## European Assets ## Trust PLC ## Report and Accounts 2021 #### Financial Calendar | First interim dividend paid for 2022 | 31 January 2022 | | --- | --- | | Announcement of annual results | March 2022 | | Second interim dividend paid for 2022 | 29 April 2022 | | Annual General Meeting | 17 May 2022 | | Third interim dividend paid for 2022 | 29 July 2022 | | Interim results for 2022 announced | August 2022 | | Fourth interim dividend paid for 2022 | 31 October 2022 | #### Forward-looking statements This document may contain forward-looking statements with respect to the financial condition, results of operations and business of the Company. Such statements involve risk and uncertainty because they relate to future events and circumstances that could cause actual results to differ materially from those expressed or implied by forward-looking statements. The forward-looking statements are based on the Board's current view and on information known to it at the date of this document. Nothing should be construed as a profit forecast. Front cover image: Regensburg, Switzerland. 2 | European Assets Trust PLC OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information ## Contents ## • • Company Overview 2 Independent Auditors’ Report 47 Financial Highlights 3 Summary of Performance 4 ## • Statement of Comprehensive Income 53 6 Statement of Changes in Equity 54 ## • Statement of Financial Position 55 Statement of Cash Flow 56 ## • Purpose, Strategy and Business Model 8 Notes to the Financial Statements 57 Investment Managers 10 Investment Manager’s Review 11 ## • | Investment Manager’s Investment Philosophy and Process 14 | Notice of Annual General Meeting 73 | | --- | --- | | Ten Largest Holdings 16 | Other Financial Information 78 | | Investment Portfolio 17 | Shareholder Information 80 | | Key Performance Indicators 19 | How to Invest 81 | | Principal Policies 20 | Ten Year Record 82 | | Promoting the Success of the Company 22 | Alternative Performance Measures 83 | | Sustainability and ESG 24 | Glossary of Terms 85 | | Principal Risks and Changes in the Year 28 | Timeline of the Company 88 | ## • Directors 30 Management and Advisers 31 Directors’ Report 32 Corporate Governance 37 Report of the Remuneration and Nomination Committee 40 Directors’ Remuneration Report 41 Report of the Audit and Risk Committee 43 Report of the Management Engagement Committee 45 Statement of Directors’ Responsibilities in Respect of the Financial Statements 46 Report and Accounts 2021 | 1 Strategic Report Auditors’ Report Governance Report Financial Statements Other Information Overview Chairman’s Statement 202030 BMO EAT AR21 Text PRINT.indd 1202030 BMO EAT AR21 Text PRINT.indd 1 22/03/2022 07:3922/03/2022 07:39 European Assets Trust NV ## Company Overview ### • The Company’s objective is to achieve long-term growth of capital through investment in ### quoted small and medium sized companies in Europe, excluding the United Kingdom. A high ### distribution policy has been adopted with dividends paid out of current year revenue profits and ### the Distributable Reserve. ### • Through its aim to pay Shareholders a dividend of 6% based on the Net Asset Value (NAV) on ### 31 December each year, the Company has offered an attractive level of yield – both in absolute ### terms and relative to other asset classes. Investors seeking long-term capital appreciation ### meanwhile can choose to reinvest dividends in order to enhance their growth potential. ### • The Board seeks to manage liquidity in the Company’s shares through its ability to issue or ### buyback shares dependant on the extent of any share premium or discount. This is designed to ### reduce the volatility of the Company’s share price relative to its Net Asset Value. † ### • With an Ongoing Charges ratio of 0.89% the Company compares favourably with open-ended ### investment companies and many other investment trusts. The cumulative benefits of low costs ### are very significant for long-term investors. ## Visit our website at www.europeanassets.co.uk 2 | European Assets Trust PLC Registered in England and Wales with company registration number 11672363. Legal Entity Identifier 213800N61H8P3Z4I8726 † Year ended 31 December 2021 – calculated with reference to the basis recommended by the Association of Investment Companies (AIC). 202030 BMO EAT AR21 Text PRINT.indd 2202030 BMO EAT AR21 Text PRINT.indd 2 22/03/2022 07:3922/03/2022 07:39 OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information ## Financial Highlights ## for the year ended 31 December 2021 ‡ ## 23.2% 8.80p16.3% 0.89% * | Share price performance | NAV performance | Dividend | Ongoing charges | | --- | --- | --- | --- | | The Company recorded a Sterling | The Sterling Net Asset Value per | The Board has declared a total | Ongoing charges have continued | | Share Price total return* of 23.2% | share total return* was 16.3% | dividend for 2022 of 8.80 pence | to fall to a ten year low of 0.89% | | for the year ended 31 December | for the year ended 31 December | per share in accordance with | for the year ended 31 December | | 2021 in comparison to the EMIX | 2021. Further analysis of this | its aim to pay six per cent of | 2021. | | Smaller European Companies | performance is provided in | the closing Net Asset Value | | | (ex UK) Index (our 'Benchmark') | the Chairman's Statement and | of the preceding year. This is | | | which returned 14.9%. | Investment Manager's Review. | an increase of 10.0% from the | | 2021 dividend of 8.00 pence per share. ∞ ## The Longer Rewards (rebased to 100 at 31 December 2011) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 European Assets Trust Share Price Total Return (Sterling) European Assets Trust NAV Total Return (Sterling) EMIX Smaller European Companies (ex UK) Index Total Return (Sterling) Report and Accounts 2021 | 3 With effect from 1 April 2021 the benchmark changed from EMIX Smaller European Companies (ex UK) Index (gross) to EMIX Smaller European Companies (ex UK) Index (net). Refer to Alternative Performance measures on page 84. The annualised ten year share price total return was 17.0% Calculated in accordance with the basis recommended by the AIC. ‡ O verview 280.00 480.00 360. 00 320. 00 80 .0 0 200. 00 120. 00 240. 00 400. 00 520.00 440.00 160. 00 ∞ * 202030 BMO EAT AR21 Text PRINT.indd 3202030 BMO EAT AR21 Text PRINT.indd 3 22/03/2022 07:3922/03/2022 07:39 Strategic Report ## Summary of Performance ### Investing in European small and medium sized companies to deliver income and capital growth Total Return for the year ended 31 December 2021 2020 Sterling Euro 16.3% 24.0% 23.2% 31.3% 14.9% 22.5% Capital Return at 31 December 2021 2020 Sterling Euro £525.4 €625.8 £1.46 €1.74 † £1.40 €1.66 786.06 936.23 Dividend per share for the year ended 2021 2020 Sterling Euro 8.00p n/a 150.0 130.0 110.0 90.0 70.0 50.0 2018 2020 202120192017 Source: BMO GAM ‡ ‡ 9.00 Share Price per share (pence) at 31 December Net Asset Value per share (pence) at 31 December 8.00 7.00 6.00 5.00 4.00 3.00 2.00 90.0 90.0 1.00 0.00 70.0 70.0 | | 2018 | 2019 2021 20222020 | | | | | --- | --- | --- | --- | --- | --- | | Source: BMO GAM | 50.0 | | | 50.0 | | | | | 2017 | 2018 2019 2020 2021 | | 2018 2020 202120192017 | | | Source: Refinitive Eikon | | | Source: BMO GAM | | 150.0 150.0 130.0 130.0 110.0 110.0 4 | European Assets Trust PLC | Sterling Sterling Sterling EMIX Smaller European Companies (ex UK) Index EMIX Smaller European Companies (ex UK) Index Net Asset Value per share Share Price per share Total dividends paid 7.02p Net Asset Value Total Return per share* n/a European Assets Trust NV prior to the migration on 16 March 2019. † Converted in to Euros using the relevant exchange rate at the balance sheet date. * See Alternative Performance Measures on page 84 for explanation. With effect from 1 April 2021 the benchmark changed from EMIX Smaller European Companies (ex UK) Index (gross) to EMIX Smaller European Companies (ex UK) Index (net). † ‡ €534.0 €1.48 €1.34 775.14 Net assets – millions £478.0 Euro Share Price Total Return* 17.4% 11.1% £1.33 £1.20 18.9% 12.6% Euro 21.9% 15.4% Euro 693.83 | Source: BMO GAM, Refinitiv Eikon | | --- | --- | | ∞ ∞ ∞ | | | 202030 BMO EAT AR21 Text PRINT.indd 4202030 BMO EAT AR21 Text PRINT.indd 4 22/03/2022 07:3922/03/2022 07:39 | | 9.00 8.00 1.20 7.00 6.00 1.10 5.00 4.00 1.00 3.00 2.00 0.90 1.00 0.00 2018 2019 2021 20222020 0.80 Source: BMO GAM 2018 2020 202120192017 Source: BMO GAM 150.0 130.0 110.0 90.0 70.0 50.0 2017 2018 2019 2020 2021 Source: Refinitive Eikon 1.20 1.10 1.00 0.90 0.80 2018 2020 202120192017 Source: BMO GAM OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information At 31 December 2021 (4.4%) 3.2% 0.89% 150.0 130.0 2021 Year ’s Highs/Lows 110.0 High Low 157.14p 128.08p 90.0 150.50p 116.50p 70.0 (2.8%) (12.2%) 50.0 2018 2020 202120192017 Source: BMO GAM 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 2018 2019 2021 20222020 Source: BMO GAM ‡ † Net dividends paid/declared^ per share - (pence) 150.0 ‡ (adjusted for ten for one stock split effective 3 May 2018) Ongoing charges* - % 150.0 130.0 9.00 1.20 130.0 8.00 110.0 | 110.0 | | 7.00 | 1.10 | | --- | --- | --- | --- | | | 90.0 | 6.00 | | | 90.0 | | 5.00 | | 1.00 | | 70.0 | 4.00 | | | --- | --- | --- | --- | | 70.0 | | 3.00 | | | | 50.0 | | 0.90 | 2.00 50.0 2017 2018 2019 2020 2021 1.00 2018 2020 202120192017 0.00 0.80 Source: Refinitive Eikon 2018 2019 2021 20222020 2018 2020 202120192017 Source: BMO GAM Source: BMO GAM Source: BMO GAM Report and Accounts 2021 | 5 | (9.4%) Gearing* Ongoing Charges Net Asset Value per share 2022 Sterling dividends declared. See Alternative Performance Measures on page 83 for explanation. Dividends were paid by European Assets Trust NV net of Dutch Withholding tax. EAT NV prior to migration on 16 March 2019. * See Alternative Performance Measures on page 83 for explanation. † ‡ Overview Share Price Discount to Net Asset Value* Discount to Net Asset Value 2020 5.0% 0.95% | Source: BMO GAM, Refinitiv Eikon | | --- | --- | | * ^ * | | | 202030 BMO EAT AR21 Text PRINT.indd 5202030 BMO EAT AR21 Text PRINT.indd 5 22/03/2022 07:3922/03/2022 07:39 | | 150.0 130.0 110.0 90.0 70.0 50.0 2017 2018 2019 2020 2021 Source: Refinitive Eikon 1.20 1.10 1.00 0.90 0.80 2018 2020 202120192017 Source: BMO GAM # Chairman's Statement ![img-0.jpeg](img-0.jpeg) Jack Perry CBE, Chairman "During this volatile period, we have been pleased with the performance of the Company. Our NAV total return was ahead of a strong benchmark. The share price performance was stronger still and we announced a substantial dividend increase." ## Fellow Shareholders, I am pleased to report that European Assets Trust PLC ("the Company") recorded a Sterling Net Asset Value ("NAV") total return for the year ended 31 December 2021 of 16.3% (2020: 21.9%). This compares to the total return of its benchmark, the EMIX Smaller European Companies (ex UK) Index, which rose 14.9% (2020: 18.9%) during the same period. With the discount narrowing from 9.4% as at 31 December 2020 to 4.4% at the year-end, the Sterling share price total return for the year was an impressive 23.2% (2020: 17.4%). As this report goes to press, we have all been following events in Ukraine with a growing sense of foreboding. While the Company has no interests in Russian equities and the vast majority of our invested companies do not have any significant dependence on Russia or Ukraine as markets or as part of their supply chains, all global markets have been impacted by this war on European soil. At this stage it is impossible to predict the outcome of this conflict and the resultant effect on markets. As individuals, our thoughts are very much focused on the human tragedy which is unfolding. As custodians of your assets, we are maintaining a close watch on events in an effort to do everything we can to preserve capital during this period of volatility. The Manager and investee companies are also reviewing operations to ensure that they are in compliance with any new sanctions which arise as a result of the conflict. Like many of you I am sure, I hoped 2021 would be the year that we moved on from the COVID-19 pandemic. Alas, it continued to impact our daily lives as well as markets over the last twelve months. Due to the vaccine roll out we entered the year with optimism. This was soon tempered by new variants placing a strain on healthcare systems once again, resulting in governments having to respond with further stimulus support and mobility restrictions. Equity markets, though, were able to remain buoyant for most of the year yielding, strong returns overall. The second half of the year was, however, more volatile as supply chains were disrupted, inflation began to take hold and discussions around how to withdraw from years of central bank sponsored liquidity were initiated. These concerns have continued to negatively impact markets so far in 2022. During this volatile period, we have been pleased with the performance of the Company. Our NAV total return was ahead of a strong benchmark. The share price performance was stronger still and we announced a substantial dividend increase. Performance was primarily driven by stock selection, as we would expect, with our technology names in particular performing well as the continued digital transformation of our world continues at pace. After a higher than usual portfolio turnover in 2020, as the Manager sought to take advantage of opportunities afforded by the broad-based market correction at the onset of the pandemic, turnover returned to more normal levels this year. The performance of the select number of high-quality growth companies added to the portfolio last year has been pleasing. We continue to see substantial long-term opportunities for these businesses. This is, of course, discussed in more detail in the Manager's Review. ## Fiftieth Anniversary This year the Company celebrates its fiftieth anniversary. The Company was created in 1972 following the acquisition of a Dutch investment company 'Mijbeb NV' by a consortium of United Kingdom institutional investors and the appointment of a predecessor of BMO Investment Business Limited as its Manager. Initially the Company was listed solely on the Amsterdam Stock Exchange. In 1983 its shares were also listed on the London Stock Exchange. It is interesting to note that a Shareholder who invested £1,000 in the Company in 1983 would have an investment of approximately £41,000 as at 31 December 2021 on a total return basis. Until 1982 the Company was called European Community Trust NV. It was then renamed European Assets Trust NV and in 2019 following its migration from the Netherlands to the United Kingdom and de-listing from the Amsterdam Stock Exchange became, European Assets Trust PLC. I would like to take this opportunity on behalf of the Board to thank and remember the many individuals who have contributed to the success of this Company during this 50 year period and to you, my fellow Shareholders many of whom have been loyal and longstanding investors in the Company. ## Dividend The level of dividend paid each year is determined in accordance with the Company's distribution policy. The Company has stated that, barring unforeseen circumstances, it will pay an annual dividend equivalent to six per cent of its NAV at the end of the preceding year. The 2022 dividend of £0.088 per share, which represents an increase of 10.0% from the 2021 dividend of £0.080 per share, is payable in four equal instalments of £0.022 on 31 January, 29 April, 29 July and 31 October 2022. One consequence of the pandemic was a reduction in the dividend income the Company received from its investment holdings. Many of the companies held within the investment portfolio reduced or cancelled the dividends they pay to their shareholders. While the Company has seen some rebound in dividend receipts this year, this remains subdued. The Board, however, is confident of the continuation of the Company's dividend policy. To fund its dividends the Company can use a combination of current year profits and the Distributable Reserve. As at 31 December 2021 the Company had a Distributable Reserve of £322.7 million 6 | European Assets Trust PLC Chairman's Statement ### Responsible Investment The Board and the Manager have long recognised the importance of high standards of Environmental, Social and Governance ("ESG") practice in assessing investments for inclusion within the Company's portfolio. Both believe that high standards of ESG practice can help to deliver better and more sustainable long-term growth in returns for shareholders. Indeed, the Manager has one of the largest and longest established teams in the City dedicated to responsible investment. Pages 24 to 27 explain in detail the Manager's ESG policies and its engagement during the year with the management of invested companies within the Company's portfolio. ### Ownership of the Manager On 12 April 2021, BMO announced that it had reached an agreement to sell its asset management business in Europe, the Middle East and Africa to Columbia Threadneedle, the global asset management business of Ameriprise Financial, Inc. This acquisition completed on 8 November 2021. During this acquisition process the Board has sought and received confirmation from senior management at Columbia Threadneedle of the importance of maintaining stability and continuity of the teams which presently support your Company. The Board welcomes these assurances and will ensure that Shareholders are kept informed of developments as this new relationship develops. ### Ongoing charges For the year ended 31 December 2021 the ongoing charges of the Company were 0.89%. This is the lowest rate ever recorded by the Company and is a consequence of annual cost savings arising from the migration of the Company from the Netherlands to the United Kingdom coupled with the reduction in investment management fee rates implemented from 1 April 2020. The Board will continue to actively monitor costs to maintain the Company's competitiveness. ### Operations Since March 2020 the Board had met by videoconference with representatives of the Manager and with other advisers attending. Although this has worked well, I am pleased to report that since July 2021, most Directors have been able to attend Board meetings physically which I consider a welcome step towards a return to our pre-pandemic practices. ### Annual General Meeting I am pleased to report that we intend to revert to normal practices for the 2022 Annual General Meeting ("AGM"). The AGM will be held on Tuesday 17 May 2022 at 3.00pm at Exchange House, Primrose Street, London, EC2A 2NY, being the London offices of the Manager. The meeting will include a presentation on the Company and its investment portfolio from Sam Cosh and Lucy Morris. However, as the situation with regards to the COVID-19 pandemic remains uncertain, if circumstances change on or prior to 17 May 2022 so that laws, regulations or Government guidance no longer permit physical Shareholders' attendance, or if the Board should otherwise determine Shareholders' attendance at an open meeting to be contrary to the safety and wellbeing of Shareholders, alterations may be required to be made to the AGM format. In these circumstances, the Company will communicate to Shareholders any changes to arrangements by a London Stock Exchange announcement and through updates to the Company's website: www.europeanassets.co.uk. The Board strongly advises all Shareholders to consider their personal circumstances before deciding whether or not to attend the AGM in person. Any Shareholders who choose not to attend can submit questions regarding the resolutions proposed at the AGM, or the performance of the Company, to the dedicated email account: europeanassetsagm@bmogam.com. Questions should be submitted not later than Tuesday 10 May 2022. The Board will endeavour to ensure that questions received by such date are addressed at the meeting. In addition, so all Shareholders have an opportunity to view the AGM, the meeting will be recorded and will be available to view shortly thereafter on the Company's website as detailed above. To ensure that each Shareholder's votes will count in the event that they cannot attend in person, or that Shareholder attendance has been restricted due to health and safety concerns, the Board would encourage all Shareholders to complete and submit their Form of Proxy or Form of Direction in advance of the AGM, in accordance with the requirements contained in the AGM notice set out on pages 73 to 77. Further, should the AGM be restricted, Shareholders are strongly encouraged to appoint the Chairman of the AGM as their proxy as any other person so appointed may not be admitted to the AGM, resulting in that Shareholder's vote not being counted. ### Outlook As discussed in my opening paragraphs, events in Ukraine have exacerbated what had already been a period of extreme volatility at the beginning of the year. Initial optimism over a recovery from the COVID-19 pandemic has been replaced with concern over not just the war but spiking energy costs and other pressures on the cost of living. Rapidly rising prices have prompted a more hawkish tone from the US Federal Reserve and the expectation that the era of exceptionally low interest rates may well be at its end. Not only has this caused precipitous falls in equity markets but a rapid change in market leadership with cheaper, perhaps, lower quality parts of the market leading performance. It is fair to say that this might not be the best environment for a quality biased portfolio. We believe, however, the best counter to this uncertainty is to ensure your investments are comprised of high-quality dynamic growth businesses. Companies that hold important positions in the value chain should be insulated from the worst effects of inflation while their long-term opportunities should allow them to continue to grow and prosper. Discipline around valuation is also vital as a change in the interest rate regime will have a disproportionate negative impact on expensive, long duration assets. To help us reflect on the past 50 years, we have developed a 'timeline' to illustrate the major milestones not just in the Company's life but also in European and global history. This is reproduced on the inside back cover of this report. As we now face a volatile geopolitical and economic climate, it is worth remembering that European Assets Trust has weathered many periods of extreme volatility and despite this has over the longer term provided shareholders with an attractive income stream and a growing net asset value. We cannot predict the outcome of the present conflict but we will maintain our disciplined process and philosophy. This has always been our approach to deliver long term returns. Jack Perry CBE Chairman 21 March 2022 Report and Accounts 2021 | 7 Overview Chairman's Statement Ongoing Report Continuous Report Further Report General Statements Other Information # Purpose, Strategy and Business Model ## Purpose and strategy The purpose of the Company is to achieve long-term growth of capital. A high distribution policy has been adopted with dividends paid out of current year net profits and the Distributable Reserve. The strategy is to invest in quoted small and medium-sized companies in Europe, excluding the United Kingdom. ## Investment policy and principal guidelines The investment policy is to seek investments in small and medium-sized companies in Europe, excluding the United Kingdom, defined as those with a market capitalisation below that of the largest company in the EMIX Smaller European Companies (ex UK) index. The Company will not invest more than 20 per cent of its total assets in any one company and does not take legal or management control of any company in which it invests. The Company does not restrict its investments to any specific industrial or geographical sector; a diversified geographical spread is maintained. The Company does not seek to create a portfolio to take advantage of anticipated currency fluctuations. The Company has the ability to undertake stock lending activities but does not anticipate doing so and would need to enter into a new agreement with its custodian before commencing. The Company has the powers under its Articles to borrow an amount up to 20 per cent of its securities portfolio. It is the intention of the Company barring unforeseen circumstances, to pay an annual dividend equivalent to six per cent of the NAV of the Company at the end of the preceding year. ## Business model The Directors have a duty to promote the success of the Company. As an investment company with no employees, the Board believes that the optimum basis for doing this and achieving the Company's objective, and strategy is a strong working relationship with the Company's appointed manager, BMO Investment Business Limited (the Manager). Within policies set and overseen by the Board, the Manager has been given overall responsibility for the management of the Company's assets, asset allocation, gearing, stock selection and risk. As an Investment Trust the Company is not constrained by asset sales to meet redemptions and is well suited to investors seeking longer term returns. The share capital structure provides the flexibility to take a long-term view and stay invested while taking advantage of illiquidity throughout normal and volatile market conditions. All the Company's investments are listed. Having the ability to borrow to invest is a significant advantage over a number of other investment fund structures. The Board remains responsible for decisions over corporate strategy; corporate governance; risk and internal control assessment; setting policies as detailed on pages 20 and 21, setting limits on gearing and asset allocation; monitoring investment performance; and monitoring marketing performance. ## Implementing the strategy The investment management contract is with BMO Investment Business Limited (the Manager) a wholly owned subsidiary of BMO Global Asset Management (Europe) Limited ('BMO GAM'). The Manager has been appointed as Alternative Investment Fund Manager ('AIF Manager'). BMO GAM is owned by Columbia Threadneedle UK International Limited which has Ameriprise Financial, Inc as its ultimate parent company. Sam Cosh is the lead portfolio manager appointed by the Manager to the Company. He is assisted by Lucy Morris. Biographies of Sam Cosh and Lucy Morris who are members of the Global Smaller team at BMO GAM are provided on page 10. Details of the Manager's approach are provided on pages 14 and 15. The fee that the Manager receives for its services is based on the value of assets under management of the Company, thus aligning its interests with those of the Shareholders. The ancillary functions of secretarial and marketing services are also provided by the Manager. The Manager is also responsible for the provision of administration to the Company. A separate administration fee is charged. Details of the management and administration fees payable to the Manager are provided on page 35. ## Environmental, Social and Governance ('ESG') Impact Our ESG policies are set out on pages 24 to 27. The direct impact of our activities is minimal as the Company has no employees, premises, physical assets or operations either as a producer or a provider of goods or services. Its indirect impact occurs through the investments that it makes and this is mitigated through BMO GAM's Responsible Investment Approach as explained on pages 24 to 27. ## Manager evaluation Investment performance and responsible ownership are fundamental to delivering sustainable long-term growth in capital for the Company's Shareholders and therefore an important responsibility of the Board is exercising a robust annual evaluation of the Manager's performance. This is conducted by the Management Engagement Committee of the Board. This is an essential part of the strong governance that is carried out by the Board, all the members of which are independent and non-executive. The process for the evaluation for the year under review and the basis on which the decision to reappoint the Manager for another year are set out on page 45. As noted above, the management fee is based on the value of assets under management of the Company, thus fully aligning the Manager's interests with those of Shareholders. 8 | European Assets Trust PLC Strategic Report ### Gearing strategy The Company has the ability to borrow up to an amount of 20 per cent of the value of its investment portfolio. At 31 December 2021 the Company had drawn €30 million from its €45 million borrowing facility with RBSI and held cash balances of €9.9 million, resulting in gearing of 3.2%. ### Liquidity management The Company has share issuance and buy back authorities which are designed to minimise the volatility of its share price relative to its Net Asset Value ("NAV"). ### Communication and marketing with key stakeholders The Company fosters good working relationships with its key stakeholders; the Manager, Shareholders, suppliers and contractors. As an investment trust the Company has no employees. With approximately 83% of the shares held by retail investors, and savings or execution-only platforms representing an increasingly significant and growing element of the Shareholder base, the Company remains focused with its Manager on promoting its success. All appropriate channels are used including the internet and social media as well as the BMO Savings Plans. The Company's activities and performance are reported through the publication of its financial statements but the majority of Shareholders and BMO Savings Plan investors prefer not to receive such detailed information. To avoid losing this essential line of communication, the Company issues a short notification with the key highlights of its half-yearly and annual results. The Company also issues a monthly factsheet. All stakeholders can locate the full information on the Company's website, www.europeanassets.co.uk. In normal circumstances the Annual General Meeting ("AGM") of the Company provides a forum, both formal and informal for Shareholders to meet and discuss issues with the Directors and Fund Manager. Through the Manager, the Company also ensures that BMO Savings Plan investors are encouraged to attend and vote at annual general meetings in addition to those who hold their shares on the main shareholder register. Details of the proxy voting results on each resolution are published on the Company's website where there is also a link to the daily publication of the Company's NAV and its monthly factsheet. The Manager also has in place a programme of meetings designed to foster good relations with wealth managers in promoting the Company's investment proposition. These meetings are reported regularly to the Board. Any contact with the Company's institutional Shareholders is also reported. The Chairman and Senior Independent Director are available to meet with major Shareholders. ### Managing risks and opportunities Like all businesses, investment opportunities do not come without risks and uncertainties and so the performance of the Manager is monitored at each board meeting. In addition to managing the Company's investments, the ancillary functions of administration, secretarial, accounting and marketing services are all carried out by the Manager. The Board receives reports on the investment portfolios; the wider portfolio structure; risks; income and expense forecasts; internal control procedures; marketing; shareholder and other stakeholder issues, including the Company's share price premium or discount to NAV; and accounting and regulatory updates. Shareholders can assess the financial performance of the Company from the Key Performance Indicators that are set out on page 19. The Board has undertaken a robust assessment of the principal and emerging risks facing the Company. The Principal Risks that the Board considers the Company faces are detailed on page 28. The risk of not achieving the Company's objective, or of consistently underperforming the benchmark or peer group, may arise from any or all of inappropriate asset allocation, poor market conditions, ineffective or expensive gearing, poor cost control, loss of assets and service provider governance issues. In addition to regularly monitoring the Manager's performance, their commitment and available resources and their systems and controls, the Directors also review the quality and value of services provided by other principal suppliers. These include the Custodian and Depositary in their duties in respect of the safeguarding of the assets. The principal policies that support the strategy are set out on page 20, whilst the Investment Manager's review of activity in the year can be found on page 11. Report and Accounts 2021 | 9 Overview Statement statement Strategic Report Government Report Budget Report Financial Statements Other Information ## Investment Managers Sam Cosh, Lucy Morris, 10 | European Assets Trust PLC before transferring to Equities in 2011. fund. Lucy holds the Investment Management Lead Manager appointed Lead Manager for European Assets Trust during 2011. Sam also manages Manager Lucy joined the business in 2007, originally working in the Performance Analytics team Companies PLC. She also manages the BMO BMO GAM. Sam joined BMO GAM in 2010 the European investments of BMO Global European investments of BMO Global Smaller European Smaller Companies open ended Smaller Companies PLC. He has twenty years’ experience in European equities, principally within small and mid cap mandates. GAM in the Global Smaller Companies Team. She has worked on European Small Cap mandates since that point which include European Assets Trust as well as the Certificate and is a CFA Charterholder. is a Director at from BNP Investment Partners and was is a Director at BMO 202030 BMO EAT AR21 Text PRINT.indd 10202030 BMO EAT AR21 Text PRINT.indd 10 22/03/2022 07:3922/03/2022 07:39 OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information ## Investment Manager’s Review “We continue to focus on companies that deliver good levels of profits and “Our technology holdings had an exceptional year cash flow, protect those cash flows from competition with strong business leading our performance, with good stock selection ## models, and benefit from sensible capital allocation by their management being the main driver.” Market Backdrop Portfolio Performance/Attribution Report and Accounts 2021 | 11 trategic in part, why the Euro struggled against Pound Sterling (“GBP”). As we eport Investors entered the year with confidence, the markets having rallied and the recovery of the global economy. While this was not quite the translate the value of our assets back to our reporting currency, the recovery was strongest. The second half was more challenging with the most of the year was characterised by wild swings in sentiment. As COVID-19 variants emerged, the market lurched towards quality, growth assets. However, this changed rapidly, with improving data relating to and rising input costs, with energy and raw material prices accelerating more rapid monetary tightening from the Federal Reserve with bond Ringkjoebing Landbobank, the regional Danish bank, continued its outstanding record of delivery and this year was no exception, similarly helped Sparebank, the local Norwegian bank, which also Sam Cosh, Lead Manager semiconductor holdings, Nordic Semiconductor and ASM International, were the largest contributors. Nordic is the leading designer globally of low power Bluetooth chips and is benefitting from the proliferation investing in two new business areas; power management integrated backlog improved by five times, which clearly bodes well for the ASM International produces semiconductor manufacturing equipment. of semiconductors with their equipment being particularly relevant for Our technology holdings had an exceptional year leading our trends such as digitalisation and while we are aware of significant We were pleased to report a very strong share price performance and yields increasing, prompting market leadership to rotate towards more Rising inflation can impact interest rate expectations and this in turn can influence currency movements. The UK for example is further along the monetary tightening cycle than Europe, which had lagged in its impacting the economy for longer. These factors help explain, at least depreciation of the Euro against GBP, dampened our returns in 2021, though as has been reported and as discussed below, we were still able to deliver a strong year, both in absolute and relative terms, for case, equities delivered good gains over the year, though most of the emergence of new variants, firstly Delta and more recently Omicron, putting a dampener on this optimism, albeit temporarily. In fact, rising inflation. Corporates were faced with significant supply chain challenges. With improving demand, this led to component shortages higher towards the year end. Inflation data consequently increased reaching its highest level for 39 years. This resulted in expectations of Our financial holdings also contributed well to performance. though the expectation of higher interest rates, something that has benefitted from a rising energy market and the effect that this would have on the local economy. Storebrand, the Norwegian life insurance challenge for its legacy guaranteed life business, but the prospects of higher rates, helps its transition to more profitable fee-based business. This also brought forward expectation of higher dividends. circuits and cellular ‘internet of things’ microchips. Both areas saw some promising progress last year. In total the company’s order over the last few years, driven by huge demand for technology and continue. ASM International also benefits from the ever shrinking size smaller chip manufacturing. Other technology holdings of note that performed well were Lectra, the French manufacturer of material cutting machines and related software, and Alten, the French listed provider of engineering R&D outsourcing. Both companies benefitted from expectations of an performance, with good stock selection being the main driver. Most of our positions in this area benefit from long term structural we are confident in their long-term potential. For example, our value and cyclical areas of the market. These moves have accelerated returns occurred in the first half when optimism around an uninhibited The semiconductor industry capital spend has increased dramatically increased data consumption. The area has also become politically sensitive as countries attempt to break free from the reliance economic recovery and saw better demand as the industrial sectors that they depend on saw increased activity levels. volatility in the sector currently with valuations under pressure, a NAV total return ahead of the benchmark. This performance allowed the Company to announce a 10% increase in dividend. on the back of the positive vaccine data announced towards the end of 2020. 