TIDMIIT
RNS Number : 6286B
Independent Investment Trust PLC
14 February 2022
The Independent Investment Trust PLC
Legal Entity Identifier: 213800IYHGJTZJ3MO642
Regulated Information Classification: Annual Financial and Audit
Reports
Annual Report and Financial Statements
Further to the preliminary statement of annual results announced
to the Stock Exchange on 14 January 2022, The Independent
Investment Trust PLC ("the Company") announces that the Company's
Annual Report and Financial Statements for the year ended 30
November 2021, including the Notice of Annual General Meeting, has
been posted to shareholders and submitted electronically to the
National Storage Mechanism where it will shortly be available for
inspection at data.fca.org.uk/#/nsm/nationalstoragemechanism
It is also available on the Company page
independentinvestmenttrust.co.uk (as is the preliminary statement
of annual results announced by the Company on 14 January 2022).
Covid-19 - Important note regarding arrangements for the Annual
General Meeting (AGM)
The board of The Independent Investment Trust PLC recognises the
public health risk associated with the Covid-19 pandemic arising
from public gatherings. At the same time, the board is conscious of
the legal requirement for the Company to hold its AGM before the
end of May 2022. Given the current uncertainty around when public
health concerns will have abated, the board has for the time being
decided to aim to follow the Company's customary corporate
timetable and, accordingly, the Company's AGM will take place at
4.30pm on Thursday 24 March 2022 at the offices of Baillie Gifford
& Co, Calton Square, 1 Greenside Row, Edinburgh EH1 3AN. At
present, the Board expects to be able to welcome shareholders to
the meeting. Should public health advice and Government measures
change, however, arrangements will be made by the Company to ensure
that the minimum number of shareholders required to form a quorum
will attend the meeting in order that the meeting may proceed and
the business be concluded. The board will however continue to
monitor developments and any necessary changes will be advised to
shareholders and posted on the Company's website
independentinvestmenttrust.co.uk.
In the meantime, the board encourages all shareholders to submit
proxy voting forms as soon as possible and, in any event, by no
later than 4.30pm on 22 March 2022.
Statement of Directors' Responsibilities in respect of the
Annual Report and the Financial Statements
The directors are responsible for preparing the annual report
and the financial statements in accordance with United Kingdom
applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have elected to prepare the financial statements in accordance with
applicable law and United Kingdom Generally Accepted Accounting
Practice, (United Kingdom Generally Accepted Accounting Practice)
including Financial Reporting Standard FRS 102 'The Financial
Reporting Standard applicable in the UK and Republic of Ireland'
('FRS 102'). Under company 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 in accordance with
Section 10 of FRS 102 and then apply them consistently;
-- make judgements and accounting estimates that are reasonable
and prudent;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
-- provide additional disclosures when compliance with the
specific requirements in FRS 102 is insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the group and company financial position and
financial performance;
-- state whether applicable UK Accounting Standards, including
FRS 102, 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
the financial statements and directors' remuneration report comply
with the Companies Act 2006. The Directors are also responsible
both for safeguarding the assets of the Company and for the
maintenance and integrity of the Company's website, and hence for
taking reasonable steps for the prevention and detection of fraud
and other irregularities (in the case of the safeguarding of
assets) and also for the preservation of the website integrity.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Under applicable laws and regulations, the directors are also
responsible for preparing a Strategic Report, a Directors' Report,
a Directors' Remuneration Report and a Corporate Governance
Statement that comply with that law and those regulations.
Each of the directors, whose names and functions are listed
within the board of directors section confirms that, to the best of
his knowledge:
-- the financial statements, which have been prepared in
accordance with applicable law and United Kingdom Accounting
Standards (United Kingdom Generally Accepted Accounting Practice)
including FRS 102 'The Financial Reporting Standard applicable in
the UK and Republic of Ireland', give a true and fair view of the
assets, liabilities, financial position and net return of the
Company;
-- 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; and
-- 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 that it faces.
Principal and Emerging Risks
As explained on pages 22 and 23 of the Annual Report and
Financial Statements there is a process for identifying, evaluating
and managing the risks faced by the Company on a regular basis. The
directors have carried out a robust assessment of the principal and
emerging risks facing the Company, including those that would
threaten its business model, future performance, solvency or
liquidity. A description of these risks and how they are being
managed or mitigated is set out below.
The board considers the coronavirus (Covid-19) pandemic to be a
factor which exacerbates existing risks, rather than a new emerging
risk. Its impact is considered within the relevant risks.
Financial risk - The Company's assets consist mainly of listed
securities and its principal financial risks are therefore market
related and include market risk (comprising currency risk, interest
rate risk and other price risk), liquidity risk and credit risk. An
explanation of those risks and how they are managed is contained in
note 16 to the accounts on pages 47 to 49 of the Annual Report and
Financial Statements. The board has, in particular, considered the
impact of heightened market volatility since the Covid-19 outbreak.
