A unique investment

philosophy

ANNUAL REPORT 2022

AVI Global Trust plc

(AGT or the Company)

was established in

1889. The Company’s

investment objective is

to achieve capital growth

through a focused

portfolio of investments,

particularly in companies

whose shares stand

at a discount to

estimated underlying

net asset value.

Welcome to our 2022 Annual Report

TOTAL ASSETS

†

£1.1 billion*

LAUNCH DATE

1 July 1889

ANNUALISED NAV TOTAL

RETURN SINCE 1985

†

11.4%**

EXPENSE RATIO

†#

0.88%***

Retail Investors Advised by IFAs

The Company currently conducts its affairs so that its

shares can be recommended by Independent Financial

Advisers (IFAs) in the UK to ordinary retail investors in

accordance with the Financial Conduct Authority rules

in relation to non-mainstream investment products and

intends to continue to do so. The shares are excluded

from the Financial Conduct Authority’s restrictions which

apply to non-mainstream investment products because

they are shares in an authorised investment trust.

The Company is an Alternative Investment Fund (AIF)

under the European Union’s Alternative Investment

Fund Managers’ Directive (AIFMD). Its Alternative

Investment Fund Manager (AIFM) is Asset Value

Investors Limited. Further disclosures required under

the AIFMD can be found on the Company’s website:

www.aviglobal.co.uk.

ISA Status

The Company’s shares are eligible for Stocks

& Shares ISAs.

* As at 30 September 2022.

** Source: Morningstar, performance period

30 June 1985 to 30 September 2022, total return

net of fees, GBP. The current approach to investment

was adopted in 1985.

*** As at 30 September 2022, includes: management

fee, marketing and administration costs.



# For a detailed discussion of the Expense Ratio,

please see Key Performance Indicators on page 12.

Investment Trust

Awards 2022

Winner

Global Equities

Shareholder Communication

Awards 2022

Highly Commended

Best Report and Accounts

(Generalist)

AVI Global Trust plc Annual Report 2022

CONTENTS

We maintain a corporate website

containing a wide range of information

of interest to investors and stakeholders

www.aviglobal.co.uk

KEY STORIES

@AVIGlobalTrust

AVIGlobalTrust

A  collection

of businesses

Read more on page 39 of the Annual Report

Generating 

shareholder value

Read more on page 11 of the Annual Report

Investing responsibly

Read more on page 29 of the Annual Report

Strategic Report

02 Company Overview

04 Company Performance

 The Investment Manager at a Glance

08 Chairman’s Statement

12 KPIs and Principal Risks

 Section 172 Statement

17 Stakeholders

19 Responsible Business

20 Ten Largest Equity Investments

22 Investment Portfolio

Investment Review

24 About Asset Value Investors

 Promoting Sustainable Attitudes

30 Performance Review

34 Japan: Time for a Sleeping Kaiju to Awaken

 Portfolio Review

51 Outlook

Governance

52 Directors

54 Report of the Directors

Financial Statements

 Statement of Comprehensive Income

 Statement of Changes in Equity

 Balance Sheet

 Statement of Cash Flows

 Notes to the Financial Statements

Other Reports

 AIFMD Disclosures (Unaudited)

87 Report of the Audit Committee

90 Directors’ Remuneration Policy

92 Report on Remuneration Implementation

94 Independent Auditor’s Report

Shareholder Information

98 Notice of Annual General Meeting

102 Shareholder Information

103 Glossary

107 Company Information

A unique investment

portfolio

Read more on page 33 of the Annual Report

AVIGlobalTrust AVI-Global-Trust

Seeking opportunities

globally

Read more on page 3 of the Annual Report

Engaging with our

investee companies

Read more on page 35 of the Annual Report

01SIORFSGIRSR

AVI Global Trust plc Annual Report 2022

STRATEGY INVESTMENT APPROACH

Strategic Report / Company Overview

COMPANY PURPOSE

The Company is an investment trust. Its investment objective is

to achieve capital growth through a focused portfolio of mainly

listed investments, particularly in companies whose shares

stand at a discount to estimated underlying net asset value.

BUSINESS MODEL

The Company’s strategy is to seek out-of-favour companies whose assets

are misunderstood by the market or under-researched, and which trade



of this strategy is active engagement with management, in order to provide

suggestions that could help narrow the discount and improve operations,

thus releasing value for shareholders.

The Company’s assets are managed by Asset Value Investors Limited

(AVI, or the Investment Manager). AVI aims to deliver superior returns and



may be selling on anomalous valuations.





There is no income target set and no more than 10% of the Company’s



there has been an average of 43 stocks held in the AGT portfolio.

AVI’s investment philosophy is described in more detail

on page 25 of the Annual Report

30 September 2022

197.27p

30 September 2021

221.95p**

NET ASSET VALUE PER SHARE*

30 September 2022



NUMBER OF INVESTMENTS

 

Read more about the PRI:

www.unpri.org/

BESPOKE ESG MONITORING SYSTEM



to monitoring the ESG performance of our

companies. AVI has developed a bespoke

system to track the performance and progress



ESG metrics. This is built into our proprietary

database to ensure that ESG considerations

are integrated into each stage of analysis,

as well as elevating our ability to constructively

engage with our portfolio companies. This is



and we are in the process of undertaking

assessments on our companies.

TAILORED QUESTIONNAIRES

These assessments inform tailored

questionnaires that we are sending to each

company to request further information and

promote improved sustainability disclosure.

The information we receive from companies is

fed back into our database and helps us to better

understand their approach to these issues.

AVI Global Trust plc Annual Report 2022

27GIR FS OR SISR

Investment Review / Promoting Sustainable Attitudes continued

Good stewardship is

essential to preserving

and enhancing long-term

value.

We view stewardship as a

continuous practice and ongoing

monitoring of our portfolio

companies is fundamental to this.

Our ESG monitoring system is a

key part of this process, helping

us to identify potential areas of

engagement and empowering

us to effectively engage where

appropriate.

Active engagement is at the core

of our investment strategy. As

long-term investors, our aim is to

build constructive relationships with

the Boards and management of

the companies in which we invest,

offering suggestions to sustainably

improve corporate value. Through

constructive engagement, we

encourage and expect investee

companies to take meaningful

action in addressing issues and

weaknesses in the context of

long-term value creation.

