The Edinburgh Investment Trust plc ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 MARCH 2022
### The Edinburgh
## The Edinburgh
### Investment Trust plc
## Quartermile One Investment Trust plc
15 Lauriston Place
ANNUAL FINANCIAL REPORT
Edinburgh
FOR THE YEAR ENDED 31 MARCH 2022
EH3 9EP
## www.edinburghinvestmenttrust.com
## The Edinburgh
## Investment Trust plc
STRATEGY
OVERVIEW
 2-4
Chairman’s Statement 5-7
STRATEGIC REPORT
 9-12
 13
Business Review 14-15
 16-17
 18
 19-21
Viability Statement 22
 23-25
GOVERNANCE
The Directors 28-29
The Company’s Corporate Governance Framework 30
Corporate Governance Statement 31
 32-34
Directors’ Report 35-41
 42
 43-45
FINANCIAL REVIEW
Independent Auditor’s Report 47-53
Income Statement 54
Balance Sheet 55
Statement of Changes in Equity 56
Cash Flow Statement 57
Notes to the Financial Statements 58-75
OTHER INFORMATION FOR SHAREHOLDERS
 77-80
 81
Advisors and Principal Service Providers 82
 83-85
 86
If you wish to contact members of the Edinburgh Investment Trust The Company is a
Board then please get in touch with the Company Secretary on member of
+44 (0)20 3327 9720. If you have any enquiries for the Manager,
please contact them on +44 (0)20 7412 1700.
## www.edinburghinvestmenttrust.com
THE EDINBURGH INVESTMENT TRUST PLC / OVERVIEW / 1
## Investment Objective
The Edinburgh Investment Trust plc (‘The Company’) is an investment trust whose investment

## £1,176m
Net assets
## 1. an increase of the Net Asset Value per share in excess
## of the growth in the FTSE All-Share Index; and
## 634.00p
Share price
## 2. growth in dividends per share in excess of the rate of
## 
## 3.9%
Dividend Yield



## (7.7)%

Discount*
## Nature of the Company
## 0.52%
The Company is a public listed Investment Company whose shares are traded on the London Stock


14

## 4.4%

Gearing (net)*

 
given on page 2 
 PLC
83 to 85 


are
2 / OVERVIEW / THE EDINBURGH INVESTMENT TRUST PLC

# Financial Information and Performance Statistics

|  Total Return^{(1)(4)} (all with dividends reinvested) | Year Ended 31 March 2022 | Year Ended 31 March 2021  |
| --- | --- | --- |
|  Net asset value^{(1)} (NAV) - debt at market value | +14.1% | +34.8%  |
|  Share price^{(1)} | +10.6% | +46.4%  |
|  FTSE All-Share Index^{(1)} | +13.0% | +26.7%  |

The Company's benchmark is the FTSE All-Share Index.

|  Capital Return^{(1)} | At 31 March 2022 | At 31 March 2021 | Change %  |
| --- | --- | --- | --- |
|  Net asset value - debt at market value | 686.69p | 628.29p | +9.3  |
|  Share price^{(1)} | 634.00p | 600.00p | +5.7  |
|  FTSE All-Share Index^{(1)} | 4,187.78 | 3,831.05 | +9.3  |
|  Discount^{(1)(4)} – debt at market value | (7.7)% | (4.5)% |   |
|  Gearing (debt at market value)^{(1)(4)} – gross gearing | 10.3% | 10.1% |   |
|  – net gearing | 4.4% | 7.1% |   |

|  Revenue and Dividends^{(1)} | Year Ended 31 March 2022 | Year Ended 31 March 2021 | Change %  |
| --- | --- | --- | --- |
|  Revenue return per ordinary share | 22.41p | 16.21p | +38.2  |
|  Dividends |  |  |   |
|  – first interim | 6.00p | 6.00p |   |
|  – second interim | 6.00p | 6.00p |   |
|  – third interim | 6.40p | 6.00p |   |
|  – proposed final | 6.40p | 6.00p |   |
|  – total dividends excluding special dividend | 24.80p | 24.00p | +3.3  |
|  – special dividend | nil | 4.65p |   |
|  – total dividends including special dividend | 24.80p | 28.65p | -13.4  |
|  Retail Price Index^{(1)(4)} – annual change | 9.0% | 1.5% |   |
|  Consumer Price Index^{(1)} – annual change | 7.0% | 0.7% |   |
|  Dividend Yield^{(1)(4)} | 3.9% | 4.0% |   |
|  Ongoing Charges Ratio^{(1)(4)(5)} | 0.52% | 0.43% |   |

# Notes:

$^{(1)}$ These terms are defined in the Glossary of Terms and Alternative Performance Measures, including reconciliations, on pages 83 to 85. NAV with debt at market value is widely used by the investment company sector for the reporting of performance, premium or discount, gearing and ongoing charges. The prior year Dividend Yield was exclusive of a special dividend of 4.65p per share. Including the special dividend, the dividend yield was 4.8%.

$^{(2)}$ Source: Refinitiv.

$^{(3)}$ This measure of inflation will not be shown in future reports. The Consumer Price Index will then become the sole measure of inflation in future reports.

$^{(4)}$ Key Performance Indicator.

$^{(5)}$ Majedie Asset Management Limited waived its investment management fee for the first three months of its appointment from 4 March 2020. The Ongoing Charges Ratio disclosed above for the prior year show the actual charges incurred during the period. The pro-forma charges had the investment management fees not been waived over that period would have been 0.51%.
THE EDINBURGH INVESTMENT TRUST PLC / OVERVIEW / 3
## Ten Year Historical Information
Per ordinary share

|  |  |  |  |  |  |  |  |  |  |  |  | Net asset |  |  |  |  | (Discount)/ |  |  | Gross |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  | Shares |  |  |  |  |  |  |  | value |  |  |  |  | Premium |  | gearing |  | Net gearing |  |  |
|  |  | Ordinary |  |  | (bought |  |  |  |  |  |  | (debt at |  |  |  |  |  | (debt at |  | (debt at |  |  | (debt at |  |
|  | shareholders’ |  |  |  | back)/ |  | Revenue |  | Dividend |  |  |  | market |  | Share |  |  | market |  | market |  |  | market |  |
| Year ended |  |  | funds |  | issued |  | return |  |  | rate |  |  | value) |  | price |  |  | value) |  | value) |  |  | value) |  |
| 31 March |  |  |  | £m |  | m |  | p |  |  | p |  |  | p |  | p |  |  | % |  | % |  |  | % |

2013 1,138 – 22.01 22.80 559.01 572.00 2.3 22.4 22.4
2014 1,228 – 23.18 23.50 613.25 594.00 (3.1) 19.1 18.6
2015 1,376 – 24.83 23.85 686.07 662.00 (3.5) 13.9 13.8
2016 1,392 0.55 26.66 24.35 695.30 665.00 (4.4) 15.5 15.3
2017 1,535 – 27.94 25.35 768.81 713.50 (7.2) 15.9 15.7
2018 1,400 – 29.25 26.60 703.34 642.00 (8.7) 12.1 11.8
2019 1,382 (0.19) 28.66 28.00 696.91 644.00 (7.6) 11.0 10.8
2020 872 (20.80) 27.83 28.65 490.40 434.00 (11.5) 13.4 8.3
(1)
2021 1,091 (2.50) 16.21 28.65 628.29 600.00 (4.5) 10.1 7.1
2022 1,176 (1.10) 22.41 24.80 686.89 634.00 (7.7) 10.3 4.4
(1)

Capital Returns (excluding dividends paid) to 31 March 2022
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 3yr 5yr 10yr
NAV (debt at market value) (%) 16.9 9.7 11.9 1.3 10.6 -8.5 -0.9 -29.6 28.1 9.3 -1.5 -10.7 43.6
Share Price (%) 15.0 3.8 11.4 0.5 7.3 -10.0 0.3 -32.6 38.2 5.7 -1.6 -11.1 27.4
FTSE All-Share Index (%) 12.6 5.2 3.0 -7.3 17.5 -2.4 2.2 -21.9 23.3 9.3 5.3 5.0 39.5

Total Returns (with dividends reinvested) to 31 March 2022
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 3yr 5yr 10yr
NAV (debt at market value) (%) 22.9 14.3 16.2 5.0 14.7 -5.9 2.9 -26.7 34.8 14.1 12.7 9.8 114.0
Share Price (%) 20.1 8.0 15.7 4.0 11.2 -6.7 4.6 -29.4 46.4 10.6 14.3 11.5 93.8
FTSE All-Share Index (%) 16.8 8.8 6.6 -3.9 22.0 1.2 6.4 -18.5 26.7 13.0 16.8 25.8 99.5

4 / OVERVIEW / THE EDINBURGH INVESTMENT TRUST PLC
### Ten Year Historical Information / continued
Rebased to 100 at 31 March 2012
Share price Net Asset Value - debt at market value FTSE All-Share Index
250
200
150
100
50
20222012 2013 2014 2015 2016 2017 2018 2019 2020 2021

to 31 March 2022
Dividends (excluding specials) Inflaon (RPI)* Inflaon (CPI)
40%
30% 34.3%
20%
22.7%
20.1%

| 10% |  |  |  | 14.2% |  |
| --- | --- | --- | --- | --- | --- |
|  |  | 13.5% |  |  | 12.7% |
|  | 9.0% |  | 9.4% |  |  |

7.0%
0% 3.3%
-2.2%
-11.4%
One Year Three Years Five Year en Years

 

Rebased to 100 at 31 March 2012
Share price Net Asset Value - debt at market value FTSE All-Share Index
200
Total Returns Over Ten Years Capital Returns Over Ten Years
Cumulave Dividend Growth
150
100
50
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
-10%

-20%
sT
THE EDINBURGH INVESTMENT TRUST PLC / OVERVIEW / 5
## Chairman’s Statement
DEAR SHAREHOLDER RETURNS
 term
 
recently a challenging two year period during the 
Covid pandemic markets now have to contend I
with a crisis in Ukraine and all the economic 


GLEN SUAREZ T able to report another year in which the growth
 
 I
 
  Manager’s Report on the
 




is driven by the  Manager’s total return
Budget Responsibility and the Monetary Policy












table on page 15

 