2021 was therefore supposed to see the end of COVID-19 into the new year which we will discuss in more detail in the outlook vaccination rate and maintained more social restrictions, potentially hospitalisations and vaccination rates and their effectiveness. The second half of the year also had to contend with the spectre of rapidly with, for example, the US Consumer Price Index in November been a headwind for the sector, provided an additional tailwind. This company, also performed well. Low interest rates have been a real of connected devices. In addition to Bluetooth, they have been of extended supply chains. We therefore expect this demand to S section. future. our shareholders. R 202030 BMO EAT AR21 Text PRINT.indd 11202030 BMO EAT AR21 Text PRINT.indd 11 22/03/2022 07:3922/03/2022 07:39 Strategic Report Portfolio Activity Outlook 12 | European Assets Trust PLC Looking at where we suffered, we were a victim of a theme that towards the end of the year saw the shares sell off aggressively. We following crashes. They produced an exceptional operating IMCD also continued their excellent track record of earnings growth, The year has started with extreme volatility with significant falls across Higher interest rates are a valuation headwind for longer duration We bought back into Tecan, the Swiss provider of healthcare automation equipment for the molecular and invitro diagnostics acquisition earlier in the year. Given the attractive growth outlook we The Thule group, listed in Sweden, manufacture bike racks and strollers. They have established large market shares and a strong brand reputation in most of their product categories which has led to strong growth and attractive margins. The areas they operate in are mentioned above, we have sold our holdings in Elekta, the equipment anticipated to grow strongly as outdoor pursuits become more popular the opportunity to expand the global reach of their products into new geographies, such as the United States, which provides an attractive to expand into adjacent categories such as ice cream and chocolate. growth as they use their wide distribution network to expand their Another disappointing performer was Fjordkraft, the Norwegian energy provider. Norwegian lockdowns impinged on their ability to acquire new customers, whilst they struggled to pass on rising energy prices on a timely basis. We sold our holding following a emerged in the second half of the year. E-commerce, or online only did they suffer alongside their regional competitors, but they also issued some disappointing results. A combination of a more competitive market in Latin America and a weak trading period think this has been overdone and believe the long-term investment case remains intact, however, we acknowledge that whilst the market focuses on the impact of higher interest rates, the shares will struggle. position in key countries had deteriorated markedly. Although the channel glasses retailer, which we bought during its IPO, also struggled as COVID-19 related lockdowns impacted their bricks and technology business, and IMCD, the Dutch listed specialist chemical distributor. MIPs designs helmet inlays that improve injury outcomes performance last year but also made good progress in growing in the safety industry, a market which is bigger in terms of revenue again beating market expectations. They also announced a series geographical reach. response to persistently high inflation data indicating a monetary tightening programme beginning with an interest rate hike in March. assets, so it is no surprise that quality, growth areas of the market have suffered. Healthcare and technology significantly underperformed have a quality biased portfolio with significant holdings in these areas, so it is fair to say that it was a challenging start to the year for the activity for the Company, as we took advantage of the market related sell off. 2021 was far more muted with activity returning to more felt that the valuation was attractive enough to warrant re-purchase. cargo carriers for vehicles, products for other active outdoor leisure usage and have recently expanded into offering pushchairs and Cognac brand owner. The former was sold due to concerns over their Lotus Bakeries, listed in Belgium, is best known for its famous runway for growth whilst also utilising the brand and unique taste Alongside this the company also own well regarded “healthy snacking” In addition to the disposal of Fjordkraft and Just Eat Takeaway Just Eat Takeaway, the food delivery platform, had similar issues. However, we decided to sell the stock as we felt that the competitive Company. Shareholders will remember that 2020 was an unusual period of normalised levels. In addition to Mister Spex mentioned above, we added three more positions. position late in 2020 and had announced an attractive, value accretive competitive position and the latter due to concerns over valuation. and populations become more active. speculoos biscuits and spread sold under the Biscoff brand. They have reach beyond the UK market where they were created. reassessment of the quality of the business model. companies were de-rated en-masse as the market looked to sell perceived COVID-19 winners to fund investments in the post-virus recovery. Global Fashion Group was hurt particularly badly as, not shares hurt us over the year the decision to sell was correct as performance has continued to deteriorate. Mister Spex, an omni- Other stocks worthy of mention are MIPs, the Swedish safety opportunity than the areas which they are currently exposed to. of acquisitions which have improved their market position and most markets. Initially this was prompted by the US Federal Reserve’s over this period and market leadership transitioned to value areas. We market. The shares had underperformed since we had sold the manufacturer used in cancer therapies, and Remy Cointreau, the brands Nakd, Trek and Bear which provide an alternative path of Lotus Bakeries’ Biscoff Spread. mortar revenues. 202030 BMO EAT AR21 Text PRINT.indd 12202030 BMO EAT AR21 Text PRINT.indd 12 22/03/2022 07:3922/03/2022 07:39 Strategic Report # Portfolio Split by Sector at 31 December 2021 ![img-1.jpeg](img-1.jpeg) The more recent period has of course been dominated by the appalling events in Ukraine. Not surprisingly the market sell off has accelerated and European equities have borne the brunt of this and are now heavily in negative territory. A more defensive bias has now prevailed, and our portfolio has fared better relatively, though inevitably still suffering large absolute losses. We do not know how long the war will last or what the specific long-term ramifications will be, but we acted quickly on outset of hostilities. We reduced gearing moving to a small net cash position and reduced holdings that have operating exposure to the region or are over exposed to rising energy costs. None of our holdings are listed or domiciled in Russia or Ukraine. We continue to closely assess the portfolio in light of the current environment and will continue to execute our philosophy and process identifying any quality companies that fall to attractive levels as we did during the COVID-19 related sell-off in early 2020. While we of course understand that this crisis is very different and potentially more catastrophic and wide ranging we believe that buying good quality assets at attractive prices is the best way to deliver good long-term returns. Sam Cosh Lead Investment Manager BMO Investment Business Limited 21 March 2022 Report and Accounts 2021 | 13 Overview Business Environment Strategic Report Geographic Report Belfast Report Financial Statements Other Information Strategic Report ## Investment Manager’s Investment ## Philosophy and Process ## Continuous Monitoring Process 14 | European Assets Trust PLC Social and Governance (“ ”) issues that face the Company and its There are approximately 4,000 quoted European (ex UK) small and growth of superior cash flow is more likely. This will result in a portfolio companies with the following characteristics: Management teams of smaller companies have a huge role to play in for worse. We want to invest alongside management teams who make compound high returns over an enduring period tend to be undervalued by the market. We want to invest in these high-quality companies, characteristics in the future. Integral to this approach is understanding delivering growing profits for shareholders. generation will be the principal determinant of shareholder returns, delivering long term performance. Maintaining valuation discipline is Integral to our assessment of quality is an analysis of Environmental, response to them. More details can be found on pages 24 to 27. mid-cap companies. This is a large, diversified universe of exciting stock pickers, can take advantage of to deliver superior investment performance over the long term. operators, who are successful entrepreneurs, who tend to be good While we do not necessarily target specific sectors, our philosophy will naturally lead us towards certain areas or themes where long-term that is significantly differentiated against the benchmark. Higher growth rates, margins and returns on capital than the Management teams that have the right balance of entrepreneurial the competitive advantages, or moats, of these companies. After all this crucial to long term returns and often requires patience. Companies Superior cash flow generation and strong balance sheets that good long-term decisions and are rewarded for doing so. This often guardians of capital and reinvest their profits intelligently. flair and rational capital allocation, who are incentivised or those that have the business models that will achieve quality that reach our quality hurdle but do not appear reasonably valued are placed on our watch list. This allows us to execute quickly when the provide stability and opportunity for value added deployment Proven business models that are defended by scale, intellectual property, brand or market positions opportunities and is not necessarily well researched or understood properly. This leads to ‘market inefficiency’ that we, as disciplined leads us to have a natural affinity towards family businesses, owner- Ultimately this approach should lead to a portfolio of quality smaller the evolution of their businesses. How they are motivated, rewarded, and allocate capital is crucial in a company’s development, for better or While we believe the evolution of a company’s profits and cash appropriately Our philosophy is based on our belief that companies that can is what will allow a business to defend or improve its market position we also believe the price that you pay for an asset is also crucial in opportunity presents itself. ESG Investments fit for the future with attractive ESG credentials market Source: BMO GAM - - - - - 202030 BMO EAT AR21 Text PRINT.indd 14202030 BMO EAT AR21 Text PRINT.indd 14 22/03/2022 07:3922/03/2022 07:39 OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information ## The Investment Process Focuses on Three Aspects for Each Company • • High quality • business • • • • • • • Attractive Strong • price management • • Report and Accounts 2021 | 15 trategic Proven management team Appropriate incentives/aligned Enduring differentiation/competitive advantages Superior profit generators Attractive growth prospects Strong sustainability characteristics eport embedded in proprietary Entrepreneurial Consistent/proven execution Responsible capital allocators Lead Investment Manager Having a disciplined process is essential in driving a consistent decision. This ensures the benefit of shared knowledge and experience is brought to bear on each investment. The original investment thesis negative, if the assessment of the company’s long-term value drivers deteriorates significantly. We believe this approach gives us the best chance of delivering attractive long term returns for our shareholders. Like all investors, we are having to make assessments about the future of being wrong. We believe we can mitigate this risk by following this long-term philosophy, emphasising a number of factors: thorough independent research; the need for a margin of safety on purchase; continuous monitoring; and diversification of the investment portfolio. Reasons to sell can be driven by positive or negative factors: positive is peer reviewed by the wider investment team prior to a purchase is retested particularly if the company or its share price performs below expectations. if the value of the company has risen to an excessive valuation, or and take decisions in the face of uncertainty. There is a real possibility application of our philosophy. We undertake our own research which S Sam Cosh valuation method interests & relative valuation BMO Investment Business Limited 21 March 2022 R Margin of safety Sustainable superior returns ESG & Sustainability score Use of discounted cash flow 202030 BMO EAT AR21 Text PRINT.indd 15202030 BMO EAT AR21 Text PRINT.indd 15 22/03/2022 07:3922/03/2022 07:39 # Ten Largest Holdings as at 31 December 2021 ## 1. Ringkjoebing Landbobank (3) Denmark High quality regional Danish bank with a long track record of "sticky" customers, low loan losses and good returns on equity. They have a dominant position in their local region, and have been growing outside this as they take advantage of lower quality competitors. 3.3% of total investments £17,985,225 value www.landbobanken.dk ## 3. Interpump (24) Italy Manufacturer of ultra high pressure pumps used for fluid movement and hydraulic components installed on vocational tracks and other machinery. Proven resilient operator as a result of diverse end markets and high quality product, highly cash generative and excellent capital allocation record. 3.0% of total investments £16,159,317 value www.interpumpgroup.it ## 5. Cancom (17) Germany Leading value added if hardware and software reseller who are helping German SMEs with their digital transformation. Margins are improving as the mix shifts towards software and cloud related services. 2.9% of total investments £15,515,821 value www.cancom.com ## 7. MIPS (37) Sweden Safety technology company that have designed a Brain Protection System that sits within helmets and improves injury outcomes following crashes. They are penetrating the bicycle, MOTO, and snow market and significant potential lies in the safety market. 2.9% of total investments £15,282,134 value www.mipscorp.com/en ## 9. Stratec (18) Germany Manufacturer of analyser systems and instruments for global customers in the field of in vitro-diagnostics. Has strong customer/partner relationships where they are fully embedded leading to durable and recurring revenues and is exposed to fast growing end markets. 2.8% of total investments £14,885,226 value www.stratec.com ## 2. Nordic Semiconductor (15) Norway Global leading designer of bluetooth semiconductors with additional potential in power management integrated circuits and cellular internet of things. Demand is driven by the growth in connected devices as the world transforms digitally. 3.2% of total investments £17,081,453 value www.nordicsemi.com ## 4. Lectra (11) France Manufacturer of Computer Aided Design & Manufacturing (CAD/CAM) software and hardware used for textile processing and cutting primarily by the fashion, automotive and furniture industries. Attractive business model characterised by high degree of recurring revenue leads to strong margins and returns. 2.9% of total investments £15,748,899 value www.lectra.com/en ## 6. Storebrand (19) Norway Leading Norwegian life insurer and asset manager. Returns are improving as the capital intensive guaranteed life book diminishes and their more profitable fee based business improves. This should lead to a higher rating and significant return of capital. 2.9% of total investments £15,459,738 value www.storebrand.no ## 8. Tecan (New) Switzerland Tecan is a leading global provider of automated laboratory instruments and solutions. Their systems and components improve productivity in a market that is growing strongly driven by increasingly personalised diagnostic needs. 2.8% of total investments £15,262,319 value www.tecan.com ## 10. flatexDEGIRO (4) Germany German listed online broker, flatex, recently became a pan-european broker following its acquisition of Dutch company DeGiro. With a strong technology proposition, low cost online brokers are taking share from the incumbents who tend to be traditional banks. 2.7% of total investments £14,371,025 value www.flatex.de/en 16 | European Assets Trust PLC Strategic Report Overview Statement Statement Strategic Report Investment Report Lending Report Financial Statements Other Information # Investment Portfolio as at 31 December 2021 | Company | Nature of Business | Valuation £'000 | % of Total Assets | Country of Incorporation | | --- | --- | --- | --- | --- | | Ringkjoebing Landbobank | Regional Banking | 17,985 | 3.4% | Denmark | | Nordic Semiconductor | Market Leader in Low Power Bluetooth Semiconductor Design | 17,081 | 3.3% | Norway | | Interpump | Industrial Producer of Fluid Movement Pumps and Hydraulic Components | 16,159 | 3.1% | Italy | | Lectra | Provider to the Fashion, Automotive and Furniture Industries | 15,749 | 3.0% | France | | Cancom | Information Technology Services Provider | 15,516 | 3.0% | Germany | | Storebrand | Long-term Savings and Insurance | 15,460 | 2.9% | Norway | | MIPS | Helmet Safety | 15,282 | 2.9% | Sweden | | Tecan | Automated Laboratory Instruments and Solutions | 15,262 | 2.9% | Switzerland | | Stratec | Manufacturer of Invitro Diagnostic Instrumentation and Consumables | 14,885 | 2.8% | Germany | | flatexDEG/RO | Online Broker | 14,371 | 2.7% | Germany | | **Ten largest investments** | | **157,750** | **30.0%** | | | IMCD | Speciality Chemical Distributor | 14,152 | 2.7% | Netherlands | | Azimut | Asset Management | 13,993 | 2.7% | Italy | | Aften | Outsourced Engineering and R&D Provider | 13,478 | 2.6% | France | | Atea | Value Added IT Hardware and Software Reseller | 13,446 | 2.6% | Norway | | Gerresheimer | Glass and Plastic Containers | 13,334 | 2.5% | Germany | | SpareBank | Banking | 13,201 | 2.5% | Norway | | Wizz Air | Budget Airline | 12,709 | 2.4% | Switzerland | | SIG Combibloc | Systems and Consumables Provider for Aseptic Packaging | 11,787 | 2.2% | Switzerland | | Karnov | Mission Critical Information Provider to the Legal Industry | 11,585 | 2.2% | Sweden | | ASM International | Semiconductor Equipment | 11,088 | 2.1% | Netherlands | | **Twenty largest investments** | | **286,523** | **54.5%** | | | Dometic | Manufacturer of Cooling Equipment | 11,083 | 2.1% | Sweden | | Thule | Outdoor and Transportation Product Manufacturer | 11,063 | 2.1% | Sweden | | Sligro Food Group | Food and Beverage Provider | 11,020 | 2.1% | Netherlands | | Sdiptech | Industrial Consolidator Focused on Sustainability | 11,002 | 2.1% | Sweden | | Forbo | Flooring, Adhesives and Conveyor Belts | 10,793 | 2.1% | Switzerland | | Norma | Plastic and Metal Based Components | 10,681 | 2.0% | Germany | | Mair | Food Service Provider | 10,606 | 2.0% | Italy | | Vidrala | Manufacturer and Supplier of Glass Containers | 10,546 | 2.0% | Spain | | Fluidz | Swimming Pool Equipment and Maintenance | 10,472 | 2.0% | Spain | | Verallia | Glass Bottle Manufacturer | 10,208 | 1.9% | France | | **Thirty largest investments** | | **393,997** | **74.9%** | | | HelloFresh | Home Meal Kit Provider | 9,716 | 1.9% | Germany | | Lotus Bakeries | Indulgent and Natural Snack Manufacturer | 9,370 | 1.8% | Belgium | | Marel | Solutions for Poultry, Fish and Meat Processing Industries | 9,357 | 1.8% | Iceland | | CTS Eventim | Concerts and Ticketing | 9,133 | 1.7% | Germany | | SimCorp | Provider of Highly Specialised Software for the Investment Management Industry | 9,019 | 1.7% | Denmark | | Indutrade | Niche Industrial Conglomerate | 8,968 | 1.7% | Sweden | | Scout24 | Digital Real Estate Marketplace | 8,896 | 1.7% | Germany | | Amorim | Cork Product Producer | 8,649 | 1.7% | Portugal | | Carasent | Cloud Healthcare Software Provider | 8,535 | 1.6% | Norway | | Avanza Bank | Swedish Savings and Investment Platform | 8,137 | 1.6% | Sweden | | **Forty largest investments** | | **483,777** | **92.1%** | | Report and Accounts 2021 | 17 | Company | Nature of Business | Valuation £'000 | % of Total Assets | Country of Incorporation | | --- | --- | --- | --- | --- | | Symrise | Speciality Chemicals | 7,927 | 1.5% | Germany | | Coor | Provider of Integrated Facilities Management and Consulting Services | 7,904 | 1.5% | Sweden | | Cairn Homes | House Builder | 7,567 | 1.4% | Ireland | | Royal Unibrew | Nordic and Baltic Beverage Producer | 7,449 | 1.4% | Denmark | | Patrizia | Real Estate Asset Manager | 6,124 | 1.2% | Germany | | Global Fashion | Online Fashion Retailer | 5,951 | 1.1% | Germany | | Rational | Specialist in Hot Food Preparation for Professionals | 5,849 | 1.1% | Germany | | Mister Spex | Omnichannel Eyewear Retailer | 3,667 | 0.7% | Germany | | V Zug | Luxury Household Appliance Manufacturer and Service Provider | 3,541 | 0.7% | Switzerland | | **Total investments** | | **539,756** | **102.7%** | | | **Net current liabilities** | | **(14,321)** | **(2.7%)** | | | **Net assets** | | **525,435** | **100.0%** | | 18 | European Assets Trust PLC OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information ## Key Performance Indicators ‡ Net Asset Value per share Sterling total return performance at 31 December 2021 1 Year % 3 Years % 5 Years % 10 Years % ‡ Share price sterling total return performance at 31 December 2021 1 Year % 3 Years % 5 Years % 10 Years % ‡ ‡ Average (Discount)/Premium * Ongoing charges as at 31 December * For the year ended 31 December % ‡ Shares issued during the year ended 31 December Report and Accounts 2021 | 19 | trategic (9.5) EMIX Smaller European (ex. UK) Companies Index (6.7) (5.2) (10.0) EMIX Smaller European (ex. UK) Companies Index indicators (“KPIs”): 3. Premium / (discount) to Net Asset Value 5. Shares issued / (bought back) European Assets Trust* European Assets Trust* eport Return; the management of the Company’s share price premium/ The Board recognises that it is longer term share price performance that is most important to the Company’s investors. Underlying Asset Value. The overriding priority is to continue to strive for the consistent achievement of relative outperformance; adding value for Shareholders through Net Asset Value and Share Price Total discount; dividend yield; low and competitive ongoing charges; and effective marketing. The Board assesses its performance in meeting the Company’s objective against the following key performance 4. Ongoing charges Investment Manager’s Review. 1. Net Asset Value per share Total Return share price performance is driven by the performance of the Net Commentary can be found in the Chairman’s Statement and the 134,573 179,383 15,553,450 12,312,883 With effect from 1 April 2021 the benchmark changed from EMIX Smaller European Companies (ex UK) Index (gross) to EMIX Smaller European Companies (ex UK) Index (net). EAT NV prior to the migration on 16 March 2019. * See Alternative Performance Measures on page 83 for explanation. Excludes issuance related to the migration on 16 March 2019. Rebased for stock split of 3 May 2018. Source: BMO GAM, Refinitiv Eikon Source: BMO GAM, Refinitiv Eikon † † ‡ † S 2018 64.8 304.4 2019 2020 16.3 69.7 76.0 333.2 2017 0.7 2018 2019 2017 2021 2021 0.89 2017 1.06 2018 2019 2020 64.8 304.4 23.2 81.9 88.0 381.1 % 2020 0.95 2021 Information in relation to these KPIs is set out in the tables below. 2. Share Price Total Return 14.9 14.9 Source: BMO GAM Source: BMO GAM Source: BMO GAM 77.4 1.11 1.11 77.4 ¥ R ¥ ¥ | | --- | | ∞ ∞ - | | 202030 BMO EAT AR21 Text PRINT.indd 19202030 BMO EAT AR21 Text PRINT.indd 19 22/03/2022 07:3922/03/2022 07:39 | Strategic Report ## Principal Policies Investment Taxation Dividends Liquidity Borrowings Currency hedging 20 | European Assets Trust PLC The Company’s borrowings shall not (without the sanction of a general meeting of the Company) exceed an amount equal to the subsidiaries (if any). 2010 (“Section 1158”) such that it does not suffer UK Corporation Tax will take into account: the prevailing market conditions; the degree of constraints. Any material changes to this policy can only be made with complying with applicable legislation and statutory guidelines. It is to comply with the eligibility conditions. The Manager also ensures take advantage of anticipated currency fluctuations and has no current Since January 2020 the Board has declared dividends in Sterling, a provides greater certainty of income for the overwhelming majority Euro exchange rate exposure which may arise from this change in currency hedging contracts to cover this specific exposure. is the intention of the Company, barring unforeseen circumstances, to Company at the end of the preceding year. The Company expects to been declared in Sterling rather than Euro. aggregate of 20% of the book value of its securities portfolio and its The Board recognises the need to address any sustained and significant imbalance of buyers and sellers which might otherwise lead to shares trading at a material discount or premium to NAV per targets which would dictate the point at which the Company is committed to utilising its share purchase and share issuance authorities where appropriate in such a way as to mitigate the effects of any such imbalance. In considering whether buyback or issuance might be appropriate in any particular set of circumstances, the Board of investment opportunities open to the Company; and the working through schemes operated by savings plans and platforms. Manager shall promptly inform the Board and if the Board considers the breach to be material, notification will be made by a regulatory information service to the London Stock Exchange. Details of the investment policy are provided on page 8. status by complying with Section 1158 of the Corporation Tax Act on capital gains. The Company has received approval from HMRC Due to its investment focus on investing in companies in Europe, the intention of seeking to hedge any currency exposure which may arise from investing in non Euro denominated investments. change from the previous practice of declaring in Euro. This change in Sterling rather than Euros. To attempt to manage any Sterling/ pay the dividend in four equal instalments in January, April, July and October each year. With effect from 1 January 2020 dividends have would seek to purchase shares or issue further shares, the Board NAV accretion that will result from the buyback or issuance; the cash The Company is required to have a publicly available investment the approval of Shareholders and the Financial Conduct Authority. essential that the Company always retains its investment trust tax that the Company submits correct taxation returns annually to HMRC; settles promptly any taxation due; and claims back, where possible, The Company will pay dividends on the shares only to the extent that of the Company’s Shareholders who choose to receive their dividends the currency of the dividend, the Company has entered into forward The level of dividend paid by the Company each year is determined by the Board in accordance with the Company’s distribution policy. It pay an annual dividend equivalent to six per cent of the NAV of the share. While it has not adopted any formal discount or premium resources readily available to the Company; the immediate pipeline capital requirements of the Company. The Board is mindful that many Shareholders reinvest their dividends In the event of a breach of the Company’s investment policy, the policy from which shareholders, prospective investors and stakeholders can understand the scope of its investment remit and The Board’s policy towards taxation is one of full commitment to all taxes suffered in excess of taxation treaty rates on non-UK dividend receipts. Company’s investments can be denominated and quoted in currencies other than Euro. The Company does not seek to create a portfolio to it has distributable reserves available for that purpose. Dividends are funded from current year revenue profits and the Distributable as an investment trust under Section 1158 and has since continued Reserve. 202030 BMO EAT AR21 Text PRINT.indd 20202030 BMO EAT AR21 Text PRINT.indd 20 22/03/2022 07:3922/03/2022 07:39 Strategic Report Overview Statement of Investment Strategy Report Government Report BailNet Report Financial Statements Other Information ### Board diversity The Board's policy towards the appointment of non-executive directors is based on its belief in the benefits of having a diverse range of experience, skills, length of service and backgrounds. The policy is always to appoint the best person for the role and, by way of this policy statement, it is confirmed that there will be no discrimination on the grounds of gender, race, ethnicity, religion, sexual orientation, age or physical ability. The overriding aim of the policy is to ensure that the Board is composed of the best combination of people for ensuring the delivery of the Company's objective. In achieving gender diversity, the Board's composition on 31 December 2021 of three male and two female Directors met the target of 33% of women on FTSE 350 company boards set under The Hampton-Alexander Review. The Board is also compliant with the target of the Parker Review to have at least one non-white director by 2021 for FTSE 100 and by 2024 for FTSE 250 companies. ### Integrity and business ethics The Company applies a strict anti-bribery and anti-corruption policy insofar as it applies to any directors or employee of the Manager or of any other organisation with which it conducts business. The Board also ensures that adequate procedures are in place and followed in respect of third-party appointments, acceptance of gifts and hospitality and similar matters. ### Prevention of the facilitation of tax evasion The Company is committed to compliance with the UK's Criminal Finances Act 2017, designed to prevent tax evasion in the jurisdictions in which it operates. The policy is based on a risk assessment undertaken by the Board and professional advice is sought as and when deemed necessary. ### Modern Slavery Act 2015 The Company is an investment company with no employees or customers and does not provide goods or services in the normal course of business. The Company has appointed the Manager to manage the investments, engage on ESG issues and to carry out administrative and secretarial services. The Company's own supply chain consists predominately of professional advisers and service providers in the financial services industry, which is highly regulated. The Board therefore believes that the potential for acts of modern slavery or human trafficking in the Company's own environment is extremely low On behalf of the Board **Jack Perry** Chairman 21 March 2022 Report and Accounts 2021 | 21 Strategic Report ## Promoting the Success of the Company • • • • Manager and Service Providers • • The Stakeholders of the Company 2021 – Key Board Decisions Engagement with Shareholders www.europeanassets.co.uk 22 | European Assets Trust PLC Service providers such as, JP Morgan Chase Bank (“ ”), JP Morgan Europe Limited (“ ”), Panmure Gordon (“ ”), The Bank of Nova Scotia, London Branch (" ") and Computershare Investor Services PLC (“ ”) the United Nations Sustainable Development Goals (“ ”). Further and key decisions are announced to the London Stock Exchange The Company holds an Annual General Meeting. In normal By developing strong and constructive working relationships with these parties, the Board seeks to ensure high standards of business information on the annual evaluation of the Manager, to ensure its duty to act in a way they consider, in good faith, would be most likely as a whole, and in doing so, have regard, amongst other matters, to: the Board and representatives of the Manager and the Company’s the Registrar are also considered key stakeholders. The Board receives regular the likely consequences of any decision in the long term; As explained on page 8, the Company is an externally managed The key stakeholders are the Shareholders, the Manager, suppliers, regulators and service providers. The Manager also engages with the Company’s larger Shareholders at the following Board Meeting. Shareholders are invited to communicate with the Board through the Chairman or Company registered office address detailed on page 31. A high distribution policy has been adopted with a stated aim to pay the desirability of the Company maintaining a reputation for high The Directors value engagement with Shareholders. The Company’s through a Regulatory News Service. The Board believes that the optimum basis for meeting its duty to promote the success of the Company is by appointing and managing Directors have, however, been able to maintain the Company’s high whenever possible. This combined with the careful management The Company’s primary working relationship is with the Manager. The portfolio activities undertaken by the Manager and the impact of decisions taken are set out in the Investment Manager’s Review on pages 11 to 13. On pages 24 to 27 information is provided on the are supportive of the Manager’s approach, which includes engagement is set out on page 45. services required to achieve the investment objective and successfully reports from them and evaluates them to ensure expectations on and the outcome of these discussions are reported to the Board third parties with the requisite performance records, resources, operate the Company. makes decisions and key examples this year include: circumstances the Shareholders are invited to attend, and this provides suppliers, customers and others; of costs is for the benefit of all Shareholders who are also key with the investee companies on ESG issues and how this links with to promote the success of the Company for the benefit of its members the Depositary service delivery are met. investment company and has no employees, customers or premises. Secretary. Alternatively, issues can be discussed with the Company’s Senior Independent Director, who can be contacted at the Company’s The Board is aware that dividend income is important to Shareholders. year. the interests of the Company’s Shareholders; infrastructure, experience and control environments to deliver the The Company’s Stakeholders are always considered when the Board The economic impact of COVID-19 resulted in a reduction in the portfolio income the Company receives from its investments. The distribution policy as the dividend can be funded from current year the need to act fairly as between members of the Company. an open forum for them to discuss issues and matters of concern with the need to foster the Company’s business relationships with Company’s approach towards responsible investment. The Directors continued appointment remains in the