Controversy Monitoring

Controversies can bring major

reputational damage and a loss of

consumer trust to a brand which



value. Powered by ISS Norm-Based

Research, we closely monitor any

controversies and potential violations

of international norms associated

with our universe. Whilst our hope

is that controversies do not occur,

they can be a marker of how well a

company’s policies are integrated

into business operations and culture.

This is useful to us as investors in

highlighting vulnerabilities, structural

problems and indicating where

improvements can be made.

STEWARDSHIP

Proxy Voting:

As responsible, active stewards

of our clients’ capital, we have

a duty to vote carefully and

thoughtfully on their behalf, and

we take this duty seriously. We aim

to vote at every general meeting

for which we are eligible.

Private Engagement:

The majority of our engagement

takes place behind closed doors.

We continue to be in regular

communication with our portfolio

companies on a wide range of topics.

Public Engagement:

We are willing to take our

engagement public if necessary.

We launched a number of public

campaigns during 2022 and

submitted shareholder proposals

covering issues related to ‘E’ ‘S’

and ‘G’.

Useful resources

https://www.weforum.org/

stakeholdercapitalism/our-metrics

https://www.assetvalueinvestors.

com/process/esg-approach/

www.issgovernance.com/esg/

screening/

We are committed to actively

engaging with our portfolio companies

to help build resilience to long-term



promote sustainable attitudes.

Total voted

100%*

Voted against management

15%

Voted with management

85%

AGT 2022 PROXY VOTING RECORD**

Source / Getty Images / terminator1

 

** As at 30/09/2022

AVI Global Trust plc Annual Report 2022

HIGHLIGHTING OUTCOMES FROM

OUR ENGAGEMENTS

Investing responsibly

– Painting a better

SK Kaken

SK Kaken is the leading architectural paints

manufacturer in Japan. Despite a high-quality

business model and a dominant share of the

domestic construction paint market, its share

price has consistently underperformed both

global and domestic peers.

Climate change is perhaps the biggest global challenge we face, and

failure to act will have devastating consequences. Japan is the sixth

largest emitter of greenhouse gases. Its industrial sector accounts

for 37% of national energy-related emissions and within this sector,

the chemical industry is the second largest emitter

. We believe that

good governance is the linchpin to a strong business that responsibly

manages environmental and social issues. SK Kaken is controlled

by its founding family who own approximately 40% of shares and

hold key senior executive positions. This has fostered a culture of

intransigence and traditionalism which not only neglects the interests

of minority shareholders, but ignores the collective responsibility to act

on systemic issues that impact both the long-term sustainability of the

company and its wider stakeholders.

Since we became a shareholder in 2017, AVI has tried to work with

management privately, offering numerous constructive suggestions

to sustainably improve corporate value. Our aim is to conduct

engagements behind closed doors as we feel this is usually the most

conducive way to effect change; however, due to a lack of progress

and with both the President and Chairman refusing to meet, AVI

launched a public campaign in 2021.

In 2022, we expanded the scope of this campaign, publishing

a presentation and submitting a total of six shareholder proposals

covering issues such as SK Kaken’s lack of board independence

and failure to transparently address its environmental impact as part

of our wider campaign.

https://www.assetvalueinvestors.com/painting-a-better-sk-kaken/#

We seek to raise awareness surrounding key failings, in consideration

of all stakeholders and to encourage other shareholders to bring similar

arguments to the company. We continue to engage with SK Kaken

and given that our proposals achieved support from the majority of

minority shareholders, our concerns are clearly shared widely.

Source: Climate Action Tracker.

@AVIGlobalTrust

AVIGlobalTrust

Read more about our ESG news on our website:

www.assetvalueinvestors.com/agt/commentary-updates/esg-news/

AVIGlobalTrust AVI-Global-Trust

1. DTS improves

board diversity,

appointing

two female board

members and

establishes

a Sustainability

Committee.

2. Third Point

Investors appoints

Richard Boléat as

new independent

non-executive

Director. Read more

about our campaign:

https://www.

assetvalueinvestors.

com/agt/campaign/

avi-requisitions-third-

point-investors-to-call-

an-egm/

3. T Hasegawa

establishes an

English-speaking

global IR team

and makes its

sustainability

disclosures available

in English.

Source / Getty Images / terminator1

AVI Global Trust plc Annual Report 2022

29GIR FS OR SISR

Sustained periods

of panic and

market decline

create compelling

opportunities.

We remain nimble

and ready to

seize them.

Joe Bauernfreund



Investment Review / Investment Manager’s Report

Performance Review

AVI Global Trust plc Annual Report 2022

Performance Review



predominant fear playing on investors’ minds”. Unfortunately, this fear has

become a reality.

In December 2021, the Chairman of the Federal Reserve conceded





have imagined.

Central Banks have made it clear they will do “whatever it takes” to rid



includes inducing a recession. The era of ever declining interest rates

and central banks having the backs of equity investors appears well and

truly behind us.

As we noted in last year’s Annual Report, on a look-through basis our

portfolio companies are typically characterised by strong competitive

positions, pricing power and low levels of gearing. This has stood them



insulated their share prices, as higher bond yields have fed through to

higher discount rates and created considerable volatility.

Moreover, markets don’t operate in a vacuum. Rather, they are jolted by

events in the real world. Russia’s invasion of Ukraine has done just this,



European governments are working hard to resolve. Whether this spills

into a full-blown economic crisis remains to be seen.

As is expected in such an environment, discounts have widened, acting

as a headwind to performance. The weighted average discount to NAV

of our portfolio stands at 38% today, versus 29% a year ago.

Within this context AVI Global Trust’s NAV declined by -7.3% on a total



ex-US index (our comparator benchmark) and a -4.2% return for the



In a challenging macro environment, it is notable that a number of the

largest positive contributors – namely Fondul Proprietatea and DTS –

are positions where we have engaged as active owners. We believe

such engagement, and other types of idiosyncratic opportunities that

can generate absolute returns regardless of the performance of broader

markets, is an increasingly relevant part of our arsenal, particularly during

periods that are less hospitable for equities en masse.