 
 
Company – and I am pleased to report that the basis are 
 



and capital return is explained not only by the

dividends paid 



to pay dividends to shareholders (discussed in

|  |  |
| --- | --- |
|  | % |
|  |  |
| The | index returning  |
|  |  |
| announced on 7  James will | been  |
|  Manager and we are | benchmark index returning % over the same |
|  |  |
|  |  |

 We expect (and have been
I would like to take this opportunity to remind





 

6 / OVERVIEW / THE EDINBURGH INVESTMENT TRUST PLC
### Chairman’s Statement / continued
 
 normalised 

SHARE PRICE DISCOUNT TO NET ASSET VALUE

 The Board keeps the Company’s share price discount under
case that under the new  Manager we have made a very 
encouraging the 23 May

DIVIDENDS

 
 
  
 
 
 the Board will do what we can to
 




 
 
 This would enhance net asset value per share and enable the
 Manager’s 
Report
BORROWINGS
James
 
 
 
 
in the Board’s view and was behind the Board’s decision to 
increase the third interim dividend and to recommend the same



he Board 
 be available to replace the debenture when it matures this
  new 
last year at a much lower cost will allow the interest expense 
urther capacity to support the 
 that raising the same sums today would incur an equivalent
a healthy ‘r which can be distributed 
should allow the Board to address any 
 
 
 
borrowings should provide a structure to enhance shareholder



 
 
 


 4net gearing would have
 been 3
 

THE EDINBURGH INVESTMENT TRUST PLC / OVERVIEW / 7
APPOINTMENT OF MANAGER 







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
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 S
 
  
 
concernin 
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
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
 OUTLOOK

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


es


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  
.  
 


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
’

BOARD 
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 
 
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 
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
 GLEN SUAREZ 


## Strategic Report
THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 9
## Portfolio Manager’s Report
### For the year ended 31 March 2022
## For much of the last twelve months there
## has been improving economic sentiment,
## as western economies have emerged from
## varying degrees of Covid restrictions.
JAMES DE UPHAUGH /
##  However, much of the economic progress
## has been overturned by the depressing
## turn of events in Ukraine.
 remains
 the same
 
 
 detail on page 13
CHRIS FIELD /
 


Naturally our core task is to meet the Company’s
 

 INVESTMENT RESULTS

























Company has been buying back shares since the












 



retailer that was acquired by private equity during






to shareholders; the key point is that capital





10 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
### Portfolio Manager’s Report / continued
 
 
 


gradually embraces sustainability in clothing to the detriment

 
Weir (engineering) which had modestly weaker share prices and
 
 
 group is now undergoing a cultural and capex reset under the new









ACTIVITY OVER THE YEAR 







CURRENT PORTFOLIO

 
 
 
 


 
 
 
 
 
 (Compass and Intel) and 
 




 
 
 
 that can address – and indeed capitalise on – these changes
 










 
 
 
 turn support Edinburgh Investment Trust’s ability to deliver a
 
 

THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 11
DIVIDENDS 

















macro level but the companies we invest in certainly do not lag














So what are the trends? Economies are late cycle and central
bankers are looking to raise interest rates and where applicable
Company’s balance

s 

this

dividend 

 
 
 









BORROWINGS








concern


4


 The next concern
 
 

LOOKING TO THE FUTURE: WHY INVEST IN THE (“”) 
UK EQUITY MARKET? have been eaten up in conduct charges – remember PPI? – but
 

convert into distributable cash and has a chunky dividend and an





are the ienergy c








12 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
### Portfolio Manager’s Report / continued
 
 
 
  
 
 
 
This is also an excellent example 
 
 


 

take 





has been huge over the last decade – “dry powder” that needs

JAMES DE UPHAUGH / PORTFOLIO MANAGER
there will be more Morrisons as the gap between the earnings
 CHRIS FIELD / DEPUTY PORTFOLIO MANAGER

252




THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 13
## The Portfolio Manager’s Core Investment Beliefs
 TOTAL RETURN STRATEGY

A focus on both capital growth and income. We take a total


 






ACTIVE MANAGEMENT

Stock-driven.


 LONG TERM
Typical holding period of 3-5 years. This is an appropriate period







Gearing should enhance shareholder returns. 
Risk.







CAPACITY MANAGEMENT
FLEXIBLE INVESTMENT STYLE
Scale diseconomies. 

Open-minded approach. 











DEEP INVESTMENT RESOURCE WITH GLOBAL
Disciplined, rigorous, fundamental research. In keeping with the PERSPECTIVE

A close-knit investment team.





Challenge and debate. This is encouraged within a structured



Team members own Liontrust equity and coinvest in the team’s






14 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
## Business Review
STRATEGY AND BUSINESS MODEL 

The Edinburgh Investment Trust plc is an investment company and












The business model the Company has adopted to achieve its







RESULTS AND DIVIDENDS

 




Sanne 
 
Limited)  

INVESTMENT OBJECTIVE AND POLICY 2022


term 
 which is the same as the third interim dividend declared last
month i
 
This represents


31 
 

PERFORMANCE
Investment Policy

The Company will generally invest in companies quoted on a 
 page 2
 
 
 
by the  
The Chairman’s Statement on pages 5 to 7 gives a commentary on




















The Company may borrow money to provide gearing to the equity

THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 15
 – 
22 
 
Company was ranked 5 
17th over three years and  
 

OUTLOOK, INCLUDING THE FUTURE OF THE COMPANY 


 
 


pages 


FINANCIAL POSITION AND BORROWINGS

The Company’s balance sheet on page 55 shows the assets and





Unsecured Senior Loan Notes1

25
  
Interest 


PERFORMANCE ATTRIBUTION Market value movement – represents the change in market
’
for year ended

31 March 2022

%
(1) Management fee 
Total Return Basis

NAV (debt at market value) 14.1
Less: Benchmark 13.0 Other expenses and tax
 1.1 

Share buybacks

|  13.9 |  |  |  |
| --- | --- | --- | --- |
|  | (1) |  |  |
| Less: Benchmark total return |  | 13.0 |  |

 0.9
Borrowings:

|  | 0.8 |
| --- | --- |
| Interest | -0.7 |
| Market value movement | 0.7 |

 -0.4
Other expenses -0.1
Tax -0.1
Share buybacks 0.0
Total 1.1
(1)

16 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC

# Investments in Order of Valuation

At 31 March 2022

## UK LISTED ORDINARY SHARES UNLESS OTHERWISE STATED

|  Company | Sector | Value £'000 | % of Portfolio  |
| --- | --- | --- | --- |
|  Shell | Oil, Gas and Coal | 89,094 | 7.3  |
|  Tesco | Personal Care, Drug and Grocery Stores | 63,192 | 5.2  |
|  Anglo American | Industrial Metals and Mining | 60,815 | 5.0  |
|  AstraZeneca | Pharmaceuticals and Biotechnology | 54,918 | 4.5  |
|  BAE Systems | Aerospace and Defence | 53,545 | 4.4  |
|  Unilever | Personal Care, Drug and Grocery Stores | 52,043 | 4.3  |
|  NatWest | Banks | 45,242 | 3.7  |
|  Ashtead | Industrial Transportation | 44,743 | 3.7  |
|  Electrocomponents | Industrial Support Services | 36,994 | 3.0  |
|  Weir | Industrial Engineering | 36,567 | 3.0  |
|  **TEN TOP HOLDINGS** |  | **537,153** | **44.1**  |
|  Newmont - US Listed | Precious Metals and Mining | 35,458 | 2.9  |
|  GlaxoSmithKline | Pharmaceuticals and Biotechnology | 32,290 | 2.6  |
|  KPN - Dutch Listed | Telecommunications Service Providers | 31,396 | 2.6  |
|  Ascential | Software and Computer Services | 30,760 | 2.5  |
|  Smith & Nephew | Medical Equipment and Services | 30,114 | 2.5  |
|  Hays | Industrial Support Services | 29,484 | 2.4  |
|  HSBC | Banks | 29,051 | 2.4  |
|  TotalEnergies - French Listed | Oil, Gas and Coal | 27,865 | 2.3  |
|  Centrica | Gas, Water and Multi-Utilities | 27,488 | 2.3  |
|  Dunelm | Retailers | 26,127 | 2.1  |
|  **TWENTY TOP HOLDINGS** |  | **837,186** | **68.7**  |
|  Standard Chartered | Banks | 24,831 | 2.0  |
|  WPP | Media | 23,344 | 1.9  |
|  Compass | Consumer Services | 23,258 | 1.9  |
|  Mondi | General Industrials | 22,178 | 1.8  |
|  Serco | Industrial Support Services | 21,552 | 1.8  |
|  Reckitt | Personal Care, Drug and Grocery Stores | 21,037 | 1.7  |
|  Diageo | Beverages | 19,442 | 1.6  |
|  Direct Line | Non-Life Insurance | 18,311 | 1.5  |
|  Greggs | Personal Care, Drug and Grocery Stores | 17,934 | 1.5  |
|  Novartis - Swiss Listed | Pharmaceuticals and Biotechnology | 17,588 | 1.5  |
|  **THIRTY TOP HOLDINGS** |  | **1,046,661** | **85.9**  |
|  Marks & Spencer | Retailers | 14,902 | 1.2  |
|  Marshalls | Construction and Materials | 14,805 | 1.2  |
|  Genuit | Construction and Materials | 12,906 | 1.1  |
|  easyJet | Travel and Leisure | 12,810 | 1.1  |
|  Bellway | Household Goods and Home Construction | 12,731 | 1.0  |
|  Whitbread | Travel and Leisure | 12,400 | 1.0  |
|  ConvaTec | Medical Equipment and Services | 12,060 | 1.0  |
|  Redrow | Household Goods and Home Construction | 11,624 | 0.9  |
|  Thales - French Listed | Aerospace and Defence | 10,771 | 0.9  |
|  QinetiQ | Aerospace and Defence | 10,068 | 0.8  |
|  **FORTY TOP HOLDINGS** |  | **1,171,738** | **96.1**  |
THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 17

|  Company | Sector | Value £'000 | % of Portfolio  |
| --- | --- | --- | --- |
|  Roche - Swiss Listed | Pharmaceuticals and Biotechnology | 10,047 | 0.8  |
|  Intel - US Listed | Technology Hardware and Equipment | 9,054 | 0.8  |
|  Domino's | Travel and Leisure | 8,409 | 0.7  |
|  St James's Place | Investment Banking and Brokerage Services | 5,148 | 0.4  |
|  Dr. Martens | Personal Goods | 4,711 | 0.4  |
|  RELX | Media | 4,025 | 0.3  |
|  Made.com | Household Goods and Home Construction | 3,158 | 0.3  |
|  Cazoo - US Listed | Retailers | 2,129 | 0.2  |
|  Raven Property^{2)} - Preference shares | Real Estate Investment and Services | 237 | –  |
|  Eurovestech^{2)} | Investment Banking and Brokerage Services | 69 | –  |
|  **TOTAL HOLDINGS 50 (2021: 50)** |  | **1,218,725** | **100.0**  |