best interests of Shareholders, Under Section 172 of the Companies Act 2006, the Directors have a the impact of the Company’s operations on the community and environment; standards of business conduct; and Dividends SDGs the Bank the Custodian the Broker the Lender Shareholders a dividend of 6% based on the NAV on 31 December each conduct are adhered to at all times and service levels are enhanced stakeholders. advisors. and website is available to all Shareholders 202030 BMO EAT AR21 Text PRINT.indd 22202030 BMO EAT AR21 Text PRINT.indd 22 22/03/2022 07:3922/03/2022 07:39 Overview Chairman's statement Strategy Report Government Report Author's Report Financial Statements Other Information revenue profits and the Distributable Reserve. The Distributable Reserve, which had a value of £322.7 million as at 31 December 2021 was created during the migration of the Company from the Netherlands to the United Kingdom. ### Ongoing charges The Board monitors closely the costs of the Company. The ongoing charges for the year ended 31 December 2021 is 0.89%. This is the lowest rate ever recorded by the Company and is a consequence of annual cost savings arising from the migration of the Company from the Netherlands to the United Kingdom coupled with the reduction in investment management fee rates implemented from 1 April 2020. ### Share issuance and buy-backs Ensuring that liquidity is maintained for the Company's shares is important to Shareholders. The Directors sought and received the authority from Shareholders at the 2021 AGM the power to issue and buyback shares. At each Board Meeting the Directors will consider the current level and direction of the discount that the Company's shares price trades to its NAV. Representatives of the Company's broker, Panmure Gordon, will attend most Board meetings and provide an update on the demand for the Company's shares. During the year ended 31 December 2021 the Company did not buyback or issue shares. The discount as at 31 December 2021 was 4.4% (2020: 9.4%). ### Board succession planning With effect from 26 February 2021 Pui Kei Yuen was appointed to the Board. Laurence Jacquot retired from the Board on 13 May 2021 having served nine years. These changes allowed for the retirement of the Company's longest serving Director while maintaining an appropriate balance of skills and experience on the Board. A plan for the orderly succession for all directors has been developed, commencing with the planned retirement of the Chairman in 2024. The recruitment for this role, using external consultants, will take place in late 2022/early 2023 with a view to appointing a successor in Spring 2023. This will allow for a period of overlap before the Chairman's retirement. ![img-2.jpeg](img-2.jpeg) Thule ProRide is the world's best selling roof mounted bike carrier. Report and Accounts 2021 | 23 Strategic Report ## Sustainability ## and ESG ### As stewards of more than £525 million of assets, we support positive change. The Company benefits from ### the Manager’s leadership in this field. Our approach ESG and the investment process www.un.org/sustainabledevelopment/sustainable-development-goals/. Responsible ownership 24 | European Assets Trust PLC Responsible Investment ( ) under which signatories contribute Environmental, Social and Governance ( ) issues are the three investee companies to encourage that high standards of ESG practice forming part of the assessment of the Quality and Management criteria review process, the Manager will also note if the investment is aligned The impact it has through the investments that are made on its behalf by its Manager. ensuring that there is an effective mechanism for the internal reporting of wrongdoing, whether within the investee company itself, or involving other parties, such as suppliers, customers, contractors or central factors in measuring sustainability and can present both opportunities and threats to the long-term investment performance committed to taking a responsible approach to ESG matters. There are The Manager is also a signatory to the United Nations Principles for to encourage higher standards where appropriate. In this the Manager capital and in turn a higher valuation, and vice-versa. In these ways, Management and Valuation, as well as driving an ongoing dialogue between the Manager and the investee company. pages 37 to 39. In addition, the Principal Policies statement on pages 20 Engaging actively with companies on significant ESG matters, to reduce risk, improve performance, encourage best practice and the first instance rather than simply divesting or excluding investment The Company’s own responsibilities on matters such as governance; The Board recognises that the most material way in which the Company can have an impact is through responsible ownership of its investments. The Manager engages actively with the management of are adopted. The Manager has long been at the forefront of the the longest established and largest teams focused solely on ESG. ESG issues are an integral part of the Manager’s investment process, for possible and ongoing investments. The Manager’s ESG teams work closely with the portfolio managers to create an internally generated these goals can be found at The Manager’s Corporate Governance Guidelines set out its expectations of the management of investee companies in terms of good corporate governance. This includes the affirmation of responsibility for reviewing internal business ethics policies and to the development of a more sustainable global financial system. As a signatory the Manager aims to incorporate ESG factors into its The Manager’s own ESG assessment is cross-referenced against external Manager’s understanding of the issues involved, to create a dialogue and force to drive change. Secondly, it is used to adjust the Manager’s assessment of the weighted average cost of capital for the investee that companies with higher ESG standards will warrant a lower cost of and 21 notes the Company’s policies towards board diversity, integrity underpin long-term investor value forms a fundamental part of the Manager’s approach towards responsible investment. Engagement in may join with other major investors in order to be a yet more powerful assessment of the relevant ESG issues for each company. As part of the business partners. the Company aims to deliver to Shareholders. The Board is therefore two strands to this approach: used to initiate discussions with the investee company, to clarify the ESG affects each of the cornerstones of the investment process, Quality, Governance is detailed in the Corporate Governance Statement on the Modern Slavery Act 2015. opportunities is also part of this approach. investment industry in its consideration of these issues and has one of explicitly with any of the UN Sustainable Development Goals. Details of investment processes. sources, for example MSCI ESG Research to check it is comprehensive. company; this is an important component of the valuation model, such The Company’s compliance with the revised AIC Code of Corporate and business ethics, prevention of the facilitation of tax evasion and There are two main outcomes of this research. First, the research is “UNPRI” “ESG” and • • 202030 BMO EAT AR21 Text PRINT.indd 24202030 BMO EAT AR21 Text PRINT.indd 24 22/03/2022 07:3922/03/2022 07:39 OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information Investing in sustainability leaders ## Sustainability Leader examples in the reporting period Storebrand Wizz Air ## Engagement 28 2021 engagement analysis Labour Standards 30% Corporate Governance 29% Environmental Stewardship 22% Climate Change 19% BMO Investment Business Limited sEngagement examples in the reporting period Tecan Cairn Homes Report and Accounts 2021 | 25 Source: trategic emissions. The company’s global carbon footprint (including Scope 3 emissions) is currently being evaluated, eport ESG issues present opportunities as well as risks. The Company has investments in a number of companies which the Manager has identified as make progress on a range of environmental and social issues. The Manager considers Storebrand to have a strong commitment to Wizz Air have set a target to reduce its CO2 emissions by 25% by 2030, During the year ended 31 December 2021, the Responsible Investment team engaged with The Manager held a call with the chair and remuneration committee chair to discuss executive pay. It long-term plan. The CEO has historically participated in a founder share scheme that has seen him receive in being leaders in providing sustainable solutions, through the products and services they provide. inappropriate and asked for additional consideration to be given. Following Tecan’s Global Leadership Conference, during which the Manager gave a presentation, the Manager discussed with senior company representatives Tecan’s progress on integrating sustainability considerations into its corporate planning and board oversight. The Manager also discussed Tecan’s approach to reducing its carbon and Tecan has committed to set carbon emission reduction targets in 2022. Additional disclosure on its waste strategy has also been requested. The Manager continues to be impressed by the company’s willingness to responsible investment practices and is an industry leader against peers. In addition to being a signatory to the UNPRI, it also engages investee companies on a range of ESG topics. The most common topics for discussion were climate change, corporate governance, labour standards and environmental stewardship. Analysis of this engagement follows. include the CEO in the conventional long-term scheme. The Manager considered the timing of the move to be excess of EUR 10 million additional pay. Meanwhile the share price has halved and now the company seeks to specifically discussed the increase to annual bonus postponed from last year and the inclusion of the CEO in the proactively with investee companies on sustainable business practices. with a focus on fuel efficiency and a modern fleet. These factors would make it the lowest carbon airline in Europe by some way. It also has the most ambitious Transition Pathway Initiative plans in the sector. S R 202030 BMO EAT AR21 Text PRINT.indd 25202030 BMO EAT AR21 Text PRINT.indd 25 22/03/2022 07:3922/03/2022 07:39 Strategic Report sEngagement examples in the reporting period (continued) Marel Voting on portfolio investments 83% 91% 26% 40 sMilestone examples in the reporting period Symrise Cairn Homes 26 | European Assets Trust PLC Symrise has responded to the Workforce Disclosure Initiative’s (‘ ) annual survey. The WDI is a multi- renewable sources. Sustainable timber sourcing is now ensured, helping address deforestation-related risks and opportunities. The Manager has been engaging on this topic for more than a year. of all management resolutions relating to pay, often due to either poor disclosure or a milestones achieved in the reporting period are set out below. independence given his long association with the company. The Manager was pleased that the company published a 2020 remuneration report and, having listened to investor concerns, was committed to continued the Manager is empowered to exercise discretion in the use of the voting record. We expect the Company’s shares to be voted on all holdings where possible. During the year, the Manager voted at meetings of workforce initiatives and engage on specific topics. The participation, still not common, is an important step to enhancing the management of workforce-related issues. all meetings. With respect to all items voted, the Manager supported of all management resolutions. One of the most contentious voting issues remained remuneration. Either by voting against or abstaining, the Manager did not support misalignment of pay with long-term performance. The Manager’s strategic approach to engagement helps to achieve positive outcomes, or ‘milestones’, relating to the targets that have been The Manager met the board members of Marel to discuss its composition and succession planning, executive pay structures and its sustainability strategy. The Manager shared its view on the incoming chair’s improvement of pay disclosure, with an emphasis on KPIs and target setting including around ESG metrics. The issue of external auditor rotation was also raised. It highlighted areas of disclosure that need improvement and As noted previously, the Manager’s Corporate Governance Guidelines of good corporate governance. The Board expects to be informed by the Manager of any sensitive voting issues involving the Company’s Company’s voting rights and reports at each meeting to the Board on its investee companies. The Manager did not support management’s stakeholder initiative calling for enhanced workforce data that allows investors to better assess companies' set out expectations of the boards of investee companies in terms The company has updated its tender process to require that timber products are sourced from certified recommendations on at least one resolution at approximately set under each of the Sustainable Development Goals. Two examples of hopes to see this in future publications. investments. In the absence of explicit instructions from the Board, WDI’ of over 202030 BMO EAT AR21 Text PRINT.indd 26202030 BMO EAT AR21 Text PRINT.indd 26 22/03/2022 07:3922/03/2022 07:39 Strategic Report Overview Statement of Investment Strategic Report Investment Report Number of Report Financial Statements Other Information ## Climate Change Of all the ESG issues the Manager considers, climate change is one of the most important both in terms of the scale of potential impact and in how widespread this impact could be across sectors and regions. The Company expects the Manager to incorporate considerations around climate change risks and opportunities in its investment processes. In this report, the Company discloses its assessment of the carbon footprint of its investments, in line with the recommendations of the Task Force on Climate-related Financial Disclosures. This measures the amount of greenhouse gas emissions produced by each investee company, per US$1m of revenue they generate. This is then aggregated for the Company as a whole, using the portfolio weights of the companies, and compared with the benchmark. The carbon footprint is a measure of the carbon intensity of the companies the Company invests in. Whilst it does not provide a full picture of climate risks – since it does not, for instance, capture the innovation that companies may be undertaking to find solutions – it is a valuable starting point both for analysis and for shareholder dialogue. The table highlights that the Company's portfolio of investments is significantly less carbon intensive than its benchmark. ![img-3.jpeg](img-3.jpeg) ### 2022 Last year, the ongoing Covid-19 pandemic and extreme weather events reinforced the importance of creating a more resilient future. Climate change, biodiversity loss and human rights are all issues that require urgent action and it is these areas that engagement focused on in 2021. It is these areas that will continue to be of focus in 2022. Climate related engagement activity focuses on the phase-out of unabated coal generation by 2030 for developed markets, and 2050 for developing markets, both of which are essential to achieve the Paris goals. The Manager will hold companies to account on net zero pledges, engaging with all portfolio companies, to ensure the thorough implementation of net zero strategies. Effective supply chain management practices are essential to ensuring the protection of human rights and in 2022 the Manager will engage with corporates on implementing due diligence across supply chains, as part of efforts to protect human rights, and enhance business continuity and general supply chain management practices. Furthermore, with an over-reliance on social audit firms to assess supplier compliance, the Manager's Responsible Investment team will focus on ensuring audit quality, and for companies in apparel, retail and service sectors, on appropriately fulfilling their human rights and labour standards obligations. Report and Accounts 2021 | 27 Strategic Report ## Principal Risks and Changes in the Year ## The Board has carried out a comprehensive robust assessment of the principal risks as well ## as a thorough process for the identification of emerging risks and reviewed the uncertainties ## that could threaten the Company’s success. Principal Risks Mitigation Actions taken in the year No change in overall risk in year No change in overall risk in year No change in overall risk in year No change in overall risk in year No change in overall risk in year 28 | European Assets Trust PLC Since the beginning of 2020, the global economy has suffered and the actions being taken to mitigate them. The principal ongoing portfolio including market, credit, foreign currency and liquidity is and actions to mitigate those risks, are described below. The Directors have reviewed the risk register for the Company which provided in note 22 beginning on page 67. Details of actions taken to different to those of other investment trusts investing in listed markets. identifies the risks that the Company is exposed to, the controls in place reduce the potential impact of these risks is also provided. Most of the Company’s principal risks are market-related and no risks and uncertainties currently faced by the Company, and the controls considerable disruption due to the effects of the COVID-19 pandemic. In addition a detailed review of the risks of the Company’s investment Regulatory and compliance (including ESG reporting) Error, fraud or control failures at service providers or loss of data through The Board receives regular reports from the Investment Manager on oversight of third Execution risk arising from the acquisition of BMO GAM EMEA by Columbia noting underlying demand for the Company's shares. poor NAV and share price performance against benchmark and/or peer group. Failing performance results in reduced demand for the Company’s shares and a widening share price discount. At each Board meeting the Directors monitor performance against benchmark and peer group. The Manager attends each regular board meeting and will discuss the reasons for Failure of Investment Manager or loss of senior staff could cause reputational damage and/or place the business in jeopardy. The Board meets regularly with the management of BMO and receives an annual Audit Assurance Faculty Report on its procedures. The Manager’s appointment can be the AIFMD and the relevant regulations of the London Stock Exchange and the will be subject to increasing ESG related reporting. Shepherd and Wedderburn as its legal counsel. The Manager has a long established and highly regarded Responsible Investment team which presents to the Board The Company has received the necessary authority from shareholders to regulate the premium or discount that the Company's shares may trade at by purchasing or issuing Relevance/attractiveness of the investment strategy and policy An unattractive investment strategy, loss of cost competitiveness and/or a changing investment product environment, including ESG, leads to a fall in demand for the Company’s shares resulting in an increasing share price discount. Investment policy and performance are reviewed by the Board at each meeting. Rigorous either hold, accumulate or sell. Cash, borrowing and gearing limits are set and monitored regularly. cyber-attack or business continuity failure could damage reputation or result party service providers, together with annual ISAE 3402 reports on controls. The Company's broker, Panmure Gordon, will provide market intelligence at each meeting Inappropriate stock selection, asset allocation and gearing levels result in The Manager At each Board meeting the Company receives an update from the Secretary on legal, regulatory and accounting developments. The Company is a member of the Association of Investment Companies which provides guidance on regulatory individual stock reviews are regularly performed by the Manager and action taken to required to comply with UK company law, is subject to the requirements of terminated at six months’ notice. Key man risk is limited by the team approach adopted To maintain its investment trust status, the Company is required to comply developments. The Company has appointed EY LLP as its tax advisor and annually. Service provider failure Poor absolute and/or relative performance any over or underperformance. by the Global Smaller team at BMO. with Section 1158 of the UK Corporation Taxes Act. The Company is also Financial Conduct Authority. In future years it is anticipated that the Company The Depositary oversees custody of investments and cash in accordance with the requirements of the AIFMD. The Custodian also provides an annual ISAE 3402 report. in loss of assets. shares. Threadneedle. 202030 BMO EAT AR21 Text PRINT.indd 28202030 BMO EAT AR21 Text PRINT.indd 28 22/03/2022 07:3922/03/2022 07:39 Overview Chairman's statement Strategic Report Government Report Belfast Report Annual statements Other information ![img-4.jpeg](img-4.jpeg) Rational's range of combi-steamer ovens reduce costs, energy consumption and improve the quality of the prepared food. ### Actions taken in the year An annual strategy meeting of the Board is held to consider longer terms issues and opportunities for the Company. This includes a review of the Company's investment policy. Representatives of the Company's broker attended most Board meetings and update Directors with regard to changes in the demand for the Company's shares. During the year the Board sought and received from Shareholders at the Annual General Meeting held in May 2021 the powers to issue and buyback shares. Share price total return (23.2 per cent in Sterling) and net asset value total return (16.3 per cent in Sterling) exceeding the benchmark, the EMIX Smaller European Companies (ex UK) Index (14.9 per cent) over the year. The share price discount of the Company has fallen to 4.4% as at 31 December 2021 (2020: 9.4%). This is a reflection of increased demand for the Company's shares. Sustainability and ESG disclosures are included on pages 24 to 27. At the Board's annual strategy meeting held in November 2021, the CEO of Columbia Threadneedle Investments EMEA updated the Board with regard to the acquisition of BMO GAM EMEA. In addition, the Chairman met the CEO earlier in the year when the acquisition was first announced. Following the onset of the COVID-19 pandemic home working arrangements have been implemented at the Manager without any impact upon service delivery and operations. The Company has lodged its 2020 Annual Report with Companies House. It has also submitted its 2021 tax return to HMRC. At the Board's annual strategy meeting held in November 2021, the Manager presented an update on the latest investment trust developments on ESG reporting. The 2021 Annual General Meeting of the Company was held on 13 May 2021. Due to travel and gathering restrictions arising from the COVID-19 pandemic, Shareholders were not able to attend in person. However, Shareholders were able to view online a presentation by the Company's Investment Manager and participate in a live question and answer session with him and the Chairman. The Investment Manager continues to strengthen and develop its Risk, Compliance and Internal Control functions including IT security. Supervision of BMO GAM's third party service providers has been maintained by BMO GAM and includes assurances regarding IT security and cyber-attack prevention. The Depository oversees custody of investments and cash and reports to the Board in accordance with the AIFMD. Following the onset of the COVID-19 pandemic home working arrangements have been implemented at many of the Company's service providers without any impact upon service delivery and operations. Report and Accounts 2021 | 29 Governance Report ## Directors Jack Perry CBE Martin Breuer Julia Bond OBE Pui Kei Yuen Stuart Paterson 30 | European Assets Trust PLC Report and Accounts 2021 | 31 alongside leading One Bank Delivery. She has served director of International Public Partnerships, Strategic Command and the British Foreign and Commonwealth Partners, one of Europe’s leading technology growth equity investors. He is an experienced technology investor with over 20 years of equity investing and Chairman and Chair of Management Engagement companies. He is currently Chairman of ICG-Longbow Scottish Enterprise and prior to this, Managing Partner, Glasgow and a Regional Industry Leader for Scotland and Northern Ireland for Ernst and Young LLP. He is a included UK institutional equity portfolio management and research at Mercury Asset Management, Pan of America Merrill Lynch advising large institutional investors and hedge funds, and more recently working with earlier stage private companies. Suisse where she led global client facing teams Development Office. Julia was formerly Vice Chair of has 29 years’ experience of capital markets in the on various boards and is currently a non-executive the Royal Academy of Dance. Shared directorships with other Directors: None Shared directorships with other Directors: None Shared directorships with other Directors: None is a co-founder and partner of Scottish Equity board positions in European private companies. He is She was appointed to the Board on 26 February 2021. is Founder and CEO of 2M SRLS and Gruppo Glossip Srl, both companies active in the international beauty business. Previously he was an executive with Group. In addition he has served as Chief Executive Shared directorships with other Directors: None is a portfolio non-executive director and has served on the Boards of FTSE 250 and other public and private Senior Secured UK Property Debt Investments Limited plc. In his executive career he was Chief Executive of Scotland and is a past Chairman of CBI Scotland. has worked for over 25 years in equities. Her roles European equity responsibilities at UBS and Bank Shared directorships with other Directors: None Senior Independent Director and Chair of financial services sector, most recently at Credit Siemens, Chief Financial Officer of SEVES and Intercos Remuneration and Nomination Committee Chair of Audit and Risk Committee Committee a member of the Institute of Chartered Accountants of Scotland. Officer for Intercos in Asia Pacific and Chief Executive Officer of Italian cosmetic manufacturer Gotha Cosmetics. and a non-executive director and Chairman of the Audit and Risk Committee of Witan Investment Trust member of the Institute of Chartered Accountants of 202030 BMO EAT AR21 Text PRINT.indd 30202030 BMO EAT AR21 Text PRINT.indd 30 22/03/2022 07:3922/03/2022 07:39 Governance Report Overview Chairman's Statement Strategy Report Governance Report Neither? Report Financial Statements Other Information # Management and Advisers Board Jack Perry (Chairman and Chair of the Management Engagement Committee) Julia Bond (Senior Independent Director and Chair of the Remuneration and Nomination Committee) Stuart Paterson (Chair of the Audit and Risk Committee) Martin Breuer Pui Kei Yuen (appointed 26 February 2021) All Directors are non-executive Registered Office Exchange House Primrose Street London EC2A 2NY Investment Manager, Secretary and AIF Manager BMO Investment Business Limited 6th Floor Quartermile 4 7a Nightingale Way Edinburgh EH3 9EG Tel No. 0131 718 1000 Registrar Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS99 6ZZ Tel No. 0370 889 4094 Email: webqueries@computershare.com Loan Provider The Bank of Nova Scotia, London Branch 201 Bishopsgate 6th Floor London EC2M 3NS Brokers Panmure Gordon (UK) Limited One New Change London EC4M 9AF Depository JP Morgan Europe Limited 25 Bank Street Canary Wharf London E14 5JP Custodian JP Morgan Chase Bank National Association, London Branch 25 Bank Street Canary Wharf London E14 5JP Independent Auditors PricewaterhouseCoopers LLP 7 More London Riverside London SE1 2RT Lawyers Shepherd and Wedderburn LLP 1 Exchange Crescent Conference Square Edinburgh EH3 8UL Tax Advisers Ernst & Young LLP Atria One 144 Morrison Street Edinburgh EH3 9EX Website www.europeanassets.co.uk Report and Accounts 2021 | 31 # Directors' Report The Directors submit the Report and Accounts of the Company for the year ended 31 December 2021. The Directors' biographies, the Corporate Governance Statement; the Reports of the Remuneration and Nomination Committee; the Audit and Risk Committee and the Management Engagement Committee; and the Directors' Remuneration Report form part of this Directors' Report. ## Statement regarding Report and Accounts The Directors consider that, following advice from the Audit and Risk, Management Engagement and Remuneration and Nomination Committees, the Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company's position and performance, business model and strategy. The Audit and Risk Committee has reviewed the final draft Report and Accounts for the purposes of this assessment. The market outlook for the Company can be found on page 7. Principal risks can be found on page 28 with further information on page 67. There are no instances where the Company is required to make disclosures in respect of Listing Rule 9.8.4R. The Company is exempt from Streamlined Energy and Carbon Reporting Disclosures as it has consumed less than 40,000 kilowatts of energy in the United Kingdom during the year. ## Accounting Shareholders will be asked to approve the adoption of the Report and Accounts at the forthcoming AGM (Resolution 1). The financial statements, starting on page 53, comply with current International Financial Reporting Standards, supplemented by the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ("SORP"). The significant accounting policies of the Company are set out in note 2 to the accounts. The auditor's unqualified opinion on the financial statements appears on pages 47 to 52. ## Results and dividends The results for the period are set out in the attached accounts. The Company's dividend payments during the year ended 31 December 2021 are set out below. | Dividends paid in the year ended 31 December 2021 | | | --- | --- | | First interim dividend for the year ended 31 December 2021 paid on 29 January 2021 | 2.00p | | Second interim dividend for the year ended 31 December 2021 paid on 30 April 2021 | 2.00p | | Third interim dividend for the year ended 31 December 2021 paid on 30 July 2021 | 2.00p | | Fourth interim dividend for the year ended 31 December 2021 paid on 29 October 2021 | 2.00p | As explained in the Chairman's Statement, the Board has resolved to pay an interim dividend of, in aggregate, 8.80 pence per share for 2022. The interim dividend for 2022 will be paid in four equal, quarterly instalments on 31 January, 29 April, 29 July and 31 October 2022 to registered holders of shares at an appropriate record time. The first quarterly dividend of 2.20 pence per share was paid on 31 January 2022 to Shareholders on the register of members on 14 January 2022 with an ex-dividend date of 13 January 2022. As the Company's current practice is to pay dividends quarterly at the end of January, April, July and October, the Company does not pay a final dividend that would otherwise require formal Shareholder approval at a General Meeting. In the absence of such a requirement for Shareholder approval of a final dividend, approval will be sought at the forthcoming 2022 Annual General Meeting ("AGM") to approve the Company's dividend policy as set out on page 20 of this report. (Resolution 2 in the Notice of AGM set out on pages 73 to 77). ## Company status The Company is a public limited company and an investment company as defined by section 833 of the Companies Act 2006. The Company is limited by shares and is registered in England and Wales with company registration number 11672363. It is subject to the Listing Rules of the UK Financial Conduct Authority, UK legislation and regulations including company law, financial reporting standards, taxation law and its own articles of association. ## Taxation As set out on page 20 and in note 9 to the accounts, the Company is exempt from UK Corporation Tax on its dividend income and from UK Corporation Tax on any capital gains arising from the portfolio of investments, provided it complies at all times with section 1158 of the Corporation Tax Act 2010. Dividends received from investee companies domiciled outside the UK are subject to taxation in those countries in accordance with relevant double taxation treaties. ## Viability and going concern statements The UK Corporate Governance Code requires a board to assess the future prospects for a company, and report on the assessment within the annual report. 