As readers will know by now, our portfolios are constructed from the

bottom up, based on fundamentals and the prospects for NAV growth

and discount narrowing, as opposed to some over-arching economic

theory or concern for index constituent weights. We see little merit in

trying to time markets and wholly subscribe to the adage that it is time

in the market, not timing the market, that matters. As such, we typically

aim to stay more or less 100% invested at all times.

As an Investment Trust however, we have the capacity to use gearing.

We explained in the interim report how, as markets rose in calendar

year 2021, we maintained our sell discipline and exited positions where

discounts and valuations had become less compelling, selling Kinnevik

on a large premium and exiting Investor AB on a tight discount. Come

the end of February 2022, we were not employing any of the available

gearing and by the summer we were in a net cash position of 7%,

having exited Fondul Proprietatea.

2022

2021

<£1 billion

>£1 billion – <£5 billion

>£5 billion – <£10 billion

>£10 billion



EQUITY PORTFOLIO VALUE BY MARKET CAPITALISATION

-50%

-45%

-40%

-35%

-30%

-25%

-20%

Sept 12 Sept 14 Sept 16 Sept 18 Sept 20

Sept 22

-50

-45

-40

-35

-30

-25

-20

-50

-45

-40

-35

-30

-25

-20

WEIGHTED AVERAGE DISCOUNT*

PORTFOLIO DISCOUNT*

38.0%

 

Source / Estimated by Asset Value Investors.

For further information, please turn to page 12 of the Annual Report

ANNUALISED NAV 10 YEAR TOTAL RETURN PER SHARE*

9.4%

AVI Global Trust plc Annual Report 2022

31GIR FS OR SISR

Investment Review / Investment Manager’s Report continued

Performance Review continued

Over the last few months we have cautiously redeployed capital such

that we are now approximately fully invested once again, but with our

gearing still available to deploy. We have taken advantage of write-downs

in valuations to build positions in two new European holding companies

(Schibsted and D’Ieteren), and a new North American Holding Company

(Cannae Holdings).



room for us to add value through engagement, and have also taken a

basket-like approach to investing in a group of closed-end funds offering

exposure to private equity and venture capital trading at abnormally wide

discounts, even after incorporating the impact of public market movements

onto private company valuations.

In times of market stress it is easy to be melodramatic. This feels

particularly relevant, as the now former UK government’s recent budget

proved to be anything but “mini”. Volatility in Sterling and the UK Gilt



on pension funds’ Liability Driven Investing strategies – attesting to the



apparent in times of stress.

As a global fund we will always be correlated with broader markets. With

that said, our experience shows that discount widening and panic provide

opportunities. Valuations – both within the portfolio and our wider universe

– are increasingly attractive. Through our own activism, engagement and

corporate events, there is scope for unlocking value, independent of the

broader market. We believe that this will play an increasingly important role

in our returns in an uncertain world. With the opportunity to deploy gearing



and drive attractive long-term returns.

Source / Trio Images

AVI Global Trust plc Annual Report 2022

A unique investment

portfolio

Pershing Square Holdings (PSH) is a London listed closed-ended fund



the opportunity to own a concentrated portfolio of high-quality US

companies on a 34% discount to their net asset value.

Universal Music Group (UMG) is PSH’s largest holding and accounts

for 23% of PSH’s NAV. Through our prior research on UMG when it

was owned by Vivendi, and through our exposures to Sony Music and

Hipgnosis Songs Fund, we have come to appreciate the secular growth

attractions of the music industry and the advantaged positioning of

content owners in the value chain. Streaming has transformed the

industry in terms of both growth and quality of earnings. We see

a long growth runway ahead as streaming subscription services

penetrate further into emerging markets, as subscription prices rise in

developed markets, and as music becomes increasingly monetised



disproportionately over time to UMG and other content owners.

Chipotle (CMG), the American chain of fast casual restaurants,

accounts for a further 17% of PSH’s NAV. Chipotle’s business



ex-Taco Bell boss, Brian Niccol, as CEO. Under Niccol’s leadership,

Chipotle has effectively reinvented itself: launching a high-growth

digital strategy; improving the quality of its menu and operations;

and building strong brand equity with its marketing campaigns.

This reinvention was best illustrated by the company’s response to

COVID-19, where the company proactively accelerated its investment

into the digital business. CMG introduced digital IDs, a reward

scheme, and digital-only “Chipotlane” drive-thrus, offering consumers

the opportunity to order ahead of time through their app. This has

enabled Chipotle to build-up a database of 30m members, gaining

insight into their consumption and ordering habits, and tailoring its

marketing/rewards around this. Today digital represents 40% of sales.



home, Chipotle still offers one of the most reliable/growth algorithms

available on public markets, where mid-high single digit same-

store-sales combined with 8-10% unit growth translates through to

consistent high-level earnings growth of c. 35%. Pairing this with the

strong growth runway from its personalised rewards scheme, Chipotle

remains an exciting investment for PSH.

While PSH detracted -0.1% from AGT’s NAV, the company’s

discount has widened (to 34% vs average of 21%) over the past



term performance track record and attractive portfolio. PSH remains

AGT’s largest holding.

Read more of our insights on our website:

www.assetvalueinvestors.com/agt/about-the-trust/our-edge/insights/

@AVIGlobalTrust

AVIGlobalTrust

AVI-Global-Trust

AVI Global Trust plc Annual Report 2022

33GIR FS OR SISR

Japan: Time for a Sleeping

Kaiju to Awaken

Japan is famed for its innovation

and high-technology products,

but its IT infrastructure lags

other developed countries.

Many Japanese businesses

need a tech upgrade to make



Japanese government has been

making for several years now.

In 2018 Japan’s trade ministry, METI

, warned

that companies were in danger of falling off a

‘digital cliff’ due to limitations caused by the

industry’s ageing IT systems. METI warned that

companies would have to innovate or die, else

the country could fall behind other jurisdictions,

potentially incurring lost potential of $120 billion

a year, should they fail to achieve this digital

transformation by 2025.

METI’s 2018 report recommended that, in the

decade that followed, Japanese companies

should embrace digital transformation by

overhauling IT systems that have long since

passed their prime, while also harnessing cloud,

big data and social technology, for Japan to

remain globally competitive.

