Annual Results

Global Opportunities Trust plc

Legal Entity Identifier: 2138005T5CT5ITZ7ZX58

Annual Results for the year ended 31 December 2023

Financial Highlights

CHANGE IN NET ASSET VALUE PER SHARE  – cum inc.  0.2%	NET ASSET VALUE TOTAL RETURN (with dividends added back)* 1.7%
SHAREHOLDERS’ FUNDS £106.4m	DISCOUNT TO NET ASSET VALUE* 18.2%

	31 December 2023	31 December 2022	% Change
Net assets/shareholders’ funds (£)	106,411,000	106,144,000	0.3
Shares in issue	29,222,180	29,222,180	-
Net asset value per share – cum inc. (pence)*	364.1	363.2	0.2
Net asset value total return (with dividends added back) (%)*	1.7	15.8	n/a
Share price (pence)	298.0	314.0	(5.1)
Dividend per share (pence)	5.0	5.0	–
Share price total return (with dividends added back) (%)*	(3.6)	9.8	n/a
Share price discount to net asset value (%)*	(18.2)	(13.5)	n/a
Ongoing charges ratio (%)*	0.9	0.9	n/a

* Alternative Performance Measure.

CHAIRMAN’S STATEMENT

Introduction

I am pleased to present the Company’s Annual Report and Financial Statements for the year ended 31 December 2023.

The Company’s year under review is the first completed entirely under its self-managed status and has also been witness to the transition to its new management arrangements, as further detailed below. These changes have been undertaken through a period of volatile markets, experienced within both equities and bonds, arising from unstable macroeconomic variables as well as heightened geopolitical tensions on a global scale.

Management arrangements  

Following the transition to self-managed status in 2022, the Company terminated its investment management agreement with Franklin Templeton in May 2023 with the management of the global listed equities portion of the portfolio now being undertaken directly by Dr Nairn, Executive Director. As disclosed in the prior year’s Annual Report, the Company has entered into a strategic relationship with Goodhart Partners LLP (‘Goodhart’). Goodhart’s role is twofold, both to introduce private market opportunities to the Company and to act as a Sub-Advisor in relation to the management of the global listed equities mandate. Despite being relatively early into the new arrangements, the Company is benefiting from the combined knowledge of Dr Nairn and Goodhart and the opportunities this relationship is presenting. Further information on Goodhart is available via the website at www.goodhartpartners.com.

Investment performance

Despite the challenging market conditions of 2023, the Company’s net asset value (‘NAV’) grew by 1.7% during the year however its share price fell by 3.6%, both on a total return basis with dividends assumed to be reinvested. In comparison, the FTSE All-World Total Return Index rose by 15.7%, following a strong rally towards the end of 2023 and the heavier weighting given by this index to technology stocks (dominated by the so called “Magnificent Seven”), including those buoyed by the rapid growth in artificial intelligence. Shareholders should note however that the Company has no stated benchmark against which it seeks to outperform. Its objective is to achieve real long-term total return through investing in undervalued global securities.

As at 31 December 2023 the Company had net assets of £106.4 million. The NAV per ordinary share was 364.1p and the middle market price per share on the London Stock Exchange was 298.0p, representing a discount to NAV of 18.2%. The Company’s discount is discussed in more detail under the ‘Share capital’ section that follows.

Further details on the investment performance of the Company during the year under review are included in the Executive Director’s Report.

Share capital

The Company’s discount to underlying NAV averaged 14.5% during the year, on a monthly basis, and at the year-end stood at 18.2%. Despite operating at a discount throughout the year, the discount has not been subject to the levels of volatility experienced by some of the Company’s peers, and at the year-end was comparable to the average discount of 18.3% in the ‘Flexible Investment’ sector of the Association of Investment Companies (‘AIC’), of which the Company is a member. Following the change in investment objective which was approved by shareholders at the end of 2021 and subsequent tender offer early in 2022, no share buybacks have been conducted by the Company, and the buyback policy no longer aims to keep the share price at close to NAV. The Board however remains of the opinion that having the option to utilise share buybacks as a discount control mechanism is important and is therefore requesting that shareholders approve a renewal to this authority at the forthcoming Annual General Meeting (‘AGM’).

Earnings and final dividend

The return per ordinary share for the year ended 31 December 2023 was 5.9 pence per share comprising a revenue return of 5.3 pence per share and a capital return of 0.6 pence per share. The Board is proposing a final dividend of 5.0 pence per share which, subject to approval by shareholders at the AGM, will be paid on 31 May 2024 to those shareholders on the register at the close of business on 3 May 2024. This dividend is fully covered by the Company’s earnings in the financial year under review and exceeds the minimum that the Company is obliged to distribute under law to maintain its investment trust status.

Board composition

We welcomed Katie Folwell-Davies to the Board following her election at the last AGM held in April 2023. David Ross retired following the AGM’s conclusion. The Board believes that its size and composition remain appropriate for the activities of the Company and the Board retains a good balance of skills and business experience to enable it to operate effectively. As such, all Directors will be standing for re-election at the forthcoming AGM.

Annual General Meeting

This year’s AGM will be held on 16 May 2024 at the offices of Juniper Partners Limited, 28 Walker Street, Edinburgh EH3 7HR at 12 noon.

In addition to the formal business of the meeting, Dr Nairn will provide a short presentation to shareholders on the performance of the Company over the past year as well as an outlook for the future.

The AGM is an opportunity for shareholders to ask questions of both the Board and of the Executive Director, and as always, the Board would welcome your attendance. If you are unable to attend the AGM in person, I would encourage you to vote in favour of all resolutions by Form of Proxy and appointing me (as Chair of the meeting) as your proxy to ensure your vote is registered.

Outlook

Whilst last year we thought that significant market rallies would be likely in response to falling inflation, these rallies have been sustained longer than we might have expected. The reason probably lies in the growth recorded in the US which has given rise to the hope that there will be a ‘soft landing’ and a meaningful recession will be avoided. Should this occur, it is just about possible to make an argument for the current extended equity valuations, however this would not leave much room for significant returns. If the global economy were to follow normal historic patterns, then there will be significant scope for negative corporate profit outcomes which would quickly puncture the current prevailing sanguine view of equity markets. Against this backdrop the Company has retained a broadly similar structure to last year in anticipation of new opportunities arising.

As noted earlier, whilst the Company’s NAV rose slightly over the year this was not reflected in the share price such that the discount widened further. To address this, efforts have begun to increase investors’ awareness of the Company and these will be intensified during 2024.

Once again, we would like to thank our shareholders for their continued support and look forward to the day when the investment landscape is more attractive. Periodically, investment articles are posted on the Company’s website when we encounter investment issues worthy of comment and we would encourage shareholders to sign up to the website to receive such notifications during the year.

Keep up to date

Shareholders can keep up to date on the performance of the portfolio through the Company’s website at www.globalopportunitiestrust.com where you will find information on the Company, a monthly factsheet and regular updates from Dr Nairn.

As always, the Board welcomes communication from shareholders and I can be contacted directly through the Company Secretary at [e-mail].

