The Edinburgh Investment Trust Plc Annual Financial Report 2022 - Flipbook - Page 25
THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 23
Section 172 Statement, Company
Sustainability and Stakeholders
BOARD RESPONSIBILITIES
As set out in the Directors’ Report on pages 35 to 41 the Directors
have a statutory duty to promote the success of the Company, whilst
also having regard to certain broader matters, including the need
to engage with employees, suppliers, customers and others, and to
have regard to their interests (s172 Companies Act 2006). However,
the Company has no employees and no customers in the traditional
sense. Consistent with the Company’s nature as an investment trust,
the Board’s principal concern has been, and continues to be, the
interests of the Company’s shareholders taken as a whole.
COMPANY SUSTAINABILITY AND STAKEHOLDERS
As an externally managed investment company, the Company
does not have any employees. The Board considers its main
stakeholders to be its shareholders, service providers, investee
companies and the Manager.
ENGAGEMENT WITH SHAREHOLDERS
Shareholder relations are given high priority by both the Board
and the Manager and the Board welcomes feedback from
shareholders throughout the year. The prime medium by which
the Company communicates with shareholders is through the
half-yearly and annual financial reports, which aim to provide
shareholders with a full understanding of the Company’s activities
and results. This information is supplemented by the daily
publication of the net asset value, monthly factsheets as well as
dividend and other announcements.
Feedback from shareholders forms part of the discussion at
all Board meetings and at the Board’s annual strategy meeting
which involves consideration of how the Company is meeting
shareholder expectations.
Shareholders can also visit the Company’s website
www.edinburghinvestmenttrust.com in order to access copies
of the annual and half-yearly financial reports, pre-investment
information, Key Information Documents (KIDs), proxy voting
results, factsheets and stock exchange announcements. The
Company’s website also hosts videos and other applicable written
materials by the Manager to enhance the information available.
Typically at each AGM, a presentation is made by the Manager
following the formal business of the meeting and shareholders
have the opportunity to attend, vote and most importantly to
communicate directly with the Manager and Board. Presentations
to both institutional shareholders and analysts also follow the
publication of the annual results. Due to COVD-19 restrictions
the Board held a hybrid AGM on 21 July 2021 which allowed
shareholders to join via a live weblink and to submit questions
during the meeting. In addition to the AGM and presentations,
the Board and Manager will host a shareholder event in London
on 22 September 2022 and shareholders can register via the
Company’s website. The Chairman uses these events to lead the
Company’s engagement with its shareholders.
Regular dialogue is maintained between the Manager and major
institutional shareholders throughout the year to discuss aspects
of investment performance, governance and strategy and to listen
to shareholder views in order to help develop an understanding of
their issues and concerns. All meetings between the Manager and
shareholders are reported to the Board. As a part of the process
of change of Chairman from Glen Suarez, the next Chair, Elisabeth
Stheeman, has been in attendance at meetings with shareholders
during the financial year.
There is a clear channel of communication between the Board
and the Company’s Shareholders via the Company Secretary. The
Company Secretary passes to the Chairman all correspondence
addressed to the Board of the Company.
The strategy of the Company is reviewed by the Board on
an annual basis. At the strategy day in October 2021 the
Board discussed the refinancing of the debenture, discount
management, marketing and board recruitment. Whilst feedback
from shareholders is sought regularly, shareholders’ feedback
provided by the Company’s broker and Manager is a major
consideration at this meeting.
ENGAGEMENT WITH THE MANAGER
The Board has regular dialogue with and reporting from the
Manager on the portfolio of investments and a representative of
the Manager attends each Board meeting to provide updates and
answer questions from the Board.
During the financial year ended 31 March 2022, the Manager
assisted with sourcing new debt finance through the issue of a
loan note of £20m repayable in 2051 and £100m of pre-arranged
new debt which will be available to replace the debenture when it
matures in September 2022.
ENGAGEMENT WITH SERVICE PROVIDERS
As an externally managed investment trust, the Company conducts
all its business through its key service providers. The Board believes
that maintaining a collaborative relationship with each of the
Company’s service providers Is essential to the Board’s decision
making and the ongoing success of the Company. At least annually
the Board reviews the performance and services of all its service
providers including the Manager, and receives and considers
the internal control reports on a quarterly basis covering their
operations, policies and control environments.
The Board reviews the quarterly reports of the service providers
and assesses annually whether the services meet the requirements
of the Company, represent value for money and are therefore in the
best interests of shareholders.
Following the COVID-19 pandemic, the Board continues to ensure
that service providers are as prepared as possible for all such
eventualities which could disrupt performance of their respective
functions.