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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Witan Pacific Investment Trust Plc | LSE:WPC | London | Ordinary Share | GB0003656021 | ORD 25P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 397.00 | 380.00 | 393.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMBGCG
RNS Number : 7804W
Baillie Gifford China Grwth TrstPLC
19 April 2023
Baillie Gifford China Growth Trust plc (BGCG)
Legal Entity Identifier: 213800KOK5G3XYI7ZX18
Regulated Information Classification: Annual Financial and Audit Reports
Annual Report and Financial Statements
Further to the preliminary statement of audited annual results announced to the Stock Exchange on 5 April 2023, Baillie Gifford China Growth Trust ("the Company") announces that the Company's Annual Report and Financial Statements for the year ended 31 January 2023, including the Notice of Annual General Meeting, has today been posted to shareholders and submitted electronically to the National Storage Mechanism where it will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
It is also available on the Company page of the Baillie Gifford website at: bailliegiffordchinagrowthtrust.com (as is the preliminary statement of audited annual results announced by the Company on 5 April 2023).
Responsibility Statement of the Directors in respect of the Annual Financial Report
The Directors confirm that, to the best of their knowledge:
3/4 the Financial Statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and net return of the Company;
3/4 the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties it faces; and
3/4 the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.
Principal Risks relating to the Company
As explained on page 33 of the Annual Report and Financial Statements, there is an ongoing process for identifying, evaluating and managing the risks faced by the Company. The Directors have undertaken a robust assessment of the principal and emerging risks facing the Company, including those that would threaten the business model, future performance, solvency or liquidity. There have been no significant changes to the principal risks during the year other than cyber security risk having moved from emerging to principal risks. A description of these risks and how they are being managed or mitigated is set out below:
Risk Mitigation ------------------------------------- --------------------------------------------------- Inappropriate business strategy The Board reviews its strategy at an annual and/or changes in the financial strategy meeting. It considers investor services market leads to lack feedback, consults with its broker and of demand for the Company's reviews its marketing strategy. It regularly shares and its shares trading reviews its buy back and issuance policy. at a persistent and anomalous The strategy is considered in the context discount to of developments in the wider financial the NAV . services industry. ------------------------------------- --------------------------------------------------- Adverse market conditions The Company's exposure to equity market , particularly in equities risk and foreign currency risk is an integral and currencies, lead to a part of its investment strategy. Adverse fall in NAV. markets may be caused by a range of factors including economic conditions, political change, geopolitical events, natural disasters and health epidemics. Volatility in markets from such factors can be higher in less developed markets including China. Market risk is mitigated to a degree by appropriate portfolio diversification . ------------------------------------- --------------------------------------------------- Poor investment performance The performance of the Manager is reviewed , including through inappropriate at each Board meeting and compared against asset allocation, leads to the benchmark and peer group. Exposures value loss for shareholders are reviewed against benchmark exposures in comparison to the benchmark to identify the highest risk exposures. or the peer group. The Board regularly reviews and monitors the Company's objective and investment policy and strategy. ------------------------------------- --------------------------------------------------- Operational failure, failure The Manager has a comprehensive business of Baillie Gifford's systems continuity plan which or those of other third party facilitates continued operation of the service providers could lead business in the event of a to an inability to provide service disruption or major disaster. The accurate reporting and monitoring Audit Committee reviews or a misappropriation of assets. Baillie Gifford's Report on Internal Controls and the reports by other key third party providers are reviewed by Baillie Gifford on behalf of the Board and a summary of the key points is reported to the Audit Committee and any concerns investigated. In the year under review, the other key third party service providers have not experienced significant operational difficulties affecting their respective services to the Company. ------------------------------------- --------------------------------------------------- Tax and regulatory change Compliance with investment trust status or breach leads to the loss regulations is regularly of investment trust status reviewed by the Board. The Board reviews and, as a consequence, the compliance with other loss of the exemption from regulatory, tax and legal requirements taxation of capital gains. and is kept informed of Change in tax, regulation forthcoming regulatory changes. or laws could make the activities of the Company more complicated, more costly or even not possible. Other regulatory breaches (including breaching the listing rules, market abuse regulations and UK AIFM Regulations) could result in reputational damage and costs. Regulatory change can also increase the costs of operating the Company. ------------------------------------- --------------------------------------------------- Single country risk . The The Company's exposure to a single country, Company invests predominantly China, is an integral part of its investment in equities of companies which strategy. Risk is mitigated to a degree are incorporated or domiciled, by appropriate portfolio diversification or which conduct a significant and careful analysis of investment opportunities. portion of their business, in China. Investing in a single country is generally considered a higher risk investment strategy than investing more widely, as it exposes the investor to the fluctuations of a single geographical market, in this case the Chinese market. ------------------------------------- --------------------------------------------------- Emerging market risk . Investing The Managers are cognisant of the risks in an emerging market such associated with investing in emerging markets as China subjects the Company such as China, and they shape their investment to a higher level of market strategy and due diligence accordingly. risk than investment in a The Board is kept informed of political more developed market. This and regulatory issues impacting China and is due, among other things, the portfolio. The Board monitors the risks to the existence of greater associated with any complex investment market volatility, lower trading structures, including the proportion of volumes, the risk of political investments held in VIEs (estimated to and economic instability, be 31% as at 31 January 2023). legal and regulatory risks, risks relating to accounting practices, disclosure and settlement, a greater risk of market shut down, standards of corporate governance and more governmental limitations on foreign investment than are typically found in developed markets. Geopolitical tensions between the US and China, in particular relating to Taiwan, remain heightened with the potential for further sanctions to be imposed. Investing in China is often through contractual structures, such as Variable Interest Entities ('VIEs', see Glossary of Terms and Alternative Performance Measures on page 76 of the Annual Report and Financial Statements) that are complex and could be open to challenge.