Cahal Dowds

Chairman

9 April 2024

EXECUTIVE DIRECTOR’S REPORT

Background and context

Before discussing the returns during 2023, and the outlook for 2024, it is worth recapping on the experience of 2022, and how we felt as 2022 unfolded. The main message in 2022 was the level of overvaluation that we believed was apparent across all asset classes and markets, flowing from the extended period of interest rate suppression. Whilst inflation was thought to be absent from the system it was possible for markets to believe in a world where excessive debt carried little consequences, leverage was positive and economic growth could continue without any setback, safe in the knowledge that governments would step in whenever necessary. This sanguine market view was interrupted when post-Covid consumption increases and the invasion of Ukraine met supply side bottlenecks, oil prices soared and inflation reared its head. The net result was that asset markets declined markedly during 2022, although this was mitigated for sterling-based investors by the pound’s depreciation.

Prior to these price moves it was possible to make an unequivocal statement about the excess valuation in asset markets, requiring as it did a heroic set of assumptions to provide any meaningful justification. Once those price moves had taken place, the position was more nuanced. Many sovereign bonds for example, including UK Gilts and US Treasuries, had moved to yields which in the event of declines in inflation would leave them, for the first time in several years, trading in a historically sustainable range. Whether they represented good value or not at those levels would be determined by one’s economic outlook, but they could plausibly be seen as at least fair value. Equities in the major markets on the other hand remained, despite the declines, at historically high valuations.

Cyclically adjusted price-earnings ratios (Shiller) US equities, even at the trough in February 2022, were at a valuation similar to that which existed before the 1929 crash and only exceeded two other times in a hundred years. To justify such a valuation required a view that the global economy was at an economic trough and about to venture into an extended period of strong growth. This was not our view. We believed that the normalisation of interest rates would slow growth from the post Covid sugar high and that economic conditions would tighten. Our concerns lay with future growth, not inflation. As the year progressed markets took the view that falling inflation would lead to interest rate declines and that the equity party could recommence. As a consequence, there were meaningful rallies in equity markets globally. In our view this was effectively a nostalgic desire to go back to a period where interest rates were suppressed and governments used fiscal policy to try and maintain growth.

We do not subscribe to the view that the post ‘Global Financial Crisis’ world can be recreated. Whilst the US recorded 2.5% real growth in 2023 this was supported by a significant fiscal injection and despite the backdrop of a debt/GDP position in excess of 100%. The fiscal arithmetic is such that limits on the extent to which governments can sustain growth are now very real. Indeed, history suggests that fiscal retrenchment will be required at some point soon. In other words, if market rises were predicated on expectations of more of the same, they are likely to be disappointed.

It is hard to see how the global economy can survive the accumulated debt levels and normalisation of interest rates without economic pain. A repeat can only come about if debt markets become particularly supine. Despite the fiscal injection, there is evidence of rising corporate bankruptcy filings (from public companies or private companies with listed debt) such that in the US, for example, the level reached in 2023 was the highest since 20101. Moreover, studies suggest the proportion of listed companies that can be described as “zombies”, meaning able to generate sufficient cash, to survive, but unable to grow or make a meaningful profit, has almost doubled to over 10%2. For context, 10% would be a level exceeded only once since 2000.

1 S&P Global Market Intelligence

2 The Rise of the Walking Dead: Zombie Firms Around the World; Albuquerque, B and Iyer, R. I IMF WP/23/125, June 2023

Rather than a rosy economic environment ahead, the storm clouds look to be gathering. Sovereign bond prices may not suffer too much from here, but one has to expect credit spreads to widen and for equities eventually to react to an environment in which profit progression becomes increasingly difficult. Policymakers should be aware also of the tail risk of sovereign credit risk becoming a theme the vulture funds can latch onto. The deterioration in Germany’s economic position is particularly worthy of note.

The portfolio

Since our view on future economic prospects and current valuations in equities has not changed significantly, the portfolio structure remains similar to last year. In last year’s Annual Report we highlighted the characteristics of the portfolio. Specifically, we set out the four major components and the role that they play in creating a structure which aims to reduce the absolute downside whilst retaining some upside potential.

1. The direct equity portfolio at the end of 2023 accounted for approximately 40% of the total assets. It had a total return of 9.5%, just over half of that recorded by the MSCI All Country World Index. This is in line with our expectations given the defensive nature of the portfolio. Fresenius Medical Care rose by over 30% as it recovered from previous concerns over US staffing shortages. We felt that with the rise in direct obesity medicines the market for diabetes care would eventually be affected and hence we sold the holding. The rest of the portfolio remained relatively stable with few new holdings added. This reflected the difficulty, not in finding companies with good growth prospects but ones that also had an attractive valuation. In other words, at an individual company level the evidence on valuations is consistent with what we see at the aggregate level. Our research efforts are therefore focussed on creating a reserve list of potential investments where we expect opportunities to arise. This is part of what will be a transition to companies where the risk/reward is tilted more towards reward. This transition is likely to see increased exposure to small and mid-cap companies. It is likely to be achieved both directly and, where appropriate, through the use of specialist third party managers. We are currently conducting research on both.

2. The investment in the Templeton European Long-Short Equity Fund provided slightly negative sterling returns over the year reflecting the sharp rally in equities at the beginning and end of the year. The negative contribution to the total return of the overall portfolio was less than 1% which we believe is creditable when set against the magnitude of the positive returns we achieved in 2022 when markets fell. We remain strongly of the belief that this holding performs a vital role in balancing the risk in the overall portfolio and potentially providing meaningful upside if markets were to fall. The long-short manager’s view, with which we concur, was that the losses on the short portfolio were largely driven by expectations “that central banks would lower rates sooner and at a steeper slope than previously expected. This led to a rotation into companies which would benefit from looser policy (weak balance sheet, persistent cash burners) on the basis that more capital will become available to tide them over and keep them alive for longer.” He believes that this will only postpone the inevitable and that the value destruction will eventually overwhelm any rates decisions. This is consistent with the study of ‘zombie’ companies cited earlier.

3. The Volunteer Park Capital Fund rose over 10% in US dollar terms with the underlying holdings generally hitting their targets. Just as a reminder, our interest in this investment was driven by a risk/reward profile which focusses on obtaining significant downside protection whilst retaining the potential for a double-digit compounding upside. Such a combination was possible because of the underserved nature of this market segment. At a simple level, the underlying investments require significant due diligence irrespective of the size of the deal. This means that most players focus on the larger deals to justify the work that is required. In many cases banks have withdrawn from the space and the collapse of Silicon Valley Bank removed one of the major remaining players. The VPC manager anticipates that, given the progress made by a number of the invested companies, there is the potential for some distributions later in 2024.

4. Overall, the cash component of the portfolio was roughly flat reflecting the strength of sterling over the year. For reference sterling rose 5.7% against the US dollar and 14% against the Japanese Yen. We view these moves as simply part of the volatility of currency markets aided by the view that with inflation in the UK being more intransigent than in other countries, UK interest rates would remain higher, giving a higher yield on UK cash. This tends to be a temporary view which is overtaken by concerns that any yield pick-up will eventually be overtaken by currency devaluation. We are comfortable with the distribution of our cash assets as we wait for investment opportunities to arise.

Reflecting the individual components discussed above, for the year ended 31 December 2023, the Company’s NAV total return, including dividends was 1.7%. The comparable figure for the FTSE All-World Total Return Index was 15.7%; for the Bloomberg Global Aggregate Bond Index (0.16)%. Over the period, the Barclays Sterling Overnight Cash index returned 4.86%. While the portfolio did not track the global equity index higher, nor did it lose money.