$^{2)}$ Temporary suspension

$^{2)}$ Unquoted investment
18 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
## Portfolio Analysis
Porolio Analysis by Industry
At 31 March 2022 and 2021
30%
2022 2021
25%
20%
15%
10%
5%
0%
Technology Tele- Health Financials Ulies Real Estate Consumer Consumer Industrials Basic Energy
communicaons Care Discreonary Staples Materials
Comparison of Porolio to FTSE All-Share Index by Industry
At 31 March 2022
30%
Porolio FTSE All-Share Index
25%
20%
15%
10%
5%
0%
Technology Tele- Health Financials Real Consumer Consumer IndustrialsBasic EnergyUlies
communicaons Care Estate Discreonary Staples Materials
THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 19
## Principal Risks and Uncertainties
RISK MANAGEMENT AND MITIGATION INVESTMENT PERFORMANCE RISK
 
 
 individual investment decisions are delegated
 to the   Manager’s approach is to
 
  Manager
 
 
  
 
  Manager
 


 The  Manager’s style may result in a concentrated
 
in individual stocks or sectors compared to the index and





 Manager manages



 





 Manager believe





Value per share

dividend per share 
Russia’s invasio
to the  
Ukraine 


the benchmark and peer group is provided to the Board at each


MARKET RISK 
 Manager is responsible





 
 
 
geo war in Ukraine and government













Market risk is included in the risk control summary report that is


20 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
### Principal Risks and Uncertainties / continued
BORROWING RISK 
The Company may borrow to provide gearing to the equity 
 
 which will mature at 30 
September 2022Unsecured 
Senior Loan Notes 
 
debenture  
 
 
 
which is

currently undrawn can be renewed and on terms acceptable to
providers is carried out by the Company Secretary who provides


 
 

RELIANCE ON THE MANAGER AND OTHER THIRD PARTY

PROVIDERS RISK
Borrowing and gearing risk is included in the risk control summary



compliance with the Company’s investment policy guidelines





INCOME/DIVIDEND RISK 







 
 
contained within the Board papers and the Board considers the appointment could have a materially detrimental impact on the
 

SHARE PRICE RISK





 
 
within agreed parameters which are regularly reviewed with 
 
 being unwilling to deal with the Manager and by extension the
 
 
Share price risk is included in the risk control summary report that 

 

CORPORATE GOVERNANCE AND INTERNAL CONTROLS

RISK
 
The Board has delegated to third party service providers the


has the power to replace the Manager and reviews the


THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 21
  

-e or

other p

 
4





 

  
 
 







 









EMERGING RISKS 


 
 
 


 
 
 
 










The  



 Manager

  


22 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
## Viability Statement
 
 
investment vehicle rather than a commercial business venture processes set out on page 34
 
 
 level at the year end and the board considers this implausible
  
 
has thus been assessed 
  
 


 
 
The investment strategy and its associated risks are kept under 
 






pandemic
set out on page 






detail in the Going Concern Statement on page 




THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 23
## Section 172 Statement, Company
## Sustainability and Stakeholders
BOARD RESPONSIBILITIES Regular dialogue is maintained between the Manager and major

35 to 41 the Directors






 



Stheeman



 
 The
COMPANY SUSTAINABILITY AND STAKEHOLDERS
Company Secretary passes to the Chairman all correspondence









ENGAGEMENT WITH SHAREHOLDERS


provided by the Company’s broker and Manager is a major



ENGAGEMENT WITH THE MANAGER
the Company communicates with shareholders is through the













arranged

new debt which will be available to replace the debenture when it


Shareholders can also visit the Company’s website
ENGAGEMENT WITH SERVICE PROVIDERS
m in order to access copies
 
 
 
 
 




the internal control reports on a quarterly basis covering their



 
 and assesses annually whether the services meet the requirements
 
 
 s

the Board and Manager will host a shareholder event in London

on 22 September 2022 and shareholders can register via the

Company’s website


24 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
### Section 172 Statement, Company Sustainability
### and Stakeholders / continued
ENGAGEMENT WITH INVESTEE COMPANIES EXERCISE OF VOTING POWERS AND STEWARDSHIP CODE
 Stewardship

The Board considers that the Company has a responsibility as a


and the Manager believe that engagement with investee companies
Governance standards are maintained in the companies in which


 
 
 
 

The Board supports the Manager’s approach to ESG in the context


 The Manager has adopted a clear and considered policy towards
 
 

CONCLUSION





on the Manager’s website at  together with a


all the Company’

’
longly to
M





MATTERS

 
 environmental policy has limited 
In respect  the Company’s investments Manager

and the other members  investment team integrate ESG risks

and  as part  

 

this analysis is   risks
and  that each holding aces over a three to  
period  Many  these issues 
  The issues that 
are 

discussions on 

the manager 

over the three   
The Manager publishes a quarterly
 ussl
year on its website 
risks legislan  The Manager is a
signatory to the Princ   MODERN SLAVERY DISCLOSURE
d through the





THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 25
The Company is an investment vehicle and does not provide goods











PREVENTION OF THE FACILITATION OF TAX EVASION


GREENHOUSE GAS EMISSIONS AND STREAMLINED











This Strategic Report was approved by the Board on 25 May 2022
SANNE FUND SERVICES (UK) LIMITED / 
26 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
### 
## Governance
28 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
## The Directors
### All Directors are
### non-executive
### and considered
### independent.

| GLEN SUAREZ | VICKY HASTINGS | STEVE BALDWIN |
| --- | --- | --- |
|  |  |  |
| 24 May 2013 | 23 May 2013 | 10 September 2018 |

Became Chairman on
22 November 2017

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| M | Management Engagement | M | Management Engagement | M | Management Engagement |
| N |  | N |  | N |  |
| A |  | A |  | A |  |
|  |  | Vicky was appointed Senior |  |  |  |
|  |  | Independent Director on 25 July |  |  |  |
|  |  |  |  |  |  |
|  |  | experience in the investment |  | director at Plus500 Ltd and a |  |
|  |  | management industry and is a |  | Trustee at Howard de Walden |  |
|  |  |  |  |  |  |
|  |  | Environmental Markets plc and |  |  |  |
|  |  |  |  | Elegant Hotels Group plc and |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  | Equity Capital Markets and |  |
|  |  | held investment leadership roles |  | Corporate Broking at Macquarie |  |
|  |  | at Merrill Lynch Investment |  |  |  |
|  |  |  |  | Prior to this Steve was a Director |  |
|  |  |  |  |  |  |
|  |  | non |  |  |  |
|  |  | include Investment Trusts as well |  |  |  |
|  |  |  |  |  |  |





THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 29
PATRICK EDWARDSON ELISABETH STHEEMAN
 
 

|  |  |  |  |
| --- | --- | --- | --- |
| M | Management Engagement | M | Management Engagement |
| N |  | N |  |
| A |  | A |  |
| Patrick Edwardson joined Baillie |  | Elisabeth is an External Member |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
| Company plc between 2004 and |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |












LaSalle Investment Management


30 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
## The Company’s Corporate Governance Framework
THE BOARD AND COMMITTEES


and other external service providers.
The Board
Chairman Glen Suarez

 (NEDs)
Chairman

– to set strategy, values and standards;
– 
– to appoint the Manager and other external service providers; and
– 
Management Engagement 
   
All NEDs All NEDs All NEDs The Board as a whole performs

Chairman Chairman Chairman
Steve Baldwin Glen Suarez Glen Suarez
   
– to oversee the control – to review regularly the – to review regularly – 
 management contract and the Board’s structure, policy of the Company.
 the performance of the 
Manager. performance; and
– 
for the appointment of the – 
auditor; and for any changes or new
appointments.
– to review the performance
of other service providers,
including the auditor.
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 31
## Corporate Governance Statement
### For the year ended 31 March 2022
This Corporate Governance statement forms part of the Directors’ 
 AIC Code and the UK Code is provided in the Directors’ Report as
Corporate Governance and is accountable to shareholders for the 

 
 30, and page 32 in
of the 2019 AIC Code of Corporate Governance (the “AIC Code”). 

– the Company’s approach to internal control and risk

management is summarised on page 34;
disclose how they have applied the principles and complied with
– the contractual arrangements with, and assessment of, the
the provisions of The UK Corporate Governance Code 2018 (the
Manager are summarised on page 39;

 
The UK Code can be viewed on the FRC’s website.
summarised on pages 39 and 40;

 

on page 40;
the AIC Code adapts the Principles and Provisions set out in the
– the rules concerning the appointment and replacement
UK Code to make them relevant for investment companies.

36 and 37. There

are no agreements between the Company and its directors
AIC Code and the relevant provisions of the UK Code, except the


– powers to issue or buy back the Company’s shares, which
 
are sought annually, and any amendments to the Company’s
  
shareholders.
 