It was a stark warning from a government not

known for its use of hyperbole. Businesses

stood up and listened when METI told them to



outdated systems and determine which of them

should be abolished.”

Progress has been slow but steady, with the



pandemic, as the world became accustomed

to relying on new technology to allow workforces

to work remotely.

Japan’s digital transformation has become

a focus of the Japanese government and

corporate executives. Once realised, it should



companies. This in turn will generate shareholder

value, via higher margins and new growth

domains, helping Japanese companies achieve

their full potential.

METI is Japan’s Ministry of Economy, Trade and Industry.

DANIEL LEE

Head of Japan Research

What experience

does AVI have in the

Japan market?

We’ve been investing in Japan for

nearly three decades, with members

of our 12-strong investment team

based both in London and Tokyo. As

well as a high allocation to Japan in

the AVI Global Trust (AGT), we also

manage the AVI Japan Opportunity

Trust (AJOT), which launched in 2018.

How do you work with

companies to help them

achieve their potential?

At AVI, we pride ourselves on

active engagement across all our

investments. We engage with the

management teams, building close

relationships with our portfolio

companies, to help them to develop

their businesses and achieve their full

potential. In Japan, engagement is a

core pillar of our strategy, working on

operational improvements, balance



and other ESG issues. In fact, many

Japanese companies actively seek out

our help when it comes to sustainability

and responsible investment.

How has AVI developed

its expertise in Japan?



substantially expanded our Japan

investment resources to help us better

understand the market, its economy

and the companies that operate

within it. We have one member of the

team based in Tokyo who assists with

our engagement activity. In total we

have four Japanese nationals which

gives us a local understanding of both

Japanese management perspectives

and how we can work with them to

add value to their businesses.

What trends are you

seeing in the market?

Shareholder engagement is on the

rise. 2021 marked a record high in the

number of activist events in Japan and

share buybacks this year are tracking

to break the 2021 record.

Compared to 2015 when Japan

introduced the Corporate Governance

Code there has been a seismic shift in

the attitudes of company management

to shareholders. Shareholders are seen

less as a passive stakeholder and more

emphasis is being placed on good

corporate governance, balance sheet



There is still some way to go, and

not every company has moved with



positive trend will continue, and most

importantly, that it is underappreciated

by the market, offering an opportunity

to exploit mispriced situations.

Why has AGT’s Japan

exposure been reduced

in FY22?

AGT’s Japan exposure fell from 28%

to 20% over FY22. While this may

seem like a large change, this reduction

is entirely attributable to: 1) our decision

to exit out of Nintendo and Keisei

Electric, and 2) our decision to trim our

holding in Sony. The reduction was,

therefore, driven by sales from large-

cap Japanese companies to re-deploy

into other opportunities elsewhere

in our universe. The exposure to

overcapitalised Japanese small-cap

companies increased slightly to



segment of the portfolio, we increased

the emphasis on quality and the

opportunity for engagement over FY22,

favouring fewer, higher-quality positions

e.g. Wacom and DTS.

Investment Review / Investment Manager’s Report continued

AVI Global Trust plc Annual Report 2022

Source / Getty Images / zf L

We’ve been investing in Japan for over three

decades, building relationships with companies

and working with management to help them

grow their businesses. Japan might be considered

a sleeping giant (or Kaiju) right now, but as

the digital transformation gets underway and

shareholder engagement continues, we see

opportunities for growth across the region.

Now is a great time to be interested and

invested in Japan.

Engaging with our

investee companies

Much like the California gold rush, where savvy

entrepreneurs made their fortunes providing

tools and supplies for the prospectors, it is

those providing IT services that stand to gain

from Japan’s rush to digitise. Japanese IT

service delivery companies are well placed

to cash in from the inevitable tidal wave of

demand for IT transformation.

DTS is a prime example of this. The systems integration and

comprehensive information services company occupies a niche

position in the IT service delivery market, serving up high growth





unlock greater value through active engagement. Despite being well



governance standards and strategy were in vital need of improvement

when we initiated our position in 2020.

As the largest shareholder, owning c. 10% of the shares across AVI’s

funds, we have been working closely with management and the board

privately to help them to live up to their slogan: ‘Delivering Tomorrow’s

Solutions’. DTS’ response to our engagement has been exemplary – bar

a few minor points, all our suggestions were accepted and included in

a comprehensive mid-term plan announced in May 2022 in which they



focus on high-value-added IT services. Moreover, they have addressed

corporate governance issues and set the foundations to guide them to

long-term sustainability, adopting an Audit and Supervisory Committee

structure, improving board diversity by appointing two female directors,

and establishing a Sustainability Committee.

Since the announcement in May, DTS’ share price has appreciated by







pressure and we are well aware of the careful, strategic engagement

required to spur change. The positive share price performance, and



our efforts and clearly demonstrates the real value of AVI’s constructive

activism.

METI have made it clear that the digital cliff is coming, warning



DTS are boldly embracing change and are set to soar from this

digital cliff, taking the rest of the Japanese economy with them.

Read more of our insights on our website:

www.assetvalueinvestors.com/agt/about-the-trust/our-edge/insights/

@AVIGlobalTrust

AVIGlobalTrust

AVI-Global-Trust

GIR FS OR SISR 35

AVI Global Trust plc Annual Report 2022

Investment Review / Investment Manager’s Report continued

Portfolio Review

AGT invests in holding companies and closed-ended funds that in turn invest in listed and unlisted companies. We show below the top 20 holdings

on a ‘look-through basis’, i.e. the underlying companies to which we have exposure. For example, AGT owns a stake in Aker ASA, a Norwegian

listed holding company, that accounts for 7.1% of AGT’s NAV. One of Aker ASA’s holding is Aker BP, a Norwegian Oil & Gas company, which





Underlying

look-through Look-through

Look-through companies Parent company weight holding sector

LVMH Christian Dior SE 4.8% Apparel, Accessories and Luxury Goods

KKR Fund Management Business KKR 4.3% Asset Management and Custody Banks

Aker BP ASA Aker ASA 4.3% Oil and Gas Exploration and Production

FEMSA Comercio FEMSA 3.0% Food Retail

Wacom Operating Business Wacom 2.9% Interactive Home Entertainment

Apollo Fund Management Business Apollo Global Management 2.4% Asset Management and Custody Banks