------------------------------------- --------------------------------------------------- Unlisted securities The Company Baillie Gifford conducts appropriate due may invest in unlisted securities, diligence in respect of all unlisted investments, which are not readily realisable and has an established valuation approach and are more difficult to (as described on page 51 of the Annual value given the absence of Report and Financial Statements ), which a quoted price. There may is carefully reviewed by the Board. be less available information and there will be less regulation in respect of disclosures and corporate governance. ------------------------------------- --------------------------------------------------- Gearing . The Company may Under the Investment Policy, the maximum utilise borrowings in order gearing is 25% of gross assets, though to increase the Company does not expect borrowing to its investment exposure. While be in excess of 20% of gross assets. All such leverage presents opportunities borrowing facilities are approved by the for increasing total returns, Board and gearing levels are discussed it can also have the opposite by the Board and the Managers at every effect of increasing losses. meeting. Covenant levels are monitored If income and capital appreciation regularly. on investments acquired with borrowed funds are less than the costs of the leverage, the Company's net asset value will decrease. The use of leverage also increases the investment exposure, which means that if the market moves adversely, the resulting loss to capital would be greater than if leverage were not used . ------------------------------------- --------------------------------------------------- Cyber security risk . A cyber-attack The Audit Committee reviews Reports on on Baillie Gifford's network Internal Controls or that of a third party service published by Baillie Gifford and other provider could impact the third party service providers. Baillie confidentiality, integrity Gifford's Business Risk Department report or availability of data and to the Audit Committee on the effectiveness systems. of information security controls in place at Baillie Gifford and its business continuity framework. Cyber security due diligence is performed by Baillie Gifford on third party service providers which includes a review of crisis management and business continuity frameworks. ------------------------------------- --------------------------------------------------- Climate and Governance risk As described on pages 9 to 14 of the Annual . As investors place increased Report and Financial Statements, the consideration emphasis on climate change of ESG (including and other Environmental, Social climate change) is a core component of and Governance (ESG) issues, Baillie Gifford's investment process, with perceived problems with these the Board overseeing and challenging Baillie matters Gifford on ESG matters. The Board meet in an investee company could with the Investment Manager and discuss lead to that company's shares the investment portfolio, including the being less attractive to investors, application of Baillie Gifford's ESG framework. adversely affecting its share Baillie Gifford's Governance and Sustainability price. team undertake specific ESG reviews on In addition, potential valuation investment portfolios. issues could arise from any direct impact of the failure to address the ESG weakness on the operations or management of the investee company (for example in the event of an industrial accident or spillage). Repeated failure by the Investment Manager to identify climate/ESG weaknesses in investee companies could lead to the Company's own shares being less attractive to investors, adversely affecting its own share price. ------------------------------------- ---------------------------------------------------
Emerging Risks - The Audit Committee has regular discussions
on principal risks and uncertainties, including any risks which are
not an immediate threat but could arise in the longer term.
The Board considers that the key emerging risks arise from
the interconnectedness of global economies and the related
exposure of the investment portfolio to emerging threats such
as the societal and financial implications of escalation of the
Russia-Ukraine military conflict and pandemic or similar public
health threats. The Board considers the impact of such threats on
both markets globally and also more specifically on the Chinese
market. These risks are mitigated by the Investment Manager's
close links to the investee companies and their ability to ask
questions on contingency plans. The Investment Manager believes
the impact of such events may be to impact growth rather than to
invalidate the investment rationale over the long term.
The Company also monitors its service providers to ensure there
is adequate business continuity.
Baillie Gifford & Co Limited
Company Secretaries
19 April 2023
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April 19, 2023 06:33 ET (10:33 GMT)
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