To mitigate this risk, at each board meeting the composition and
diversification of the portfolio by geographical and industrial
sectors are considered along with sales and purchases of
investments. Individual investments are discussed with the managing
director together with his general views on the various investment
markets and sectors.
Investment strategy risk - pursuing an investment strategy to
fulfil the Company's objective which the market perceives to be
unattractive or inappropriate, or an ineffective implementation of
an attractive or appropriate strategy, may lead to reduced returns
for shareholders and, as a result, a decreased demand for the
Company's shares. This may lead to the Company's shares trading at
a widening discount to their Net Asset Value. To mitigate this
risk, the board regularly reviews and monitors: the Company's
objective and investment policy and strategy; the investment
portfolio and its performance; the level of discount/premium to Net
Asset Value at which the shares trade; and movements in the share
register.
Regulatory risk - failure to comply with applicable legal and
regulatory requirements such as the tax rules for investment
trusts, the FCA Listing Rules, the Companies Act and the
Alternative Investment Fund Managers Regulations 2013 could lead to
suspension of the Company's Stock Exchange listing, financial
penalties, a qualified audit report or to the Company being subject
to tax on capital gains. To mitigate this risk, the practical
measures to ensure compliance with regulations and with company
law, and to provide effective and efficient operations as they
relate to secretarial and administrative matters, have been
delegated to Baillie Gifford & Co. Baillie Gifford's Internal
Audit and Compliance departments provide regular reports to the
audit committee on Baillie Gifford's monitoring programmes. Major
regulatory change could impose disproportionate compliance burdens
on the Company or threaten the viability of the investment trust
structure. In such circumstances, representation would be made to
defend the special circumstances of investment trusts. Shareholder
documents and announcements, including the Company's published
interim and annual report and financial
statements, are subject to stringent review processes and
procedures are in place to ensure adherence to the Transparency
Directive and the Market Abuse Directive with reference to inside
information.
Custody risk - safe custody of the Company's assets may be
compromised through control failures by the Company's custodian,
including breaches of cyber security. To mitigate this risk, cash
and portfolio holdings are regularly reconciled to the custodian's
records by Baillie Gifford & Co. The audit committee reviewed
Baillie Gifford's Report on Internal Controls which details the
controls in place regarding the recording and reconciliation of
cash and portfolio holdings to third party data. The custodian's
Internal Controls Reports are reviewed by Baillie Gifford & Co
and a summary of the key points is provided to the audit committee
by Baillie Gifford & Co's Business Risk department. In
addition, the existence of assets is subject to annual external
audit.
Operational risk - risk of loss resulting from inadequate or
failed internal controls, processes and systems, or from external
events. To mitigate this risk, Baillie Gifford's Internal Audit and
Compliance departments provide regular reports to the audit
committee. The board also reviews Baillie Gifford's Report on
Internal Controls and the reports by other key service providers
are reviewed by Baillie Gifford on behalf of the board. In
addition, Baillie Gifford has a comprehensive business continuity
plan which facilitates continued operations of the business in the
event of a service disruption (including any disruption resulting
from the coronavirus pandemic) or major disaster. Baillie Gifford
has continued to work on a business-as-usual basis throughout the
Covid-19 pandemic. Following the relaxation of Covid-19
restrictions by the Scottish and UK governments, there had been a
gradual increase in office attendance with a hybrid model operating
whereby staff determined the most appropriate split between working
from home and working in the office. With the recent reintroduction
of restrictions, Baillie Gifford staff have, in the main, reverted
to working from home. 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
Discount risk - the discount/premium at which the Company's
shares trade relative to its Net Asset Value can change. The risk
of a widening discount is that it may undermine investor confidence
in the Company. To manage this risk, the board monitors the level
of discount/ premium at which the shares trade and the Company has
authority to buy back its existing shares when deemed by the board
to be in the best interests of the Company and its
shareholders.
Economic, Social and Governance (ESG) risk - a failure by the
investment manager to identify potential future problems on ESG
matters in an investee company could lead to the Company's shares
being less attractive to investors as well as potential valuation
issues in the underlying investee company.
Political risk - the board is of the view that political change
in areas in which the Company invests or may invest may have
practical consequences for the Company. To mitigate this risk,
developments are closely monitored and considered by the board.
Whilst there remains considerable uncertainty at present, the board
will continue to monitor developments as they occur and assess the
potential consequences for the Company's future activities.
Resource risk - as the Company is self managed and has only two
employees (the managing director and full-time portfolio manager of
the portfolio, Max Ward, and an office manager) the loss of
personnel may adversely impact investment performance. To mitigate
this risk, contingency plans are in place to deal with any loss of
personnel. Secretarial and accounting functions are contracted out
to Baillie Gifford & Co and are not subject to resource
risk.
Baillie Gifford & Co Limited
Company Secretaries
14 February 2022
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END
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