The Board considers these provisions are not relevant to the

By order of the Board



through the Manager’s own control environment which itself is
COMPANY SECRETARY / 25 MAY 2022

therefore not reported further in respect of these provisions.
32 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
## Audit Committee Report
### For the year ended 31 March 2022
COMMITTEE COMPOSITION AND ROLE AUDIT COMMITTEE ACTIVITIES
 
 
reviewed 
 
 
the Company or viewed on the Company’s website. 
with the Manager, reviews the Company’s compliance with
AUDIT COMMITTEE RESPONSIBILITIES 



  
 
 
 




 


The 
balanced and understandable and provides the necessary



and performance, business model and strategy;

  There have been no such issues raised during the year. The
and risk management systems, including reports received on auditor’s report, together with reports from the Manager, the
 Manager’s Compliance Department and the depositary, form the
and the Manager’s whistleblowing arrangements; 
  
Manager’s compliance department, monitoring and reviewing 
 statements.

 



their appointment, reappointment and removal and for the
terms of their audit engagement;
 

– considering annually whether there is a need for the Company

THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 33
ACCOUNTING MATTERS AND SIGNIFICANT AREAS

 How addressed
A 
 prices provided by third party pricing vendors. Investments that




 The Manager 

records.
R 
dividend income. policies note 1F. The Manager provides detailed revenue

ensure it is complete and accounted for correctly. Careful

revenue or capital according to the nature of the payment by the

auditor.
 
revenue and capital. 



 
 external audit approach. Combining the output of all the above,
 
with, the Manager and the auditor at the conclusion of the audit 
process. 


independence.
2022
Board that the report taken as a whole is fair, balanced and 
 
 auditor make them a suitable supplier of such services and
business model and strategy. 
conduct of the audit as a result. Excluding VAT and any expenses,
 the annual audit fee was £41,0003,000). and the
AUDIT SERVICES  fee was £nil, see note 4 on page 62. The



of the external auditor and their audit process. This included a




sought the view of the Manager in their dealings with the


34 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
### Audit Committee Report / continued
AUDITOR INTERNAL AUDIT
PwC were appointed as the Company’s Auditors at the AGM on The Company, being an externally managed investment company
 
 
 
Company’s shareholders at the 2022 AGM. reviews.
INTERNAL CONTROLS AND RISK MANAGEMENT COMMITTEE EVALUATION
 
which the Company is exposed by reference to a risk control 
 
 Performance Appraisal’ on page 37.

the Directors to concentrate on those risks that are most

 / CHAIRMAN OF THE AUDIT
19 to 21.
COMMITTEE / 25 MAY 2022

ensuring that the Company maintains a sound system of

assets. The 

management systems, is reviewed at least annually. Appropriate





administrator, custodian, company secretary and registrar. These

THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 35
## Directors’ Report
### For the year ended 31 March 2022
BUSINESS AND STATUS 
present, two are female. Summary biographical details of the
The Company was incorporated and registered in Scotland on
Directors are set out on pages 28 and 29.
1 March 1889 as a public limited company, registered number

BOARD RESPONSIBILITIES
of the Companies Act 2006 and operates as an investment trust




the success of the Company and for the proper conduct of the
HM Revenue & Customs have approved the Company’s status

as an investment trust and, in the opinion of the Directors, the



such approval.

CORPORATE GOVERNANCE the environment; the desirability of the Company maintaining a

The Corporate Governance Statement set out on page 31 is
act fairly between shareholders of the Company. This is reported
included in this Directors’ Report by reference.
in the Strategic Report on page 23

THE BOARD
and, taking account of the nature of the Company’s business
At the year end the Board comprised  
The Company’s Corporate Governance Framework is set out on 
page 30 persons associated with it from engaging in bribery. It has a zero
 
 
 
 shareholders and that the interests of creditors and suppliers to the
Company are properly considered.
The Board regards all of the Directors to be wholly independent of
the Company’s Manager. 

Chairman 
The Chairman of the Company is Glen Suarez. He has been a 
member of the Board since 2013 and was appointed Chairman on 
22 November 2017. 

Senior Independent Director payable; managing the capital structure; reviewing investment
performance; assessing risk; approving borrowing; and reviewing,


was appointed to the role on 25 July 2019.

Board Balance and Diversity 




experience, skills, length of service and backgrounds, including

but not limited to gender diversity. The Board has considered
which they are exposed by holding their shares, through the


reviews as well as the Parker review, but does not consider it
factsheets and daily NAV disclosures.

policy is always to appoint the best person for the job and there


are arranged as necessary. Regular contact is maintained by


aim of the policy is to ensure that the Board is composed of a






against stock market indices and the Company’s peer group, asset


36 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
### Directors’ Report / continued
 


and industry and other issues.




Manager and Company Secretary ensure that all Directors have
skills, experience, independence and knowledge of the Company;



directors at AGMs.
There is an agreed procedure for the Directors, in the furtherance









(including gender). The Board has not set any measurable targets


into account all factors which are deemed necessary in order to
ensure that members of the Board are provided with appropriate






recruitment process. The Company and the Directors have no


their criteria for the appointment. Odgers Berndtson introduced
AUDIT INFORMATION

 It has
 
unaware; and each Director has taken steps that he or she ought that Aidan Lisser will join the Board from 27 May 2022.
to have taken as a Director to make himself/herself aware of any
 No Director has a contract of employment with the Company.
 
and should be interpreted in accordance with the provisions of 
 

THE COMMITTEES 
all the other Directors.




 New Directors are appointed by the Board following
 
 
available on the Company’s page of the Manager’s website. 

 Code of Corporate Governance, the Board has resolved that all
 
32 to 34,
On being appointed to the Board, Directors are fully briefed as
which is included in this Directors’ Report by reference.



Company Secretary and the Board have formulated a programme



also put arrangements in place to address ongoing training
least annually to review the investment management agreement

and to review the services provided by the Manager.
Company Secretary which ensure that Directors can keep up to


of the Manager.
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 37
 BOARD, COMMITTEE AND DIRECTORS’ PERFORMANCE
 APPRAISAL
who have served for more than nine years should be presumed
The Directors recognise the importance of the AIC Code’s
not to be independent. The AIC does not believe that this




individual Directors.
prevented from forming part of the independent majority of an
investment trust board. It is the Board’s policy that all Directors,
In 2020 the Board appointed Linstock Limited, an external
including the Chairman, shall normally have tenure limited to


and the Directors individually. As no concerns were raised
the Board may determine otherwise if it is considered that the
in these reports, the Board opted to conduct the 2022


or the Chairman, is in the best interests of the Company and its
discussion between the Directors, the Chairman and the
shareholders. This is also subject to the Director’s 

annually by shareholders. The Board considers that this policy
each Director’s independence. The conclusion was that the
encourages regular refreshment and is conducive to fostering

diversity. Glen Suarez reached the ninth anniversary of his


Board’s considered view, all Directors were independent.
at the AGM on 21 July 2022 and is therefore not standing for
re
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
 
appointment to the Board during the year. The Board has asked 
 
 
Stheeman is appointed as Chairman. The Board has considered 
 during the year.

 ATTENDANCE AT BOARD AND COMMITTEE MEETINGS


.
31 

Management
Audit Engagement s
Board   
 5 2 2 3
Glen Suarez 5 2 2 3
Steve Baldwin 5 2 2 3
Patrick Edwardson 5 2 2 3
 5 2 2 3
Elisabeth Stheeman 5 2 2 3
Gordon McQueen 2 1 1 1
Maxwell Ward 2 1 1 1

38 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
### Directors’ Report / continued
DIRECTORS INTERNAL CONTROLS AND RISK MANAGEMENT
Directors’ Interests in Shares 
the Company’s system of internal controls. The Board assumes
The Directors’ interests in the ordinary share capital of the



page 45.
internal controls is designed to manage rather than eliminate the

Disclosable Interests
reasonable assurance against material misstatement or loss. The
No Director was a party to, or had any interests in, any contract or
Board has undertaken a review of the aspects covered by the


the year end.





 
 represent an appropriate framework to meet the internal control
executed on behalf of the Company for each of the Directors 
 
 the year and up to the date of this report.

 The Company’s internal controls and risk management systems
their appointment. have been reviewed with the Manager against risk parameters
approved by the Board. The Board reviews a risk control summary
CONFLICTS OF INTEREST 
the risk procedures and controls in place at the Manager and

other key service providers is performed.







which apply when Directors decide whether to do so. First, only
compliance and risk management systems. The Company’s

system of internal controls is designed to manage rather than
are able to take the relevant decision, and second, in taking the
eliminate risk of failure to achieve the Company’s investment
decision the Directors must act in a way they consider, in good
and/ or adhere to the Company’s investment policy
faith, will be most likely to promote the Company’s success.
and/or investment limits. This system can therefore provide

only reasonable and not absolute assurance against material

misstatement or loss.




weaknesses occurred throughout the year ended 31 March 2022


the Board and Directors know to advise the Company Secretary as


forecasts, relevant stock market criteria and the Company’s peer
STREAMLINED ENERGY & CARBON REPORTING ‘SECR’

 systems of internal controls and risk management and the Board
in the Strategic Report on page 25. 
Department of the Manager. Formal reports are also produced
PROPOSED DIVIDENDS annually on the internal controls and procedures in place for the



shareholders, the details of this are given on page 14 of the
Strategic Report.
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 39

39

# GOING CONCERN

The financial statements have been prepared on a going concern basis. The Directors consider this is the appropriate basis as they have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, being taken as at least twelve months after the signing of the balance sheet, for the same reasons as set out in the Viability Statement on page 22. In considering this, the Directors took into account both ongoing expenses and any obligations under the Company's borrowing (each of the debenture, unsecured notes and the bank facility). In reaching this conclusion, the Directors have considered the liquidity of the Company's portfolio of investments as well as its cash position, income and expense flows. As at 31 March 2022, the Company held £68.7 million (2021: £32.6 million) in cash and cash equivalents and £1,218.7 million (2021: £1,151.0 million) in quoted investments. The Company's audited net assets at 31 March 2022 were £1,175.8 million (2021: £1,091.2 million).

Given the level of market volatility experienced due to the impact of the COVID-19 pandemic and Russia's invasion of Ukraine, the Manager has performed stress tests on the Company's portfolio of investments under current conditions and the Board remain comfortable with the liquidity of the portfolio.

It is estimated that over 99% by value of the quoted investments held at the year end could be realised in one month under normal market conditions.