Future prospects

Asset markets and equities in particular have proved extremely resilient and determined to focus on positives almost to the point where, although it has not been openly articulated, they depend upon the emergence of some new paradigm of investing. Valuations are close to historic highs, but so are debt levels, and economic storm clouds have gathered. There are some arguments that the asset world has reordered itself such that private valuations are now leading public ones. The argument runs that public listed companies are not that expensive since institutional private equity investors have been willing to pay higher multiples. Of course there is a counter argument that private equity investors are unable to list their holdings in public markets at a premium and are therefore forced to continue to hold or sell to another private holder. I would subscribe to the latter argument.

The portfolio remains positioned to take advantage of the ‘great unwind’ when it comes whilst both protecting investors and providing some upside at the same time. It is a difficult period since patience is one of the hardest virtues to sustain, particularly when constantly confronted with more upbeat narratives. However, in our view the evidence is still overwhelming that great caution is required. At the stock level we simply are not finding many compelling opportunities. We believe it would be a mistake to be “persuaded” into paying more for stocks than is consistent with attractive longer-term performance. In the meantime, we are conscious that the discount to NAV widened during 2023 and we realise it is incumbent upon us to ensure that we reach the wider audience who we believe will have a genuine interest in the Company as our thesis is reflected in market performance. This is a high priority for 2024.

Dr Sandy Nairn

Executive Director

9 April 2024

PORTFOLIO OF INVESTMENTS

as at 31 December 2023

Company	Sector	Country	Valuation £’000	% of Net assets
Templeton European Long-Short Equity SIF1	Financials	Luxembourg	14,699	13.8
Volunteer Park Capital Fund SCSp2	Financials	Luxembourg	8,249	7.8
TotalEnergies	Energy	France	3,789	3.6
Samsung Electronics	Information Technology	South Korea	2,961	2.8
Unilever	Consumer Staples	United Kingdom	2,926	2.7
ENI	Energy	Italy	2,852	2.7
Sumitomo Mitsui Trust Holdings	Financials	Japan	2,791	2.6
Orange	Communication Services	France	2,379	2.2
General Dynamics	Industrials	United States	2,243	2.1
Dassault Aviation	Industrials	France	2,111	2.0
Panasonic	Consumer Discretionary	Japan	2,102	2.0
Lloyds Banking	Financials	United Kingdom	2,057	1.9
Tesco	Consumer Staples	United Kingdom	2,054	1.9
Imperial Brands	Consumer Staples	United Kingdom	2,033	1.9
Murata Manufacturing	Information Technology	Japan	1,995	1.9
Raytheon Technologies	Industrials	United States	1,983	1.9
Daiwa House Industry	Real Estate	Japan	1,910	1.8
Sanofi	Health Care	France	1,857	1.7
Nabtesco	Industrials	Japan	1,721	1.6
Verizon Communications	Communication Services	United States	1,371	1.3
Total investments			64,083	60.2
Cash and other net assets			42,328	39.8
Net assets			106,411	100.0

1 Luxembourg Specialised Investment Fund

2 Luxembourg Special Limited Partnership

STRATEGIC REVIEW

Introduction

The purpose of this report is to provide shareholders with details of the Company’s strategy, objectives and business model as well as the principal and emerging risks and challenges the Company has faced during the year under review. It should be read in conjunction with the Chairman’s Statement, the Executive Director’s Report and the portfolio information, which provide a review of the Company’s investment activity and outlook.

The Board is responsible for the stewardship of the Company, including overall strategy, investment policy, dividends, corporate governance procedures and risk management. The Board assesses the performance of the Company against its investment objective at each Board meeting by considering its key performance indicators.

Business and Status

The principal activity of the Company is to carry on business as an investment trust.

The Company is registered in Scotland as a public limited company and is an investment company within the meaning of section 833 of the Companies Act 2006. The Company has been approved by HM Revenue & Customs as an authorised investment trust under sections 1158 and 1159 of the Corporation Tax Act 2010 and the ongoing requirements for approved companies as detailed in Chapter 3 of Part 2 of the Investment Trust (Approved Company) (Tax) Regulations 2011. In the opinion of the Directors, the Company has conducted its affairs so as to enable it to continue to maintain its status as an investment trust.

The Company is a self-managed investment company run by its Board and is authorised by the FCA as a small registered alternative investment fund manager.

The Company’s shares are listed on the premium segment of the Official List of the FCA and traded on the main market of the London Stock Exchange.

The Company is a member of the AIC, a trade body which promotes investment companies and develops best practice for its members.

Investment Objective

The Company’s investment objective is to provide shareholders with an attractive real long-term total return by investing globally in undervalued asset classes. The portfolio is managed without reference to the composition of any stock market index.

Investment Policy

The Company invests in a range of assets across both public and private markets throughout the world. These assets include both listed and unquoted securities, investments and interests in other investment companies and investment funds (including limited partnerships and offshore funds) as well as bonds (including index linked securities) and cash as appropriate.

Any single investment in the Company’s portfolio may not exceed 15% of the Company’s total assets at the time of the relevant investment (the ‘Single Investment Limit’).

The Company may invest in other investment companies or funds and may appoint one or more sub-advisors to manage a portion of the portfolio if, in either case, the Board believes that doing so will provide access to specialist knowledge that is expected to enhance returns. The Company will gain exposure to private markets directly and indirectly through investments and interest in other investment companies and investment funds (including limited partnerships and offshore funds). The Company’s investment directly and indirectly in private markets (including through investment companies and investment funds) shall not, in aggregate, exceed 30% of the Company’s total assets, calculated at the time of the relevant investment.

The Company will invest no more than 15% of its total assets in other closed-ended listed investment companies (including investment trusts).

The Company may also invest up to 50% of its total assets in bonds, debt instruments, cash or cash equivalents when the Board believes extraordinary market or economic conditions make equity investment unattractive or while seeking appropriate investment opportunities for the portfolio or to maintain liquidity. The Single Investment Limit does not apply to cash or cash equivalents in such circumstances. In addition, the Company may purchase derivatives for the purposes of efficient portfolio management.

From time to time, when deemed appropriate and only where permitted in accordance with the UK Alternative Investment Fund Managers Regulations 2013, the Company may borrow for investment purposes up to the equivalent of 25% of its total assets. By contrast, the Company’s portfolio may from time to time have substantial holdings of debt instruments, cash or short-term deposits.

The investment objective and policy are intended to ensure that the Company has the flexibility to seek out value across asset classes rather than being constrained by a relatively narrow investment objective. The objective and policy allow the Company to be constrained in its investment selection only by valuation and to be pragmatic in portfolio construction by only investing in assets which the Executive Director considers to be undervalued on an absolute basis.

Investment Strategy

The Company’s portfolio is managed without reference to any stock market index. Investments are selected for the portfolio only after extensive research by the Executive Director. The Executive Director’s approach is long-term and focused on absolute valuation. Dr Nairn aims to identify and invest in undervalued asset classes, and to have the patience to hold them until they achieve their long-term earnings potential or valuation.

Dividend Policy

The Company does not have a stated dividend policy.

The Company’s investment objective is to provide real long-term total return rather than income growth. As a result, the level of revenue generated from the portfolio will vary from year to year, and any dividend paid to shareholders is likely to fluctuate.

The Board is mindful that in order for the Company to continue to qualify as an investment trust, the Company is not permitted to retain more than 15% of eligible investment income arising during any accounting period. Accordingly, the Board will ensure that any declared dividend is sufficient to enable the Company to maintain its investment trust status.