Ferrari EXOR 2.3% Automobile Manufacturers

Universal Music Group (UMG) Pershing Square Holdings 2.1% Movies and Entertainment

DTS Operating Business DTS Corp 2.0% IT Consulting and Other Services

Godrej Consumer Products Godrej Industries 1.9% Personal Products

Lowe’s Pershing Square Holdings 1.7% Automobile Manufacturers

Finn   

Chipotle Mexican Grill Pershing Square Holdings 1.5% Food Retail

Adevinta Schibsted ASA B 1.5% Internet Software and Services

Stellantis EXOR 1.5% Automobile Manufacturers

Fujitec Operating Business Fujitec 1.5% Industrial Machinery

Belron D’Ieteren 1.4% Specialised Consumer Services

KKR Balance Sheet Investments KKR 1.4% Asset Management and Custody Banks

Godrej Properties Godrej Industries 1.3% Real Estate Development

Restaurant Brands Pershing Square Holdings 1.2% Food Retail

TOP 20 LOOK-THROUGH COMPANIES

PERSHING SQUARE HOLDINGS: HOW THE LOOK-THROUGH ANALYSIS WORKS

Pershing Square Holdings is a Euronext and London listed closed-ended fund in which AGT invests. Although Pershing Square Holdings is just



of businesses.

Company name Estimated % of Pershing Square Holdings’ portfolio Geography Sector

Universal Music Group 22.5% Global Movies and Entertainment

Lowe’s 18.3% United States Home Improvement Retail

Chipotle Mexican Grill   

Restaurant Brands   

Hilton 11.2% Global Hotels, Resorts and Cruise Lines

Canadian Pacific Railway 9.9% North America Railroads

Howard Hughes   

Fannie Mae & Freddie Mac 1.5% United States Thrifts and Mortgage Finance

AVI Global Trust plc Annual Report 2022

Classification

Closed-ended Fund

% of net assets

0.0%

Discount

-38%

% of investee company

0.0%

Total return on position FY22 (local)

23.1%

Total return on position FY22 (GBP)

22.5%

Contribution (GBP)

102bps

ROI since date of initial purchase

133.0%

Classification

Asset-backed Special Situation

% of net assets

2.9%

Discount

-22%

% of investee company

2.7%

Total return on position FY22 (local)

38.1%

Total return on position FY22 (GBP)



Contribution (GBP)



ROI since date of initial purchase

34.2%

Fondul Proprietatea (Contribution: +1.02%)

We exited from Fondul Proprieteatea (FP), our largest contributor



Over the lifetime of AGT’s investment in FP (initiated in 2014) we generated







FP was established to provide restitution to Romanian citizens whose

property was expropriated by the former Communist government.

As shareholders we have played an engaged role, last year nominating

a new director to the board, and recently working with the board and other

shareholders to negotiate a revised Investment Management Agreement

that better incentivises management. FP is a case study in what optimal

capital allocation can achieve, with the company’s policy of making no

new investments and instead returning proceeds from realisations to

shareholders (via buybacks, tenders, and dividends) turbo-charging strong

underlying NAV growth. Remarkably, the company’s shares outstanding

more than halved over our holding period.

FP’s crown jewel asset, Hidroelectrica, has been a key driver of FP’s

NAV growth and our expectation had been that the long-awaited IPO

of their 20% stake in the company would result in further gains for

FP shareholders. But political and regulatory risks are mounting, and

uncertainty remains over whether a dual listing of Hidroelectrica (i.e.

in London as well as the approved Bucharest listing) will ultimately be

permitted by the Romanian government. With the anti-business PSD party

well ahead in the polls and elections to be held in 2024, the window for

a successful IPO is narrowing. We note that subsequent to our exit, the

existing windfall tax on electricity sales over the RON450MW/h threshold

has been increased from 80% to 100%, and its expiry date extended from

31 March 2023 to 31 August 2023. FP’s share price was not, in our view,



FP’s relative attractiveness versus the rest of our universe reduced by its

material outperformance over the last few years, we took the decision to

exit our investment. This began with us taking advantage of a tender offer

held in late-June that saw us a sell a quarter of our shareholding back to

the company at a premium to share price and a low double-digit discount

to NAV.

DTS Corp (Contribution: +0.64%)

Despite starting the year with only a 2.0% weight DTS was the second





January 2020 as part of our focus on Japanese equities and the potential

upside from a structural improvement in corporate governance and a

greater focus on shareholder returns.

DTS is an IT systems developer, and our investment was premised on a

focus by the Japanese government and corporates to upgrade their IT





company in Japan has a fax machine which relates to Japan’s reliance on

the archaic practice of hanko stamps – a stamp required for over 11,000

procedures to sign off documents. During the coronavirus pandemic



either mailing or faxing them – an archaic task.

Compared to the US, Japanese companies rely more heavily on the



a year that METI (Ministry of Economy, Trade and Industry) has coined

the digital cliff, Japanese companies will need to increasingly utilise DTS’

services, and with a shortage of IT professionals, it should prove a boon

for both sales growth and margin expansion.

As DTS’ largest shareholder, owning just under 10% of the shares

across our managed funds (of which AGT owns 3.1%), we have been

working closely with management and the board behind the scenes.

DTS’ response to our engagement has been exemplary – they allowed us

frequent dialogue with senior board members and, aside from a few minor

issues, actioned all our suggestions in a comprehensive mid-term plan

announced in May 2022. Since then, DTS’ share price has appreciated







vs the market, is we believe, a testament to our efforts and clearly

demonstrates the value of AVI’s constructive activism - something that

we hope will not have gone unnoticed by our other investee companies

as well as other investors in the Japanese markets.

DTS’ valuation, albeit less compelling than when we initiated the position,

is still attractive with the shares trading on an EV/EBIT multiple of 9.2x

vs peers on 13.5x. We believe that as the company executes its plan

to double EBITDA by 2030 and return up to 30% of its market cap to

shareholders, there is still further upside.

CONTRIBUTORS

 

Weighted returns adjusted for buys and sells over the year.