The Board also considered the Company's obligations under the Company's borrowing. On 30 September 2021, the Company announced an issue of £120m of long-term fixed rate, Unsecured Senior Loan Notes with a weighted average cost of 2.44% of which £20m was drawn in October 2021. The other £100m will be drawn in September 2022 to repay the £100m 7.75% debenture on its maturity. These notes require the Net Tangible Assets of the Company to remain not less than £300m. The Board, which routinely monitors borrowing restrictions, does not anticipate difficulties in meeting this. The £100 million debenture matures in September 2022. The bank facility which is not currently drawn, remains available whilst the Company's Net Asset Value is above £300 million (see notes 11 and 12 to the financial statements). The bank facility was renewed on 16 June 2021 at £25 million and matures on 15 June 2022. This facility is not expected to be renewed.

The total ongoing charges (excluding taxation, non-recurring legal and professional fees and finance costs) for the year ended 31 March 2022 were £6.0 million (2021: £4.2 million).

# THE MANAGER

On 4 March 2020, the Board appointed Majedie Asset Management Limited ('Majedie') as its Alternative Investment Fund Manager. As disclosed in Note 21 (Post Balance Sheet Events), with effect from 1 April 2022, Liontrust Fund Partners LLP was appointed the

Manager following completion of the acquisition of Majedie by Liontrust Asset Management Plc. The responsibility for the day-to-day investment management activities of the Company has been delegated to Liontrust Investment Partners LLP.

# Investment Management Agreement ('IMA')

The Manager provides investment and administration services to the Company under an investment management agreement dated 3 March 2020. The agreement is terminable by either party by giving not less than three months' notice.

The monthly management fee is calculated on 0.04000% on the first £500 million and 0.03875% on the remainder of the market capitalisation of the Company's ordinary shares at each month end and paid monthly in arrears (equivalent to an annualised fee of 0.480% on the first £500m and 0.465% on the remainder). There is no performance fee. In 2022 the Ongoing Charges ratio was 0.52%.

# Assessment of the Manager

The Management Engagement Committee has carried out a review following the Company's takeover of Majedie by Liontrust with effect from 1 April 2022 and following recommendation from the Committee, the Board considers that the continuing appointment of Liontrust Fund Partners LLP as Manager is in the best interests of the Company and its shareholders.

# COMPANY SECRETARY

On 3 March 2020, the Board appointed PraxisIFM Fund Services (UK) Limited as secretary to the Company. The Board has continuous direct access to the advice and services of the corporate Company Secretary, who are responsible for ensuring that the Board and Committee procedures are followed and that applicable rules and regulations are complied with. The Company Secretary provides full company secretarial services to the Company, ensuring that the Company complies with all legal, regulatory and corporate governance requirements and officiating at Board meetings and shareholders' meetings. The Company Secretary is also responsible to the Board for ensuring timely delivery of information and reports and that the statutory obligations of the Company are met. Finally, the Company Secretary is responsible for advising the Board through the Chairman on all governance matters. On 2 February 2022 PraxisIFM Fund Services (UK) Limited was renamed Sanne Fund Services (UK) Limited as a result of the company's acquisition by Sanne Group PLC.

# SHARE CAPITAL

# Capital Structure

At the year end, the Company's allotted and fully paid share capital consisted of 195,666,734 ordinary and treasury shares of 25p each of which 24,588,605 shares are held in treasury. To enable the Board to take action to deal with any significant overhang or shortage of shares in the market, it seeks approval
40 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
### Directors’ Report / continued
from shareholders every year to buy back and sell shares. No price of 632.95p per share (including costs). Since the year end,
shares were issued in the year. During the year 1,104,800 ordinary 290,000 ordinary shares have been bought back for holding in
shares were repurchased for holding in treasury at an average treasury.
SUBSTANTIAL HOLDINGS IN THE COMPANY
T

Shares %
Rathbone Investment Management 10,390,173 6.08
 
set out on page 43.


3 is for members to approve the Annual Statement




4 

control following a successful takeover bid. 5 to 8 
Directors can be found on pages 28 and 29.

Resolu is to elect Aidan Lisser as a Director. Aidan's

biography can be found in the Chairman’s Statement on page 7.
one vote on a show of hands and, on a poll, one vote for each



the AGM having completed a nine year term as a director of

the Company. All other Directors will stand for 
shareholders at the AGM. The Board has determined that each
Repurchase Powers

The Board’s current powers to repurchase shares and proposals
and demonstrates commitment to their role. Their balance of
for their renewal are disclosed on page 41.
knowledge and skills combined with their diversity and business

DISCLOSURES REQUIRED BY UKLA LISTING RULE 9.8.4
Elisabeth Stheeman has extensive
 
 and real estate that bring highly relevant and valuable skills to
 the Board. Steven Baldwin is a Chartered Accountant and his
Company for the year under review. experience in a range of industries brings a breadth of experience

 investment management industry that has brought her broad
sector experience to the Board. Patrick Edwardson has years of

investment experience as a fund manager and deep knowledge

 Aidan Lisser



The following summarises the business of the forthcoming 
AGM of the Company, which is to be held on 21 July 2022
at 11am.  10 and 11 
on pages 77 to 80 
 
is for members to receive and consider this Annual

auditor’s report.
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 41
Special Business 5

2 is an Ordinary




A 
this being an aggregate nominal amount of £4,269,703 as at

23 May 2022.
 

3 Authority to Allot Shares is a Special




used only where the Board believes it is in the best interests of



shares to be issued to new shareholders, within the prescribed



thus broadening the shareholder base of the Company. The
them all to be in the best interests of shareholders as a whole.

The Directors therefore recommend that shareholders vote in
using the authority to issue shares at a price which is less than

the Net Asset Value (calculated with debt at market value) of the



By order of the Board


4Authority to Buy Back Shares
COMPANY SECRETARY / 25 MAY 2022


this being 25,601,140 ordinary shares as at 23 May 2022. The
authority will expire at the Company’s next AGM or 15 months

purpose of share buy backs is to enhance the net asset value for
remaining shareholders and purchases will only be made if they
do so.


(i) 

higher of the price of the last independent trade in the shares and
the highest then current independent bid for the shares on the
London Stock Exchange. The minimum price which may be paid
will be 25p per share, this being the nominal value of a share. In

of the London Stock Exchange.



The Directors might consider holding repurchased shares as
treasury shares with a view to possible resale.
42 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
## Statement of Directors’ Responsibilities
### in respect of the preparation of the Annual Financial Report
 
 responsible for preparing a Strategic Report, Directors’ Report,
 


 The Directors are responsible for the maintenance and integrity
 
The Financial Company’s website, which is maintained by the Company’s
 




 RESPONSIBILITY STATEMENT OF THE DIRECTORS IN
 RESPECT OF THE ANNUAL FINANCIAL REPORT
disclosures have changed as a result of the revised SORP.


 




for that period.
loss of the Company; and

– the Strategic Report includes a fair review of the development


  
consistently; 
  
prudent; 

  performance, business model and strategy.
followed, subject to any material departures disclosed and

  Signed on behalf of the Board of Directors

and
/ CHAIRMAN / 25 MAY 2022
 







They are responsible for such internal control as they determine is

are free from material misstatement, whether due to fraud or
error, and have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Company

THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 43

# Directors' Remuneration Report

For the year ended 31 March 2022

This report has been prepared under the requirements of The Large and Medium-sized Companies and Group (Accounts and Reports) (Amendment) Regulations 2013.

The Company's auditor is required to audit certain of the disclosures provided in this Report. Where disclosures have been audited, they are indicated in this Report. The independent auditor's opinion is included on pages 47 to 53.

## REMUNERATION RESPONSIBILITIES

The Board has resolved that a remuneration committee is not appropriate for a company of this size and nature. Remuneration is therefore regarded as part of the Board's responsibilities to be addressed regularly. All Directors are non-executive and all participate in meetings of the Board at which Directors' remuneration is considered.

## DIRECTORS' REMUNERATION POLICY

The Directors' Remuneration Policy (the 'Policy') is put before shareholders for approval every three years and was approved by shareholders at the AGM on 25 July 2019 and became effective on that date. The Policy will be put before shareholders for approval at the AGM on 21 July 2022.

The policy is that the remuneration of Directors: be fair and reasonable in relation to that of other investment trusts and to the time commitment and responsibilities undertaken; be reviewed relative to movements in the Retail Price Index; be sufficient to retain and motivate appointees, as well as ensure that candidates of a high calibre are recruited to the Board but not be more than necessary for the purpose; and take into consideration any committee memberships and chairmanship duties.

Fees for the Directors are determined by the Board within the limits stated in the Company's Articles of Association ('Articles'). The maximum currently is £250,000 in aggregate per annum.

Directors do not have service contracts. Directors are appointed under letters of appointment, copies of which are available for inspection at the registered office of the Company. Directors are entitled to be reimbursed for any reasonable expenses properly incurred by them in the performance of their duties. Directors are not eligible for bonuses, pension benefits, share options or other incentives or benefits. There are no agreements between the Company and its Directors concerning compensation for loss of office.

Notwithstanding the above, the Company's Articles also provide that additional discretionary payments can be made for services which, in the opinion of the Directors, are outside the scope of the ordinary duties of a Director.

The level of Directors' remuneration is reviewed annually, although such review will not automatically result in any changes. This Directors' Remuneration Policy will apply to any new directors, who will be paid the appropriate fee based on the Directors' fees level in place at the date of appointment. The Board will consider, where raised, shareholders' views on Directors' remuneration.

The Board may amend the level of remuneration paid to Directors within the parameters of the Directors' Remuneration Policy.

This Directors' Remuneration Policy is the same as that currently followed by the Board as disclosed in last year's Directors' Remuneration Report.

The Company has no employees and consequently has no policy on the remuneration of employees.