Management Arrangements

As a self-managed investment trust, the Board is fully responsible for the management of the Company and all required reporting to the FCA in respect of the safeguarding of the Company’s assets.

The Company terminated the investment management agreement with Franklin Templeton on 30 May 2023 and the global listed equities portion of the portfolio is now managed by Dr Nairn, as a full time executive of the Company. In addition, the Company has entered into a strategic relationship with Goodhart Partners LLP (‘Goodhart’) through which Goodhart will introduce opportunities in the private markets to the Company. As part of this strategic relationship, Goodhart has also been appointed to provide investment sub-advisory services to the Company to assist Dr Nairn in managing the global listed equities mandate.

Portfolio Performance

Full details on the Company’s activities during the year under review are contained in the Chairman’s Statement and Executive Director’s Report. The portfolio consisted of 20 investments, excluding cash and other net assets as at 31 December 2023, thus ensuring that the Company has a suitable spread of investment risk.

Key Performance Indicators

At each Board meeting, the Directors consider key performance indicators to assess whether the Company is meeting its investment objective.

The key performance indicators used to measure the performance of the Company over time are as follows:

Share price total return to 31 December 2023	1 year (%)	3 years (%)	5 years (%)
Global Opportunities Trust plc	(3.6)	10.7	9.7
AIC Flexible Investments peer group†	(3.3)	9.7	23.1
FTSE All-World Total Return Index*	15.7	28.7	77.8

Net asset value total return to 31 December 2023	1 year (%)	3 years (%)	5 years (%)
Global Opportunities Trust plc	1.7	24.1	30.7
AIC Flexible Investments peer group†	2.1	19.8	42.8
FTSE All-World Total Return Index*	15.7	28.7	77.8

Share price discount to net asset value as at 31 December	2023 (%)	2022 (%)	2021 (%)
Global Opportunities Trust plc	18.2	13.5	8.5
AIC Flexible Investments peer group†	18.3	14.4	7.0

Ongoing charges ratio to 31 December	2023 (%)	2022 (%)	2021 (%)
Global Opportunities Trust plc	0.9	0.9	1.1
AIC Flexible Investments peer group†	0.9	1.0	0.9

† Source: theaic.co.uk & Morningstar. The Company is classified by the Association of Investment Companies in its Flexible Investment sector. The sector’s performance indicators have been shown for comparative purposes only.

* The Company does not formally benchmark its performance against a specific index, the FTSE All-World Total Return Index (in   sterling) has been shown for comparative purposes only.

Gearing

The Company did not have any borrowings and did not use derivative instruments for currency hedging during the year ended 31 December 2023. The Company has an investment in the Templeton European Long-Short Equity SIF which uses derivatives.

Emerging and Principal Risks

The Board, through delegation to the Audit and Management Engagement Committee, has undertaken a robust annual assessment and review of all the risks facing the Company, together with a review of any new and emerging risks which may have arisen during the year, including rising levels of inflation and heightened geopolitical events following the invasion of Ukraine. These risks are formalised within the Company’s risk assessment matrix which is formally reviewed on at least an annual basis and ad-hoc by the Audit and Management Engagement Committee when required.

The emerging and principal risks and uncertainties facing the Company, together with a summary of the mitigating actions and controls in place to manage these risks, and how these risks have changed over the period are set out below:

Emerging Risks	Mitigation and Controls
Geopolitical Risk Heightened geopolitical tensions, including the ongoing conflict in Ukraine and emerging conflict in the Middle East, continue to have an adverse impact on global markets and could adversely impact the Company’s portfolio. Risk has been heightened by increased geopolitical tensions.	The Board regularly reviews the Company’s portfolio, including geographical split, and its performance against its stated investment objective. Ongoing discussions between the Executive Director and Sub-Advisor ensures that the portfolio has exposure to various geographies and sectors.
Principal Risks	Mitigation and Controls
Investment and Strategy Risk There can be no guarantee that the investment objective of the Company, to provide shareholders with an attractive real long-term total return by investing globally in undervalued asset classes, will be achieved. No change to this risk	The Board meets regularly to discuss the portfolio performance and strategy and to receive investment updates from the Executive Director. The Board receives quarterly reports detailing all portfolio transactions and any other significant changes in the market or stock outlooks. The Board would take appropriate action should the Company’s performance jeopardise the investment objective.
Key Person Risk The Company’s ability to deliver its investment strategy is dependent on the Executive Director, Dr Nairn. A change in key investment management personnel who are involved in the management of the Company’s portfolio could impact on future performance and the Company’s ability to deliver on its investment strategy. No change to this risk	The Board frequently considers succession planning. Dr Nairn has day-to-day responsibility for the investment management of the Company and the Sub-Advisor has a dedicated investment team supporting the Company. Dr Nairn and the Board are also in regular contact with the Sub-Advisor (who attends Board meetings upon request), and underlying fund managers and would be informed of any proposed changes in their personnel.
Financial and Economic Risk The Company’s investments are impacted by financial and economic factors including market prices, interest rates, foreign exchange rates, liquidity and inflation, which could cause losses within the portfolio. No change to this risk	The Board receives regular updates on the composition of the Company’s investment portfolio and market developments from the Executive Director. Investment performance is continually monitored specifically in the light of emerging risks throughout the period. The Board regularly reviews and agrees policies for managing market price risk, interest rate risk, foreign exchange risk, liquidity risk and inflationary risk.
Discount Volatility Risk The Board recognises that it is in the long-term interests of shareholders to reduce discount volatility and believes that the prime driver of discounts over the longer term is investment performance. An inappropriate or unattractive objective and strategy may have an adverse effect on shareholder returns or cause a reduction in demand for the Company’s shares, both of which could lead to a widening of the discount. No change to this risk	The Board actively monitors the discount at which the Company’s shares trade, and is committed to using its powers to allot or repurchase the Company’s shares. The Board may use share buybacks, when appropriate, to narrow the discount to NAV at which the shares trade. This will be done in conjunction with creating new demand and being aware of the liquidity of the shares. The Board’s commitment to allot or repurchase shares is subject to it being satisfied that any offer to allot or purchase shares is in the best interests of shareholders of the Company as a whole, the Board having the requisite authority pursuant to the Articles of Association and relevant legislation to allot or purchase shares, and all other applicable legislative and regulatory provisions. The Board reviews changes to the shareholder register regularly and considers shareholder views and developments in the market place.
Regulatory Risk The Company operates in an evolving regulatory environment and faces a number of regulatory risks. Failure to qualify under the terms of sections 1158 and 1159 of the CTA may lead to the Company being subject to capital gains tax. A breach of the Listing Rules may result in censure by the FCA and/or the suspension of the Company’s shares from listing. If all price sensitive issues are not disclosed in a timely manner, this could create a misleading market in the Company’s shares. A Small Registered Alternative Investment Fund Manager does not carry on a regulated activity in respect of its activities as an Alternative Investment Fund Manager for an Alternative Investment Fund for which it is entitled to be registered. It is, however, required to comply with certain requirements under the Alternative Investment Fund Managers Directive (‘AIFMD’) (which mainly relate to reporting). No change to this risk	Compliance with the Company’s regulatory obligations is monitored on an ongoing basis by the Company Secretary and other professional advisers as required who report to the Board regularly. The Directors note the corporate offence of failure to prevent tax evasion and believe all necessary steps have been taken to prevent facilitation of tax evasion. The Directors are aware of their responsibilities relating to price sensitive information and would consult with their advisers if any potential issues arose. This includes ensuring compliance with the Market Abuse Regulation. The Company Secretary would notify the Board immediately if it became aware of any disclosure issues. The Sub-Advisor has a comprehensive market abuse policy and any potential breaches of this policy would be promptly reported to the Board. The Board has agreed service levels with the Company Secretary and Sub-Advisor which include active and regular review of compliance with these requirements.
Operational risk There are a number of operational risks associated with the fact that third parties undertake the Company’s administration and custody functions. The main risk is that third parties may fail to ensure that statutory requirements, such as compliance with the Companies Act 2006 and the FCA requirements, are met. No change to this risk	The Board regularly receives and reviews management information on third parties which the Company Secretary compiles. In addition, each of the third parties, where available, provides a copy of its report on internal controls to the Board each year. The Company employs the Administrator to prepare all financial statements of the Company and meets with the Auditor at least once a year to discuss all financial matters, including appropriate accounting policies. The Company is a member of the AIC, a trade body which promotes investment trusts and also develops best practice for its members. The Executive Director and the Company’s third-party suppliers have contingency plans to ensure the continued operation of the business in the event of disruption.