32 | European Assets Trust PLC Governance Report The Board considered that a number of characteristics of the Company's business model and strategy were relevant to this assessment: - The Company as an active investor looks to long-term outperformance compared to its benchmark rather than short term opportunities. - The Company is a closed-end investment company and as such is not required to sell investments in a market downturn in order to fund investor redemptions. - The Company's investment objective, strategy and policy, which are subject to regular Board monitoring, mean that it is invested in realisable, listed securities and that the level of borrowings is restricted. - The Company's business model and strategy is not time limited. Also relevant were a number of aspects of the Company's operational arrangements: - It retains title to all assets held by the Custodian under the terms of formal agreements with the Custodian and Depositary. - The annual dividend declared by the Company is determined in accordance with the year-end net asset value. - Revenue and expenditure forecasts of the Company are reviewed by the Directors at each Board Meeting. In addition, the Board carried out a robust assessment of the principal risks which could threaten the Company's objective, strategy, future performance, liquidity and solvency. These risks, mitigating actions in place to ensure the Company's resilience and the processes for monitoring risks are set out on page 28 and in Note 22 of the accounts. These principal risks were identified as relevant to the viability assessment. In undertaking this assessment, the Board took into account the following factors: - the liquidity of the Company's portfolio; - the existence of a borrowing facility; - the effects of any significant future falls in investment values and income receipts on the ability to repay and re-negotiate borrowings; - the maintenance of dividend payments and the retention of investors; - the potential need for more share issuance capacity in the event of unexpected market demand; and - minimising the discount between the Company's share price and net asset value. The Board gave careful consideration to the impact of COVID-19 and the resulting volatility in stockmarkets and economic disruption when making this assessment. As discussed in note 23 to the financial report on page 72, the Company has a number of banking covenants and at present the Company's financial position does not suggest that any of these are close to being breached. The primary risk is that there is a very substantial decrease in the net asset value of the Company in the short to medium term. Financial modelling has been undertaken to consider compliance with these covenants in several scenarios including the outcome of the 2008 Global Financial Crisis. These extreme but plausible scenarios indicate that the loan covenants would not be breached. In addition, the Directors have considered the remedial measures that are open to the Company if such a covenant breach appears possible. As at 17 March 2022, the latest practicable date before the publication of this report, borrowings amounted to €30 million. This is comparison to a net asset value of €508.5 million. In accordance with its investment policy the Company is invested mainly in readily realisable listed securities. These can be realised if necessary, to repay the loan facility and fund the cash requirements for future dividend payments. These matters were assessed over a five year period to March 2027. The Board of the Company will continue to assess viability over five year rolling periods, taking account of foreseeable severe but plausible scenarios. A rolling five year period represents the horizon over which the Board believes it can form a reasonable expectation of the Company's prospects, balancing its financial flexibility and scope with the current uncertain outlook for longer-term economic conditions affecting it and its shareholders. Based on their assessment, and in the context of the Company's business model, strategy and operational arrangements set out above, the Board has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five year period to March 2027. For this reason, the Board also considers it appropriate to continue adopting the going concern basis in preparing the Report and Accounts. # Statement as to disclosure of information to the auditor Each of the Directors confirms that, so far he or she is aware, there is no information relevant to the preparation of the Report and Accounts of which the auditor is unaware and that he or she has taken all the steps that a Director ought to have taken to be aware of relevant audit information and to establish that the auditor is aware of that information. # Appointment of auditors and auditor's remuneration Resolutions 4 and 5 seek shareholder approval, respectively, for the re-appointment of PricewaterhouseCoopers LLP as the auditor of the Company and to authorise the Audit and Risk Committee to determine their remuneration for the year ended 31 December 2022. # Capital structure As at 31 December 2021 there were 360,069,279 Ordinary Shares in issue. As at 17 March 2022 (being the latest practicable date before publication of this report) the number of Ordinary Shares in issue was 360,069,279. No Ordinary Shares were held in treasury. All ordinary shares rank equally for dividends and distributions and carry one vote each. There are no restrictions concerning the transfer of securities in the Company, no special rights with regard to control attached to securities, no agreements between holders of securities regarding their transfer known to the Company and no agreement which the Company is party to that affects its control following a takeover bid. Details of the capital structure can be found in note 16 to the accounts. The revenue profits of the Company, together with the realised capital profits and the balance of the Distributable Reserve Overview Statement Statement Company Report Governance Report Budget Report General Statements Other Information Report and Accounts 2021 | 33 are available for distribution by way of dividends to the holders of the Ordinary Shares. Upon a winding-up, after meeting the liabilities of the Company, the surplus assets would be distributed to Shareholders pro-rata to their holdings of Ordinary Shares. Full details are set out in the Company's articles of association. ### Share capital At 31 December 2021 the Company had received notification of the following holding of voting rights (under the FCA's Disclosure and Transparency Rules): | | Ordinary Shares Held | % of Ordinary Shares Held | | --- | --- | --- | | 1607 Capital Partners LLC | 18,152,817 | 5.04% | Since 31 December 2021, 1607 Capital Partners LLC has notified the Company that its holding has been reduced to 17,873,069 shares. BMO Retail Products owned 116,289,634 Ordinary Shares or 32.3 per cent of the issued share capital of the Company, at 31 December 2021. For non-contentious resolutions the nominee company holding these shares votes the shares held on behalf of planholders who have not returned their voting directions in proportion to the directions of those who have ("proportional voting"). Implementation of this arrangement is subject to a minimum threshold of 5% of the shares held in the BMO savings plans being voted. A maximum limit of 50,000 shares that any one individual investor can vote, being approximately 1.0% of the relevant minimum threshold, also applies. Any individual voting directions received in excess of the maximum limit will remain valid but will not form part of the proportional voting basis. Planholders have the right to exclude their shares from the proportional voting arrangement. ### Borrowings In March 2021 the Company entered in to a €45 million multi-currency revolving loan facility with Royal Bank of Scotland International expiring March 2022. The loan covenants have all been met during the period. The interest rate on the amount drawn down and commitment fees payable on undrawn amounts are based on the commercial terms agreed with Royal Bank of Scotland International. As at 31 December 2021 the loan facility was €30 million drawn. Following the year end, the Company has agreed to refinance its facility with The Bank of Nova Scotia, London Branch on favourable terms. ### Remuneration Report The Directors' Remuneration Report, which can be found on page 41, provides detailed information on the remuneration arrangements for Directors of the Company, including the Directors' Remuneration Policy. Shareholders are asked to approve the policy at an AGM every three years. There have been no changes to the policy since approval by Shareholders in 2020. Remuneration is set at a level commensurate with the skills and experience necessary for the effective stewardship of the Company and the expected contribution of the Board as a whole in continuing to achieve the investment objective. It is intended that the policy approved by Shareholders at the 2020 AGM will continue for the three-year period ending at the AGM in 2023. Shareholders will be asked to approve the Directors' Remuneration Report (Resolution 3). ### Director re-elections The names of the Directors, along with their biographical details, are set out on page 30. With the exception of Pui Kei Yuen, who was appointed on 26 February 2021, all the Directors held office throughout the period under review. All directors will stand for re-election by Shareholders at the AGM. Following a review of their performance, the Board believes that each of the Directors standing for re-election has and will continue to make a valuable and effective contribution to the Company. The skills and experience each Director brings to the Board for the long-term sustainable success of the Company are set out below. The Board recommends that Shareholders vote in favour of the election and re-elections of the Directors (Resolutions 6 to 10). Resolution 6 concerns the re-election of Jack Perry, who has served the Company and its predecessor for over 7 years, 6 as Chairman. He has served on the Boards of FTSE 250 and other public and private companies and is a member of the Institute of Chartered Accountants of Scotland. He was Managing Partner for Scotland and Northern Ireland for Ernst and Young and is currently Chairman of one other investment company and non-executive director of another. Resolution 7 concerns the re-election of Julia Bond, who has served the Company and its predecessor for over 7 years and has a strong financial sector background having held senior positions within Credit Suisse. She is currently a non-executive director of another investment trust, Strategic Command and the British Foreign and Commonwealth Development Office. Resolution 8 concerns the re-election of Stuart Paterson who has served on the Board for over two years. He was a co-founder and is a partner of Scottish Equity Partners, one of Europe's leading technology growth equity investors. He is an experienced technology investor with over 20 years of equity investing in European private companies and is a member of the Institute of Chartered Accountants of Scotland. Resolution 9 concerns the re-election of Martin Breuer, who has served the Company and its predecessor for over 5 years. He is a German national, currently based in Italy, with extensive industrial experience with Continental European companies. Resolution 10 concerns the re-election of Pui Kei Yuen, who was appointed to the Board on 26 February 2021. She has extensive experience in the fund management and investment banking industries at Mercury Asset Management, UBS and Bank of America Merrill Lynch. ### Directors' interests and indemnification There were no contracts of significance to which the Company was a party and in which a Director is, or was, materially interested during the period. There are no agreements between the Company and its Directors concerning compensation for loss of office. 34 | European Assets Trust PLC Governance Report The Company has granted deeds of indemnity to the Directors in respect of liabilities that may attach to them in their capacity as Directors of the Company. These deeds cover any liabilities that may arise to a third party for negligence, default or breach of trust or duty. These deeds of indemnity are qualifying third-party provisions (as defined by section 234 of the Companies Act 2006) and have been in force throughout the period of review and remain in place at the date of this report. They are available for inspection at the Company's registered office during normal business hours and at the AGM. The Company also maintains directors' and officers' liability insurance. #### Safe custody of assets The Company's investments are held in safe custody by JP Morgan Chase Bank ("the Custodian"). Operational matters with the Custodian are carried out on the Company's behalf by the Manager in accordance with the provisions of the management agreement. The custodian is paid a variable fee dependent on the number of trades transacted and location of the securities held. #### Depository JPMorgan Europe Limited acts as the Company's depository ("the Depository") in accordance with the AIFMD. The Depository's responsibilities, which are set out in an Investor Disclosure Document on the Company's website, include: cash monitoring; ensuring the proper segregation and safekeeping of the Company's financial instruments that are held by the custodian; and monitoring the Company's compliance with investment and leverage limits requirements. Although the Depository has delegated the safekeeping of all assets held within the Company's investment portfolio to the Custodian, in the event of loss of those assets that constitute financial instruments under the AIFMD, the Depository will be obliged to return to the Company financial instruments of an identical type, or the corresponding amount of money, unless it can demonstrate that the loss has arisen as a result of an external event beyond its reasonable control, the consequences of which would have been unavoidable despite all reasonable efforts to the contrary. #### The Manager's fee The Manager receives a fee equal to 0.75 per cent per annum of the value of funds under management up to the value of €400 million. Funds under management is calculated as the value of total assets less current liabilities (excluding borrowings) at the end of the preceding quarter. Where the value of funds under management exceeds €400 million, the applicable rate over such excess value is 0.6 per cent per annum. An additional fee of £100,000 per annum is payable by the Company to the Manager for the provision of administrative services. #### AGM AGM The Notice of AGM to be held on 17 May 2022 at 3.00pm is set out on pages 73 to 77. #### Directors' authority to allot shares and disapplication of pre-emption rights The Directors are seeking to renew their authority to allot shares. **Resolution 11** in the Notice of AGM, which will be proposed as an ordinary resolution, seeks renewal of such authority to allot Ordinary Shares up to an aggregate nominal amount of £3,600,692 (being an amount equal to 10 per cent of the total issued share capital of the Company as at the date of this report). Under **Resolution 12**, which will be proposed as a special resolution, the Directors are also seeking to renew the authority to allot new Ordinary Shares and/or sell Ordinary Shares held by the Company as treasury shares for cash as if section 561 of the Companies Act 2006 did not apply. (This section requires that, when equity securities are allotted for cash, such new shares are first offered to existing equity shareholders in proportion to their existing holdings of shares, this entitlement being known as "pre-emption rights"). Allotments of Ordinary Shares pursuant to these authorities would enable the Directors to issue shares for cash and/or to sell equity securities held as treasury shares to take advantage of changes in market conditions that may arise, in order to increase the amount of the Company's issued share capital. A likely purpose of such an increase would be to improve the liquidity of the market in the Company's shares and to spread the fixed costs of administering the Company over a wider base. The Directors believe that this authority, if granted to the Directors, would provide the necessary flexibility permitted by investor protection guidelines to respond to market developments in the interest of existing Shareholders. Except where authorised by Shareholders, no shares will be issued or sold from treasury by the Directors at a price which (after costs and expenses) is less than the NAV per share at the time of the issue or sale, unless the shares are first offered pro rata to shareholders on a pre-emptive basis. The Company has been authorised to sell any treasury shares held from time to time at below NAV subject to the limitation on asset dilution set out below. The absolute level of dilution through the sale of treasury shares is restricted to 0.5% of Net Asset Value in any one year, and treasury shares which are sold at a discount to Net Asset Value will only be sold where the discount at which the shares are sold is lower than the average discount at which the shares have been acquired, and in addition the price at which shares are sold must not be less than the market bid price at time of sale. Resolution 12, if passed, will give the Directors power to allot for cash Ordinary Shares of the Company and to sell Ordinary Shares out of treasury up to a maximum nominal amount of £1,800,346 (being an amount representing 5 per cent of the total issued ordinary share capital of the Company as at the date of this report) without the application of the pre-emption rights described above. The calculation of the above figure is in accordance with the Investment Association Share Capital Management Guidelines and other applicable investor protection guidelines, and the Directors will not use the authority other than in accordance with those guidelines. Report and Accounts 2021 | 35 Overview Statement Statement Strategy Report Governance Report Budget Report Financial Statements Other Information The authorities contained in Resolutions 11 and 12 will continue until the AGM of the Company in 2023, and the Directors envisage seeking renewal of these authorities in 2023 and in each succeeding year, subject to such renewals again being in accordance with the applicable investor protection guidelines. #### **Directors' Authority to Buy Back Shares** The current authority of the Company to make market purchases of up to 10 per cent of the issued Ordinary Shares expires at the end of the AGM and **Resolution 13**, as set out in the Notice of the AGM, seeks renewal of such authority. The renewed authority to make market purchases will be in respect of a maximum of 10 per cent of the issued Ordinary Shares as at the date of the passing of the resolution (approximately 36 million Ordinary Shares). The price paid for Ordinary Shares under this authority will not be less than the nominal value of 10p per Ordinary Share nor more than the highest of: - (i) 5 per cent above the average of the middle market values of those shares for the five business days before the shares are purchased; - (ii) the price of the last independent trade on the trading venue where the purchase is carried out; and - (iii) the highest current independent bid on that venue. This power will only be exercised if, in the opinion of the Directors, a purchase will result in an increase in net asset value per share of the Ordinary Shares and be in the interests of shareholders as a whole. Purchases would only be made for cash at a cost which is below the prevailing net asset value per share. Any shares purchased under this authority will be cancelled or held in treasury for future re-issue. The effect of any cancellation would be to reduce the number of shares in issue. For most purposes, where held in treasury, shares are treated as if they had been cancelled (for example they carry no voting rights and do not rank for dividends). The purpose of holding some shares in treasury is to allow the Company to re-issue or sell these shares quickly and cost effectively, thus providing the Company with greater flexibility. The authority contained in Resolution 13, if passed, will continue until the AGM of the Company in 2023, and the Directors envisage seeking renewal of this authority in 2023 and in each succeeding year, subject to such renewals again being in accordance with the applicable investor protection guidelines. #### **Recommendation** The Board considers that the passing of the resolutions to be proposed at the AGM is in the interests of the Company and its Shareholders as a whole and they unanimously recommend that Shareholders vote in favour of all of them. #### **Statement Regarding Report and Accounts** Following a detailed review of the Report and Accounts by the Audit and Risk Committee, the Directors consider that taken as a whole it is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company's performance, business model and strategy. In reaching this conclusion, the Directors have assumed that the reader of the Report and Accounts would have a reasonable level of knowledge of the investment industry in general and investment trusts in particular. By order of the Board **BMO Investment Business Limited** Secretary 21 March 2022 36 | European Assets Trust PLC OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information ## Corporate Governance Introduction AIFMD Articles of association Appointments and Succession Planning The Board 36 | European Assets Trust PLC Report and Accounts 2021 | 37 issued its own revised Code (“ ”). Both revised codes are The Company is defined as an Alternative Investment Fund (“ ”) (“ ”). The Association of Investment Companies (“ ”) has Governance Code (“ ”) of the Financial Reporting Council (“ ”). The Board remains fully responsible for all aspects of the Company (except in so far as they apply to non-executive Directors) eport Amongst other considerations, the performance evaluation knowledge of the Company. The Board does not consider that the use any meaningful advantage over the process adopted. The option is, the furtherance of their duties. No such advice was sought during the the closed formal business of this meeting. During the period the performance of the Board, committees and three years, and the Board has agreed that in accordance with the AIC and the Manager sets out the matters over which the Manager company secretarial advice and services provided by the Manager. The table on page 38 sets out the number of scheduled and adhoc Board and Committee meetings held during the year ended 31 December 2021 and the number of meetings attended by each follow the general principles of the AIC Code. Significant differences sought. All other matters, including strategy, investment and dividend act and manage the Company in accordance with these general directives and to report to the Board upon its corporate management. The Company is committed to high standards of corporate has no employees. A management contract between the Company for the approval of the Board. With regard to these matters it is the appropriate balance of skills and experience, length of service and The Company has adopted corporate governance arrangements which appoint a Depositary and an Alternative Investment Fund Manager Company’s strategy, operations and compliance with regulations. The At the Annual General Meeting held on 13 May 2021 all Directors policies, gearing, and corporate governance procedures are reserved individual Directors was evaluated through a discussion process led governance and accordingly adheres, in so far as they are relevant to effective for accounting periods beginning on or after 1 January 2019. responsibility of the Board to provide the Manager with general advance of Board meetings. The Board has direct access to the The proceedings at all board meetings are fully recorded through instruction and guidance. It is the responsibility of the Manager to Manager is the Company’s AIFM. special resolution at general meetings of Shareholders. Articles of Association that all in accordance are subject to retirement Individual Directors may, at the expense of the Company, seek attended the online investor presentation. Three Directors attended by the Chairman. The performance of the Chairman was evaluated by has been implemented into UK law. This requires that all AIFs must Committee. This committee is responsible for the review of the re- Board of European Assets Trust NV, the Company's predecessor. performance, assets, liabilities and other relevant information in minutes. The Board has the power to appoint or remove the Company by rotation, the Board does not consider it appropriate for the under the AIFMD issued by the European Parliament, and which Association require the Directors to retire by rotation at least every considered the balance of skills and diversity of the Board, as well of external consultants to conduct this evaluation is likely to provide however, kept under review. independent professional advice on any matter that concerns them in period. The Company maintains appropriate Directors’ and Officers’ liability insurance. an investment trust the requirements of the 2018 revised Corporate Code all directors will retire annually. has authority and the limits above which Board approval must be in actual practice are detailed below. The Company’s articles of association may only be amended by and are therefore not reported on further. Directors to be appointed for a specified term. The Articles of The Board of the Company is entirely non-executive. The Company appointment of Directors, as they fall due for re-election and to make In order to comply with the spirit of the Code, the Directors consider that their period of office commenced with their appointment to the Since all Directors are non-executive, the provisions on the role of the The Board receives full information on the Company’s investment a process that allows Director’s concerns to be recorded in the Secretary. In view of its non-executive nature and the requirement of the G overnance the Code the AIC Code FRC the AIC as the Board’s overall effectiveness. The Board believes it has an chief executive and on Directors’ remuneration are not relevant to the the other Directors. The Board has established a Remuneration and Nomination recommendations to the Board. Director. R AIF AIFM 202030 BMO EAT AR21 Text PRINT.indd 37202030 BMO EAT AR21 Text PRINT.indd 37 22/03/2022 07:3922/03/2022 07:39 Governance Report | | | Audit and Risk | Remuneration and | | | Management | | --- | --- | --- | --- | --- | --- | --- | | Year ended | Board meetings | Committee | Nomination Committee | | Engagement Committee | | | 31 December 2021 | of Directors | Meetings | | Meetings | | Meetings | Board committees Audit and Risk Committee Management Engagement Committee Independence of Directors 38 | European Assets Trust PLC Report and Accounts 2021 | 39 workings and processes of the Company. nine-year limit subject to the AIC Code derogation. Factors that will and talent. Regular retirements of directors will take place ensuring Directors are encouraged to attend relevant training courses and seminars and receive regular updates on the industry and changes to The Company has established a Management Engagement Custodian, corporate broker, administrator and legal counsel. Full Nomination Committee and a Management Engagement Committee. using professional search consultants, with the Board agreeing the who meet the Investment Manager, Company Secretary and other key employees of the Manager and are given briefings on the The Report of the Audit and Risk Committee is contained on pages annual re-election at each AGM. Following the evaluation process set on page 37, the Board confirms that the performances of all Directors that all Directors seeking re-election be re-elected. independently and, following performance evaluations, believes that each Director is independent in character and judgement and that continuity and experience add to the strength of the Board. In addition, this committee is responsible for making recommendations to the Board regarding the nomination of additional Directors, where appropriate, for approval by the General Meeting of Shareholders. Manager. The Board does not consider that a Director’s tenure or and Risk Committee is responsible for ensuring that the financial The length of tenure of the Chairman is determined by the UK Code’s The Board has an agreed succession plan for the orderly retirement of existing directors and to provide for the regular refreshment of skills and provides a forum through which the Company’s external auditors systems and procedures and accounting policies of the Company. regulation from external advisors and the Company Secretary. independent members of the Board. The Management Engagement review the terms and conditions of the appointment of the Manager and other significant service providers including the Depositary and this process. Each appointment is subject to Shareholder approval at In accordance with the AIC Code all Directors will now be subject to with effect from 26 February 2021. Laurence Jacquot retired at the Committee, which is chaired by Jack Perry and consists of all the to the Board on the work of the committees. The Company has The Company has established an Audit and Risk Committee which is chaired by Stuart Paterson and is comprised of all the independent least twice a year. The Board considers that the members of the Audit and Risk Committee have the requisite skills and experience to fulfil the responsibilities of the Audit and Risk Committee. The Audit be considered include board rotation and retention of experience. Code. As part of this plan Pui Kei Yuen was appointed to the Board may report to the Board. The Audit and Risk Committee reviews and recommends to the Board on the annual and half yearly reports Committee meets at least once a year and its principal duties are to accordance with the AIC Code in order to increase the efficiency of the Board’s work. The respective chairs of the committees report Appointments of all new Directors are made on a formal basis the subsequent AGM. Full details of the duties of a Director are provided at the time of their appointment. An induction process takes place for new appointees, other board memberships necessarily reduces his or her ability to act All Directors are considered by the Board to be independent of the that the Company complies with both the letter and spirit of the AIC conclusion of the AGM of the Company held on 13 May 2021. performance of the Company is properly reported on and monitored The Board has appointed committees with sufficient expertise, in appointment. A Director role specification is prepared to assist with Laurence Jacquot Julia Bond OBE Jack Perry CBE Appointed 26 February 2021. Retired 13 May 2021. established an Audit and Risk Committee, a Remuneration and and financial statements, financial announcements, internal control selection criteria and the method of selection, recruitment and (2) (1) (1) (2) 43 and 44. continue to be effective and demonstrate commitment to the role. The Board therefore believes that it is in the interest of Shareholders members of the Board. The Audit and Risk Committee meets at 3 3 Pui Kei Yuen Stuart Paterson 5 5 3 3 Martin Breuer 5 5 3 3 5 5 3 3 5 5 3 3 Held Attended Held Attended Held Attended Held Attended 2 2 2 2 4 4 2 2 1 1 1 1 2 2 1 1 2 2 1 1 2 2 1 1 2 2 1 1 1 1 202030 BMO EAT AR21 Text PRINT.indd 38202030 BMO EAT AR21 Text PRINT.indd 38 22/03/2022 07:3922/03/2022 07:39 OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information Remuneration and Nomination Committee Conflicts of interest Relations with Shareholders 38 | European Assets Trust PLC Report and Accounts 2021 | 39 indirect interest that conflicts with the interests of the Company (a “situational conflict”). The Board therefore has procedures in place for eport of all continuing appointments. Chairman or other members of the Board may do so by writing to the Company will hold an Annual General Meeting to be followed by with the statutory rules requiring company directors to declare any interest in an actual or proposed transaction or arrangement with the a Director being required to be excluded from a discussion or abstain A company director has a statutory obligation to avoid a situation the authorisation and review of situational conflicts relating to the per cent or more have been cast against a resolution at a General Meeting the Company will announce the actions it intends to take to were received during 2021. The Report of the Remuneration and Nomination Committee on page Board discussions on this holding. consideration is given to the quality and value of the service received have concerns which initial contact through the Chairman or is inappropriate. Shareholders wishing to communicate with the European Assets Trust PLC, 6th Floor, Quartermile 4, 7a Nightingale Way, Edinburgh EH3 9EG. directorships and appointments, no authorisations have been sought. importance on communication with its members. The Managers hold meetings with the Company’s largest Shareholders and report back to the Board on these meetings. In normal circumstances, each year, a presentation by the Investment Manager in London. from voting because of a conflict of interest. The Report of Management Engagement Committee is contained on page 45. Committee, which is chaired by the Senior Independent Director, Julia Julia Bond has been appointed Senior Independent Director. The Senior Independent Director is available to Shareholders if they By order of the Board Bond and consists of all the independent members of the Board. The in which he or she has, or potentially could have, a direct or A further update will be published within six months. No such votes Stuart Paterson is a member of the Supervisory Board of Mister Spex SE, an investment of the Company, and therefore is recused from and recommendations are made to the Board on the appropriateness Company Secretary has failed to resolve or for which such contact Secretary The Company welcomes the views of Shareholders and places The Company has established a Remuneration and Nomination Remuneration and Nomination Committee meets at least once a year. Aside from situational conflicts, the Directors must also comply Company. In the year under review there have been no instances of Company’s Directors. In accordance with the UK Code, in the event that when votes of 20 G overnance BMO Investment Business Limited Other than the formal authorisation of the Directors’ other consult Shareholders to understand the reasons behind the result. 40 includes details of its duties. 21 March 2022 R 202030 BMO EAT AR21 Text PRINT.indd 39202030 BMO EAT AR21 Text PRINT.indd 39 22/03/2022 07:3922/03/2022 07:39 # Report of the Remuneration and Nomination Committee ## Role of the Committee The Committee met on two occasions during the year. The duties of the Remuneration and Nomination Committee are: - To periodically review the level of Directors' fees and recommend any changes to the Board; - The annual Board evaluation process. - To be responsible for reviewing and making recommendations to the Board regarding nominating candidates for the approval by the General Meeting of Shareholders to fill vacancies on the Board of Directors; - To consider and review the composition and balance of the Board from time to time and, where appropriate, to make recommendations to the Board; - To review the re-appointment of Directors, as they fall due for re-election, under the terms of the Articles, and to make recommendations to the Board as considered appropriate; - To review actual or possible conflicts of interest in respect of each Director and any authorised conflicts; and - To consider other relevant topics, as defined by the Board. ## Composition of the Committee All the Directors are members of the Committee the terms of reference of which can be found on the website at www.europeanassets.co.uk. The Committee is chaired by the Senior Independent Director, Julia Bond. ## Succession planning Appointments of all new Directors are made on a formal basis, normally using professional search consultants, with the Remuneration and Nomination Committee agreeing the selection criteria and the method of recruitment, selection and appointment. The Board has an agreed succession plan for the orderly retirement of existing Directors and to provide for the regular refreshment of skills and talent. Regular retirements of Directors will take place in the following years to ensure the Board enjoys the right balance of both continuity and the regular refreshment of talent as well as compliance with the requirements of the AIC Code. Following a rigorous selection process Pui Kei Yuen was appointed to the Board with effect from 26 February 2021. Laurence Jacquot retired from the Board at the AGM held on 13 May 2021. It is planned that the Chairman of the Company will retire in 2024. The recruitment for this role, using external consultants, will take place in late 2022/early 2023 with a view to appointing a successor in Spring 2023. This will allow for a period of overlap before the Chairman's retirement. ## Diversity The Board's diversity policy, objective and progress in achieving it are set out on page 21. ## Committee evaluation The activities of the committee were considered as part of the Board appraisal process completed in accordance with standard governance arrangements as summarised on page 37. The conclusion from the process was that the committee was operating effectively, with the right balance of membership, experience and skills. **Julia Bond** Remuneration and Nomination Committee Chairman 21 March 2022 40 | European Assets Trust PLC OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information ## Directors’ Remuneration Report Introduction Directors’ Remuneration Policy Fees for services to the Company for the year ended 31 December (audited) | | 2021 | | 2021 | | | 2021 | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | £ | | £ | | | £ | | | | 44,375 | | | 941 | | 45,316 | | | 45,810 | | | 35,300 | | | 382 | | 35,682 | | | 36,410 | | | 34,300 | | | 888 | | 35,188 | | | 35,410 | | | 30,225 | | | 457 | | 30,682 | | | 31,200 | | | 11,070 | | | | 38 | 11,108 | | | | n/a | | 25,520 | | | 803 | | 26,323 | | | 31,200 | | | | n/a | | n/a | | | n/a | | | n/a | | 180,790 | | | 3,509 | | 184,299 | | | 180,030 | | 40 | European Assets Trust PLC Report and Accounts 2021 | 41 eport Following the latest review the Board agreed that with effect from hours and will be available for 15 minutes before and during the forthcoming AGM. expenses incurred by the Directors in attending Board and committee As disclosed in the Report and Accounts 2019, during the year ended migration. The one-off fee for the senior independent director was The Company’s articles of association limit the aggregate fees for inspection at the Company’s registered office during business May 2020 with 93.5% voting in favour and 6.5% against. The policy of the Board as a whole in continuing to achieve the investment meetings, including those treated as a benefit in kind subject to tax and national insurance. The Directors are not eligible for pension benefits, share options, long-term incentive schemes or other and Pui Kei Yuen joined the Board following the completion of the migration it is confirmed that neither were eligible for a one-off fee. Each Director’s appointment is subject to election at the first AGM and continues thereafter subject to re-election at each subsequent AGM. Jack Perry CBE Julia Bond OBE Laurence Jacquot objective. The policy aims to be fair and reasonable in relation payable to the Board to a total of £500,000 per annum. The 1 April 2022 the annual rates of remuneration will be increased by whom has a service contract with the Company. Each new Director normal circumstances these letters of appointment are available The fees are fixed and are payable in cash, quarterly in arrears. to comparable investment trusts and other similar sized financial that individual Directors fulfil in respect of Board and committee responsibilities are taken into account. The policy also provides for £5,000 each to compensate for the additional work involved in the This Directors’ remuneration report covers the year ended Directors’ fees at least annually. The Committee receives details of the fees paid to directors of commensurate companies. The Committee will then recommend to the Board a proposal for its approval. 