## ANNUAL STATEMENT ON DIRECTORS' REMUNERATION

For the year ended 31 March 2022, fees paid to the Directors per annum were:

|  Role | Current fee from 1 December 2021 £ | Previous fee before 1 December 2021 £ | Percentage increase during the year %  |
| --- | --- | --- | --- |
|  Chairman | 44,000 | 44,000 | –  |
|  Senior Independent Director | 31,500 | 30,250 | 4.0  |
|  Audit Committee Chairman | 35,000 | 33,000 | 6.0  |
|  Director | 28,500 | 26,500 | 7.5  |

During the year the Board reviewed Directors' fees and considered non-executive salary information of similar investment companies. The Directors' fees had previously been increased in 2020. The increases in 2021 of approximately 6% bring the fee level more in line with market rates and reflect the significant increase in time required to meet regulatory requirements. The increases also provide the Board with flexibility to appoint new directors during the period of Board succession. The Chairman's fee remains unchanged. The overall remuneration of the Board has fallen compared to 2021.
44 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
### Directors’ Remuneration Report / continued
REMUNERATION FOR THE YEAR ENDED 31 MARCH 2022
THE COMPANY’S PERFORMANCE
The following graph plots, in annual increments, the net asset value total return and share price total return to ordinary shareholders

the Company for comparison purposes.
Total Return Graph
Figures have been rebased to 100 at 31 March 2012.
250
200
150
100
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021




|  |  | 2022 |  |  |  |  | 2021 |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Taxable |  |  |  |  | Taxable |  |  |  | Percentage |
|  |  |  | (1) |  |  |  |  | (1) |  |  |
| Fees |  |  |  | Total | Fees |  |  |  | Total | change of |

(2)
£ £ £ £ £ £ basic fees
Glen Suarez 44,000 4,887 48,887 44,000 – 44,000 –
Steve Baldwin 31,720 – 31,720 24,967 – 24,967 7.5%
 30,667 320 30,987 33,416 – 33,416 4.1%
Patrick Edwardson 27,167 1,226 28,393 3,515 – 3,515 7.5%
Elisabeth Stheeman 27,167 228 27,395 24,967 – 24,967 7.5%
 10,239 289 10,528 31,000 – 31,000 –
Total Return Graph (Figures have been rebased to 100)
 8,222 – 8,222 24,967 – 24,967 –
At 31 March 2012
Total 179,182 6,950 186,132 186,832 186,832
(1)

(2)

Share price Net Asset Value – debt at market value FTSE All-Share Index




2022
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 45

## DIRECTORS' SHAREHOLDINGS AND SHARE INTERESTS (AUDITED)

Save as here stated, no Director had any interests, beneficial or otherwise, in the ordinary shares or debenture stock of the Company during the year. No changes to these holdings have been notified since the year end. No connected person interests have been notified.

Directors hold shares in the Company at their discretion. Share ownership is encouraged, but no guidelines have been set.

The beneficial interests of the Directors in the ordinary share capital of the Company are set out below:

|   | 31 March 2022 | 31 March 2021  |
| --- | --- | --- |
|  Glen Suarez | 37,000 | 37,000  |
|  Steve Baldwin | - | -  |
|  Vicky Hastings | 9,000 | 9,000  |
|  Elisabeth Stheeman | 6,000 | 3,000  |
|  Patrick Edwardson^{(1)} | 60,000 | 60,000  |

$^{(1)}$ Patrick Edwardson's holding includes 13,000 shares which are being held by a connected person.

## RELATIVE IMPORTANCE OF SPEND ON PAY

The following table compares the remuneration paid to the non-executive Directors with aggregate distributions to shareholders in respect of the year to 31 March 2022 and the prior year:

|   | 2022 £'000 | 2021 £'000 | Change £'000  |
| --- | --- | --- | --- |
|  Aggregate Directors' Remuneration | 185 | 187 | (2)  |
|  Aggregate Shareholder Distributions | 42,512 | 49,331 | (6,819)  |

## VOTING AT LAST ANNUAL GENERAL MEETING

At the Annual General Meeting of the Company held on 22 July 2021 a resolution approving the Chairman's Annual Statement and Report on Remuneration were passed. The votes cast (including votes cast at the Chairman's discretion) were as follows.

|   | Votes For | % | Votes Against | % | Votes Withheld  |
| --- | --- | --- | --- | --- | --- |
|  Annual Statement and Report on Remuneration | 52,829,474 | 98.67 | 712,465 | 1.33 | 59,536  |

## Approval

This Directors' Remuneration Report was approved by the Board of Directors on 25 May 2022.

**GLEN SUAREZ / CHAIRMAN**

Signed on behalf of the Board of Directors
46 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
## Financial Review
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 47
## Independent Auditor’s Report
### To the members of The Edinburgh Investment Trust plc
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion

 
ended;
 


 




Basis for opinion



Independence





Our audit approach
Overview
 
 
 
 
 




 


 


48 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
### 






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
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– 



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







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 
 



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

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




THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 49
 
 


















 
 
 











Materiality





Overall Company materiality 
How we determined it 
 










50 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
### 


 

 

 


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




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




THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 51
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
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
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

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 
 
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 
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 
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 
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







52 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
### 














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





THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 53
OTHER REQUIRED REPORTING


 
 

 
 


Appointment



Jeremy Jensen



London

54 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
## Income Statement
### For the year ended 31 March

|  |  |  | 2022 |  |  |  | 2021 |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Revenue |  | Capital | Total | Revenue |  | Capital | Total |
| Notes |  | £’000 | £’000 | £’000 |  | £’000 | £’000 | £’000 |

 9(b) – 101,815 101,815 – 247,596 247,596
 – (148) (148) – (91) (91)
 2 44,211 10,036 54,247 32,842 11,041 43,883
 3 (1,512) (3,528) (5,040) (1,016) (2,371) (3,387)
 4 (977) (9) (986) (814) (13) (827)

41,722 108,166 149,888 31,012 256,162 287,174

 5 (2,492) (5,815) (8,307) (2,438) (5,690) (8,128)

39,230 102,351 141,581 28,574 250,472 279,046

 6 (663) – (663) (495) – (495)

38,567 102,351 140,918 28,079 250,472 278,551

Return per ordinary share:
 7      





THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 55
## Balance Sheet
### As at 31 March
2022 2021
Notes £’000 £’000
Fixed assets
 9(a) 1,218,725 1,151,008
Current assets
 10 10,824 7,974
 68,728 32,570
79,552 40,544
Creditors: amounts falling due within one year
 11 (2,566) (698)
 11 (99,874) –
(102,440) (698)
 (22,888) 39,846

|  |  | 1,195,837 1,190,854 |
| --- | --- | --- |
|  | 12 (20,000) (99,623) |  |
| Net assets |  | 1,175,837 1,091,231 |

Capital and reserves

|  | 13 48,917 48,917 |
| --- | --- |
|  | 14 10,394 10,394 |
|  | 14 24,676 24,676 |
|  | 14 1,041,086 945,728 |

 14 50,764 61,516
Total Shareholders’ funds 1,175,837 1,091,231
:
 15  
 15  

GLEN SUAREZ / 


56 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
## Statement of Changes in Equity
Capital

|  | Share |  | Share |  |  |  | Capital |  | Revenue |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Capital | Premium |  |  | Reserve |  | Reserve |  | Reserve |  |  | Total |
| Notes | £’000 |  | £’000 |  |  | £’000 | £’000 |  |  | £’000 |  | £’000 |

At 31 March 2020 48,917 10,394 24,676 706,726 81,771 872,484

|  | – – – 250,472 28,079 278,551 |  |
| --- | --- | --- |
|  | 8 – – – – (48,334) (48,334) |  |
|  |  | – – – (11,470) – (11,470) |

At 31 March 2021 48,917 10,394 24,676 945,728 61,516 1,091,231

|  |  | – – – 102,351 38,567 140,918 |
| --- | --- | --- |
|  | 8 – – – – (49,319) (49,319) |  |
|  |  | – – – (6,993) – (6,993) |

At 31 March 2022 48,917 10,394 24,676 1,041,086 50,764 1,175,837

 

THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 57
## Cash Flow Statement
### For the year ended 31 March
2022 2021
Notes £’000 £’000

 149,888 287,174
 6 (663) (495)

 (426,367) (417,672)
 462,132 437,425
35,765 19,753
 (101,815) (247,596)
 (3,201) (2,303)
 128 (141)
 80,102 56,392


|  |  | (1) – |
| --- | --- | --- |
|  |  | (85) (158) |
|  | (7,994) (7,750) |  |
|  | 20,000 – |  |

 (6,545) (11,538)

|  | 8 (49,319) (48,334) |  |
| --- | --- | --- |
|  |  | (43,944) (67,780) |
|  |  | 36,158 (11,388) |
|  |  | 32,570 43,958 |
| Cash and cash equivalents at the end of the year |  | 68,728 32,570 |



|  | 1,021 844 |
| --- | --- |
|  | 47,727 31,726 |
|  | 19,980 – |
| Cash and cash equivalents | 68,728 32,570 |


 50,447 39,963
 – 4
Non-cash
At 1 April 2021  movement At 31 March 2022
£’000 £’000 £’000 £’000

 32,570 36,158 – 68,728
 (99,623) – (251) (99,874)
 – (20,000) – (20,000)
Total (67,053) 16,158 (251) (51,146)
58 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
## Notes to the Financial Statements
1. PRINCIPAL ACCOUNTING POLICIES





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








 



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these
 


 
 

 
 




 

THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 59
C. Financial Instruments

 
 


 
 




 

 

 
  
  
  

  




  
  

D. Cash and Cash Equivalents





E. Hedging


F. Income





60 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
### 
G. Expenses and Finance Costs














I. Dividends Payable















  









THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 61


2. INCOME


2022 2021
£’000 £’000
Income from investments:

|  |  | 11 – |  |
| --- | --- | --- | --- |
|  | 32,253 26,028 |  |  |
|  | 6,689 2,432 |  |  |
|  | 5,193 4,368 |  |  |
|  28 |  |  | 11 |

44,174 32,839
Other income:
 – 3
 37 –
37 3
Total income 44,211 32,842

3. INVESTMENT MANAGEMENT FEE

2022 2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
 1,512 3,528 5,040 1,016 2,371 3,387


62 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
### 
4. OTHER EXPENSES


2022 2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Other expenses 977 9 986 814 13 827

(i)
 184 – 184 187 – 187
(ii)
  :
 41 – 41 33 – 33

 – – – 8 – 8

 – – – 3 – 3

 