Figure is an estimate by the managers and sum of contributions

 

 

for further details.

FONDUL PROPRIETATEA DTS CORP

AVI Global Trust plc Annual Report 2022

37GIR FS OR SISR

Investment Review / Investment Manager’s Report continued

Portfolio Review continued

Classification

Closed-ended Fund

% of net assets

3.4%

Discount

-48%

% of investee company

15.7%

Total return on position FY22 (local)

2.1%

Total return on position FY22 (GBP)

23.2%

Contribution (GBP)

54bps

ROI since date of initial purchase

50.4%

Symphony International Holdings (Contribution +0.54%)

Buoyed by robust NAV performance, even more so in local currencies



Symphony International Holdings (SIHL) was our third largest contributor

despite the headwind of a widening discount (from 44% to 48%). As with



returns experienced by AGT.

Two unlisted holdings were responsible for the majority of SIHL’s NAV

progression over the year: Indo-Trans Logistics Corporation (ITL) and ASG

Hospitals (ASG).

ITL is Vietnam’s largest independent integrated logistics company with a

network covering aviation services, freight management, contract and port

logistics spread across Vietnam, Cambodia, Laos, Myanmar, and Thailand.

ITL’s strong operating performance, and a secondary transaction that saw

Mitsubishi Logistics Corp acquire a stake in the company, led to SIHL’s



initiated in 2019, is now valued at over 3x cost.





recorded EBITDA growth in excess of 20% in the year to 30 June 2022.

In August 2022, SIHL sold just over a third of its shareholding as part of a



that was initiated in 2019.

Notwithstanding relatively robust NAV performance this year, SIHL’s

discount remains at a persistently extreme level and represents the

market’s verdict on the manner in which the company continues to be



than shareholders. Following a prolonged private engagement with

management and the board in an attempt to address these issues, we

released a public letter to SIHL shareholders which can be found here*.

Our view remains that a change to the company’s strategy and to its board

will be required for shareholders to capture the latent value trapped within

the discount to NAV, and we continue to engage with shareholders on this

and other matters.

 

Weighted returns adjusted for buys and sells over the year.

Figure is an estimate by the managers and sum of contributions will not equal

quoted total return over the financial year.

 

further details.

* https://www.assetvalueinvestors.com/content/uploads/2021/04/Save-Symphony-

Letter-Final.pdf

CONTRIBUTORS

SYMPHONY INTERNATIONAL HOLDINGS

AVI Global Trust plc Annual Report 2022

FOMENTO ECONÓMICO MEXICANO (FEMSA)

A  collection

of businesses

In FY22 we added to our position in Fomento

Económico Mexicano (FEMSA), a Mexican

family-controlled holding company whose origins

date back to the establishment of Mexico’s





1. FEMSA Comercio (72% of NAV), an unlisted business which

operates Oxxo-branded convenience stores, and other small

format retail stores, across Mexico and Latin America.

2. Listed stakes in Heineken (18%) and Coca-Cola FEMSA

(16%), the world’s largest Coca-Cola bottling business.

3. A collection of unlisted, smaller distribution and logistics

businesses (9%).



are most interested. A typical Oxxo store is approximately 100m

size, selling a large range of high-frequency, low-cost items, such as

snacks, beer and cigarettes to customers who are principally motivated

by convenience. The average cost of a new store is c.$130,000,

which at maturity earns a c.30% return on capital and has a payback

period of just three years. Oxxo’s management are expert operators

of this model, with over 20,000 stores in Mexico (10x the second-

largest player) and a new one (pre-COVID) opening every six hours.

The runway for growth in both Mexico and, more recently, Brazil, is

very long. In recent years Oxxo have layered high incremental margin

services across their physical store network, culminating in the launch

of Spin by Oxxo, a digital wallet, last year. The investment thesis is

predicated on the prospect for strong earnings growth at Oxxo, the

lowly valuation at which the stub assets trade, optionality around digital

value creation at Spin, and the potential for the family to unlock value

by simplifying the group structure. We estimate that FEMSA’s unlisted



average and that of peer Walmex. We do not believe the market is

pricing in strong fundamental performance, let alone the potential for



Source / FEMSA

AVI Global Trust plc Annual Report 2022

39GIR FS OR SISR

Classification

Closed-ended Fund

% of net assets



Discount

-42%

% of investee company

9.2%

Total return on position FY22 (local)

7.2%

Total return on position FY22 (GBP)

7.2%

Contribution (GBP)



ROI since date of initial purchase



CONTRIBUTORS

Oakley Capital Investments (Contribution +0.36%)

Oakley Capital Investments (OCI) was one of the largest contributors in



-20% to -42% in the broad market sell-off, leading to a share price return







months. Alongside this, OCI has generated further upside from realised

multiple expansion due to exiting portfolio holdings at an implied valuation

above book value.

Oakley, like all PE managers, are paid fees on committed/invested capital

rather than mark-to-market gains and have no incentive to unduly mark

up, and we believe Oakley are very much at the conservative end of

the peer group when it comes to valuations. We note OCI’s portfolio is

currently held on a very reasonable 14x EV/EBITDA. In H1 alone, OCI



realisations. In an environment where questions have been raised over

private company valuations, OCI has successfully proved the conservatism

of its NAV to the market through exits at premia to carrying values,



It was a busy year for OCI, with four new investments, four follow-on



New investments were Vice Golf (leading direct-to-consumer digitally native





and Compliance sector), and vLex (an online legal information subscription

platform). With 70% of the portfolio now delivering services digitally, and

with 75% having subscription-based or recurring revenues, OCI’s portfolio

should prove resilient in economic downturns.

The crown jewel of the portfolio is IU Group, Germany’s largest private

university group. It boasts the largest portfolio of Bachelors and Masters

degrees in Europe, offering both digital and in-campus learning across

28 German cities. As of this year, the group has over 100k students enrolled

on its 200 courses, growing from just 23 enrolled students during the



state-accredited degrees, recognised by universities and employers globally.

Approximately one third of IU Group’s revenues come from its Business

to Business (B2B) segment, which involves providing degrees/vocational

courses to 10,000 partner companies. These partners can range from

major corporations such as VW to small German enterprises. The students

wage while earning a degree. IU Group provides a matching service to link

students to businesses offering this scheme, which creates a high barrier



revenues come from standard university student enrolment.