Culture

The Chairman leads the Board and is responsible for its overall effectiveness in directing the Company. He demonstrates objective judgement, promotes a culture of openness and debate, and facilitates effective contributions by all Directors. In liaison with the Company Secretary, the Chairman ensures that the Directors receive accurate, timely and clear information. The Directors are required to act with integrity, lead by example and promote this culture within the Company.

The Board seeks to ensure the alignment of the Company’s purpose, values and strategy with the culture of openness, debate and integrity through ongoing dialogue, and engagement with shareholders, the Executive Director and the Company’s other service providers. The Company has adopted a number of policies, practices and behaviours to facilitate a culture of good governance and ensure that this is maintained.

The culture of the Board is considered as part of the annual performance evaluation process which is undertaken by each Director. The culture of the Company’s service providers is also considered by the Board during the annual review of their performance and while considering their continuing appointment. In the context of the Executive Director and Sub-Advisor, particular attention is paid to environmental, social and governance, engagement and proxy voting policies.

Directors and Gender Representation  

As at 31 December 2023, the Board of Directors of the Company comprised two male and two female Directors. The appointment of any new Director is made in accordance with the Company’s diversity policy.

Employees and Human Rights

The Board recognises the requirement under the Companies Act 2006 to detail information about human rights, employees and community issues, including information about any policies it has in relation to these matters and the effectiveness of these policies. The Company has one employee, Executive Director Dr Nairn. All the remaining Directors are Non-Executive. The Company has outsourced all its functions to third-party service providers. The Company has therefore not reported further in respect of these provisions.

Modern Slavery Statement

The Company is not within the scope of the Modern Slavery Act 2015 because it has not exceeded the turnover threshold and therefore no further disclosure is required in this regard.

Greenhouse Gas Emissions

The Company has no greenhouse gas emissions to report from its operations, nor does it have responsibility for any other emission-producing sources under the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013.

Environmental, Social and Governance (‘ESG’)

The Company seeks to invest in companies that are well managed with high standards of corporate governance. The Board believes this creates the proper conditions to enhance long-term value for shareholders. The Company adopts a positive approach to corporate governance and engagement with companies in which it invests.

In pursuit of the above objective, the Board believes that proxy voting is an important part of the corporate governance process and considers seriously its obligation to manage the voting rights of companies in which it is invested. It is the policy of the Company to vote, as far as possible, at all shareholder meetings of investee companies. The Company follows the relevant applicable regulatory and legislative requirements in the UK, with the guiding principles being to make proxy voting decisions which favour proposals that will lead to maximising shareholder value while avoiding any conflicts of interest. Voting decisions are taken on a case-by-case basis by the Sub-Advisor on behalf of the Company. The key issues on which the Sub-Advisor focuses are corporate governance, including disclosure and transparency, board composition and independence, control structures, remuneration, and social and environmental issues.

The Executive Director and Sub-Advisor consider a wide range of factors when making investment decisions including an investee company’s ESG credentials.

In making fund investment decisions, the Executive Director’s assessment includes analysing the fund manager’s ESG cultural buy-in, its ESG process, procedures and reporting, its engagement with underlying portfolio companies and an operational due diligence review of the relevant manager and fund.

Duty to Promote the Success of the Company

Under section 172 of the Companies Act 2006, the Directors have a duty to act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:

• the likely consequences of any decision they make in the long term;
• the need to foster the Company’s business relationships with its stakeholders, which includes the shareholders, the Executive Director and Sub-Advisor and other relevant parties as listed below;
• the need to act independently by exercising reasonable skill and judgement;
• the impact of the Company’s operations on the community and the environment;
• the requirement to avoid a conflict of interests;
• the desirability of the Company maintaining a reputation for high standards of business conduct;
• the need to act fairly between members of the Company; and
• the need to declare any interests in proposed transactions.

The Company has one employee, its Executive Director, Dr Nairn. As an investment trust, the Company has no customers or physical assets; the primary stakeholders are the shareholders, the Executive Director, Sub- Advisor, and other third-party service providers. The Company also engages with its investee companies where appropriate.

Stakeholder Engagement

Shareholders

Communication and regular engagement with shareholders are given a high priority by the Board. The Executive Director seeks to maintain regular contact with major shareholders and is always available to enter into dialogue with all shareholders. A regular dialogue is also maintained with the Company’s institutional shareholders and private client asset managers through the Executive Director, who regularly reports to the Board on significant contact, the views of shareholders and any changes to the composition of the share register.

All shareholders are encouraged, if possible, to attend and vote at the AGM and at any other general meetings of the Company (if any), during which the Board is available to discuss issues affecting the Company. Shareholders wishing to communicate directly with the Board should contact the Company Secretary. The Chairman is available throughout the year to respond to shareholders, including those who wish to speak with him in person. Copies of the Annual and Half-Yearly Reports are currently issued to shareholders and are also available, along with the monthly factsheets for downloading from the Company’s website at www.globalopportunitiestrust.com. The Company also releases portfolio updates to the market on a monthly basis.

Executive Director and Sub-Advisor

The Non-Executive Directors believe that maintaining a close and constructive working relationship with the Executive Director and Sub-Advisor is crucial to promoting the long-term success of the Company in an effective and responsible way. This ensures the interests of all current and potential stakeholders are properly taken into account when decisions are made. The Executive Director attends all Board meetings and provides reports on investments, performance, marketing, operational and administrative matters. The Sub-Advisor is available to attend Board meetings upon request. An open discussion regarding such matters is encouraged, both at Board meetings and by way of ongoing communication between the Board, the Executive Director and Sub-Advisor. Board members are encouraged to share their knowledge and experience with the Executive Director and Sub-Advisor, and where appropriate, the Board adopts a tone of constructive challenge. The Board keeps the ongoing performance of the Executive Director and Sub-Advisor under continual review and conducts an annual appraisal of both the parties.