 

  

  
5. FINANCE COSTS

 
2022 2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000



|  |  | 18 42 60 38 89 127 |
| --- | --- | --- |
|  |  | – 1 1 – – – |
|  | 2,325 5,425 7,750 – – – |  |
|  |  | – – – 2,325 5,425 7,750 |
| –  |  | 73 171 244 – – – |

 76 176 252 75 176 251
2,492 5,815 8,307 2,438 5,690 8,128
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 63
6. TAX AND TOTAL RETURN ON ORDINARY ACTIVITIES




2022 2021
£’000 £’000
 663 495


|  |  | 2022 | 2021 |
| --- | --- | --- | --- |
|  |  | £’000 | £’000 |
|  | 141,581 279,046 |  |  |
|  | 26,900 53,019 |  |  |



|  | (6,128) (4,945) |  |
| --- | --- | --- |
|  | (972) (2,560) |  |
|  | (3,178) (830) |  |
|  | (19,345) (47,037) |  |
|  |  | 28 11 |
|  | 2,693 2,340 |  |
|  |  | 2 2 |

 663 495
Tax charge for the year 663 495









64 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
### 





8. DIVIDENDS ON ORDINARY SHARES


2022 2021
pence £’000 pence £’000
Dividends paid and recognised in the year:

|  | 6.00 10,331 6.40 11,180 |
| --- | --- |
|  | 6.00 10,331 9.45 16,492 |
|  | 4.65 8,006 – – |
|  | 6.00 10,331 6.00 10,331 |

 6.00 10,320 6.00 10,331
28.65 49,319 27.85 48,334
2022 2021
pence £’000 pence £’000
Dividends payable in respect of the year:

|  | 6.00 10,331 6.00 10,331 |
| --- | --- |
|  | 6.00 10,320 6.00 10,331 |
|  | 6.40 10,934 6.00 10,331 |

 6.40 10,927 6.00 10,331
24.80 42,512 24.00 41,324
 0.00 0 4.65 8,007
24.80 42,512 28.65 49,331

THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 65
9. INVESTMENTS


Gains or losses are either:
 
 


|  |  | 2022 | 2021 |
| --- | --- | --- | --- |
|  |  | £’000 | £’000 |
|  | 1,218,419 1,150,903 |  |  |

 306 105
1,218,725 1,151,008


|  |  | 2022 | 2021 |
| --- | --- | --- | --- |
|  |  | £’000 | £’000 |
|  | 1,026,675 1,068,853 |  |  |
|  | 124,333 (146,420) |  |  |
|  | 1,151,008 922,433 |  |  |


 427,683 416,676
 (461,781) (435,697)
 101,815 247,596
 1,218,725 1,151,008
 1,048,510 1,026,675
 170,215 124,333
 1,218,725 1,151,008





66 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
### 
10. DEBTORS



|  | 2022 | 2021 |
| --- | --- | --- |
|  | £’000 | £’000 |
|  | 1,138 1,489 |  |
|  | 1,897 1,592 |  |

 7,789 4,893
10,824 7,974
11. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR




|  | 2022 | 2021 |
| --- | --- | --- |
|  | £’000 | £’000 |
|  | 99,874 – |  |
|  | 1,316 – |  |
|  | 448 – |  |

 802 698
102,440 698








12. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2022 2021
£’000 £’000

 20,000 –
 – 100,000
 – (377)
20,000 99,623
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 67

### 13. SHARE CAPITAL

*Share capital represents the total number of shares in issue, including treasury shares.*

|   | 2022 | 2021  |
| --- | --- | --- |
|  Share capital: |  |   |
|  Ordinary shares of 25p each (£'000) | 42,770 | 43,046  |
|  Treasury shares of 25p each (£'000) | 6,147 | 5,871  |
|   | 48,917 | 48,917  |
|   | 2022 | 2021  |
|  Number of ordinary shares in issue: |  |   |
|  Brought forward | 172,182,929 | 174,682,929  |
|  Shares bought back and held in treasury | (1,104,800) | (2,500,000)  |
|  **Carried forward** | **171,078,129** | **172,182,929**  |
|  Number of shares held in treasury: |  |   |
|  Brought forward | 23,483,805 | 20,983,805  |
|  Shares bought back into treasury | 1,104,800 | 2,500,000  |
|  **Carried forward** | **24,588,605** | **23,483,805**  |
|  **Total ordinary shares** | **195,666,734** | **195,666,734**  |

During the year the Company bought back, into treasury, 1,104,800 (2021: 2,500,000) ordinary shares at an average price of 632.95p (2021: 458.79p) (including costs). Since the year end, 290,000 shares have been bought back into treasury.

The Directors' Report on pages 39 and 40 sets out the Company's share capital structure, restrictions and voting rights.

### 14. RESERVES

***This note explains the different reserves attributable to shareholders. The aggregate of the reserves and share capital (see previous note) make up total shareholders' funds.***

The share premium comprises the net proceeds received by the Company following the issue of shares, after deduction of the nominal amount of 25 pence and any applicable issue costs. The capital redemption reserve maintains the equity share capital of the Company and arose from the nominal value of any shares bought back and cancelled; both are non-distributable.

The capital reserve includes the investment holding gains/(losses), being the difference between cost and market value at the balance sheet date. It also includes cumulative realised gains/(losses) and costs related to share buybacks. Capital investment gains and losses are shown in note 9(b) and form part of the capital reserve.

The revenue reserve and certain amounts of the capital reserve are distributable by way of dividend.
68 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
### 
15. NET ASSET VALUE PER ORDINARY SHARE


, issued
their combined







2022 2021

|  |  |  |  | Share- |  |  | Share- |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  | NAV | holders’ |  | NAV | holders’ |
|  | per share |  |  | funds | per share |  | funds |
|  |  | pence |  | £’000 |  | pence | £’000 |
|  |  | 687.31 1,175,837 633.76 1,091,231 |  |  |  |  |  |


 (0.07) (126) (0.22) (377)
 687.24 1,175,711 633.54 1,090,854



 

2022 2021

|  |  |  |  | Share- |  |  | Share- |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  | NAV | holders’ |  | NAV | holders’ |
|  | per share |  |  | funds | per share |  | funds |
|  |  | pence |  | £’000 |  | pence | £’000 |
|  |  | 687.24 1,175,711 633.54 1,090,854 |  |  |  |  |  |
|  |  | 70.14 120,000 58.08 100,000 |  |  |  |  |  |

  (70.69) (120,938) (63.33) (109,041)
 686.69 1,174,773 628.29 1,081,813
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 69
16. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS



Financial instruments
,









 

 

 

















70 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
### 
16.1.1 Currency risk















2022 2021

|  | USD | CHF | EUR | USD | CHF | EUR |
| --- | --- | --- | --- | --- | --- | --- |
|  | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 |
|  | 3,793 1,106 2,389 1,915 859 979 |  |  |  |  |  |


 46,641 27,635 70,032 39,881 12,393 39,593
Total net foreign currency exposure 50,434 28,741 72,421 41,796 13,252 40,572











16.1.2 Interest rate risk






 
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 71








Interest rate exposure



2022 2021

| Within |  | Between |  |  |  | Within |  | Between |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | one | one and |  |  |  |  | one | one and |  |  |
|  | year |  |  | years | Total |  | year |  |  | Total |
| £’000 |  |  | £’000 | £'000 | £’000 | £’000 |  |  | £’000 | £’000 |


 48,748 – – 48,748 32,570 – 32,570

 19,980 – – 19,980 – – –
 (100,000) – – (100,000) – (100,000) (100,000)

– – (20,000) (20,000) – – –

Total exposure to interest rates (31,272) – (20,000) (51,272) 32,570 (100,000) (67,430)
16.1.3 Other price risk

M









72 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
### 







More
than three
months

|  |  |  | Three |  |  | but |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | months |  |  | less than |  | More than |  |  |
|  |  |  | or less |  | one year |  | one year |  | Total |
|  | 2022 |  | £’000 |  |  | £’000 |  | £’000 | £’000 |
|  |  |  |  | – 100,000 – 100,000 |  |  |  |  |  |
|  |  |  |  | – – 20,000 20,000 |  |  |  |  |  |
|  |  |  |  | – 3,875 – 3,875 |  |  |  |  |  |
|  |  |  |  | – 506 14,421 14,927 |  |  |  |  |  |
|  |  |  | 1,316 – – 1,316 |  |  |  |  |  |  |
|  |  |  | 448 – – 448 |  |  |  |  |  |  |

 802 – – 802
2,566 104,381 34,421 141,368
More
than three
months

|  |  |  | Three |  |  | but |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | months |  |  | less than |  | More than |  |  |
|  |  |  | or less |  | one year |  | one year |  | Total |
|  | 2021 |  | £’000 |  |  | £’000 |  | £’000 | £’000 |
|  |  |  |  | – – 100,000 100,000 |  |  |  |  |  |
|  |  |  |  | – 7,750 3,875 11,625 |  |  |  |  |  |

 698 – – 698
698 7,750 103,875 112,323










THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 73

## 17. FAIR VALUE

*The values of the financial assets and financial liabilities are carried either at their fair value (investments), or at a reasonable approximation of fair value (amounts due from brokers, dividends receivable, accrued income, amounts due to brokers, accruals, cash and any drawings on the bank facility) or at amortised cost (debenture).*

### Fair Value Hierarchy Disclosures

All except two of the Company's portfolio of investments are in the Level 1 category as defined in FRS 102 as amended for fair value hierarchy disclosures (March 16). The three levels set out in this follow.

Level 1 – the unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly.

Level 3 – Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.

Categorisation within the hierarchy is determined on the basis of the lowest level input that is significant to the fair value measurement of each relevant asset/liability.