IU Group is held on a very conservative 14x EV/EBITDA vs recent

transactions in the sector closer to 20x. This is despite the business being

one of the few education assets of scale globally, being the fastest-growing

university on the continent, and having unique sticky B2B revenues as a

result of Dual Studies programme in Germany. In our view these attributes

mean that IU Group should warrant a premium valuation to its peers. As

a business that is growing its top-line, EBITDA, and student cohort 30-

50% year on year, and with a three to six-year lifetime for its customers,

IU Group is a very exciting asset. The Group is now actively marketing its

B2C segment outside of Germany, only increasing the trajectory for future

growth and prospective returns.

OCI offers a fast-growing, high-quality portfolio with attractive growth

opportunities and recurring revenue businesses, backed by a manager

with a distinct deal sourcing strategy, and all available at a discount of

42%. We remain enthusiastic holders of OCI.

 

Weighted returns adjusted for buys and sells over the year.

Figure is an estimate by the managers and sum of contributions will not

equal quoted total return over the financial year.

 

for further details.

Investment Review / Investment Manager’s Report continued

Portfolio Review continued

OAKLEY CAPITAL INVESTMENTS

AVI Global Trust plc Annual Report 2022

Source / Oakley Capital

OAKLEY CAPITAL

INVESTMENTS / IU GROUP

IU Group is Germany’s largest private

university group. The company is held

at a conservative valuation vs recent

transactions despite the business being

one of the few education assets of scale

globally and being the fastest-growing

university on the continent.

% of net assets

%

AVI Global Trust plc Annual Report 2022

41GIR FS OR SISR

Classification

Holding Company

% of net assets

0.0%

Discount



% of investee company

0.0%

Total return on position FY22 (local)

12.4%

Total return on position FY22 (GBP)



Contribution (GBP)

27bps

ROI since date of initial purchase



Investment Review / Investment Manager’s Report continued

Portfolio Review continued

CONTRIBUTORS

Investor AB B (Contribution: +0.27%)

In January 2022, AGT exited its position in Investor AB as the discount

narrowed to low double-digit levels versus a long-term average closer





Across the A and B shares we had held the position for over twenty years,

having (re) built a position in Investor A during 2001.







Re-reading the 2001 British Empire Securities and General Trust (the

former name of AVI Global Trust) Annual Report, it explains that at the turn

of the century Investor had been under activist pressure from Martin Ebner

of BZ group. At the time there was a perception that Investor management

had to become more dynamic and improve performance. Reading this

more than 20 years later, it is striking to think how Investor has evolved:

Investor today has a very clear governance model and focus on creating

best in class companies through a subtle combination of decentralisation

and accountability. Moreover, Investor have proved themselves to be active

owners, splitting Atlas Copco, selling ABB’s power grids business, splitting

Electrolux and listing EQT – all within the last few years.

The Wallenberg family have shown themselves to be excellent stewards

of capital. There will likely be times in the future where we can invest

alongside them once again, with higher prospective returns from the

discount – which had narrowed – and the NAV – where underlying

valuations had become less compelling.

 

Weighted returns adjusted for buys and sells over the year.

Figure is an estimate by the managers and sum of contributions will not

equal quoted total return over the financial year.

for further details.

INVESTOR AB B

AVI Global Trust plc Annual Report 2022

Classification

Holding Company

% of net assets

2.8%

Discount

-41%

% of investee company



Total return on position FY22 (local)

-58.0%

Total return on position FY22 (GBP)

-49.2%

Contribution (GBP)

-228bps

ROI since date of initial purchase

-50.2%

IAC Inc (Contribution: -2.28%)

IAC – the North American internet-focused holding company controlled

by Barry Diller – was the greatest detractor from your company’s

performance this year, reducing returns by -228bps. Over the last year



compounded by a widening of the discount from 25% to 41%.

IAC specialises in building businesses that are trying to transition sectors



IAC, who describe themselves as the “anti-conglomerate conglomerate”,

have a track record of spinning these off to shareholders when they reach

maturity, having spawned 10 public companies. The company has a track

record of immense value creation and the spinning off of assets pulls the

discount to par.



Vimeo, the video enterprise software business, and made highly attractive

absolute and relative returns on a small position. Following the spin-off

of Vimeo in May 2021, we have subsequentially started to scale up a

position in IAC – whose portfolio today comprises of: 1) Dotdash Meredith,

a digital media company formed in 2021 when IAC’s Dotdash acquired

the illustrious media assets of Meredith Corp; 2) a listed stake in Angi, the



consumer categories online; 3) a listed stake in MGM Resorts International,

whose BetMGM is a leader in the nascent US sports betting and online

gaming market; and 4) a collection of smaller unlisted assets, the most

promising of which are Care.com, a marketplace for caregivers, and a

minority stake in Turo, the peer-to-peer car rental company.

So what’s gone wrong? The short answer is lots.

Starting with the NAV. Dotdash Meredith has suffered from dual issues of

a slowdown in digital advertising as recessionary fears have loomed, and

slower than anticipated integration of the Meredith assets, and accordingly

their $450m digital EBITDA target for 2023, has been pushed back by





Indeed, intent-driven advertising is becoming increasingly valuable in a

world where Apple have upended the cookie-based iOS ad market.



solace is sought from the fact that the drastic share price decline is in

keeping with the US and EU internet businesses against which we track

Angi. The fact that Angi was trading at a steep discount to peers a year

ago has provided no protection as valuations have reset. This has been



impair growth for the rest of the year. The jury is very much out on Angi,





a “real option” as to whether to persevere with the current strategy or to



private or sale of the business).

Finally, shares in MGM – the casino operator whose BetMGM is a leader

in the nascent US sports betting and iGaming market – have declined

by -31% over the last year, as investors have grown cautious over the

sustainability of margins and demand outlook in light of a slowing US

economy. The stub domestic operations trades at 5x EBITDA (assigning

zero value to the BetMGM JV). This is a steep discount to the 12-17x

EBITDA at which MGM has sold assets in M&A transactions in recent

years. Clearly MGM management see value in the shares – having reduced

the share count by 20% since the start of 2021, as do IAC, who have

increased their stake this year.