Service Providers

The Company’s day-to-day operational functions are delegated to several third-party service providers, each engaged under separate contracts. In addition to the Sub-Advisor, the Company’s principal third-party service providers include the Administrator, Auditor, Company Secretary, Custodian and Registrar. The Board engages with its service providers to develop and maintain positive and productive relationships, and to ensure that they are well informed in respect of all relevant information about the Company’s business and activities. The Board, through its Audit and Management Engagement Committee, keeps the ongoing performance, fees and continuing appointment of these service providers under continual review and conducts an annual appraisal of all third-party service providers.

Investee Companies

The Sub-Advisor assists with the day-to-day management of the Company’s equity investment portfolio. As such, the Sub-Advisor has responsibility for engaging with investee companies on behalf of the Company. The Sub-Advisor does so in consideration of the principles set out in the UK Stewardship Code 2020.

The Board recognises the importance of engagement with investee companies. The Board is aware of evolving expectations in this regard and is committed to working with the Executive Director and Sub-Advisor, in relation to future engagement on behalf of the Company.

The above methods for engaging with stakeholders are kept under review by the Directors and discussed on a regular basis at Board meetings to ensure that they remain effective.

For and on behalf of the Board

Cahal Dowds

Chairman

9 April 2024

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable UK law and regulations.

The Companies Act 2006 (the ‘Law’) requires the Directors to prepare Financial Statements for each financial period. Under that Law, they have elected to prepare the Financial Statements in accordance with UK Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”.

Under the Law, the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

In preparing these Financial Statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Financial Statements; and
• prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its Financial Statements comply with the Law and include the information required by the Listing Rules of the Financial Conduct Authority. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’ Report, Remuneration Report and Corporate Governance Statement that comply with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website, www.globalopportunitiestrust.com. The work carried out by the Auditor does not include consideration of these matters and, accordingly, the Auditor accepts no responsibility for any changes that may have occurred to the Financial Statements since they were initially presented on the website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the Directors, confirm to the best of their knowledge that:

• the Financial Statements, prepared in accordance with the applicable set of UK Accounting Standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company;
• the Annual Report includes a fair view of the development and performance of the business and the position of the Company together with a description of the principal risks and uncertainties that the Company faces; and
• in the opinion of the Board, the Annual Report and Financial Statements taken as a whole, is fair, balanced and understandable and provides the information necessary to assess the Company’s performance, business model and strategy.

On behalf of the Board

Cahal Dowds

Chairman

9 April 2024

INCOME STATEMENT

for the year ended 31 December 2023

	2023			2022
	Revenue £’000	Capital £’000	Total £’000	Revenue £’000	Capital £’000	Total £’000
Gains on investments at fair value through profit or loss	–	2,271	2,271	–	10,158	10,158
Foreign exchange (losses)/gains on capital items	–	(1,974)	(1,974)	–	3,149	3,149
Income	2,460	–	2,460	2,374	-	2,374
Investment management fee	(49)	(114)	(163)	(101)	(235)	(336)
Other expenses	(653)	–	(653)	(517)	–	(517)
Net return before finance costs and taxation	1,758	183	1,941	1,756	13,072	14,828
Finance costs
Interest payable and related charges	(21)	–	(21)	(51)	–	(51)
Net return before taxation	1,737	183	1,920	1,705	13,072	14,777
Taxation – overseas withholding tax	(192)	–	(192)	(94)	–	(94)
Net return after taxation	1,545	183	1,728	1,611	13,072	14,683
Return per ordinary share	5.3p	0.6p	5.9p	5.3p	43.0p	48.3p

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

The total column of this statement is the profit and loss account of the Company.

The revenue and capital return columns are prepared under guidance issued by the Association of Investment Companies.

A separate Statement of Comprehensive Income has not been prepared as all gains and losses are included in the Income Statement.

BALANCE SHEET

as at 31 December 2023

	2023 £’000	2022 £’000
Fixed asset investments
Investments at fair value through profit or loss	64,083	69,283
Current assets
Debtors	374	412
Cash at bank and short-term deposits	42,105	36,629
	42,479	37,041
Current liabilities
Creditors	(151)	(180)
	(151)	(180)
Net current assets	42,328	36,861
Net assets	106,411	106,144
Capital and reserves
Called-up share capital	645	645
Share premium	1,597	1,597
Capital redemption reserve	14	14
Special reserve	9,760	9,760
Capital reserve	90,281	90,098
Revenue reserve	4,114	4,030
Total shareholders’ funds	106,411	106,144
Net asset value per ordinary share	364.1p	363.2p

The Financial Statements were approved by the Board of Directors on 9 April 2024 and signed on its behalf by:

Cahal Dowds

Chairman

Registered in Scotland No. SC259207

STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2023

Year ended 31 December 2023	Share capital £’000	Share premium £’000	Capital redemption reserve £’000	Special reserve1 £’000	Capital reserve1 £’000	Revenue reserve1 £’000	Total £’000
At 1 January 2023	645	1,597	14	9,760	90,098	4,030	106,144
Net return after taxation	–	–	–	–	183	1,545	1,728
Dividends paid	–	–	–	–	–	(1,461)	(1,461)
At 31 December 2023	645	1,597	14	9,760	90,281	4,114	106,411
Year ended 31 December 2022	Share capital £’000	Share premium £’000	Capital redemption reserve £’000	Special reserve1 £’000	Capital reserve1 £’000	Revenue reserve1 £’000	Total £’000
At 1 January 2022	645	1,597	14	32,961	77,026	3,880	116,123
Net return after taxation	–	–	–	–	13,072	1,611	14,683
Dividends paid	–	–	–	–	–	(1,461)	(1,461)
Share purchases for Treasury	–	–	–	(23,201)	–	–	(23,201)
At 31 December 2022	645	1,597	14	9,760	90,098	4,030	106,144

1 Distributable reserves total £94,170,000 (2022: £93,259,000). The Capital reserve comprises realised gains of £80,296,000 (2022: £79,469,000), which are distributable, and unrealised gains of £9,985,000 (2022: £10,629,000), which are not distributable.

STATEMENT OF CASH FLOW

for the year ended 31 December 2023

	Year ended 31 December 2023		Year ended 31 December 2022
	£’000	£’000	£’000	£’000
Cash flows from operating activities
Net return on ordinary activities before taxation		1,920		14,777
Adjustments for:
Gains on investments	(2,271)		(10,158)
Interest payable	21		51
Purchases of investments*	(949)		(21,645)
Sales of investments*	8,420		46,442
Dividend income	(1,774)		(2,185)
Other income	(686)		(189)
Dividend income received	1,777		2,314
Other income received	723		147
Decrease in receivables	1		7
Decrease in payables	(29)		(129)
Overseas withholding tax deducted	(195)		(107)
		5,038		14,548
Net cash flows from operating activities		6,958		29,325
Cash flows from financing activities
Repurchase of ordinary share capital	-		(23,201)
Equity dividends paid from revenue	(1,461)		(1,461)
Interest paid	(21)		(51)
Net cash flows from financing activities		(1,482)		(24,713)
Net increase in cash and cash equivalents		5,476		4,612
Cash and cash equivalents at the start of the year		36,629		32,017
Cash and cash equivalents at the end of the year		42,105		36,629

* Receipts from the sale of, and payments to acquire, investment securities have been classified as components of cash flows from operating activities because they form part of the Company’s dealing operations.

NOTES TO THE FINANCIAL STATEMENTS

at 31 December 2023

1. Accounting policies

Statement of compliance

Global Opportunities Trust plc is a company incorporated in Scotland. The Company is registered as a public limited company and is an investment company within the terms of section 833 of the Companies Act 2006 (“the Act”).