17May 2022. approximately 4% to £46,250 for the Chairman, £36,750 for the Independent Director and £31,500 for a Non-executive Director. n/a n/a n/a The Board is composed solely of non-executive Directors, none of is provided with a letter of appointment. There is no provision for compensation upon early termination of appointment. In This policy was last approved by Shareholders at the AGM held in will next be put to Shareholders for approval at the AGM to be held The Board’s policy is to set Directors’ remuneration at a level commensurate with the skills and experience necessary for the effective stewardship of the Company and the expected contribution companies. Time committed to the Company’s affairs and the role the Company’s reimbursement of all reasonable travel and associated (audited) (audited) (audited) (unaudited) Comprises amounts reimbursed for expenses incurred in carrying out business for the Company which have been grossed up to include PAYE and NI contributions. Includes one-off payment per additional work in relation to the migration. Appointed 26 February 2021. Retired 14 May 2020 Retired 13 May 2021. 33,223 33,223 35,000 35,686 216,692 3,728 220,420 Chairman of the Audit and Risk Committee, £35,750 for the Senior 54,000 1,687 55,687 41,500 41,545 35,000 35,585 17,969 18,694 consultants, Trust Associates, the Directors received a one-off fee of £7,500 and £10,000 in the case of the Chairman. As Stuart Paterson (3) (4) (5) (1) (2) (2) (5) (3) (1) (4) (2) G overnance Total Stuart Paterson Martin Breuer Pui Kei Yuen Professor Robert van der Meer Remuneration and Nomination Committee considers the level of All the Directors will stand for re-election at the AGM to be held on 45 585 686 725 in 2023. benefits. 31 December 2020 and in line with the recommendations of external 31 December 2021. Director Fees Taxable Benefits Fees 2020 2020 2020 2022 Total R £ £ £ £ – 202030 BMO EAT AR21 Text PRINT.indd 41202030 BMO EAT AR21 Text PRINT.indd 41 22/03/2022 07:3922/03/2022 07:39 Governance Report Policy implementation Relative importance of spending on pay 2021 2020 £’000s £’000s % Directors’ remuneration for the year Company performance Annual fee rates for Board responsibilities ‡ Share Price Total Return Performance (in Sterling terms, rebased to 100 at 31 December 2011) 525 500 475 450 425 Directors’ Share 400 2021 2020 375 interests (audited) 350 325 300 275 250 225 200 175 150 125 100 75 | Dec 11 | | Dec 12 | Dec 13 | Dec 14 | Dec 15 | Dec 16 | Dec 17 | Dec 18 | Dec 19 | Dec 20 | Dec 21 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | European Assets Trust | | | | | | | | Source: Reuters Eikon | | | | | EMIX Smaller European Companies (ex UK) Index | | | | | ∞ | | | | | | 42 | European Assets Trust PLC Report and Accounts 2021 | 43 Senior Independent Director Senior Independent Director Non-executive Director Non-executive Director shows the total return (assuming all dividends are re-invested) to 1 April 2022 1 April 2021 (excluding taxable benefits) ordinary Shareholders against the Benchmark. Management and other expenses Aggregate Board remuneration n/a The Directors who served during the year received remuneration at 95.1% of votes were cast in favour of the resolution and 4.9% against. The Board is responsible for the Company’s investment strategy and performance. The management of the investment portfolio is delegated to the Manager. An explanation of the performance of the Company is given in the Chairman’s Statement and Investment n/a Manager’s Review. A comparison of the Company’s performance over the required ten-year period is set out in the following graph. This other than as stated above. Directors are encouraged but not required to Shareholders at the forthcoming AGM. The results of this vote is the following annualised rates for services as non-executive Directors. Jack Perry Laurence Jacquot Julia Bond The Directors’ Remuneration Report is subject to an annual advisory At the AGM held on 13 May 2021 Shareholders approved the Directors’ Since the year end Martin Breuer has purchased 10,000 shares. No to hold shares in the Company. made available on the Company’s website as soon as practicably Senior Independent Director The table below shows the actual expenditure in relation to Board remuneration, other expenses, Shareholder dividends and 31 December Dividends paid to Shareholders Remuneration Report in respect of the year ended 31 December 2020. Director held any interests in the issued Share Capital of the Company vote and therefore an ordinary resolution for its approval will be put possible afterwards. The fees for specific responsibilities are set out below. Directors can expect to receive fees at the rates indicated for 2022 as well as reimbursement for expenses necessarily incurred. Jack Perry European Companies (ex UK) Index (gross) to EMIX Smaller European Companies (ex UK) Index (net). 2020 Includes one-off payment for additional work in relation to the migration. European Assets Trust NV prior to migration on 16 March 2019. With effect from 1 April 2021 the benchmark changed from EMIX Smaller Retired 13 May 2021. Appointed 26 February 2021. 95,000 95,000 7,700 91,428 91,428 90,000 90,000 81,606 77,168 46,250 44,500 36,750 35,400 35,750 34,400 31,500 30,300 4,513 3,714 28,804 25,272 525,435 478,004 25,000 (1) (2) (1) (2) ‡ With effect With effect from from Chairman net asset value: Stuart Paterson Pui Kei Yuen Martin Breuer Chairman of Audit and Risk Committee Non-executive Director +21.5 +14.0 Year end Net Asset Value 181 -16.6 Chairman 21 March 2022 On behalf of the Board +9.9 £ £ 217 ∞ * * 202030 BMO EAT AR21 Text PRINT.indd 42202030 BMO EAT AR21 Text PRINT.indd 42 22/03/2022 07:3922/03/2022 07:39 OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information ## Report of the Audit and Risk Committee • • • • • www.europeanassets.co.uk • • • Significant issues considered by the Audit and Risk Committee for the year ended 31 December 2021 Matter Action 42 | European Assets Trust PLC Report and Accounts 2021 | 43 PricewaterhouseCoopers LLP (‘PwC’), including its independence eport providers with regard to the operation of internal controls during The Board receives at each Board meeting analysis from the The accounting policies of the Company; The Audit and Risk Committee met on three occasions during the year and the attendance of each of the members is set out on page and investment trust teams. Amongst other things, the Audit and The committee meets at least twice yearly including at least one meeting with the auditor. Mindful of the guidance issued by the Financial Reporting Council, As part of its review of the scope and results of the audit, during the The implications of proposed new accounting standards and regulatory changes; The Audit and Risk Committee meeting considered the control investment managers reviewing the liquidity of the portfolio. The policy on the engagement of the auditor to supply non-audit the auditor and senior members of the Manager’s fund management Risk Committee considered and reviewed the following matters and The duties of the committee include reviewing the annual and objectivity. It is also the forum through which the auditor their re-appointment, remuneration and terms of engagement; The receipt of an internal controls report from the Manager; and meeting and receives quarterly reports from the AIF Manager and when assessing viability, the Company’s cash position, availability of and the application of the going concern principle are detailed on page During the year, the Chair of the Committee met representatives of the Manager to discuss the control reports of a third party service services and the independence and objectivity of the auditor, Whether the Annual Report and Accounts is fair, balanced and Appropriateness of viability assessment reported thereon to the Board: the terms of appointment and remuneration of the auditor, reports to the Board of Directors. The terms of reference of the Audit The effectiveness of the audit process and related non-audit value per share. The Company discloses a viability assessment and statement in the Depositary. chaired by Stuart Paterson. reports and accounts; provider. period the considered and approved the The principal risks faced by the Company and the effectiveness of the Company’s internal control environment; Company’s internal control environment. reports and written assurances received from third party service the year ended 31 December 2021. and interim Accounts, the system of internal controls, and The Company’s portfolio is invested in listed securities. Errors in valuation could have a material impact on the Company’s net asset accordance with the requirements of the UK Corporate Governance The Board reviews the full portfolio valuation at each Board the loan facility and the operational resilience of its service providers was considered. Further analysis of the five year viability assessment The annual results announcements, and annual and half-yearly services; 38. In the course of its duties, the committee had direct access to G overnance Effectiveness of internal control environment Existence and valuation of investments understandable. and Risk Committee can be found on the website at Code. 32 and note 23 to the financial statements. All of the Directors are members of the Committee. The Committee is Audit and Risk Committee On an annual basis the Audit and Risk Committee considers the . R 202030 BMO EAT AR21 Text PRINT.indd 43202030 BMO EAT AR21 Text PRINT.indd 43 22/03/2022 07:3922/03/2022 07:39 auditor's plan for the audit of the financial statements for the year ended 31 December 2021. At the conclusion of the audit the auditor did not highlight any issues to the Audit and Risk Committee which would cause it to qualify its audit report nor did it highlight any fundamental internal control weaknesses. The auditor issued an unqualified audit report which is included on pages 47 to 52. Following the implementation of the Statutory Audit Amending Disclosure, with effect from 1 January 2017, the auditor is unable to provide tax compliance and advisory services to the Company. As part of the review of auditor independence and effectiveness, PwC has confirmed that it is independent of the Company and has complied with relevant auditing standards. In evaluating the auditor, the Audit and Risk Committee has taken into consideration the standing, skills and experience of the firm and the audit team. In addition, the Audit and Risk Committee reviewed the FRC's Audit and Quality review for PwC and discussed the findings with the Company's audit partner to determine if any of the indicators in the report had specific relevance to this year's audit of the Company. The Audit and Risk Committee discussed the audit plan and PwC's final report and concluded that an effective external audit had been conducted. PwC Netherlands was appointed auditors to the Company's predecessor, European Assets Trust NV, on 24 April 2014. PricewaterhouseCoopers LLP UK was appointed auditors to the Company on 17 May 2019. The Company is not required to change its auditors at least until after the audit in respect of the year ended 31 December 2024. It is the current intention of the Audit and Risk Committee not to change the auditor until then. The Audit and Risk Committee, from direct observation and enquiry of the Manager, remains satisfied that the auditor continues to provide effective independent challenge in carrying out its responsibilities. Following professional guidelines, the audit partner rotates after five years. The current audit partner, Jennifer March, is in the first year of her appointment. On the basis of this assessment, the Audit and Risk Committee has recommended the continuing appointment of the auditor to the Board. The auditor's performance will continue to be reviewed annually taking into account all relevant guidance and best practice. #### **Internal Control** The Board is responsible for the Company's system of internal control and for reviewing its effectiveness. The Board has therefore established an ongoing process designed to meet the particular needs of the Company in managing the risks to which it is exposed. The process is based principally on the Manager's existing risk-based approach to internal control whereby a matrix is created for the Company that include the key functions and activities carried out by the Manager and other service providers, the risks associated with these functions and activities and the controls employed to minimise these risks. These functions and activities include the financial reporting process. A residual risk rating is then applied. The matrix is regularly updated and reviewed by the committee and the Board. A formal annual review of these procedures is carried out by the Audit and Risk Committee and includes consideration of internal control reports issued by the Manager and other service providers. Such review procedures have been in place throughout the financial year and up to the date of approval of the annual report, and the Board is satisfied with their effectiveness. These procedures are designed to manage rather than eliminate risk and, by their nature, can only provide reasonable, but not absolute, assurance against material misstatement or loss. At each Board meeting the Board monitors the investment performance of the Company in comparison to its stated objective, its peer group and its benchmark index. The Board also reviews the Company's activities since the previous Board meeting to ensure that the Manager adheres to the agreed investment policy and approved investment guidelines. The Depository reports to the Board and carries out daily independent checks on cost and investment transactions, annually verifies asset ownership and has strict liability for the loss of Company's financial assets in respect of which it has safe keeping duties. The Board has reviewed the need for an internal audit function. It has decided that the systems and procedures employed by the Manager, including its own internal audit function, provide sufficient assurance that a sound system of internal control, which safeguards Shareholders' investments and the Company's assets, is maintained. An internal audit function specific to the Company is therefore considered unnecessary but this decision will be kept under review. **Stuart Paterson** Chairman of the Audit and Risk Committee 21 March 2022 44 | European Assets Trust PLC OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information ## Report of the Management ## Engagement Committee Duties of the Committee The Manager’s Fee • • Composition of the Committee Service providers Reporting Procedures www.europeanassets.co.uk The Manager’s Evaluation Process The Manager’s Re-appointment 44 | European Assets Trust PLC Report and Accounts 2021 | 45 eport appointment of the Manager on the terms agreed is in the interests of A member of the Management Engagement Committee attends the The duties of the Management Engagement Committee are to review in Note 5 to the Accounts. At each annual Committee meeting the The Committee meets annually. Its most recent meeting was March attribution, asset and sector allocation, gearing and risk. These enable Custodian, corporate broker, administrator and legal counsel. meeting following a Management Engagement Committee Meeting. The terms of reference of the Management Engagement Committee are The Investment Manager, The Management Engagement Committee is appointed by the Board from amongst the Board Directors of the Company. A quorum is two At each meeting of the Committee the Directors consider the Annual General Meeting and is available to answer questions on the Management Engagement Committee’s activities and responsibilities. length of notice of the investment management contract and fees payable to the Manager were also reviewed. During March 2022, the Management Engagement Committee of the Board reviewed the appropriateness of the Manager’s continuing appointment. In carrying out the review, consideration was given to past investment performance and the ability of the Manager to produce also given to the standard of other services provided which include company secretarial, accounting, administration and marketing. The The Management Engagement Committee also reviews the fees paid during the year to all of the Company’s service providers. The Chairman of the Management Engagement Committee is the of the continuing appointment of: Manager’s fee. Details of the investment management fee are included Directors compare the basis of the remuneration of the Manager against that of the peer group. remuneration of the Manager. At each Board meeting throughout the detailed papers, reports and reviews from the Manager on performance at each regular Board meeting. These papers include details of portfolio the Board to assess the success or failure of the Manager’s performance against the Key Performance Indicators determined by the Board. Management Engagement Committee. Other significant service providers including the Depositary and The Secretary circulates the minutes of meetings of the Management Engagement Committee to all members of the Board at the next Board Following this review, it is the Board’s opinion that the continuing Jack Perry Chairman of the Board, Jack Perry. remuneration, quality of service provided and value for money received the terms and conditions of the appointment and the appropriateness An important responsibility of the Committee is the review of the Currently all members of the Board have been appointed to the available on the the Company’s website from each of the key service providers of the Company. satisfactory investment performance in the future. Consideration was 2022 which included a formal evaluation of the performance and year the performance of the Company is reviewed. The Board receives G overnance 21 March 2022 Shareholders as a whole. members. Chairman . R 202030 BMO EAT AR21 Text PRINT.indd 45202030 BMO EAT AR21 Text PRINT.indd 45 22/03/2022 07:3922/03/2022 07:39 Financial Statements ## Statement of Directors’ Responsibilities in ## Respect of the Financial Statement Directors’ confirmations 46 | European Assets Trust PLC the Strategic Report includes a fair review of the development Company, together with a description of the principal risks and The Directors are also responsible for keeping adequate accounting make judgements and accounting estimates that are reasonable performance, business model and strategy. statements unless they are satisfied that they give a true and fair the Company for that period. In preparing the financial statements, 30 confirm that, to the best of their knowledge: prepare the financial statements on the going concern basis select suitable accounting policies and then apply them accordance with UK-adopted International Accounting Standards, regulation. state whether applicable UK-adopted International Accounting Accounting Standards. they have taken all the steps that they ought to have taken as a The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom governing from legislation in other jurisdictions. Each of the Directors, whose names and functions are listed on page give a true and fair view of the assets, liabilities, financial The Directors are responsible for preparing the Report and Accounts The Directors are responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Jack Perry Standards have been followed, subject to any material and prudent; and view of the state of affairs of the Company and of the profit or loss of the Directors are required to: the preparation and dissemination of financial statements may differ unless it is inappropriate to presume that the Company will is approved: consistently; departures disclosed and explained in the financial statements; information of which the Company’s Auditors are unaware; and and performance of the business and the position of the 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 UK-adopted International 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. director in order to make themselves aware of any relevant audit information and to establish that the Company’s Auditors are 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 position and Under company law, Directors must not approve the financial In the case of each Director in office at the date the Directors’ report the Company financial statements, which have been prepared in position and profit of the Company; and the financial statements in accordance with applicable law and so far as the Director is aware, there is no relevant audit uncertainties that it faces; and aware of that information. continue in business. On behalf of the Board Chairman 21 March 2022 • • • • • • • • • 202030 BMO EAT AR21 Text PRINT.indd 46202030 BMO EAT AR21 Text PRINT.indd 46 22/03/2022 07:3922/03/2022 07:39 Auditors' Report # Independent Auditors' Report To the members of European Assets Trust PLC ## Report on the audit of the financial statements ### Opinion In our opinion, European Assets Trust PLC's financial statements: - give a true and fair view of the state of the Company's affairs as at 31 December 2021 and of its profit and cash flows for the year then ended; - have been properly prepared in accordance with UK-adopted international accounting standards; and - have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements, included within the Report and Accounts (the 'Annual Report') which comprise: the Statement of Financial Position as at 31 December 2021; the Statement of Comprehensive Income, the Statement of Cash Flow and the Statement of changes in Equity for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies. Our opinion is consistent with our reporting to the Audit and Risk Committee. ### Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. ### Independence We remained independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC's Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC's Ethical Standard were not provided. We have provided no non-audit services to the Company in the period under audit. ### Our audit approach #### Overview ##### Audit scope - The Company is a standalone Investment Trust Company and engages BMO Investment Business Limited (the "Manager") to manage its assets. - We conducted our audit of the financial statements using information from State Street Bank & Trust Company (the "Administrator") to whom the Manager has, with the consent of the directors, delegated the provision of certain administrative functions. - We tailored the scope of our audit taking into account the types of investments within the Company, the involvement of the third parties referred to above, the accounting processes and controls, and the industry in which the Company operates. - We obtained an understanding of the control environment in place at both the Manager and the Administrator and adopted a fully substantive testing approach using reports obtained from the Administrator. ##### Key audit matters - Valuation and existence of investments - Accuracy, occurrence and completeness of Income from investments ##### Materiality - Overall materiality: £5,254,345 (2020: £4,780,044) based on 1% of Net Asset Value (NAV). - Performance materiality: £3,940,759 (2020: £3,585,033). ##### The scope of our audit As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. Overview Statement of Statement Strategy Report Government Report Auditors' Report Financial Statements Other Information Report and Accounts 2021 | 47 Financial Statements Key audit matters Key audit matter How our audit addressed the key audit matter Valuation and existence of investments Accuracy, occurence and completeness of income from investments How we tailored the audit scope 48 | European Assets Trust PLC of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the ISAs (UK) presume there is a risk of fraud in income recognition because income streams, both revenue and capital (including gains and losses on investments). Income from investments comprised dividend income. Practice (the “AIC SORP”) as incorrect application could indicate a 'Consideration of impacts of COVID-19' and 'Change in presentational currency', which were key audit matters last year, are no longer included because We tested the existence of the investment portfolio by agreeing investment holdings to an independent custodian confirmation. We found that the accounting policies implemented were in accordance accounted for in accordance with the stated accounting policy. No misstatements were identified which required reporting to those The Company’s accounting is delegated to the Administrator who maintains the Company’s accounting records and who has implemented controls over those accounting records. We obtained our audit evidence from substantive tests. However, as part of our risk assessment, we understood and assessed the internal controls in place at both the Manager and the Administrator to the extent relevant to our audit. This assessment of the independent service auditor of the Manager and the Administrator in accordance with generally accepted assurance standards for such work. Following this assessment, we applied professional judgement to determine the extent of testing required over each balance in the financial We tested the allocation and presentation of dividend income, including We assessed the accounting policy for dividend income recognition for compliance with accounting standards and the AIC SORP and performed testing to check that income had been accounted for in accordance with We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Company, the accounting processes and controls, and the industry in which it operates. of the pressure management may feel to achieve a certain objective. income recognition as incomplete or inaccurate income could have a We also focused on the accounting policy for income recognition and its misstatement in income recognition. We tested occurrence by testing that all dividends recorded in the year had been declared in the market by investment holdings. declared for all dividends during the year. Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial statements auditors, including 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, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. change the presentational currency of the Trust from Euros to Pounds Sterling in the prior year. Otherwise, the key audit matters below are consistent agreeing the prices used in the valuation to independent third-party We tested the accuracy of dividend receipts by agreeing the dividend with accounting standards and the AIC SORP, and that income has been charged with governance. the operating and accounting structure in place at both organisations involved obtaining and analysing the relevant controls reports issued by In addition, we tested dividend receipts by agreeing the dividend rates special dividends, between income and capital by agreeing treatments this stated accounting policy. In this instance, we consider that ‘income’ refers to all the Company’s material impact on the Company’s net asset value and dividend cover. of reduced uncertainty of the impact of COVID-19 in the current year as markets and economies continue to recover and the completion of the work to with last year. equity investments is not materially misstated. We tested the valuation of 100% of the listed equity investments by rates from investments to independent market data. from all investments to independent third party sources. to third party sources. The investment portfolio at the year-end comprised listed equity existence of investments because investments represent the principal We focused on the accuracy, occurrence and completeness of dividend presentation in the Income Statement as set out in the requirements of The Association of Investment Companies Statement of Recommended To test for completeness, we tested that the appropriate dividends had been received in the year by reference to independent data of dividends This is not a complete list of all risks identified by our audit. Based on the results of the audit procedures performed we are satisfied that the listed equity investments exist and that the valuation of listed sources. statements. investments valued at £539.8m. We focused on the valuation and element of the net asset value as disclosed on the Statement of Financial Position within the financial statements. 202030 BMO EAT AR21 Text PRINT.indd 48202030 BMO EAT AR21 Text PRINT.indd 48 22/03/2022 07:3922/03/2022 07:39 Auditors' Report Overview Statement Statement Strategy Report Government Report Auditors' Report Financial Statements Other Information ## Materiality The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: | **Overall company materiality** | £5,254,345 (2020: £4,780,044). | | --- | --- | | **How we determined it** | 1% of Net Asset Value. | | **Rationale for benchmark applied** | We have applied this benchmark, which is generally accepted auditing practice for investment trust audits, in the absence of indicators that an alternative benchmark would be appropriate and because we believe this provides an appropriate and consistent year-on-year basis for our audit. | We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2020: 75%) of overall materiality, amounting to £3,940,759 (2020: £3,585,033) for the company financial statements. In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate. We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above £262,717 (2020: £239,002) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons. ## Conclusions relating to going concern Our evaluation of the directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included: - evaluating the Director's updated risk assessment and considering whether it addressed the relevant threats presented by Covid-19; - evaluating the Directors' assessment of potential operational impacts, considering their consistency with other available information and our understanding of the business and assessed the potential impact on the financial statements; - reviewing the Directors' assessment of the Company's financial position in the context of its ability to meet future expected operating expenses, their assessment of liquidity as well as their review of the operational resilience of the Company and oversight of key third-party service providers; and - assessing the implication of significant reductions in NAV as a result of a severe but plausible downside in the market's performance on the ongoing ability of the Company to operate. 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 at least twelve months from when the financial statements are authorised for issue. 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. However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Company's ability to continue as a going concern. In relation to the directors' 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. ## Reporting on other information The other information comprises all of the information in the Annual Report other than the financial statements and our auditors' report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon. In connection with our audit of the financial statements, 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 audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we Report and Accounts 2021 | 49 Financial Statements Strategic Report and Directors’ Report Directors’ Remuneration Corporate Governance Statement • • • • • • • • 50 | European Assets Trust PLC In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and Directors' Report for the year ended 31 December 2021 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements. have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and The section of the Annual Report describing the work of the Audit and Risk Committee. Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review by the auditors. Our review of the directors’ statement regarding the longer-term viability of the group was substantially less in scope than an audit and only the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is consistent with the financial statements and our knowledge and understanding of the Company and its environment obtained in the course of the audit. In addition, 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 and our knowledge obtained during the audit: information necessary for the members to assess the Company's position, performance, business model and strategy; The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting in preparing them, and their identification of any material uncertainties to the Company’s ability to continue to do so over a period liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any necessary qualifications 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 and our knowledge obtained during the audit, and we have nothing material to add or draw The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks; The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an explanation of how these are being managed or mitigated; The Listing Rules require us to review the directors’ statements 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. Our additional responsibilities with respect to the corporate governance statement as other information are described in the Reporting on other In light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic Report and Directors' Report. We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the Company’s compliance with the With respect to the Strategic Report and Directors' Report, we also considered whether the disclosures required by the UK Companies Act 2006 have consisted of making inquiries and considering the directors’ process supporting their statement; checking that the statement is in alignment with The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the The directors’ explanation as to their assessment of the Company’s prospects, the period this assessment covers and why the period is The directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue in operation and meet its or assumptions. to report based on these responsibilities. Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as of at least twelve months from the date of approval of the financial statements; appropriate; and In our opinion, the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006. information section of this report. described below. been included. attention to in relation to: 202030 BMO EAT AR21 Text PRINT.indd 50202030 BMO EAT AR21 Text PRINT.indd 50 22/03/2022 07:3922/03/2022 07:39 Auditors' Report # Responsibilities for the financial statements and the audit # Responsibilities of the directors for the financial statements As explained more fully in the Statement of Directors' Responsibilities in Respect of the Financial Statements, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they 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. # Auditors' 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 auditors' 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. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below. Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches of section 1158 of the Corporate Tax Act 2010, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006 and Chapter 15 of the UK Listing Rules applicable to Closed-Ended Investment Funds. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue (investment income and capital gains) or to increase net asset value, and management bias in accounting estimates. Audit procedures performed by the engagement team included: - Discussions with the Manager and the Audit and Risk Committee, including consideration of known or suspected instances of non-compliance with laws and regulation and fraud; - Reviewing relevant meeting minutes, including those of the Audit and Risk Committee; - Assessment of the Company's compliance with the requirements of section 1158 of the Corporation Tax Act 2010, including recalculation of numerical aspects of the eligibility conditions; - Identifying and testing journal entries, in particular year-end journal entries posted by the Administrator during the preparation of the financial statements and any journals with unusual account combinations; and - Designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing. There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, 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. Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected. A further description of our responsibilities for the audit of the financial statements is located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report. # Use of this report This report, including the opinions, has been prepared for and only for the Company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. Overview Statement statement Strategy, board Commercial report Auditors' Report Financial statements Other information Report and Accounts 2021 | 51 ## Other required reporting ### Companies Act 2006 exception reporting Under the Companies Act 2006 we are required to report to you if, in our opinion - we have not obtained all the information and explanations we require for our audit; or - adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not visited by us; or - certain disclosures of directors' remuneration specified by law are not made; or - the financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns. We have no exceptions to report arising from this responsibility. ### Appointment Following the recommendation of the Audit and Risk Committee, we were appointed by the members on 17 May 2019 to audit the financial statements for the year ended 31 December 2019 and subsequent financial periods. The period of total uninterrupted engagement is 3 years, covering the years ended 31 December 2019 to 31 December 2021. **Jennifer March** (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors London 21 March 2022 52 | European Assets Trust PLC OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information ## Statement of Comprehensive Income | | For the year ended | | | | Year ended | | --- | --- | --- | --- | --- | --- | | | 31 December 2021 | | | 31 December 2020 | | | Revenue | | Capital | Total | | | | £’000s | | £’000s | £’000s | | | – 102,892 102,892 8 469 477 8,157 – 8,157 (739) (2,954) (3,693) (995) (7) (1,002) 6,431 100,400 106,831 (50) (201) (251) 6,381 100,199 106,580 (937) – (937) 5,444 100,199 105,643 1.51 27.83 29.34 Report and Accounts 2021 | 53 | (582) (2,329) (2,911) Foreign exchange gains/(losses) (1,464) (1,330) (413) (413) (19) (76) (95) (904) (116) (1,020) value through profit or loss Earnings per share basic and diluted – International Accounting Standards. The supplementary revenue return and capital return columns are both prepared under guidance published by All revenue and capital items in the above statement derive from continuing operations. The accompanying notes on pages 57 to 72 are an integral part of these financial statements. Management fees Other expenses pence The total column of this statement represents the Company’s Statement of Comprehensive Income, prepared in accordance with UK-adopted the Association of Investment Companies. Capital Profit for the year and total comprehensive income 2,582 59,467 62,049 3,934 3,934 63,376 63,376 2,150 59,391 61,541 2,563 59,391 61,954 inancial Statements 0.60 16.49 17.09 Profit before finance costs and taxation Income Gains on investments held at fair 134 Revenue ’000s ’000s Total ’000s Profit before taxation Taxation Finance costs 6 6 5 5 3 8 8 9 F 12 11 £ £ £ | | --- | | Capital Notes Revenue Notes | | – – – | | 202030 BMO EAT AR21 Text PRINT.indd 53202030 BMO EAT AR21 Text PRINT.indd 53 22/03/2022 07:3922/03/2022 07:39 | Financial Statements ## Statement of changes in Equity 54 | European Assets Trust PLC | (23,426) Movement during the year ended Movement during the year ended The accompanying notes on pages 57 to 72 are an integral part of these financial statements. (29,408) (29,408) (15) (15) (23,122) (2,150) (25,130) *These reserves include balances that are distributable by way of dividend, as disclosed in note 2(k). (23,360) (5,444) (28,804) (17,484) Cumulative translation adjustment Cumulative translation adjustment Total comprehensive income Total comprehensive income For the year ended 31 December 2020 capital Capital For the year ended 31 December 2021 capital Capital 59,391 2,150 61,541 100,199 5,444 105,643 37,506 346,054 88,462 5,982 478,004 37,506 322,694 188,661 525,435 37,493 369,191 28,942 418,142 37,506 346,054 88,462 5,982 478,004 23,466 23,466 Costs associated with share issues Interim dividends distributed and reinvested 13 Balance as at 31 December 2020 31 December 2021 Interim dividends distributed and reinvested 31 December 2020 Balance as at 31 December 2021 Balance at 31 December 2019 Balance at 31 December 2020 Share ‘000s Distributable reserve* ‘000s reserve* ‘000s Revenue reserve* ‘000s Cumulative translation reserve ‘000 Total shareholders' funds ‘000s Share ‘000s Distributable reserve* ‘000s reserve* ‘000s Revenue reserve* ‘000s Cumulative translation reserve ‘000 Total Shareholders' funds ‘000s 129 10 10 17 £ £ £ £ £ £ £ £ £ £ £ £ | | --- | | – – – – – – – – – – – – – – – – – – – – – – – – – – Notes Notes | | 202030 BMO EAT AR21 Text PRINT.indd 54202030 BMO EAT AR21 Text PRINT.indd 54 22/03/2022 07:3922/03/2022 07:39 | OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information ## Statement of Financial Position 31 December 2021 £’000s 539,756 2,680 8,342 11,022 (155) (25,188) (25,343) (14,321) 525,435 37,506 322,694 188,661 – (23,426) 525,435 145.93 Report and Accounts 2021 | 55 | Approved by the Board and authorised for issue on 21 March 2022 and signed on its behalf of by: Investments at fair value through profit or loss The accompanying notes on pages 57 to 72 are an integral part of these financial statements. *These reserves include balances that are distributable by way of dividend, as disclosed in note 2(k). (21,942) (315) (26,853) (27,168) Jack Perry, Chairman Cash and cash equivalents Capital reserves* Capital and reserves Share capital Other payables Net Asset Value per ordinary share – pence 2,276 2,950 88,462 499,946 346,054 37,506 478,004 5,226 478,004 5,982 inancial Statements Total current assets Other receivables Revenue reserve* Cumulative translation reserve Current assets Non-current assets Distributable reserve* Net assets 31 December 2020 £’000s Current liabilities Net current liabilities Bank loan Total current liabilities 132.75 Total Shareholders’ funds 15 13 18 16 18 19 . F 17 12 14 | | --- | | – Notes | | 202030 BMO EAT AR21 Text PRINT.indd 55202030 BMO EAT AR21 Text PRINT.indd 55 22/03/2022 07:3922/03/2022 07:39 | Financial Statements ## Statement of Cash Flow for the year ended 31 December 2021 £’000s (4,660) 6,842 (271) 1,911 (107,481) 139,299 (7) 31,811 33,722 (28,804) – 8,538 (8,500) (28,766) 4,956 2,950 477 (41) 8,342 13 8,329 8,342 56 | European Assets Trust PLC | Cash flows from financing activities Cash and cash equivalents at the beginning of the year Cash flows from operating activities before dividends received and interest paid Cash flows before financing activities Cash flows from operating activities Cash flows from investing activities Financing activities Investing activities Effect of movement in foreign exchange The accompanying notes on pages 57 to 72 are an integral part of these financial statements. (204,728) (25,130) (116) (3,785) (9,888) (421) (9,467) (15) (8,180) (67) (1,330) Translation adjustment Interest paid Equity dividends paid Other capital expenses Cash and cash equivalents at the end of the year Net movement in cash and cash equivalents Short term deposits Repayment of bank loan Represented by: 2,950 1,708 3,431 11,516 26,853 2,950 2,139 195,377 15,21 15,21 Purchase of investments Dividends received Drawdown of bank loan 2020 £’000s Costs associated with share issues Sale of investments Cash at bank 811 944 20 10 | | --- | | – Notes | | 202030 BMO EAT AR21 Text PRINT.indd 56202030 BMO EAT AR21 Text PRINT.indd 56 22/03/2022 07:3922/03/2022 07:39 | Financial Statements Overview Summary Statement Foreign Board Internal Report Further Report General Statements Other Information # Notes to the Financial Statements ## 1. General Information European Assets Trust PLC is an investment company incorporated in England (UK) with a premium listing on the London Stock Exchange. The Company registration number is 11672363 and the registered office is Exchange House, Primrose Street, London, EC2A 2NY, England. The Company has conducted its affairs so as to qualify as an investment trust under the provisions of Section 1158 of the Corporation Tax Act 2010. Approval of the Company under Section 1158 has been received. The Company intends to conduct its affairs so as to enable it to continue to comply with the requirements. Such approval exempts the Company from UK Corporation Tax on gains realised in the relevant year on its portfolio of fixed asset investments. The accounting policies have been applied consistently throughout the year ended 31 December 2021, with no significant changes, as set out in note 2 below. ## 2. Significant accounting policies ### a) Basis of Preparation The financial statements of the Company have been prepared on a going concern basis under the historical cost convention modified to include fixed asset investments and derivatives at fair value, and in accordance with the Companies Act 2006, UK-adopted International Accounting Standards, which comprise standards and interpretations approved by the International Accounting Standards Board (the "IASB"), and International Accounting Standards and Standing Interpretations Committee interpretations approved by the International Accounting Standards Committee ("IASC") that remain in effect, and to the extent that they have been adopted by the European Union. Where presentational guidance set out in the 2021 Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ("SORP") for investment trusts issued by the Association of Investment Companies ("AIC") is consistent with the requirements of UK-adopted International Accounting Standards, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP. All of the Company's operations are of a continuing nature. The functional currency of the Company is the Euro and presentational currency is the Pound Sterling as the Board believe this will provide clarity of the Company's financial statements for its Shareholders, the overwhelming majority of whom are located in the United Kingdom. All transactions during the year are translated on the date of execution and the Statement of Financial Position as at the year end date. The Board confirms that no other significant accounting judgements or estimates have been applied to the financial statements and therefore there is no significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. As referred to in the Directors' Report on page 33 and note 23 to the accounts the Directors believe that it is appropriate for the accounts to be prepared on a going concern basis. ### b) New and revised Accounting Standards The Company adopted the following amended or new standards and interpretations during the year, none of which the Board expect to have a significant effect on the Company's accounts: - IAS 1 Amendment – Presentation of Financial Statements; - IAS 8 Amendment – Accounting Policies, Changes in Accounting Estimates and Errors. - IFRS 9, IAS 39 and IFRS 7 Amendments – Interest Rate Benchmark Reform. Other new standards, amendments and interpretations issued by the International Accounting Standards Board (IASB) but not effective for the current financial year and not early adopted by the Company include: - Amendments to IFRS 17 – Insurance contracts (effective 1 January 2023). The IASB has issued this new standard as a replacement for IFRS 4, which currently allows a range of accounting treatments for insurance contracts. IFRS 17 will fundamentally change the accounting for insurance and investment contracts by all entities with discretionary participation features. The IASB have issued a number of other new standards, amendments and interpretations that are not yet effective for the current financial year end and are not expected to be relevant or material to the Company's operations. They are therefore not expected to have an impact on the Company's financial statements when they become effective. ### c) Presentation of Statement of Comprehensive Income In order to reflect better the activities of an investment trust company and in accordance with guidance issued by the AIC, supplementary information which analyses the Statement of Comprehensive Income between items of a revenue and capital nature has been presented alongside the Statement of Comprehensive Income. The net revenue return is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in section 1158 Corporation Tax Act 2010. ### d) Financial instruments Investments are recognised and derecognised on the trade date where a purchase or sale is under a contract whose terms require delivery within the timeframe established by the market concerned, and are measured at fair value. Report and Accounts 2021 | 57 2. Significant accounting policies (continued) 58 | European Assets Trust PLC f) Cash and cash equivalents h) Bank borrowings e) Receivables d) Financial instruments (continued) i) Derivative financial instruments j) Payables k) Share capital and reserves g) Financial liabilities and equity (ii) quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The classification – quoted (unadjusted) prices in active markets for identical assets or liabilities. (iii) (i) 830(2), 832, and 833. through profit or loss on initial recognition. Where securities are designated upon initial recognition as fair value through profit or loss, gains and losses arising from changes in fair value are of financial instruments depends on the lowest significant applicable input, as follows: Derivatives are classified as fair value through profit or loss – held for trading and are held at fair value and changes in fair value are recognised in Share capital is held at the year end as Sterling denominated ordinary Shares. Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Financial liabilities Receivables do not carry any interest and are short term in nature and are accordingly stated at their nominal value as reduced by appropriate their total return in the form of interest, dividends or increases in fair value, listed equities and fixed income securities are designated as fair value Financial assets designated as at fair value through profit or loss are measured at subsequent reporting dates at fair value, which is either the bid Investments are classified as fair value through profit or loss. As the entity’s business is investing in financial assets with a view to profiting from price or the last traded price, depending on the convention of the exchange on which the investment is quoted. Unlisted investments are valued Accounting standards recognise a hierarchy of fair value measurements for financial instruments which gives the highest priority to unadjusted The following are accounted for in this reserve: other capital charges and credits charged or credited to this account in accordance with the above policies. – other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly. gains and losses on the disposal of fixed asset investments and derivatives; Payables are not interest bearing and are recognised initially at fair value based on contractual settlement amounts and subsequently measured at amortised cost using the effective interest rate method. term deposits with an original maturity of three months or less. bearing bank loans and overdrafts are recorded at the proceeds received. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the Statement of Comprehensive Income using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. – techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data. allowances for estimated irrecoverable amounts. Receivables are recognised initially at fair value based on contractual settlement amounts and subsequently measured at amortised cost using the effective interest rate method. The Company records any impairment allowance on financial assets receivable at amortised cost using the expected credit loss model under the simplified method. Capital reserves – arising on investments sold and distributable by way of a dividend in accordance with the Companies Act sections settled foreign exchange differences of a capital nature; and included in net profit or loss for the period as a capital item. Cash at banks and short term deposits that are held to maturity are carried at cost. Cash and cash equivalents consist of cash at bank and short Distributable reserve – created by cancellation of the share premium account. This reserve is available as distributable profits and may be used for the payment of dividends and the repurchase of Company shares. at fair value by the Directors on the basis of all information available to them at the time of valuation. Capital reserve and equity instruments are initially recorded at the proceeds received, net of issue costs. the capital return column of the Statement of Comprehensive Income. Level 3 Level 1 Level 2 Interest • • • - 202030 BMO EAT AR21 Text PRINT.indd 58202030 BMO EAT AR21 Text PRINT.indd 58 22/03/2022 07:3922/03/2022 07:39 OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information 2. Significant accounting policies (continued) Report and Accounts 2021 | 59 n) Deferred taxation l) Income k) Share capital and reserves (continued) o) Expenses and interest m) Taxation (iv) (v) the translation of assets and liabilities held at the Statement of Financial Position (SOFP) date at the exchange rate prevailing on that Shareholders as a dividend as defined by the Institute of Chartered Accountants in England and Wales and the Institute of Chartered reporting currency, Pound Sterling. The figure represents: is charged or credited in the Statement of Comprehensive Income, except when it relates to items charged or credited directly to equity, in which the differences arising from translation of transactions made by the Company at the exchange rate on the date of execution; All expenses are accounted for on an accruals basis. Expenses are charged through the revenue column of the Statement of Comprehensive Income except those incurred as a consequence of the migration and where incurred in connection with the maintenance or enhancement of the Capital reserves – arising on investments held and are non-distributable unsettled foreign exchange valuation differences of a capital nature. items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted or - the translation of brought forward assets translated at the exchange rate prevailing on the SOFP date and brought forward capital and reserves at prior period exchange rates. Dividends are recognised as income on the date that the related investments are marked ex dividend date is quoted are brought into account when the Company’s right to receive capital nature are recognised through the revenue column of the Statement of Comprehensive Income. Where recognised as income. The following are accounted for in this reserve: Accountants in Scotland technical guidance TECH 02/17BL. This reserve comprises all foreign exchange differences arising from the translation from the Company’s functional currency, Euros, to the Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Investment trusts which have approval under section 1158 Corporation Tax Act 2010 are not liable for taxation on capital gains. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that value of the Company’s investment portfolio taking account of the expected long term split of returns as follows: – Management fees and finance costs have been allocated 20 per cent to revenue and 80 per cent to capital. Interest income from fixed interest securities is accrued on a time apportioned basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount. Other investment income and deposit interest are included on an accruals basis. The revenue reserve represents accumulated revenue profits retained by the Company that have not currently been distributed to Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the period. Taxable profit differs from profit before tax as reported in the Statement of substantively enacted by the balance sheet date. Dividends receivable on equity shares where no ex payment is established. Special dividends of a non the Company has elected to receive its dividends in the form of additional shares rather than cash, an amount equal to the cash dividend is sufficient taxable profits will be available to allow all or part of the asset to be recovered. case the deferred tax is also dealt with in equity. increases and decreases in the valuation of fixed asset investments and derivatives held at the year-end; and Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes date; and, Financial Statements Revenue Reserve Cumulative translation reserve dividend. • • - - - - - 202030 BMO EAT AR21 Text PRINT.indd 59202030 BMO EAT AR21 Text PRINT.indd 59 22/03/2022 07:3922/03/2022 07:39 ## 2. Significant accounting policies (continued) ### p) Foreign currency Foreign currency monetary assets and liabilities are expressed in Sterling at rates of exchange ruling at the Balance Sheet date. Purchases and sales of investment securities, dividend income, interest income and expenses are translated at the rates of exchange prevailing at the respective dates of such transactions. Exchange profits and losses on fixed assets investments are included within the changes in fair value in the Capital Reserve. Exchange profits and losses on other currency balances are separately credited or charged to the Capital Reserve except where they relate to revenue items. | Rates of exchange as at 30 December (with regard to Sterling) | 2021 | 2020 | | --- | --- | --- | | Danish Krone | 8.85844 | 8.31584 | | Norwegian Krone | 11.94395 | 11.70375 | | Euro | 1.19104 | 1.11720 | | Swedish Krona | 12.26299 | 11.22614 | | Swiss Franc | 1.23411 | 1.20831 | ### q) Use of judgements, estimates and assumptions The presentation of the financial statements in accordance with accounting standards require the Board to make judgements, estimates and assumptions that effect the accounting policies and reported amounts of assets, liabilities, income and expenses. Estimates and judgements are continually evaluated and are based on perceived risks, historical experience, expectations of plausible future events and other factors. Actual results may differ from these estimates. The areas requiring the most significant judgement and estimation in preparation of the financial statements are: recognising and classifying unusual or special dividends received as either revenue or capital in nature; and setting the level of dividends paid and proposed in satisfaction of both the Company's long-term objective and its obligations to adhere to Investment Trust status rules under Section 1158 of the Corporation Tax Act 2010. Dividends received which appear to be unusual in size or circumstance are assessed on a case-by-case basis, based on interpretation of the investee companies' relevant statements, to determine their allocation in accordance with the SORP to either the Revenue Account or Capital Reserves. Dividends which have clearly arisen out of the investee company's reconstruction or reorganisation are usually considered to be capital in nature and allocated to Capital Reserves. Investee company dividends which appear to be paid in excess of current year profits may nevertheless still be considered to be wholly revenue in nature unless evidence suggests otherwise. The value of dividends received in the year treated as capital in nature is disclosed in note 18 to the Accounts. The value of special dividends receivable in any period cannot be foreseen as such dividends are declared and paid by investee companies without prior reference to the Company. | 3. Income | 2021 £'000s | 2020 £'000s | | --- | --- | --- | | Dividend income^{(1)} from listed investments in: | | | | - Austria | - | 297 | | - Denmark | 414 | 647 | | - France | 607 | 212 | | - Germany | 1,023 | 683 | | - Iceland | 108 | 135 | | - Ireland | 180 | - | | - Italy | 850 | 360 | | - Netherlands | 171 | 233 | | - Norway | 2,477 | 268 | | - Portugal | 213 | 152 | | - Spain | 187 | 292 | | - Sweden | 1,566 | 341 | | - Switzerland | 361 | 314 | | **Total income** | **8,157** | **3,934** | $^{(1)}$ Dividend income includes special dividends classified as revenue in nature in accordance with note 2(q) of £147,000 (2020: £892,000) 60 | European Assets Trust PLC OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information 4. Operating Segments 5. Management fee 2021 Revenue Capital Total £’000 £’000 £’000 739 2,954 3,693 | 6. Other expenses | | | | | | | 2021 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Revenue | | | Capital | | | Total | | | | £’000s | | | £’000s | | £’000s | | | | | | 163 | | | – | | 163 | | | | | 181 | | | – | | 181 | | | | | | – | | – | | | – | | | | | 2 | | – | | | 2 | | | | | 11 | | – | | | 11 | | | | 46 | | | – | | | 46 | | | | 119 | | | – | | 119 | | | | | 36 | | | – | | | 36 | | | | 242 | | | – | | 242 | | | | | 195 | | | 7 | | 202 | | 995 7 1,002 7. Directors fees Report and Accounts 2021 | 61 | management is calculated as the value of total assets less current liabilities (excluding borrowings) at the end of the preceding quarter. Where the The emoluments of the Chairman, the highest paid Director, were at the rate of £44,500 per annum (2020: £44,000). Other Directors' emoluments amounted to £30,300 (2020: £30,000) each per annum, with the chairman of the Audit and Risk Committee receiving an additional £5,100 (2020: £5,000) per annum and the Senior Independent Director an additional £4,100 (2020: £4,000). Full details value of funds under management exceeds €400 million, the applicable rate over such excess value is 0.6 per cent per annum. Legal, secretarial and accounting Management fee – additional remuneration relating to migration The Board has considered the requirements of IFRS 8 ‘Operating Segments’. The Board is of the view that the Company is engaged in a single segment of business, of investing in equity and that therefore the Company has only a single operating segment. The Board of Directors, as a The Manager receives a fee equal to 0.75 per cent per annum of the value of funds under management up to €400 million. Funds under Detailed regulatory disclosures including those on the AIF Manager’s remuneration policy and costs are available on Company’s website or from Marketing, advertising and printing costs As a result of additional work required for the migration of the Company from the Netherlands to the United Kingdom, consultants are provided in the Directors' Remuneration Report on pages 41 and 42. whole, has been identified as constituting the chief operating decision maker of the Company. the year (2020: none). Depositary and custody fees Indemnity insurance costs Other expenses Capital Total other expenses Capital Independent auditors' remuneration BMO on request. Travel expenses recommended that the Board of Directors received an additional one-off payment of £33,000 in total, paid in 2020. All expenses are stated gross of irrecoverable VAT, where applicable. See the Directors’ Remuneration Report on page 41. 1,020 2,329 2,911 (1) (1) (2) Financial Statements 149 149 – for audit services 184 131 181 116 184 131 297 2020 Revenue Total £’000 £’000 £’000 Remuneration of Directors 904 116 Revenue £’000s £’000s 2020 Total £’000s Broker fees 37 37 582 33 33 51 51 112 14 112 14 12 12 Total Auditors’ remuneration for audit services, exclusive of VAT amounts to £39,000 (2020: £45,700). There were no non-audit services paid to PwC in | | --- | | – – – – – – – – – | | 202030 BMO EAT AR21 Text PRINT.indd 61202030 BMO EAT AR21 Text PRINT.indd 61 22/03/2022 07:3922/03/2022 07:39 | Financial Statements | 8. Finance costs | | | | | | 2021 | | --- | --- | --- | --- | --- | --- | --- | | | Revenue | | Capital | | | Total | | | £’000s | | £’000s | | £’000s | | | | | 41 | | 164 | | 205 | | | | 9 | | 37 | | 46 | 50 201 251 9. Taxation 2021 Revenue Capital Total £’000s £’000s £’000s 937 – 937 937 – 937 2021 Revenue Capital Total £’000s £’000s £’000s 6,381 100,199 106,580 | 1,212 | | 19,038 | | | 20,250 | | | --- | --- | --- | --- | --- | --- | --- | | (1,549) | | | | – | (1,549) | | | | – | (19,550) | | | (19,550) | | | | (2) | | (89) | | | (91) | | 339 | | | 601 | | | 940 | | 937 | | | | – | | 937 | 937 – 937 62 | European Assets Trust PLC | Total taxation (see note 9(b)) Total taxation (see note 9(a)) (a) Analysis of tax charge / (credit) for the year The tax assessed for the year is lower (2020: lower) than the standard rate of corporation tax in the UK. (25) rate of corporation tax of 19% (2020: 19%) (748) (748) (b) Factors affecting the current tax charge for the year No deferred tax asset in respect of unutilised expenses at 31 December 2021 (2020: same) has been recognised as it is uncertain that there will Currency (gains)/losses (12,041) (12,041) Finance costs have been allocated 80% to capital reserve in accordance with the Company's accounting policies. Bank interest charges *These items are not subject to corporation tax in an investment trust company. Net profit on ordinary activities before taxation Capital Expenses not utilised in the year Capital Net profit on ordinary activities multiplied by the standard Capital returns* Capital be taxable profits from which the future reversal of a deferred tax asset could be deducted. 11,284 11,771 2,563 59,391 61,954 Total finance cost £’000s £’000s £’000s Dividends* Revenue £’000s £’000s 2020 £’000s 286 479 765 Overseas taxation 413 413 Revenue £’000s £’000s 2020 £’000s 413 413 Loan interest 10 39 49 19 76 95 Effects of: 487 413 413 9 37 46 Revenue 2020 Total 413 413 278 253 Total Overseas taxation not relieved Total | | --- | | – – – – – – | | 202030 BMO EAT AR21 Text PRINT.indd 62202030 BMO EAT AR21 Text PRINT.indd 62 22/03/2022 07:3922/03/2022 07:39 | OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information 10. Dividends | Register | | Payment | | 2021 | | | --- | --- | --- | --- | --- | --- | | | date | | date | £’000s | | | 17 Jan 20 | | 31 Jan 20 | | | – | | 14 Apr 20 | | 30 Apr 20 | | | – | | 10 Jul 20 | | 31 Jul 20 | | | – | | 9 Oct 20 | | 30 Oct 20 | | | – | | 15 Jan 21 | | 29 Jan 21 | | 7,201 | | | 9 Apr 21 | | 30 Apr 21 | | 7,201 | | | 9 Jul 21 | | 30 Jul 21 | | 7,201 | | | 8 Oct 21 | | 29 Oct 21 | | 7,201 | | 28,804 2021 £’000s 5,444 (7,201) (7,201) (7,201) (7,201) (23,360) 11. Earnings per share 2021 Revenue Capital Total £’000s £’000s £’000s 5,444 100,199 105,643 1.51 27.83 29.34 Report and Accounts 2021 | 63 Both the revenue and capital returns per share are based on a weighted average of 360,069,279 ordinary shares in issue during the year (2020: 360,012,510). The net revenue results is equivalent to profit before tax per the Statement of Comprehensive Income. The return per share figure is based on the net profit or loss for the period or year and on the weighted average number of shares in issue during the period or year. The return per The Company distributed the following interim dividends to Shareholders: stated that, barring unforeseen circumstances, it will pay an annual dividend equivalent to 6 per cent of the net asset value at the end of the preceding year. The dividend is funded from a combination of current year net profits and the Distributable Reserve. Third of four interims for the year ended 31 December 2020 of 1.755 pence per share Third of four interims for the year ended 31 December 2021 of 2.000 pence per share Fourth of four interims for the year ended 31 December 2021 of 2.000 pence per share Capital Third of four interims for the year ended 31 December 2021 of 2.000 pence per share Fourth of four interims for the year ended 31 December 2021 of 2.000 pence per share First of four interims for the year ended 31 December 2020 of 1.755 pence per share Second of four interims for the year ended 31 December 2020 of 1.755 pence per share Fourth of four interims for the year ended 31 December 2020 of 1.755 pence per share First of four interims for the year ended 31 December 2021 of 2.000 pence per share Second of four interims for the year ended 31 December 2021 of 2.000 pence per share Net return attributable to equity Shareholders Shortfall paid from distributable reserves Return per share – pence share amount can be further analysed between revenue and capital, as follows: First of four interims for the year ended 31 December 2021 of 2.000 pence per share Second of four interims for the year ended 31 December 2021 of 2.000 pence per share The level of dividend paid by the Company each year is determined in accordance with the Company's distribution policy. The Company has 6,317 6,318 6,318 6,319 2,150 59,391 61,541 25,272 Financial Statements £’000s 0.60 16.49 17.09 Revenue £’000s £’000s 2020 Total £’000s Net revenue return attributable to Shareholders 2020 – – – – 202030 BMO EAT AR21 Text PRINT.indd 63202030 BMO EAT AR21 Text PRINT.indd 63 22/03/2022 07:3922/03/2022 07:39 ## 12. Investments held at fair value through profit or loss | | 2021 Total (Level 1) £'000s | 2020 Total (Level 1) £'000s | | --- | --- | --- | | Cost brought forward | 361,025 | 329,967 | | Unrealised gains brought forward | 138,921 | 74,623 | | **Fair value of investments at 1 January** | **499,946** | **404,590** | | Movements in the period: | | | | Purchases at cost | 107,287 | 204,922 | | Sales proceeds | (139,299) | (195,377) | | Gains on investments sold in the year | 39,828 | 21,512 | | Movement in unrealised gains on investments held at the year end | 63,064 | 41,864 | | Translation adjustment | (31,070) | 22,435 | | **Fair value of investments at 31 December** | **539,756** | **499,946** | | Cost at 31 December | 368,841 | 361,025 | | Unrealised gains carried forward | 170,915 | 138,921 | | **Fair value of investments at 31 December** | **539,756** | **499,946** | | | 2021 £'000s | 2020 £'000s | | Gains on investments sold in the year | 39,828 | 21,512 | | Movement in unrealised gains on investments held at the year end | 63,064 | 41,864 | | **Total gains on investments** | **102,892** | **63,376** | All assets held by the Company were classified as Level 1 in nature as described in note 2(d) and includes investments and when applicable, derivatives, listed on any recognised stock exchange. Investments sold during the year have been revalued over time since their original purchase, and until they were sold any unrealised gains/losses was included in the fair value of the investments. Included within the capital reserve movement for the year are £94,000 of transaction costs including stamp duty on purchases of investments (2020: £169,000) and £69,000 of transaction costs on sales of investments (2020: £104,000) | | 2021 £'000s | 2020 £'000s | | --- | --- | --- | | Listed equities designated at fair value through profit or loss on initial recognition, incorporated in: | | | | - Austria | – | 10,326 | | - Belgium | 9,370 | – | | - Denmark | 34,453 | 33,788 | | - France | 39,435 | 25,455 | | - Germany | 126,050 | 127,663 | | - Iceland | 9,357 | 12,365 | | - Ireland | 7,567 | 6,925 | | - Italy | 40,758 | 42,327 | | - Netherlands | 36,259 | 40,645 | | - Norway | 67,723 | 53,144 | | - Portugal | 8,649 | 9,434 | | - Spain | 21,018 | 26,305 | | - Sweden | 85,024 | 71,033 | | - Switzerland | 54,093 | 40,536 | | | **539,756** | **499,946** | The investment portfolio is set out on pages 17 and 18. 