measured at fair value through profit and loss are grouped into the fair value hierarchy as follows:

Note 19: Stock lending

During the financial year ended 31 January 2023, the Company was not involved in securities financing transactions (SFTs) as defined in Article 3 of UK version of Regulation (EU) 2015/2365, as a result there are no outstanding balances, collateral, or SFTs reportable counterparties at the reporting date.

During the prior financial year, the Company was engaged in securities lending, the net securities lending income is disclosed in note 2 to the financial statements.

Note 21: Post balance sheet events