The Company’s Financial Statements have been prepared under FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” and in accordance with the Act and with the Statement of Recommended Practice issued by the AIC (the “AIC SORP”).

The comparative figures for the Financial Statements are for the year ended 31 December 2022.

Going concern

The financial statements have been prepared on a going concern basis and on the basis that approval as an investment trust company will continue to be met.

The Directors have made an assessment of the Company’s ability to continue as a going concern and are satisfied that the Company has adequate resources to continue in operational existence for a period of at least 12 months from the date when these financial statements were approved.

The Directors have noted that the Company, holding a portfolio consisting principally of liquid listed investments and cash balances, is able to meet the obligations of the Company as they fall due, any future funding requirements and finance future additional investments. The Company is a closed end fund, where assets are not required to be liquidated to meet day-to-day redemptions.

The Directors have completed stress tests assessing the impact of changes and scenario analysis to assist them in determination of going concern. In making this assessment, the Directors have considered plausible downside scenarios that have been financially modelled. These tests apply to any set of circumstances in which asset value and income are significantly impaired. The conclusion was that in a plausible downside scenario, the Company could continue to meet its liabilities. Whilst the economic future is uncertain, and the Directors believe that it is possible the Company could experience further reductions in income and/or market value, the opinion of the Directors is that this should not be to a level which would threaten the Company’s ability to continue as a going concern.

The Directors are not aware of any material uncertainties that may cast significant doubt on the Company’s ability to continue as a going concern, having taken into account the liquidity of the Company’s investment portfolio and the Company’s financial position in respect of its cash flows and investment commitments. Therefore, the financial statements have been prepared on the going concern basis.

Segmental reporting

The Directors are of the opinion that the Company is engaged in a single segment of business, being investment business. The Company primarily invests in listed companies.

Income recognition

Dividend and other investment income is included as revenue on the ex-dividend date, the date the Company’s right to receive payment is established. Dividends from overseas companies are shown gross of withholding tax. Where the Company has elected to receive scrip dividends in the form of additional shares rather than in cash, the amount of the cash dividend foregone is recognised as income. Any excess or shortfall compared to the cash dividend is recognised as capital. Special dividends are reviewed on an individual basis to determine whether they should be accounted for as revenue or capital. Income from private equity holdings is recognised upon notification of irrevocable income distribution by the general partner. Interest income and rebate income is included on an accruals basis.

Expenses and finance costs

All management expenses and finance costs are accounted for on an accruals basis. The Company charges 30% of management fees and finance costs related to borrowings to revenue in the Income Statement and 70% to capital in the Income Statement. All other operating expenses and finance costs are charged to revenue in the Income Statement, except costs that are incidental to the acquisition or disposal of investments, which are charged to capital in the Income Statement. Transaction costs are included within the gains and losses on investments, as disclosed in the Income Statement.

Investments

In accordance with FRS 102, Sections 11 and 12, all investments held by the Company are designated as held at fair value upon initial recognition and are measured at fair value through profit or loss in subsequent accounting periods. Investments are initially recognised at cost, being the fair value of the consideration given.

After initial recognition, investments are measured at fair value, with changes in the fair value of investments recognised in the Income Statement and allocated to capital. Realised gains and losses on investments sold are calculated as the difference between sales proceeds and cost.

For investments actively traded in organised financial markets, fair value is generally determined by reference to Stock Exchange quoted market bid prices at the close of business on the Balance Sheet date, without adjustment for transaction costs necessary to realise the asset. For the European Long-Short Equity Fund, fair value is determined with reference to the assets and liabilities of the fund valued daily, on any day on which the New York Stock Exchange is open or any full day on which banks in Luxembourg are open for normal business.

Unquoted investments are valued by the Directors at fair value, using the guidelines on valuation published by the International Private Equity and Venture Capital Association (“IPEV”). The fair value of the Company’s investments in private equity funds is based on its share of the total net asset value of the fund calculated on a quarterly basis, being the measurement date. The fair value of the private equity funds is derived from the value of its underlying investments using a methodology which is consistent with the IPEV guidelines. The Company reviews the fair valuation methodology adopted for the underlying investments of the private equity funds on a quarterly basis and will adjust where it does not believe the valuations represent fair value. Where formal valuations are not completed as at the Balance Sheet date, the last available valuation is adjusted to reflect any changes in circumstances from the last formal valuation date to arrive at the estimate of fair value.

This represents the Directors’ view of the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s length transaction.

Foreign currency

The Financial Statements have been prepared in sterling, rounded to the nearest £’000, which is the functional and reporting currency of the Company. Sterling is the currency of the primary economic environment in which the Company operates.

Transactions denominated in foreign currencies are converted to sterling at the actual exchange rate as at the date of the transaction. Assets and liabilities denominated in foreign currencies at the year end are reported at the rate of exchange at the Balance Sheet date. Any gain or loss arising from a change in exchange rate subsequent to the date of the transaction is included as an exchange gain or loss in the Income Statement, in the capital or the revenue column, depending on whether the gain or loss is of a capital or revenue nature.

Taxation

The charge for taxation is based on the net revenue for the year and takes into account taxation deferred or accelerated because of timing differences between the treatment of certain items for accounting and taxation purposes. Full provision for deferred taxation is made under the liability method, without discounting, on all timing differences between taxable profits and total comprehensive income that have arisen but not been reversed by the Balance Sheet date, unless such provision is not permitted by FRS 102. Deferred tax assets are only recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company’s taxable profits and its results as stated in the Financial Statements which are capable of reversal in one or more subsequent periods.

Cash at bank and short-term deposits

Cash at bank and short-term deposits comprise cash at bank and short-term deposits with an original maturity date of three months or less.

Short-term debtors and creditors

Debtors and creditors with no stated interest rate and receivable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the Income Statement in other operating expenses.

Dividends payable to Shareholders

Dividends payable are accounted for when they become a liability of the Company. Final dividends are recognised in the period in which they have been approved by Shareholders in a general meeting. Interim dividends are recognised in the period in which they have been declared and paid.

Own shares held in Treasury

From time to time, the Company buys back shares and holds them in Treasury for potential sale at a later date or for cancellation. The consideration paid and received for these shares is accounted for in Shareholders’ funds and, in accordance with the AIC SORP, the cost has been allocated to the Company’s special reserve. The cost of shares sold from Treasury is calculated by taking the average cost of shares held in Treasury at the time of sale. Any difference between the proceeds from shares sold from Treasury and above average cost is taken to share premium.

Judgements and key sources of estimation uncertainty

The preparation of the Financial Statements requires the Company to make judgements, estimates and assumptions that affect the application of policies and reported amounts in the financial statements. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The areas requiring judgement and estimation in the preparation of the financial statements are: the valuation of unquoted investments; and recognising and classifying unusual or special dividends received as either revenue or capital in nature.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future period if the revision affects both current and future periods.

Reserves

Share premium

The share premium account represents the accumulated premium paid for shares issued in previous periods above their nominal value less issue expenses.

This is a reserve forming part of the non-distributable reserves. The following items are taken to this reserve:

• costs associated with the issue of equity; and
• premium on the issue of shares.

Capital redemption reserve

The capital redemption reserve represents non-distributable reserves that arise from the purchase and cancellation of shares.