64 | European Assets Trust PLC Financial Statements Overview Statement Statement Foreign Report Government Report Leibler Report Financial Statements Other Information # **13. Other receivables** | | 2021 £'000s | 2020 £'000s | | --- | --- | --- | | Prepayments | 55 | 29 | | Overseas taxation recoverable | 2,625 | 2,247 | | | **2,680** | **2,276** | # **14. Other payables** | | 2021 £'000s | 2020 £'000s | | --- | --- | --- | | Investments purchased awaiting settlement | – | 194 | | Loan Interest | 8 | 28 | | Accruals | 147 | 93 | | | **155** | **315** | # **15. Borrowings** In March 2021 the Company entered into a €45 million multi-currency revolving loan facility with RBS International expiring March 2022 and subject to compliance with loan covenants. These Covenants have all been met during the year. The interest rate on the amount drawn down and commitment fees payable on undrawn amounts are based on commercial terms agreed with RBS International. As at 31 December 2021 the Company had drawn down €30 million of the loan facility. Following the year end, the Company has agreed to refinance its loan facility with The Bank of Nova Scotia, London Branch. # **16. Share capital** | | 2021 issued, allotted and fully paid | | 2020 issued, allotted and fully paid | | | --- | --- | --- | --- | --- | | | Number | £'000s | Number | £'000s | | **Ordinary shares of £0.10 each** | | | | | | Balance brought forward | 360,069,279 | 37,506 | 359,934,706 | 37,493 | | Issued as scrip | – | – | 134,573 | 13 | | **Balance at 31 December** | **360,069,279** | **37,506** | **360,069,279** | **37,506** | No further shares have been bought back or issued since the year end. # **17. Distributable reserve** | | 2021 £'000s | 2020 £'000s | | --- | --- | --- | | Balance brought forward | 346,054 | 369,191 | | Dividends paid from distributable reserve | (23,360) | (23,122) | | Costs associated with share issues | – | (15) | | **Balance carried forward** | **322,694** | **346,054** | Report and Accounts 2021 | 65 Financial Statements 18. Capital & Revenue Reserves | | Capital | | | | Capital | | Capital | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | reserve | | | | reserve | | reserve | | | Revenue | | | | - realised | | | | - unrealised | | | - Total | | | reserve | | | | | £’000s | | | | £’000s | | £’000s | | | | £’000s | | | | 39,828 | | | | | – | 39,828 | | | | | – | | | | | – | | 63,064 | | 63,064 | | | | | – | | | | 453 | | | | 16 | | 469 | | | | – | | | (2,954) | | | | | – | (2,954) | | | | | – | | | | (201) | | | | – | | (201) | | | | – | | | | | (7) | | | – | | | (7) | | | – | | | | | – | | | – | | | – | | 5,444 | | | | 37,119 | | | | 63,080 | | 100,199 | | | | 5,444 | | | | | | – | | | – | | | – | | (5,444) | | | | (44,937) | | | | 133,399 | | 88,462 | | | | | – | (7,818) 196,479 188,661 – 19. Net asset value per ordinary share 2021 145.93 525,435 360,069,279 20. Reconciliation of total return before taxation to net cash flows from operating activities 2021 £’000s 106,580 (102,892) (477) 7 (8,157) 251 (26) 54 (111,240) (4,660) 66 | European Assets Trust PLC Net cash outflows from operating activities (before dividends received and interest paid) (65,739) Management fee (see note 5) Finance costs (see note 8) Other capital charges (see note 6) There were no special dividends recognised as capital during the year (2020: £nil). Net assets attributable at the year end - (£'000s) (3,785) (Increase) / decrease in other debtors (63,376) (3,934) Dividends paid in year (see note 10) Foreign exchange movements Foreign exchange gains Non-operating expenses of a capital nature Adjustments for non-cash flow items, dividend income and interest expense: Net asset value per share - pence The net asset value per share is based on the net assets attributable to the ordinary Interest payable Net return on ordinary activities before taxation Movements in the year: Gains on investments sold in year Gains on investments held at year end Number of ordinary shares in issue at the year end 360,069,279 478,004 1,330 61,954 Return attributable to shareholders Balance at 31 December 2021 Revenue return 132.75 shares in issue as at 31 December: 2020 Gains on investments Dividend income receivable Increase in other creditors 116 95 18 2020 £’000s Balance at 31 December 2020 12 202030 BMO EAT AR21 Text PRINT.indd 66202030 BMO EAT AR21 Text PRINT.indd 66 22/03/2022 07:3922/03/2022 07:39 OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information 21. Reconciliation of liabilities arising from financing activities 2021 | Bank loans | | Total | | --- | --- | --- | | | £’000s | £’000s | | | 26,853 | 26,853 | | | 8,538 | 8,538 | | | (8,500) | (8,500) | | | (1,703) | (1,703) | 25,188 25,188 22. Financial risk management Report and Accounts 2021 | 67 (a) Market risks Directors’ Report. The Directors’ policies and processes for managing the financial risks are set out in (a), (b) and (c) on the following pages. (“UK”) as an investment trust under the provisions of section 1158 of the CTA. In so qualifying, the Company is exempted in the UK from risks are principally related to the market (currency movements, interest rate changes and security price movements), liquidity and credit. corporation tax on capital gains on its portfolio of investments. companies with regard to distribution across the European countries, sectors and individual stocks, assessing exposure to market risks when making each investment decision and monitors the ongoing market risk within the portfolio. The Company's use of leverage and borrowings can increase its exposure to these risks, which in turn can also increase the potential returns it can against the assets of the Company up to a level of 20 per cent of assets as permitted under the Articles of Association. The Company invests in equities in order to achieve its investment objective, which is to achieve growth of capital through investment in quoted small and medium-sized companies in Europe, excluding the United Kingdom. In pursuing this objective, the Company is exposed to financial risks The accounting policies which govern the reported Balance Sheet carrying values of the underlying financial assets and liabilities, as well as the related income and expenditure, are set out in note 2. The policies are in compliance with International accounting standards and best practice. The Company does not make use of hedge accounting rules. Financial liabilities brought forward The Board, together with the Manager, is responsible for the Company’s risk management, as set out in detail in the Strategic Report and The Company is an investment company, listed on the London Stock Exchange, and conducts its affairs so as to qualify in the United Kingdom The fair value of equity and other financial securities including derivatives held in the Company’s portfolio fluctuates with changes in market prices. Prices are themselves affected by movements in currencies and interest rates and by other financial issues, including the market perception of future risks. The Board sets policies for managing these risks within the Company’s objective and meets regularly to review full, timely and relevant information on investment performance and financial results. The Manager minimises the price risk by making a balanced selection of Effect of movement in foreign exchange achieve. The Company has specific limits on these instruments to manage the overall potential exposure. These limits include the ability to borrow which could result in a reduction in the Company's value of the net assets and profits available for distribution by way of dividend. These financial Repayment of bank loans 26,853 26,853 26,853 26,853 Financial Statements Non-cash: Cash-flows: Financial liabilities carried forward Drawdown of bank loans Bank loans £’000s 2020 Total £’000s – – – – – – 202030 BMO EAT AR21 Text PRINT.indd 67202030 BMO EAT AR21 Text PRINT.indd 67 22/03/2022 07:3922/03/2022 07:39 Financial Statements 22. Financial risk management (continued) 2021 % 22.5 19.0 19.3 15.4 9.7 8.9 4.1 1.1 – 100.0 2021 | Increase | Decrease | | --- | --- | | in value | in value | | £’000s | £’000s | 107,951 (107,951) 29.98 (29.98) 2021 £’000s 34,453 67,723 12,709 85,024 41,384 241,293 68 | European Assets Trust PLC (a) Market risks (continued) (b) Currency risk (99,989) (27.77) The Company invests in securities denominated in European currencies other than the Euro which gives rise to currency risk. It is not the Based on the portfolio of investments held at each Balance Sheet date, and assuming other factors, including the management charge, remain constant, an increase or decrease in the fair value of the portfolio in Euro terms by 20% would have had the following approximate effects on Technology Norwegian Krone Pound Sterling Income earned on foreign currencies is converted to Euros on receipt. The Board regularly monitors the effects on net revenue of interest earned on deposits and paid on gearing. Details of the geographical exposure of investments can be found in note 12, the table below is a summary of the sector concentrations with Company's policy to hedge this risk. The table below is a summary of the Company currency exposure: Capital return NAV per share – pence the net capital return attributable to Shareholders and on the NAV per share: Company's securities portfolio: Consumer Discretionary Consumer Staples the portfolio: 33,788 71,033 198,501 53,144 13,268 27,268 99,989 100.0 Utilities Total 2020 % 23.8 15.0 19.8 13.6 8.8 9.6 3.1 3.8 Swiss Franc 2020 £’000s Increase in value £’000s 2020 Decrease in value £’000s 2.5 Industrials Financials Health Care Basic Materials Real Estate Danish Krone Swedish Krona 27.77 202030 BMO EAT AR21 Text PRINT.indd 68202030 BMO EAT AR21 Text PRINT.indd 68 22/03/2022 07:3922/03/2022 07:39 OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information 22. Financial risk management (continued) 2021 £’000s 472 26,887 27,359 7.6 0 2021 £’000s (386) (21,998) (22,384) (6.22) | | | | | | | Cash | | Short-term | | | Short-term | | | Net monetary | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Short-term | | | | and cash | | | | creditors | | | creditors | | (liabilities)/ | | | | | | | Net | | | | debtors | | equivalents | | | | | - other | | | - loans | | | assets | | Investments | | exposure | | | | 2021 | | £’000s | | | £’000s | | | | £’000s | | | £’000s | | | £’000s | | | £’000s | | £’000s | | | | | | 1,840 | | | 8,342 | | | | (8) | | (25,188) | | | (15,014) | | | 298,463 | | 283,449 | | | | | | 242 | | | | – | | | – | | | – | | | 242 | | 34,453 | | 34,695 | | | | | | 355 | | | | – | | | – | | | – | | | 355 | | 67,723 | | 68,078 | | | | | | 56 | | | | – | | (147) | | | | – | | | (91) | | 12,709 | | 12,618 | | | | | | 24 | | | | – | | | – | | | – | | | 24 | | 85,024 | | 85,048 | | | | | | 163 | | | | – | | | – | | | – | | | 163 | | 41,384 | | 41,547 | | 2,680 8,342 (155) (25,188) (14,321) 539,756 525,435 Report and Accounts 2021 | 69 (5.06) (18,208) (b) Currency risk (continued) (129) (18,079) result of the differing functional currency and dividend payment currency. See page 20 for further details. accordance with the investment and risk management processes. As this analysis only reflects financial assets and liabilities, it does not include the impact of currency exposures on the management fee. Weakening of Euro by 10% against other currencies Strengthening of Euro by 10% against other currencies Pound Sterling During the year, the Company entered in to Forward Currency Contracts for the purpose of hedging the Euro to Pound Sterling exposure as a These effects are representative of the Company’s activities although the level of the Company’s exposure to the other currencies fluctuates in Based on the financial assets and liabilities held and the exchange rates applying at the Balance Sheet date, a weakening or strengthening of Euro against other currencies by 10% would have the following approximate effect on returns attributable to Shareholders and on the NAV per Norwegian Krone Net capital return attributable to Shareholders NAV per share – pence Net capital return attributable to Shareholders NAV per share – pence The fair values of the Company’s assets and liabilities at 31 December by currency are shown below: 22,255 22,097 Financial Statements 6.18 Net total return attributable to Shareholders Net total return attributable to Shareholders Total Euro Danish Krone Swiss Franc Net revenue return attributable to Shareholders 158 Net revenue return attributable to Shareholders 2020 £’000s 2020 £’000s Swedish Krona share. 202030 BMO EAT AR21 Text PRINT.indd 69202030 BMO EAT AR21 Text PRINT.indd 69 22/03/2022 07:3922/03/2022 07:39 Financial Statements 22. Financial risk management (continued) | Within | More than | | | | 2021 | | --- | --- | --- | --- | --- | --- | | one year | | one year | | Net total | | | £’000s | | £’000s | | £’000s | | | 8,342 | | | – | | 8,342 | | (25,188) | | | – | (25,188) | | (16,846) – (16,846) 2021 | Increase | | Decrease | | | | --- | --- | --- | --- | --- | | in rate | | | in rate | | | £’000s | | | £’000s | | | | 33 | | | (447) | | | 67 | | | 270 | 100 (177) 0.028 (0.049) 70 | European Assets Trust PLC | (b) Currency risk (continued) (c) Interest rate risk (315) (26,853) (21,942) (191) (5) (60) (468) (0.024) (71) (44) (liabilities) (53) (26,853) (22,315) (26,853) (26,853) (23,903) (23,903) (86) Exposure to floating rates: Based on the financial assets and liabilities held and the interest rates ruling at each balance sheet date, an increase or decrease in interest Pound Sterling investment and risk management processes. Norwegian Krone Interest rate risk is the risk that the value of a financial instrument will fluctuate as a result of changes in interest rates. When the Company retains cash balances, the cash is held with approved banks, usually on overnight deposit. In addition, the Company has a bank loan facility which is exposed to a floating interest rate risk. Interest received or paid on cash balances and bank overdrafts is at market rates and is monitored and reviewed by the investment manager and the board. rates of 2% would have the following approximate effects on the Income Statement revenue and capital returns after tax and on the NAV per Exposures vary throughout the year as a consequence of changes in the composition of the net assets of the Company arising out of the The Company had no exposure to fixed interest rates at the year end. Capital return equivalents exposure one year one year Net exposure The exposure of the financial assets and liabilities to interest rate movements at 31 December was: NAV per share – pence Cash and cash equivalents Net monetary assets/ 27,268 27,458 71,033 71,058 33,788 33,995 53,144 53,139 2,276 2,950 499,946 478,004 2,950 2,950 13,268 13,224 1,641 2,950 301,445 279,130 2020 Total return Total Swiss Franc 186 190 190 Revenue return 0.010 share: 96 382 Short-term debtors £’000s Cash and cash £’000s Short-term creditors - other £’000s Short-term creditors - loans £’000s £’000s Investments £’000s Net £’000s Euro £’000s More than £’000s 2020 Net total £’000s Loans 36 Swedish Krona 25 25 Increase in rate £’000s 2020 Decrease in rate £’000s Danish Krone 207 207 Within 27 | | --- | | – – – – – – – – – – – – – – – – | | 202030 BMO EAT AR21 Text PRINT.indd 70202030 BMO EAT AR21 Text PRINT.indd 70 22/03/2022 07:3922/03/2022 07:39 | Financial Statements Overview Statement Statement Strategy Report Investment Report ลบัตร (Report) Financial Statements Other Information ## 22. Financial risk management (continued) ### (d) Credit risk and counterparty exposure Credit and Counterparty risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The Company has in place a monitoring procedure in respect of counterparty risk which is reviewed on an ongoing basis. The carrying amounts of financial assets best represent the maximum credit risk exposure at the balance sheet date. Credit risk arising on transactions with brokers relates to transactions awaiting settlement. Risk relating to unsettled transactions is considered to be small due to the short settlement period involved and the financial stability and credit quality of the brokers used, which are monitored on an ongoing basis by the investment manager. The investment manager also monitors the quality of service provided by the brokers used to further mitigate this risk. The Company has an ongoing contract with its custodian for the provision of custody services. The contract is reviewed regularly. Details of securities held in custody on behalf of the Company are received and reconciled monthly. The Company's Depositary, JP Morgan Europe Limited, has regulatory responsibilities relating to segregation and safe keeping of the Company's financial assets, amongst other duties, as set out in the Directors' Report. The Board has direct access to the Depositary and receives regular reports from it via the Manager. To the extent that the Manager carries out management and administrative duties (or causes similar duties to be carried out by third parties) on the Company's behalf, the Company is exposed to counterparty risk. The Board assesses this risk through regular meetings with the management of BMO GAM (including the Fund Manager) and with its Risk Management function. In reaching its conclusions, the Board also reviews BMO GAM's annual Audit and Assurance Faculty Report. In summary, compared to the amounts held at the balance sheet date of Enil, the maximum exposure to credit risk during the year was Enil (2020: Balance Sheet: Enil; maximum exposure: Enil). None of the Company's financial liabilities is past its due date or impaired. ### (e) Liquidity risk The Company is required to raise funds to meet commitments associated with financial instruments and share buybacks. These funds may be raised either through the realisation of assets or through increased borrowing. The risk of the Company not having sufficient liquidity at any time is not considered by the Board to be significant, given: the number of quoted investments held in the Company's portfolio (100% at 31 December 2021 and 100% at 31 December 2020); the liquid nature of the portfolio of investments; the industrial and geographical diversity of the portfolio (see pages 64 and 68); and the existence of a loan agreement. All investments are realisable within one year and therefore no detailed maturity analysis has been included. Cash balances are held with approved banks, usually on overnight deposit. The Manager reviews liquidity at the time of making each investment decision. The Board reviews liquidity exposure at each meeting. The Company has a €45 million unsecured revolving floating rate credit facility with RBS International, available until March 2022. From this date, the Company has agreed to refinance its credit facility with The Bank of Nova Scotia, London Branch until March 2023. ### (f) Fair values of financial assets and liabilities IFRS 13 requires disclosures relating to fair value measurements using a three-level hierarchy. The level within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement. Assessing the significance of a particular input requires judgement, considering factors specific to the asset or liability. The assets and liabilities of the Company are, in the opinion of the Directors, reflected in the Balance Sheet at fair value, or at a reasonable approximation thereof. Borrowings under loan and overdraft facilities do not have a value materially different from their capital repayment amount. ### (g) Capital risk management The objective of the Company is stated as being to achieve growth of capital through investment in quoted small and medium-sized companies in Europe, excluding the United Kingdom. In pursuing this objective, the Board has a responsibility for ensuring the Company's ability to continue as a going concern. It must therefore maintain an optimal capital structure through varying market conditions. This involves the ability to: issue and buy back share capital within limits set by the Shareholders in general meeting; borrow monies in the short and long term; and pay dividends to Shareholders out of current year revenue earnings as well as out of other distributable reserves. Changes to ordinary share capital are set out in note 16, dividend payments in note 10 and details of loans in note 15. Report and Accounts 2021 | 71 ### 23. Going Concern In assessing the going concern basis of accounting the Directors have had regard to the guidance issued by the Financial Reporting Council. They have also considered the Company's objective, strategy and policy, the current cash position of the Company, the availability of the loan facility and compliance with its covenants and the operational resilience of the Company and its service providers. At present the global economy is suffering considerable disruption due to the effects of the COVID-19 pandemic and the Directors have given serious consideration to the consequences for this Company. The Company has a €45 million multi-currency loan facility with RBSI which will expire on 18 March 2022. As at 31 December 2021 €30.0 million was drawdown. Following the year end the Company has agreed to refinance its facility with The Bank of Nova Scotia, London Branch on favourable terms. The Company has a number of banking covenants and at present the Company's financial position does not suggest that any of these are close to being breached. The primary risk is that there is a very substantial decrease in the net asset value of the Company in the short to medium term. Financial modelling has been undertaken to consider compliance with these covenants in several scenarios including the outcome of the 2008 Global Financial Crisis. These extreme but plausible scenarios indicate that the loan covenants would not be breached. In addition, the Directors have considered the remedial measures that are open to the Company if such a covenant breach appears possible. As at 17 March 2022, the latest practicable date before the publication of this report, borrowings amounted to €30.0 million. This is comparison to a net asset value of €508.5 million. In accordance with its investment policy the Company is invested mainly in readily realisable listed securities. These can be realised if necessary, to repay the loan facility and fund the cash requirements for future dividend payments. The Company operates within a robust regulatory environment. The Company retains title to all assets held by the Custodian. Cash is held with banks approved and regularly reviewed by the Manager and the Board. The Directors have noted that home working arrangements have been implemented at the Manager and many of the Company's key suppliers without any impact upon service delivery and operations. The Company's annual dividend, which is declared in Sterling, is determined by reference to the year-end net asset value. The Company manages any Sterling/Euro exchange rate exposure which may arise from the declaration of a Sterling denominated dividend by entering into specific matched forward currency hedging contracts. As at 31 December 2021 the Company had a Distributable Reserve of £322.7 million. Since the onset of the COVID-19 pandemic, the Company in common with many investment companies has suffered a reduction in dividend income. The amount of this reduction, while significant, has not had a material impact on either net asset value or distributable reserves. As at 31 December 2021 the Company had net current liabilities of £14.3 million. The Company invests in listed securities which can be realised to fund any short term cash shortfall that may arise. Based on this information the Directors believe that the Company has the ability to meet its financial obligations as they fall due for a period of at least twelve months from the date of approval of these financial statements. Accordingly, these financial statements have been prepared on a going concern basis. ### 24. Related party transactions The Directors of the Company are considered a related party. There are no transactions with the Board other than aggregated remuneration for services as Directors as disclosed in the Directors' Remuneration Report on pages 41 to 42 and as set out in note 7 to the financial statements. There are no outstanding balances with the Board at the year end. The beneficial interests of the Directors in the Ordinary shares of the Company are disclosed on page 42. ### 25. Transactions with the Manager Transactions between the Company and BMO Investment Business Limited are detailed in note 5 on management fees. The existence of an independent Board of Directors demonstrates that the Company is free to pursue its own financial and operating policies and therefore under the AIC SORP, the Manager is not considered a related party. ### 26. Subsequent Events Subsequent to the year end, investment valuations have fallen as a result of market reaction to the Russian invasion of Ukraine. As at 17 March 2022 (being the latest practicable date before publication of this report), this had resulted in an decrease in Net Asset Value of 18.4% to 119.2p and the Company's share price closing 19.3% lower at 113.0p compared to the Balance Sheet date. These movements relate to post year-end activity and will be reported in the Company's Report and Accounts for the year ended 31 December 2022. 72 | European Assets Trust PLC Other Information # Notice of Annual General Meeting of European Assets Trust PLC ## THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of the proposals referred to in this document or as to the action you should take, you should seek your own advice from a stockbroker, solicitor, accountant, or other independent professional adviser immediately. If you have sold or otherwise transferred all of your shares, please pass this document together with the accompanying documents to the purchaser or transferee, or to the person who arranged the sale or transfer, so they can pass these documents to the person who now holds the shares. ### European Assets Trust PLC (Incorporated in England and Wales under the Companies Act 2006 with registered number 11672363) Notice is hereby given that the fourth Annual General Meeting of Shareholders of European Assets Trust PLC, the “Company”, will be held on Tuesday, 17 May 2022 at 3.00 pm at Exchange House, Primrose Street, London, EC2A 2NY, to transact the following business. The resolutions to be proposed to the meeting are set out below. Resolutions 1 to 11 will be proposed as ordinary resolutions, meaning that for each of those resolutions to be passed, more than half the votes cast must be in favour. Resolutions 12 and 13 will be proposed as special resolutions, meaning that for either of those resolutions to be passed, at least three-quarters of the votes cast must be in favour. ### Ordinary Resolutions 1. 1. To receive and adopt the Directors' report and accounts for the year ended 31 December 2021 together with the Independent Auditor's Report thereon (the “2021 Report and Accounts”). 2. 2. To approve the Company's dividend policy with regard to quarterly payments as set out on page 20 of the Report and Accounts 2021. 3. 3. To approve the Directors' Remuneration Report for the year ended 31 December 2021 set out on pages 41 to 42 of the 2021 Report and Accounts. 4. 4. To re-appoint PricewaterhouseCoopers LLP as auditor to European Assets Trust PLC, to hold office from the conclusion of the meeting until the conclusion of the next general meeting at which accounts are laid before the Company. 5. 5. To authorise the Audit and Risk Committee to determine the remuneration of the auditor. 6. 6. To re-appoint Jack Perry to the Board of European Assets Trust PLC. 7. 7. To re-appoint Julia Bond to the Board of European Assets Trust PLC. 8. 8. To re-appoint Stuart Paterson to the Board of European Assets Trust PLC. 9. 9. To re-appoint Martin Breuer to the Board of European Assets Trust PLC. 10. 10. To re-appoint Pui Kei Yuen to the Board of European Assets Trust PLC. 11. 11. That, in accordance with section 551 of the Companies Act 2006 (the “Act”), the Directors be and they are hereby generally and unconditionally authorised to allot shares in the Company to an aggregate nominal amount of £3,600,692 equal to 10 per cent of the total issued share capital of the Company as at 17 March 2022. Unless previously varied, revoked or renewed, this authority shall expire at the conclusion of the Annual General Meeting of the Company in 2023, save that the Company may, before the expiry of any authority contained in this resolution, make an offer or agreement which would or might require shares to be allotted or rights to be granted after such expiry and the Directors may allot shares or grant rights in pursuance of such offer or agreement as if the authority conferred hereby had not expired. This authority is in substitution for all previous unexercised authorities conferred on the Directors in accordance with section 551 of the Act. ### Special Resolutions 12. That, subject to the passing of resolution 11, the directors be empowered pursuant to section 570 of the Companies Act 2006 (the “Act”) to allot equity securities (as defined in section 560 of the Act) for cash pursuant to the general authority conferred on them by resolution 11 and/or to sell equity securities held as treasury shares for cash pursuant to section 727 of the Act 2006, in each case as if section 561 of the Act did not apply to any such allotment or sale, provided that this power shall be limited to: Overview Document Statement Strategy Report Comments Report Author's Report General Comments Other Information Report and Accounts 2021 | 73 a) any such allotment and/or sale of equity securities in connection with an offer or issue by way of rights or other pre-emptive offer or issue, open for acceptance for a period fixed by the directors, to holders of shares (other than the Company) on the register on any record date fixed by the directors in proportion (as nearly as may be) to the respective number of shares deemed to be held by them, subject to such exclusions or other arrangements as the directors may deem necessary or expedient in relation to fractional entitlements, legal or practical problems arising in any overseas territory, the requirements of any regulatory body or stock exchange or any other matter whatsoever; and b) any such allotment and/or sale, otherwise than pursuant to sub-paragraph (a) above, of equity securities having an aggregate nominal value not exceeding the sum of £1,800,346 (being an amount equal to 5 per cent of the total issued share capital of the Company as at 17 March 2022, being the latest practicable date before the publication of this notice). This authority shall expire, unless previously varied, revoked or renewed by the Company in general meeting, at the conclusion of the Annual General Meeting of the Company in 2023, except that the Company may before such expiry make any offer or agreement which would or might require equity securities to be allotted or equity securities held as treasury shares to be sold after such expiry and the directors may allot equity securities and/or sell equity securities held as treasury shares in pursuance of such an offer or agreement as if the power conferred by this resolution had not expired. 13. That the Company be and it is hereby authorised in accordance with section 701 of the Companies Act 2006 (the "Act") to make market purchases (within the meaning of section 693(4) of the Act) of ordinary shares of 10 pence each in the capital of the Company ("Ordinary Shares") provided that: (i) the maximum number of Ordinary Shares authorised to be purchased shall be 10 per cent of the number of the Ordinary Shares in issue at the date on which this resolution is passed; (ii) the minimum price (exclusive of expenses) which may be paid for an Ordinary Share shall be 10p; (iii) the maximum price (exclusive of expenses) which may be paid for an Ordinary Share shall not be more than the highest of: (a) 5 per cent above the average of the middle market quotations of Ordinary Shares as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the date of purchase; (b) the price of the last independent trade on the trading venue where the purchase is carried out; and (c) the highest current independent purchase bid for any of the Ordinary Shares on that venue (iv) unless previously varied, revoked or renewed, the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the Company in 2023, save that the Company may, prior to such expiry, enter into a contract to purchase Ordinary Shares under such authority which will or might be executed wholly or partly after the expiration of such authority and may make a purchase of Ordinary Shares pursuant to any such contract. By order of the Board BMO Investment Business Limited 6th Floor Quartermile 4 7a Nightingale Way Edinburgh EH3 9EG 21 March 2022 A member who is entitled to attend and vote at this meeting is entitled to appoint one or more proxies to attend and, on a poll, vote on his/her behalf. Such a proxy need not also be a member of the Company. A Form of Proxy for use by Shareholders is enclosed with this Report. Completion of the Form of Proxy will not prevent a shareholder from attending the meeting and voting in person. 74 | European Assets Trust PLC OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information ## Notes ## to the Notice of Annual General Meeting www. eproxyappointment.com Report and Accounts 2021 | 75 (in the case of a poll taken otherwise than at or on the same day as the meeting or adjourned meeting) for the taking of the poll at which it is power of attorney or other authority under which it is signed (or a notarially certified copy of such authority) must be received by post or (during normal business hours only) by hand at the Company’s Registrar, Computershare Investor Services PLC, The Pavilions, Bridgwater (a “Nominated Person”) should note that the provisions in notes 2, 4 and 5 concerning the appointment of a proxy or proxies to attend Pursuant to Regulation 41(1) of the Uncertificated Securities Regulations 2001 (as amended) and for the purposes of section 360B of the Act, the Company has specified that only those members registered on the register of members of the Company at 3 p.m. on 13 May 2022 (the “Specified Time”) (or, if the meeting is adjourned to a time more than 48 hours after the Specified Time, by 11 p.m. on the day which is two agreement to give instructions to the member as to the exercise of voting rights at the meeting. A member who wishes to attend the AGM in person should arrive at the venue for the AGM in good time to allow their attendance to be where full instructions for the procedure are given. The Control Number, Shareholder Reference and PIN as printed a Nominated Person may have a right under an agreement between the Nominated Person and the member by whom he or she was later than 3.00 p.m. on 10 May 2022. Alternatively, voting directions can be submitted electronically at www.eproxyappointment.com by to ensure that both he and such person complies with their respective disclosure obligations under the Disclosure Guidance and Transparency best interest of the safety and wellbeing of the Shareholders, the Chairman may, in his sole discretion, limit the number of individuals in attendance at the meeting on health and safety grounds. Should any Shareholder not be permitted to attend the Annual General Meeting on such grounds, all of the notes to this notice and, in particular, any reference to attendance at the Meeting, whether by a Shareholder, its proxy or its corporate representative, shall be construed accordingly. Where any such limitation or restriction is put in place prior to the meeting, to the meeting. In addition, the Company may impose entry restrictions on certain persons wishing to attend the meeting in order to secure If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may have a right under such an registered. As they may be asked to provide evidence of their identity prior to being admitted to the AGM, it is advisable for members to Alternatively, members may register the appointment of a proxy for the meeting electronically, by accessing the website be received by Computershare Investor Services PLC not less than 48 hours before the time for holding the meeting or adjourned meeting or Road, Bristol BS99 6ZZ, not less than 48 hours before the time of the holding of the meeting or any adjournment thereof. Amended instructions must also be received by the Company’s Registrar by the deadline for receipt of Forms of Proxy. Any person receiving a copy of this notice as a person nominated by a member to enjoy information rights under section 146 of the Act the meeting in place of a member do not apply to a Nominated Person as only Shareholders have the right to appoint a proxy. However, nominated to be appointed, or to have someone else appointed, as a proxy for the meeting. member’s rights to attend, speak and vote at the meeting. A proxy need not be a member of the Company but must attend the meeting for the member’s vote to be counted. If a member appoints more than one proxy to attend the meeting, each proxy must be appointed to exercise the rights attached to a different share or shares held by that member. Investors holding shares in the Company through the BMO Investment Trust ISA, Lifetime ISA, Junior ISA, Child Trust Fund, General Investment entering the Control Number, Shareholder Reference Number and PIN as printed on the form of direction. Voting directions must be submitted Any person holding 3% or more of the voting rights in the Company who appoints a person other than the Chairman as their proxy will need If law or Government guidance so requires at the time of the meeting, or the Board otherwise determines that to do so would be in the Shareholders are strongly advised to appoint the chairman of the meeting as their proxy, as a third party proxy holder may not be admitted Account and/or Junior Investment Account should ensure that forms of direction are returned to Computershare Investor Services PLC not Investor Services PLC. The proxy appointment and any power of attorney or other authority under which the proxy appointment is made must to be used. If you want to appoint more than one proxy electronically please contact Computershare Investor Services PLC on 0370 889 4094. A Form of Proxy is provided with this notice for members. If a member wishes to appoint more than one proxy and so requires additional electronically no later than 3.00 p.m. on 9 May 2022. the orderly and proper conduct of the business in the accordance with the Articles. on the Form of Proxy will be required in order to use the electronic proxy appointment system. This website is operated by Computershare proxy forms, the member should contact Computershare Investor Services PLC on 0370 889 4094. To be valid, the Form of Proxy and any A member of the Company at the time set out in note 8 below is entitled to appoint one or more proxies to exercise all or any of the Other Information have some form of identification with them. 5. 8. 6. 3. Rules. 4. 7. 2. 1. 