The valuation techniques used by the Company are explained in the accounting policies note.

|   | 2022  |   |   |   |
| --- | --- | --- | --- | --- |
|   | Level 1 £'000 | Level 2 £'000 | Level 3 £'000 | Total £'000  |
|  Financial assets designated at fair value through profit or loss:  |   |   |   |   |
|  Quoted investments:  |   |   |   |   |
|  Equities and preference shares | 1,218,419 | – | – | 1,218,419  |
|  Unquoted and suspended investments | – | – | 306 | 306  |
|  **Total for financial assets** | **1,218,419** | **–** | **306** | **1,218,725**  |

|   | 2021  |   |   |   |
| --- | --- | --- | --- | --- |
|   | Level 1 £'000 | Level 2 £'000 | Level 3 £'000 | Total £'000  |
|  Financial assets designated at fair value through profit or loss:  |   |   |   |   |
|  Quoted investments:  |   |   |   |   |
|  Equities and preference shares | 1,150,903 | – | – | 1,150,903  |
|  Unquoted investments | – | – | 105 | 105  |
|  **Total for financial assets** | **1,150,903** | **–** | **105** | **1,151,008**  |

The valuation techniques used by the Company are explained in the accounting policies note. At the end of the financial year there were no Level 2 investments. There were two investments in Level 3 at the year end (2021: one investment) totalling £306,000 (2021: £105,000).

The holding in Eurovestech did not change during the year, but the fair value was £69,000 (2021: £105,000).

Raven Property is the other unquoted investment. Their issued preference shares were suspended on 2 March 2022 due to sanctions on the company's Russian businesses. At the date of suspension the quoted price was 20p share, however the Directors' revalued the shares to 10p per share resulting in a fair value of £237,000. On 17 March 2022 Raven Property announced their intention to de-list their issued ordinary and preference shares, a process which is still underway.
74 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
### 

2022 2021

|  | Fair |  | Fair |
| --- | --- | --- | --- |
| Value | Value | Value | Value |
| £’000 | £’000 | £’000 | £’000 |


7 ¾2022 100,000 102,734 100,000 109,041
 (126) – (377) –

 20,000 18,204 – –
119,874 120,938 99,623 109,041
debt
18. CAPITAL MANAGEMENT



,











  


19. CONTINGENCIES, GUARANTEES AND FINANCIAL COMMITMENTS



THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 75
20. RELATED PARTY TRANSACTIONS AND TRANSACTIONS WITH THE MANAGER





21. POST BALANCE SHEET EVENTS

 
I


other
76 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
## Other Information
## for Shareholders
THE EDINBURGH INVESTMENT TRUST PLC / OTHER INFORMATION FOR SHAREHOLDERS / 77
## Notice of Annual General Meeting
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR 
IMMEDIATE ATTENTION. If you are in any doubt as to what 
 
 

 AGM VOTING


this document and the accompanying Form of Proxy to the



transmission to the purchaser or transferee.

NOTICE OF ANNUAL GENERAL MEETING



 

ORDINARY BUSINESS






 



 

 



 

 
6 

 

 

 









SPECIAL BUSINESS

 
 
 

 















78 / OTHER INFORMATION FOR SHAREHOLDERS / THE EDINBURGH INVESTMENT TRUST PLC
### Notice of Annual General Meeting / continued
 










 

 

 





 

 



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
















THE EDINBURGH INVESTMENT TRUST PLC / OTHER INFORMATION FOR SHAREHOLDERS / 79
Notes 
1. 




 Shareholders




be 


2.
  
 
his stead. A proxy need not be a member of the Company. In 
 
 

  

  




personal member or sponsored member or has appointed a
   
 
 

 






 


 
 

 


by 11.00 am on 19








19


3.  

19




Personal Members or other CREST sponsored members, and









made by means of CREST to be valid, the appropriate CREST




 6.
 




the appointment of a proxy or to an amendment to the






80 / OTHER INFORMATION FOR SHAREHOLDERS / THE EDINBURGH INVESTMENT TRUST PLC
### Notice of Annual General Meeting / continued
 
   
 
 


 



















 
 
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THE EDINBURGH INVESTMENT TRUST PLC / OTHER INFORMATION FOR SHAREHOLDERS / 81
## Shareholder Information
HOW TO INVEST IN THE EDINBURGH INVESTMENT 


The Company’s shares are quoted on the London Stock Exchange. 
There are a variety of ways by which investors can buy the shares. 
 
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
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
 

DEBENTURE STOCK


 

7¾% 2022 September 2022





 

31 March



The one hundred and thirty second





21



 







 
 

 Secretary whose correspondence address is shown on the
next page.
 
 
82 / OTHER INFORMATION FOR SHAREHOLDERS / THE EDINBURGH INVESTMENT TRUST PLC
## Advisors and Principal
## Service Providers
REGISTERED OFFICE THE ASSOCIATION OF INVESTMENT COMPANIES
 
 
 
 

COMPANY NUMBER
LAWYER

 

ALTERNATIVE INVESTMENT FUND MANAGER 
 



REGISTRAR

 
  

COMPANY SECRETARY 




6 






INDEPENDENT AUDITOR 








DEPOSITARY AND CUSTODIAN

 






BANKER






 
CORPORATE BROKER 










THE EDINBURGH INVESTMENT TRUST PLC / OTHER INFORMATION FOR SHAREHOLDERS / 83
## Glossary of Terms and Alternative
## Performance Measures















Page 2022 2021
Share price 2 a 634.00p 600.00p
Net asset value per share – debt at market value (note 15) 68 b 686.69p 628.29p
Discount c = (a-b)/b (7.7)% (4.5)%
DIVIDEND YIELD

Page 2022 2021
Dividends per share payable in respect of the year (note 8) 64 a 24.80p 28.65p
Share price 2 b 634.00p 600.00p
 c = a/b 3.9% 4.8%
GEARING









|  |  |  |  | 2022 | 2021 |
| --- | --- | --- | --- | --- | --- |
|  | Page |  |  | £’000 | £’000 |
| Unsecured Senior Loan Notes – debt at market value (note 15) |  | 68 18,204 – |  |  |  |
| Debenture stock – debt at market value (note 15) |  | 68 102,734 109,041 |  |  |  |
| Gross borrowings |  |  | a 120,938 109,041 |  |  |

Net asset value – debt at market value (note 15) 68 b 1,174,773 1,081,813
Gross gearing c = a/b 10.3% 10.1%
84 / OTHER INFORMATION FOR SHAREHOLDERS / THE EDINBURGH INVESTMENT TRUST PLC
### Glossary of Terms and Alternative
### Performance Measures / continued





|  |  | 2022 | 2021 |
| --- | --- | --- | --- |
|  | Page | £’000 | £’000 |
| Unsecured Senior Loan Notes – debt at market value (note 15) |  | 18,204 – |  |
| Debenture stock – debt at market value (note 15) | 68 102,734 109,041 |  |  |

Less: cash and cash equivalents 55 (68,728) (32,570)
Net borrowings a 52,210 76,471
Net asset value – debt at market value (note 15) 68 b 1,174,773 1,081,813
Net gearing c = a/b 4.4% 7.1%
LEVERAGE




















|  |  | 2022 | 2021 |
| --- | --- | --- | --- |
|  | Page | £’000 | £’000 |
| Investment management fee | 61 5,040 3,387 |  |  |
| Other expenses | 62 986 827 |  |  |


(34) (38)

Total recurring expenses a 5,992 4,176
Average daily net assets b 1,157,887 974,141
 c = a/b 0.52% 0.43%
Investment management fee waiver d – 750
 c = (a+d)/b 0.52% 0.51%
THE EDINBURGH INVESTMENT TRUST PLC / OTHER INFORMATION FOR SHAREHOLDERS / 85
RETURN

CAPITAL RETURN

TOTAL RETURN










|  |  |  | Net Asset |  | Share |
| --- | --- | --- | --- | --- | --- |
|  | 2022 Page |  |  |  | Price |
| As at 31 March 2022 |  | 2 686.69p 634.00p |  |  |  |

As at 31 March 2021 2 628.29p 600.00p
Change in year a 9.3% 5.7%
(1)
Impact of dividend reinvestments b 4.8% 4.9%
 c = a+b 14.1% 10.6%

|  |  |  | Net Asset |  | Share |
| --- | --- | --- | --- | --- | --- |
|  | 2021 Page |  |  |  | Price |
| As at 31 March 2021 |  | 2 628.29p 600.00p |  |  |  |

As at 31 March 2020 3 490.40p 434.00p
Change in year a 28.1% 38.2%
(1)
Impact of dividend reinvestments b 6.7% 8.2%
 c = a+b 34.8% 46.4%

 





COMPANY NAME

86 / OTHER INFORMATION FOR SHAREHOLDERS / THE EDINBURGH INVESTMENT TRUST PLC
## Alternative Investment Fund
## Managers Directive Disclosure
 
AND THE ALTERNATIVE INVESTMENT FUND MANAGERS
 


 
 

 








 



AIFM REMUNERATION

 
 
 
 
 






 
 









## The Edinburgh
## Investment Trust plc
STRATEGY
OVERVIEW
 2-4
Chairman’s Statement 5-7
STRATEGIC REPORT
 9-12
 13
Business Review 14-15
 16-17
 18
 19-21
Viability Statement 22
 23-25
GOVERNANCE
The Directors 28-29
The Company’s Corporate Governance Framework 30
Corporate Governance Statement 31
 32-34
Directors’ Report 35-41
 42
 43-45
FINANCIAL REVIEW
Independent Auditor’s Report 47-53
Income Statement 54
Balance Sheet 55
Statement of Changes in Equity 56
Cash Flow Statement 57
Notes to the Financial Statements 58-75
OTHER INFORMATION FOR SHAREHOLDERS
 77-80
 81
Advisors and Principal Service Providers 82
 83-85
 86
If you wish to contact members of the Edinburgh Investment Trust The Company is a
Board then please get in touch with the Company Secretary on member of
+44 (0)20 3327 9720. If you have any enquiries for the Manager,
please contact them on +44 (0)20 7412 1700.
## www.edinburghinvestmenttrust.com
The Edinburgh Investment Trust plc ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 MARCH 2022
### The Edinburgh
## The Edinburgh
### Investment Trust plc
## Quartermile One Investment Trust plc
15 Lauriston Place
ANNUAL FINANCIAL REPORT
Edinburgh
FOR THE YEAR ENDED 31 MARCH 2022
EH3 9EP
## www.edinburghinvestmenttrust.com