Special reserve

The special reserve was created by a reduction in the share premium account by order of the High Court. The costs of share buy backs, including shares acquired through the tender offer, and any related stamp duty and transaction costs, if applicable, are charged to the special reserve. The special reserve is distributable.

Capital reserve

The following are taken to the capital reserve through the capital column in the Income Statement:

Capital reserve – other, forming part of the distributable reserves:

• gains and losses on the realisation of investments;
• realised exchange differences of a capital nature;
• 70% of management fees and finance costs related to borrowings; and
• expenses, together with related taxation effect, charged to this account in accordance with the above policies.

Capital reserve – not distributable:

• net movement arising from changes in the fair value of investments; and
• unrealised exchange differences of capital nature.

Revenue reserve

The revenue reserve represents the surplus of accumulated profits and is distributable.

2. Income

		2023			2022
	Revenue £’000	Capital £’000	Total £’000	Revenue £’000	Capital £’000	Total £’000
Income from investments
UK dividend income	464	–	464	522	–	522
Overseas dividend income	1,310	–	1,310	1,663	–	1,663
Income from investments	1,774	–	1,774	2,185	–	2,185
Total income comprises
Dividend income	1,774	–	1,774	2,185	–	2,185
Bank interest	619	–	619	121	–	121
Rebate income1	67	–	67	68	–	68
	2,460	–	2,460	2,374	–	2,374

1 Rebate of management fee from managed investment fund held in the investment portfolio.

3. Management fee

		2023			2022
	Revenue £’000	Capital £’000	Total £’000	Revenue £’000	Capital £’000	Total £’000
Management fee	49	114	163	101	235	336
	49	114	163	101	235	336

With effect from 31 May 2023, the Company appointed Goodhart Partners LLP (“Goodhart”), replacing Franklin Templeton Investment Management Limited (“FTIML”), as the Company’s Sub-Advisor. Under the Investment Management Agreement, Goodhart is entitled to a fee paid quarterly in arrears at the rate of 0.12% per annum of the market value of equity securities, and 0.12% of the value of cash and other current assets. No performance fee will be paid.

The Company’s investment in the Volunteer Park Capital Fund SCSp is excluded from the market value of equity securities, prior to calculation of the management fees payable by the Company to Goodhart, being an investment in private markets, as prescribed by the sub-advisory agreement.

Prior to the appointment of Goodhart as Sub-Advisor, FTIML was entitled to a management fee paid quarterly in arrears at the rate of 0.35% per annum of the market value of listed equity securities, 0.05% per annum of the market value of bonds and other debt instruments and 0.02% of the value of cash and cash equivalents.

During the year ended 31 December 2023, the management fees payable totalled £163,000 (2022: £336,000). At 31 December 2023, there was £31,000 outstanding payable (2022: £84,000) in relation to management fees.

During the year ended 31 December 2023, the administration fees payable to the Administrator, as detailed in Note 4, totalled £177,000 (2022: £165,000). At 31 December 2023, there was £15,000 outstanding payable to the Administrator (2022: £14,000) in relation to administration fees.

4. Dividends

		2023 £’000	2022 £’000
	Declared and paid
	Amounts recognised as distributions to Ordinary Shareholders in the year.
	2022 final dividend of 5.0p per share paid on 31 May 2023 (2022: year ended 31 December 2021 final dividend of 5.0p paid on 25 May 2022).	1,461	1,461
		1,461	1,461
		2023 £’000	2022 £’000
Proposed
Detailed below is the proposed final dividend per share in respect of the year ended 31 December 2023, which is the basis on which the requirements of section 1159 of the Corporation Act 2010 are considered. 2023 final dividend of 5.0p per share (2022 final dividend of 5.0p per share paid on 31 May 2023).		1,461	1,461

The Directors recommend a final dividend of 5.0p per share for the year ended 31 December 2023 (2022:  final dividend of 5.0p per share, paid on 31 May 2023). Subject to Shareholder approval at the Annual General Meeting to be held on 16 May 2024, the dividend will be payable on 31 May 2024 to Shareholders   on the register at the close of business on 3 May 2024. The ex-dividend date will be 2 May 2024. Based on 29,222,180 shares, being the number of shares in issue (excluding shares held in Treasury) at 8 April 2024, being the latest practical date prior to the publication of this report, the total dividend payment will amount to £1,461,000. The proposed dividend will be paid from the revenue reserve.

5. Return per share

		2023			2022
	Net return £’000	Number of shares1	Per share pence	Net return £’000	Number of shares1	Per share pence
Revenue return after taxation	1,545	29,222,180	5.3	1,611	30,383,061	5.3
Capital return after taxation	183	29,222,180	0.6	13,072	30,383,061	43.0
Total return after taxation	1,728	29,222,180	5.9	14,683	30,383,061	48.3

1 Weighted average number of ordinary shares, excluding shares held in Treasury, in issue during the year.

6. Net asset value per share

The NAV, calculated in accordance with the Articles of Association, is as follows:

	2023 pence	2022 Pence
Share	364.1	363.2

The NAV is based on net assets of £106,411,000 (2022: £106,144,000) and on 29,222,180 (2022: 29,222,180) shares, being the number of shares, excluding shares held in Treasury, in issue at the year end.

7. Significant holdings

As at 31 December 2023, the Company owned 68.5% (2022: 67.4%) of the net assets of the Templeton European Long-Short Equity SIF, a Luxembourg Specialised Investment Fund, a sub-fund of Franklin Templeton Specialised Investment Funds, a Luxembourg investment company with variable capital – specialised investment fund. The registered office of Franklin Templeton Specialised Funds is 8A, rue Albert Borschette, L-1246 Luxembourg, Grand Duchy of Luxembourg.

As at 31 December 2023, the Company owned 25% (2022: 25%) of the net assets of the Volunteer Park Capital Fund SCSp, a Luxembourg Special Limited Partnership. The registered office of Volunteer Park Capital Fund SCSp is 412F, route d’Esch, L-1471 Luxembourg, Grand Duchy of Luxembourg.

The Company had no other holdings of 3.0% or more of the share capital of any portfolio companies.

8. Related party transactions

Under the AIC SORP, the Sub-Advisor is not considered to be a related party of the Company.

Dr Sandy Nairn is the Executive Director of the Company and is a substantial shareholder. The Company has invested in Volunteer Park Capital Fund SCSp (“VPC”). The Alternative Investment Fund Manager of VPC is Goodhart Partners LLP (“Goodhart”). Goodhart Partners S.a.r.l. is the general partner to VPC and is 100% owned by Goodhart. Dr Nairn is the sole controller of a company which holds a significant shareholding (25.83%) in Goodhart and will be a beneficiary of the management fees and carried interest payable to Goodhart related companies. Under the Class Tests Rules of the UK Listing Rules the transaction was a small transaction and was therefore not classified as a related party transaction requiring shareholder approval. Prior to the investment in VPC, the Directors undertook appropriate due diligence to confirm that they considered the investment to be in the best interests of shareholders.

9. Availability of Annual Report and Financial Statements

The Annual Report and Financial Statements will shortly be available to view on the Company's website at www.globalopportunitiestrust.com. where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.

A copy of the Annual Report and Financial Statements will shortly be submitted to the Financial Conduct Authority’s National Storage Mechanism and will be available for inspection at:

https://data.fca.org.uk/#/nsm/nationalstoragemechanism

For further information please contact:

Juniper Partners Limited

Company Secretary

e-mail: [e-mail]

10 April 2024

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