202030 BMO EAT AR21 Text PRINT.indd 75202030 BMO EAT AR21 Text PRINT.indd 75 23/03/2022 09:1523/03/2022 09:15 www.euroclear.com/CREST www. euroclear.com/CREST 76 | European Assets Trust PLC and any adjournment(s) thereof by using the procedures described in the CREST Manual. CREST Personal Members or other CREST sponsored also apply for the purpose of determining the entitlement of members to attend and vote (and for the purposes of determining the number CREST members and, where applicable, their CREST sponsors or voting service provider(s) should note that Euroclear UK & Ireland Limited apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service provider(s) are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings ( ). In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s specifications and must contain the information required for such instruction, as described in the CREST Manual (available via ). The message, proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID number 3RA50) by the latest time(s) for receipt of proxy appointments specified in notes 4 and 5. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Application Host) from which the issuer’s agent is able to retrieve the message by (a) the audit of the Company’s Accounts (including the auditors’ report and the conduct of the audit) that are to be laid before the The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001 (as amended). members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. days prior to the time of the adjourned meeting) shall be entitled to attend and vote at the meeting in respect of the number of shares of votes they may cast) at the adjourned meeting. Changes to the register of members after the relevant deadline shall be disregarded in (b) that you read these carefully as you will be bound by them and they will govern the electronic appointment of your proxy. be communicated to the appointee through other means a member provided that, if it is appointing more than one corporate representative, it does not do so in relation to the same shares. It is proxy must be lodged by 3.00 p.m. on 13 May 2022 in order to be considered valid. registered in their name at that time. If the meeting is adjourned to a time not more than 48 hours after the Specified Time, that time will publish on a website a statement setting out any matter relating to: Before you can appoint a proxy via this process you will need to have agreed to Proxymity’s associated terms and conditions. It is important does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should therefore no longer necessary to nominate a designated corporate representative. agreed by the Company and approved by the Registrar. For further information regarding Proxymity, please go to www.proxymity.io. Your meeting; CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the meeting determining the rights of any person to attend and vote at the meeting. any circumstances connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual Under section 527 of the Act, members meeting the threshold requirements set out in that section have the right to require the Company to Accounts and Reports were laid in accordance with section 437 of the Act. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as If you are an institutional investor you may be able to appoint a proxy electronically via the Proxymity platform, a process which has been 10. 13. 9. or 14. 11. 12. 202030 BMO EAT AR21 Text PRINT.indd 76202030 BMO EAT AR21 Text PRINT.indd 76 22/03/2022 07:3922/03/2022 07:39 Other Information Overview Statement Statement Strategy Report Consensus Report Author Report General Statements Other Information 15. The Company may not require the members requesting any such website publication to pay its expenses in complying with sections 527 or 528 of the Act. Where the Company is required to place a statement on a website under section 527 of the Act, it must forward the statement to the Company's auditor not later than the time when it makes the statement available on the website. The business which may be dealt with at the meeting includes any statement that the Company has been required under section 527 of the Act to publish on a website. 16. Any member permitted to attend the meeting has the right to ask questions. The Company must cause to be answered any question relating to the business being dealt with at the meeting put by a member attending the meeting. However, members should note that no answer need be given in the following circumstances: (a) if to do so would interfere unduly with the preparation of the meeting or would involve a disclosure of confidential information; (b) if the answer has already been given on a website in the form of an answer to a question; or (c) if it is undesirable in the interests of the Company or the good order of the meeting that the question be answered. 17. As at 17 March 2022, being the latest practicable date before the publication of this notice, the Company's issued capital consisted of 360,069,279 ordinary shares of 10 pence each carrying one vote each. Therefore, the total voting rights in the Company as at 17 March 2022 were 360,069,279. No shares are held in treasury. 18. This notice, together with information about the total number of shares in the Company in respect of which members are entitled to exercise voting rights at the meeting as at 17 March 2022 being the latest practicable date prior to the printing of this notice and, if applicable, any members' statements, members' resolutions or members' matters of business received by the Company after the date of this notice, will be available at www.europeanassets.co.uk. 19. Copies of the letters of appointment between the Company and its Directors; a copy of the Articles of Association of the Company; the register of Directors' holdings; and a deed poll relating to Directors' indemnities will be available for inspection at the registered office of the Company during usual business hours on any weekday (Saturdays, Sundays and Bank Holidays excluded) until the date of the meeting and also on the date and at the place of the meeting from 15 minutes prior to the commencement of the meeting to the conclusion thereof. 20. No Director has a service agreement with the Company. 21. Under sections 338 and 338A of the Act, members meeting the threshold requirements in those sections have the right to require the Company: (a) to give, to members of the Company entitled to receive notice of the meeting, notice of a resolution which may properly be moved and is intended to be moved at the meeting, and/or (b) to include in the business to be dealt with at the meeting any matter (other than a proposed resolution) which may be properly included in the business 22. Such a request may be in hard copy form or in electronic form, and must identify the resolution of which notice is to be given or the matter to be included in the business, must be authorised by the person or persons making it, must be received by the Company not later than six clear weeks before the meeting, and (in the case of a matter to be included in the business only) must be accompanied by a statement setting out the grounds for the request. Report and Accounts 2021 | 77 ## Other Financial Information (unaudited) Alternative Investment Fund Managers (‘AIFM’) Directive | Gross | Commitment | | | --- | --- | --- | | method | | method | | 200% | | 200% | | 103% | | 104% | www.europeanassets.co.uk Securities financing transactions ("SFTR") 78 | European Assets Trust PLC The maximum gross leverage is therefore 125% (equivalent to 20% of the book value of its securities portfolio). The Company has not, in the year to 31 December 2021 (2020: same), participated in any: repurchase transactions; securities lending or borrowing; buy-sell back transactions; margin lending transactions; or total return swap transactions (collectively called SFT). As such, it has no Investment Business Limited, is required to be made available to investors. Detailed regulatory disclosures including those on the AIFM's For the purposes of the AIFM Disclosure, leverage is any method which increases the Company's exposure, including the borrowing of cash and the use of derivatives. It is expressed as a percentage of the Company's exposure to its net asset value and is calculated on both a gross and Under the gross method, exposure represents the sum of the Company's positions after deduction of cash balances, without taking account of any hedging or netting arrangements. Under the commitment method, exposure is calculated without the deduction of cash balances and after certain hedging and netting positions are offset against each other. The Company’s maximum and actual leverage levels at 31 December 2021 are shown below: In accordance with the AIFM Directive, information in relation to the Company’s leverage and the remuneration of the Company’s AIFM, BMO disclosure to make in satisfaction of the EU regulations on transparency of SFT, issued in November 2015. The Company's Articles of Association allow borrowings up to a maximum of 20% of its book value of the securities portfolio. The Company can only exceed this level of borrowing with the prior approval of shareholders at a general meeting. remuneration policy and costs are available on the Company's website or from BMO on request. An Investor Disclosure Document is available on Maximum limit Actual commitment method. . 202030 BMO EAT AR21 Text PRINT.indd 78202030 BMO EAT AR21 Text PRINT.indd 78 22/03/2022 07:3922/03/2022 07:39 OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information ## A Shareholder who ## invested £1,000 in the ## Company in 1983, when it ## listed on the London Stock ## Exchange, would have an ## investment of £41,000 as ## at 31 December 2021 on a ## total return basis. Report and Accounts 2021 | 79 Frankfurt, Germany 202030 BMO EAT AR21 Text PRINT.indd 79202030 BMO EAT AR21 Text PRINT.indd 79 22/03/2022 07:3922/03/2022 07:39 # Shareholder Information Dividends Shareholders who wish to have dividends paid directly into a bank account rather than by cheque to their registered address can complete a mandate form for the purpose. Mandates may be obtained from Computershare Investor Services PLC, The Pavilions, Bridgewater Road, Bristol, BS99 6ZJ on request. Where dividends are paid to Shareholders' bank accounts, dividend tax vouchers are sent directly to Shareholders' registered addresses. Share Price The Company's shares are listed on the London Stock Exchange. Prices are published daily in the Financial Times and other newspapers. Change of Address Communications with shareholders are mailed to the address held on the share register. In the event of a change of address or other amendment this should be notified to Computershare Investor Services PLC under the signature of the registered holder. Website Additional information regarding the Company may be found at its website address which is: www.europeanassets.co.uk Warning to Shareholders – Beware of Share Fraud Fraudsters use persuasive and high-pressure tactics to lure investors into scams. They may offer to sell shares that turn out to be worthless or non-existent, or to buy shares at an inflated price in return for an upfront payment. If you receive unsolicited investment advice or requests - Check the Financial Services Register at www.fca.org.uk to see if the person or firm contacting you is authorised by the Financial Conduct Authority ('FCA') - Call the FCA on 0800 111 6768 if the firm does not have contact details on the Register or you are told they are out of date - Search the list of unauthorised firms to avoid at www.fca.org.uk/scams - Consider that if you buy or sell shares from an unauthorised firm you will not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme - Think about getting independent financial and professional advice If you are approached by fraudsters please tell the FCA by using the share fraud reporting form at www.fca.org.uk/scams where you can find out more about investment scams. You can also call the FCA Consumer Helpline on 0800 111 6768. If you have already paid money to share fraudsters you should contact Action Fraud on 0300 123 2040. 80 | European Assets Trust PLC Other Information # How to Invest One of the most convenient ways to invest in European Assets Trust PLC is through one of the savings plans run by BMO. BMO ISA You can use your ISA allowance to make an annual tax-efficient investment of up to £20,000 for the current tax year with a lump sum from £100 or regular savings from £25 a month. You can also transfer any existing ISAs to us whilst maintaining the tax benefits. BMO Junior ISA (JISA)* A tax efficient way to invest up to £9,000 per tax year for a child. Contributions start from £100 lump sum or £25 a month. JISAs or CTFs with other providers can be transferred to BMO. BMO Lifetime ISA (LISA) For those aged 18-39, a Lifetime ISA could help towards purchasing your first home or retirement in later life. Invest up to £4,000 for the current tax year and receive a 25% Government bonus up to £1,000 per year. Invest with a lump sum from £100 or regular savings from £25 a month. BMO Child Trust Fund (CTF)* If your child already has a CTF you can invest up to £9,000 per birthday year, from £100 lump sum or £25 a month. CTFs with other providers can be transferred to BMO. BMO General Investment Account (GIA) This is a flexible way to invest in our range of Investment Trusts. There are no maximum contributions, and investments can be made from £100 lump sum or £25 a month. BMO Junior Investment Account (JIA) This is a flexible way to save for a child in our range of Investment Trusts. There are no maximum contributions, and the plan can easily be set up under bare trust (where the child is noted as the beneficial owner) or kept in your name if you wish to retain control over the investment. Investments can be made from a £100 lump sum or £25 a month per account. You can also make additional lump sum top-ups at any time from £100 per account. *The CTF and JISA accounts are opened by parents in the child's name and they have access to the money at age 18. **Calls may be recorded or monitored for training and quality purposes. Charges Annual management charges and other charges apply according to the type of plan. Annual account charge ISA/LISA: £60+VAT GIA: £40+VAT JISA/JIA/CTF: £25+VAT You can pay the annual charge from your account, or by direct debit (in addition to any annual subscription limits). Dealing charges £12 per fund (reduced to £0 for deals placed through the online BMO Investor Portal) for ISA/GIA/LISA/JIA and JISA. There are no dealing charges on a CTF. Dealing charges apply when shares are bought or sold but not on the reinvestment of dividends or the investment of monthly direct debits. Government stamp duty of 0.5% also applies on the purchase of shares (where applicable). The value of investments can go down as well as up and you may not get back your original investment. Tax benefits depend on your individual circumstances and tax allowances and rules may change. Please ensure you have read the full Terms and Conditions, Privacy Policy and relevant Key Features documents before investing. For regulatory purposes, please ensure you have read the Pre-sales Cost & Charges disclosure related to the product you are applying for, and the relevant Key Information Documents (KIDs) for the investment trusts you want to invest into. How to Invest To open a new BMO plan, apply online at bmogam.com/apply Online applications are not available if you are transferring an existing plan with another provider to BMO, or if you are applying for a new plan in more than one name but paper applications are available at bmoinvestments.co.uk/documents or by contacting BMO. New Customers Call: 0800 136 420** (8.30am – 5.30pm, weekdays) Email: info@bmogam.com Existing Plan Holders Call: 0345 600 3030** (9.00am – 5.00pm, weekdays) Email: investor.enquiries@bmogam.com By post: BMO Administration Centre PO Box 11114 Chelmsford CM99 2DG You can also invest in the trust through online dealing platforms for private investors that offer share dealing and ISAs. Companies include: Barclays Stockbrokers, EQi, Halifax, Hargreaves Lansdown, HSBC, Interactive Investor, Lloyds Bank, The Share Centre bmoinvestments.co.uk facebook.com/bmoinvestmentsuk 0845 600 3030, 9.00am – 5.00pm, weekdays, calls may be recorded or monitored for training and quality purposes BMO Asset Management Limited ©2021 BMO Asset Management Limited is authorised and regulated by the Financial Conduct Authority. BMO Asset Management Limited is a wholly owned subsidiary of Columbia Throidneedle Investments UK International Limited, whose direct parent is Ameripine Inc., a company incorporated in the United States. BMO Asset Management Limited was formerly part of BMO Financial Group and is currently using the "BMO" mark under licence. Report and Accounts 2021 | 81 Overview Comment Statement Design Report Comment Report Author Report General Comments Other Information ## Ten Year Record 82 | European Assets Trust PLC | (16.3) (13.6) (15.4) (12.7) ( 7. 3) (12.8) (12.0) (1.9) (23.3) * European Assets Trust NV prior to the migration on 16 March 2019. Dividends prior to 16 March 2019 are shown gross of Dutch withholding tax. For comparison purposes, historical values have been adjusted for the ten for one stock split effective 3 May 2018. n/a n/a n/a n/a n/a n/a n/a n/a Sterling Total Return per share per share per share per share per share per share price price from previous value per value per Dividends/ Dividends/ year † † † † † † † † † † 2018* 2016* 102.2 1.197 112.19 1.314 0.09429 21.8 6.4 23.3 2017* 130.8 129.85 1.463 0.08220 18.0 18.6 22.6 23.3 2015* 2012* 69.2 0.854 74.34 0.917 0.04698 32.0 20.4 28.2 17.0 2013* 96.4 1.159 96.86 1.164 0.05757 22.5 34.4 34.0 37.8 37. 5 2020 120.3 1.343 132.75 1.480 0.07947 7.020 15.4 12.6 21.9 18.9 2021 139.5 1.662 145.93 1.740 0.09285 8.000 16.8 24.0 22.5 16.3 14.9 2014* 98.7 98.05 1.263 0.07221 25.4 15.3 5.2 7.6 2019 110.0 1.300 116.17 1.370 0.07136 26.9 27.8 19.8 20.6 93.0 1.036 102.73 1.140 0.09298 13.1 1.529 112.01 1.520 0.07743 26.9 23.5 20.5 Net asset Net asset Movement Net asset Net asset share Benchmark share Benchmark 31 December Pence Euro Pence Euro Euro Pence % % % % % value value distributions distributions Euro Total Return Market Market 7.4 1.474 11.4 1.272 112.7 7. 2 17. 2 ∞ | | --- | | ∞ ∞ ∞ ∞ ∞ ∞ ∞ | | 202030 BMO EAT AR21 Text PRINT.indd 82202030 BMO EAT AR21 Text PRINT.indd 82 22/03/2022 07:3922/03/2022 07:39 | Other Information # Alternative Performance Measures The Company uses the following Alternative Performance Measures ("APMs"). APMs do not have a standard meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other entities. No new APMs have been identified or added since the prior year end. **Discount or Premium** – the share price of an Investment Company is derived from buyers and sellers trading their shares on the stock market. This price is not identical to the net asset value ("NAV") per share of the Company. If the share price is lower than the NAV per share, the shares are trading at a discount. This usually indicates that there are more sellers of shares than buyers. The discount is shown as a percentage of the NAV per share. Shares trading at a price above NAV per share are deemed to be at a premium | | | 31 December 2021 Pence | 31 December 2020 Pence | | --- | --- | --- | --- | | Net Asset Value per share | (a) | 145.93 | 132.75 | | Share price per share | (b) | 139.50 | 120.25 | | **Discount (c = (b-a)/a)** | (c) | **(4.4%)** | **(9.4%)** | **Gearing** – this is the ratio of the borrowings of the Company to its net assets. Borrowings have a "prior charge" over the assets of a company, ranking before ordinary Shareholders in their entitlement to capital and/or income. They may include: preference shares; debentures; overdrafts and short and long-term loans from banks; and derivative contracts. If the Company has cash assets, these may be assumed either to net off against borrowings, giving a "net" or "effective" gearing percentage, or to be used to buy investments, giving a "gross" or "fully invested" gearing figure. Where cash assets exceed borrowings, the Company is described as having "net cash". The Company's maximum permitted level of gearing is set by the Board and is described within the Strategic Report and Directors' Report. | | | 31 December 2021 £'000 | 31 December 2020 £'000 | | --- | --- | --- | --- | | Loan | | 25,188 | 26,853 | | Less Cash and cash equivalents | | (8,342) | (2,950) | | Total | (a) | 16,846 | 23,903 | | Net Asset Value | (b) | 525,435 | 478,004 | | **Gearing/(net cash) (c = a/b)** | (c) | **3.2%** | **5.0%** | **Ongoing Charges** – all operating costs expected to be incurred in future and that are payable by the Company, expressed as a proportion of the average net assets of the Company over the reporting year (see Historic Record). The costs of buying and selling investments and derivatives are excluded, as are interest costs, taxation, non-recurring costs and the costs of buying back or issuing shares. | | | 31 December 2021 £'000 | 31 December 2020 £'000 | | --- | --- | --- | --- | | **Ongoing charges calculation** | | | | | Management fees | | 3,693 | 2,911 | | Other expenses | | 995 | 904 | | Less loan commitment/arrangement fees | | (1) | (26) | | Less ad-hoc non-recurring expenses | | (93) | (11) | | Total | (a) | 4,594 | 3,778 | | Average net assets | (b) | 515,419 | 397,769 | | **Ongoing charges (c = a/b)** | (c) | **0.89%** | **0.95%** | Report and Accounts 2021 | 83 Overview Summary Statement Strategy Report Operating Report Author Report General Comments Other Information **Total Return** - the theoretical return to shareholders calculated on a per share basis by adding dividends paid in the period to the increase or decrease in the Share Price or NAV in the period. The dividends are assumed to have been re-invested in the form of shares or net asset, respectively, on the date on which the shares were quoted ex-dividend. | | Net asset value | Share price | | --- | --- | --- | | NAV/share price per share at 31 December 2020 (pence) | 132.75 | 120.30 | | NAV/share price per share at 31 December 2021 (pence) | 145.93 | 139.50 | | Change in the year | 9.9% | 16.0% | | Impact of dividend reinvestments | 6.4% | 7.2% | | **Total return for the year** | **16.3%** | **23.2%** | 84 | European Assets Trust PLC Other Information # Glossary of Terms **AIC** – Association of Investment Companies, is the UK trade body for closed-end investment companies (www.theaic.co.uk). **AIFMD** – Alternative Investment Fund Managers Directive. Issued by the European Parliament in 2012 and 2013, the Directive requires that all investment vehicles (AIF – Alternative Investment Fund) in the European Union must have appointed a Depositary and an Alternative Investment Fund manager on or before 22 July 2014. The Directors of the Company nevertheless, remains fully responsible for all aspects of the Company's strategy, operations and compliance with regulations. **AIF Manager** – The AIF Manager, BMO Investment Business Limited, is responsible for the provision of investment management services to the Company. **Benchmark** – This is a measure against which the Company's performance is compared. The Company's benchmark is the EMIX Smaller European Companies (ex UK) Index. **Custodian** – A specialised financial institution responsible for safeguarding worldwide the listed securities and certain cash assets of the Company, as well as the income arising therefrom, through provision of custodial, settlement and associated services. The Company's custodian is JP Morgan Chase Bank NA. **Depository** – Under AIFMD rules applying from July 2014, the Company must appoint a depositary, whose duties in respect of investments, cash and similar assets include: safekeeping; verification of ownership and valuation; and cash monitoring. Under AIFMD regulations, the depositary has strict liability for the loss of the Company's financial assets in respect of which it has safekeeping duties. The depositary's oversight duties include, but are not limited to dividend payments and adherence to investment limits. The Company's depositary is JP Morgan Chase Bank NA. **Dividend** – The income from an investment. The Company currently pays dividends to shareholders four times per year in January, April, July and October. The rate of the dividend is announced in January each year and is set at an annual yield of six per cent to the net asset value at the end of the preceding year. In January 2020 the Board announced that the Company would declare its annual dividend in Sterling. The previous practice was to declare in Euros. **Gearing** – The Company has the ability to borrow to invest within pre-determined limits. This term is used to describe the level of borrowings that the Company has undertaken, and is stated as a percentage of total assets less current liabilities. The higher the level of borrowings, the higher the gearing ratio. **Leverage** – As defined under AIFMD rules, leverage is any method by which the exposure of an AIF is increased through borrowing of cash or securities or leverage embedded in derivative positions. Leverage is broadly equivalent to Gearing, but is expressed as a ratio between the assets (excluding borrowings) and the net assets (after taking account of borrowing). Under the gross method, exposure represents the sum of the Company's positions after deduction of cash balances, without taking account of any hedging or netting arrangements. Under the commitment method, exposure is calculated without the deduction of cash balances and after certain hedging and netting positions are offset against each other. **Market Capitalisation** – The stock market value of a company is determined by multiplying the number of shares in issue, excluding those shares held in treasury, by the market price of the shares. **Net Assets (or Shareholders' Funds)** – This is calculated as the value of the investments and other assets of the Company, plus cash and debtors, less borrowings and any other creditors. It represents the underlying value of the Company at a point in time. **Ordinary Shares** – Shareholders are entitled to their share of both income, in the form of dividends paid by the Company and any capital growth. The Company has only Ordinary Shares in issue. **Scrip Dividend** – Historically Shareholders could elect to receive dividends by way of further shares in the Company rather than cash. Where shareholders so elect, they will receive shares based on the net asset value of the Company; the shares may trade in the market at a discount or premium to net asset value. The scrip dividend scheme was discontinued following the payment of the October 2020 dividend. **Share Price** – The value of a share at a point in time as quoted on a stock exchange. The Company's Ordinary Shares are quoted on the London Stock Exchange. Overview Comment Statement Strategy Report Comments Report Further Report General Comments Other Information Report and Accounts 2021 | 85 86 | European Assets Trust PLC 202030 BMO EAT AR21 Text PRINT.indd 86202030 BMO EAT AR21 Text PRINT.indd 86 22/03/2022 07:3922/03/2022 07:39 OverviewOverview Chairman’s statement Strategic Report Governance Report Auditors’ Report Financial Statements Other Information Report and Accounts 2021 | 87 Other Information 202030 BMO EAT AR21 Text PRINT.indd 87202030 BMO EAT AR21 Text PRINT.indd 87 22/03/2022 07:3922/03/2022 07:39 ## Timeline of the Company Initial portfolio mostly Roger Trust's Sister vehicle Mike Woodward Sir John Proudly managed by Dutch companies with Inglis shares Continental appointed lead Ward CBE a bias towards oil appointed listed Assets Trust investment appointed Chairman on LSE launched manager Chairman | Nadia Comaneci is | European flag | | | | Eur | | --- | --- | --- | --- | --- | --- | | | | | Disneyland | | B | | first Olympic gymnast | raised for the | | | | | | | | | Paris opens | ECB | | | to receive a perfect 10 | first time | Louvre | | | | | | | Pyramid | | | Pr | UK, Ireland Spain holds 1 st opens in European & Denmark democratic elections Team Europe Paris Economic Area EEA join European wins Ryder established Communities for 41 years Single Cup for the first time European Act First European in space ## 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 | Pre-1972: Mijbeb investment trust owned by C&A family | European | Centre | Civil war | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Council | Pompidou | in the | Maastricht | | | | | | | | | founded | opens in Paris | Balkans | Treaty | | | | | European Assets Trust | European | | | | | | | European Assets | Crispin Longden | Sam Cosh appointed | Jack Perry | introduces quarterly | Assets Trust | Austria, | | | | | | | First | | | Trust introduces | appointed lead | lead investment | CBE appointed | dividends and has | reaches £500m | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | OPEC | Ernö Rubik | Abolition of 25% | | | Single | Eurostar | Finland & | | | | | | | | | | | | | | | | | | High Dividend | investment | manager | Chairman | ten-for-one stock split | in total assets | | oil price | invents | investment currency | Schengen | Fall of | Market | passenger | Sweden join | F | | | | | | | | | | | | | | | | | Policy | manager | | | | | | shock | Rubik’s Cube | premium account | Agreement Black Monday | Berlin Wall | launched | train | the EU | Agr | | | | | | | opean Central Cyprus, Domain name “.eu” opens EU wins ECB begins .eu ank established Czechia, for all EU residents Nobel quantitative under the Estonia, easing Peace Prize | | | | | esidency of | | | | | | | measures | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | Hungary, | | | | | Christine Lagarde | | | | European Assets Trust launched as European | | Pascal De Salaberry | Peter Hadden | Wim Duisenberg | Jenni | | | | | Mario Draghi | | | | | | | | | | | | Euro | Latvia, | | | | | becomes ECB | | | | Community Trust NV to address the challenges | European Community | appointed | appointed lead | | appoi | | | | | delivers | | President | | | | | | | | | | adopted | Lithuania, | | | | | | | UK and | | posed by the UK’s dollar premium account | Trust NV renamed | lead investment | investment | | inves | | | Brent crude | Treaty of | “whatever | | | | | | | | | | | | in 12 EU | Malta, | | | it takes” | | | | EU agree | | | European Assets Trust NV | manager | manager | | man | | | oil price | Lisbon - | | | | | | | | | | | | | countries | Poland, | breaches | | speech | | | | post- | | | | | | | | | | | including | | UK votes | | | | | | | | | | | | Slovakia & | US$140pb | | pledging | | | | Brexit | | | | | | | | | | | Article 50 | | to leave | | | | | | | | | | | | Slovenia | | | support for | | | | trade deal | | | | | | | | | | | - becomes | | the EU | | Trade war | | | | | | | | | | join EU | | | the euro | | | | | law ## 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Covid-19 pandemic Brent crude oil price Croatia falls below Global joins EU US$20pb Financial | | | Angela | | | Launch | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | Crisis | | | | German | | | | Jean-Claude | Merkel | | | of EU’s | | | | | | | | | | | Paris | 10-yr bond | | | Good | Trichet | becomes | Romania | Onset of | Investment | Agreement | yield turns | | | riday | becomes ECB | Chancellor | & Bulgaria | sovereign | Plan for | on climate | negative for | | | eement | President | of Germany | join EU | debt crisis | Europe | change | first time | UK leaves EU | | 88 \| European Assets Trust PLC | fer Bacarisse | Millar Law | Paris Anand appointed | Lucy Morris | European Assets Trust moves domicile | | --- | --- | --- | --- | --- | --- | | | nted lead | appointed lead | lead investment manager; | appointed | from Netherlands to UK; delists from | | | tment | investment | Sam Cosh appointed | alternate fund | Amsterdam Stock Exchange; | | | ager | manager | fund manager | manager | renamed European Assets Trust PLC | Other Information 202030 BMO EAT AR21 Text PRINT.indd 88202030 BMO EAT AR21 Text PRINT.indd 88 22/03/2022 07:3922/03/2022 07:39 | | | | | European Assets Trust | European | | --- | --- | --- | --- | --- | --- | | European Assets | Crispin Longden | Sam Cosh appointed | Jack Perry | introduces quarterly | Assets Trust | | Trust introduces | appointed lead | lead investment | CBE appointed | dividends and has | reaches £500m | | High Dividend | investment | manager | Chairman | ten-for-one stock split | in total assets | | Policy | manager | | | | | European Central Cyprus, Domain name “.eu” opens EU wins ECB begins .eu Bank established Czechia, for all EU residents Nobel quantitative under the Estonia, easing Peace Prize | Presidency of | | | | | | measures | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Hungary, | | | | | Christine Lagarde | | | | Wim Duisenberg | | | | | Mario Draghi | | | | | | | Euro | Latvia, | | | | | becomes ECB | | | | | | | | | delivers | | President | | | | | adopted | Lithuania, | | | | | | | UK and | | | | | Brent crude | Treaty of | “whatever | | | | | | | in 12 EU | Malta, | | | it takes” | | | | EU agree | | | | | oil price | Lisbon - | | | | | | | | countries | Poland, | breaches | | speech | | | | post- | | | | | | including | | UK votes | | | | | | | Slovakia & | US$140pb | | pledging | | | | Brexit | | | | | | Article 50 | | to leave | | | | | | | Slovenia | | | support for | | | | trade deal | | | | | | - becomes | | the EU | | Trade war | | | | | join EU | | | the euro | | | | | law ## 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Covid-19 pandemic Brent crude oil price Croatia falls below Global joins EU US$20pb Financial | | | | | | | | | | Angela | | | Launch | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Initial portfolio mostly | Roger | Trust's | Sister vehicle | Mike Woodward | Sir John | | | | Crisis | | | | German | | | | | | | | | | | Jean-Claude | Merkel | | | of EU’s | | | | | Proudly managed by | Dutch companies with | Inglis | shares | Continental | appointed lead | Ward CBE | | | | | | | Paris | 10-yr bond | | | | | | | | | | Good | Trichet | becomes | Romania | Onset of | Investment | Agreement | yield turns | | | | a bias towards oil | appointed | listed | Assets Trust | investment | appointed | | | | | | | | | | | | | | | | | | Friday | becomes ECB | Chancellor | & Bulgaria | sovereign | Plan for | on climate | negative for | | | | | Chairman | on LSE | launched | manager | Chairman | | | | | | | | | | | | | | | | | | Agreement | President | of Germany | join EU | debt crisis | Europe | change | first time | UK leaves EU | Nadia Comaneci is European flag Disneyland | | first Olympic gymnast | | | raised for the | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | Paris opens | ECB | | | | | | | | to receive a perfect 10 | | | first time | Louvre | | | | | | | | | UK, Ireland | | | | | Pyramid | | | | | | | | | | | Spain holds 1 | st | | opens in | European | | Jennifer Bacarisse | Millar Law | Paris Anand appointed | Lucy Morris | European Assets Trust moves domicile | & Denmark democratic elections Team Europe Paris Economic Area EEA appointed lead appointed lead lead investment manager; appointed from Netherlands to UK; delists from join European wins Ryder established investment investment Sam Cosh appointed alternate fund Amsterdam Stock Exchange; Communities for 41 years Single Cup for the European Act manager manager fund manager manager renamed European Assets Trust PLC first time First European in space ## 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 | Pre-1972: Mijbeb investment trust owned by C&A family | European | Centre | Civil war | | | --- | --- | --- | --- | --- | | | Council | Pompidou | in the | Maastricht | | | founded | opens in Paris | Balkans | Treaty | Austria, First | OPEC | Ernö Rubik | Abolition of 25% | | | Single | Eurostar | Finland & | | --- | --- | --- | --- | --- | --- | --- | --- | | oil price | invents | investment currency | Schengen | Fall of | Market | passenger | Sweden join | | shock | Rubik’s Cube | premium account | Agreement Black Monday | Berlin Wall | launched | train | the EU | | European Assets Trust launched as European | | Pascal De Salaberry | Peter Hadden | 89 \| European Assets Trust PLC | | --- | --- | --- | --- | --- | | Community Trust NV to address the challenges | European Community | appointed | appointed lead | | | posed by the UK’s dollar premium account | Trust NV renamed | lead investment | investment | | | | European Assets Trust NV | manager | manager | | ## European Assets Trust PLC ## Report and Accounts 31 December 2021 Registered office: Exchange House, Primrose Street, London EC2A 2NY Tel No. 020 7628 8000 www.europeanassets.co.uk Info@bmogam.com Registrars: ### Computershare Investor Services PLC The Pavilions Bridgewater Road Bristol BS99 6ZZ Tel No. 0370 889 4094 computershare.com webqueries@computershare.com * Calls to this number cost 12p per minute plus network extras. Callers from outside the UK: +44(0) 208 639 3399 ©2021 BMO Asset Management Limited is authorised and regulated by the Financial Conduct Authority. BMO Asset Management Limited is a wholly owned subsidiary of Columbia Threadneedle Investments UK International Limited, whose direct parent is Ameriprise Inc., a company incorporated in the United States. BMO Asset Management Limited was formerly part of BMO Financial Group and is currently using the “BMO” mark under licence.