This weak NAV performance has been compounded by a widening of the

discount. Given IAC’s long and successful history of spinning off assets

to shareholders, we believe that the fair discount is zero. Combined with

the prospects for NAV growth from Angi, MGM and Dotdash, and further

optionality around how IAC deploy their $1.2bn (14% of NAV) cash pile,

there is much to be excited about. It has been a painful last twelve months,

but the ingredients for attractive long-term returns appear to be in place.

IAC INC

DETRACTORS

AVI Global Trust plc Annual Report 2022

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Investment Review / Investment Manager’s Report continued

Portfolio Review continued

IAC INC / MGM RESORTS

INTERNATIONAL

MGM Resorts International is one of the

largest hotel/casino operators in the United

States, and part owner of BetMGM, one

of the leading players in US online sports

betting and iGaming.

% of net assets

2.8%

Source / MGM Resorts

AVI Global Trust plc Annual Report 2022

Classification

Asset-backed Special Situation

% of net assets

2.8%

Discount

-34%

% of investee company

0.0%

Total return on position FY22 (local)

-21.3%

Total return on position FY22 (GBP)

-27.3%

Contribution (GBP)

-152bps

ROI since date of initial purchase

37.5%

DETRACTORS

Sony Group (Contribution: -1.52%)

Sony was the second largest detractor to returns over the period,

deducting 209bps from performance, with a share price return of -25%

vs TOPIX -10%.





The aggressive actions from Xbox/Microsoft since the start of 2022 stoked

this underperformance, with the competitor announcing its intention to



gaming deal in history. This sent Sony’s shares down -13% on the day.



predicated on the opportunity to own Sony’s unmatched combination of

media content assets and consumer hardware technology which, due

to misperceptions about Sony’s conglomerate structure, traded at a very

reasonable EV/EBIT valuation (11.2x).

In 2022, investors have grown increasingly critical of Sony’s individual

businesses, voicing particular concerns over what is arguably Sony’s

crown jewel asset, and the one subjected to most scrutiny, Sony’s

PlayStation business (33% of NAV). Since the introduction of the Microsoft

Game Pass, and the announced acquisition of Activision Blizzard, there

has been increasing uncertainty of what the gaming industry could look



subscription model into the industry, shifting away from the £50-70 per

individual title, instead requiring consumers to pay c. £11/month for an

immediately available catalogue with over 100 blockbuster AAA titles.

 

Weighted returns adjusted for buys and sells over the year.

Figure is an estimate by the managers and sum of contributions will not

equal quoted total return over the financial year.

for further details.

As a refresher, Sony’s gaming model has been to acquire small, high-

quality studios and have them develop new story-driven, single-player

IP of very high quality. In stark contrast, Microsoft has taken a content-



they own, to acquire as much popular IP as possible. They then make

these games exclusive to the Xbox Game Pass platform in the hope of

acquiring new subscribers to the network. For example, Microsoft acquired

Bethesda Softworks in 2021 for $7.5bn, and is now hoping to do the same



While this aggressive route to capturing market share could be successful,



within gaming and across other streaming mediums. It is a large bet by





evidenced by Sony CFO, Hiroki Totoki, who explained during a recent

investor Q&A that “putting AAA titles straight onto their subscription service

will result in a deterioration in quality due to less funds being available.”

How this will ultimately impact Sony remains unclear, but management

have been measured in not blindly following Microsoft guns blazing

down the streaming path. Sony did introduce an all-new PlayStation Plus

subscription service in June, but this offered a back-catalogue of games

in the service and no day-one exclusive releases. This ensured that

Sony’s current model with new game releases can continue on the PS5,

while offering players more content for their subscription. A sensible step

by management.

Sony’s share price has now fallen -40% from its peak and the stub*

valuation stands at 10.4x forward EV/EBIT. While it is unclear what the



accounts for a further 31% of NAV and is expected to see further earnings

growth this year. The new iPhone is continuing to use Sony sensors,

and the PlayStation continues to outsell the Xbox each week. While the





opportunity to own four high-quality assets with proven synergies between



investment in Sony and feel that it is a company that will continue to excel

in its respective industries for years to come.

SONY GROUP

* The stub valuation of Sony is the market capitalisation, less the value of all listed



AVI Global Trust plc Annual Report 2022

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Investment Review / Investment Manager’s Report continued

Portfolio Review continued

Classification

Holding Company

% of net assets

7.4%

Discount

-43%

% of investee company

0.5%

Total return on position FY22 (local)

%

Total return on position FY22 (GBP)

-7.7%

Contribution (GBP)

-89bps

ROI since date of initial purchase

25.2%

DETRACTORS

EXOR (Contribution: -0.89%)

Having been one of the strongest performers last year, this year EXOR was

a meaningful detractor from your company’s returns. The shares declined

-10% over the period, as a -4% decline in the NAV was compounded by a

widening of the discount from 39% to 43%.

Starting with the NAV side of the equation, the dynamic which we

described in the interim report continues to be the case: strength at Ferrari

is being offset by weakness at Stellantis. Over the last year Ferrari shares



results. Importantly, Ferrari continue to report their strongest ever order

book intake, with minimal cancellations. Ultimately everything – sales



and the competitive advantage it yields. Investors recognise this and award

Ferrari a relatively high multiple for such certainty in an uncertain world.

Turning to Stellantis, the shares have declined -20% over the last year,





sceptical when investors claim that the market is just plain wrong, but

the divergence between fundamentals and share price is hard to justify.

Investors have grown increasingly cautious over the state of the global



broader debate in autos as to whether current record high margins and low

dealer incentives will stick when volumes (hitherto restricted by shortages

of semiconductor chips) return. Stellantis management, however, contend

that the company can generate a 10% operating margin in a “reasonable

crisis” and that they would be breakeven even below 50% of volumes.

Stellantis now trades at 3x consensus 2023 earnings – just over half that

of Ford and GM once adjusting for accounting differences. As one sell side

analyst put it in a recent note: “What does the market fear? Clearly the

answer is a lot”. With such low expectations there appears ample room



As we discussed in the interim report, in late calendar year 2021 EXOR

agreed (for the second time!) to sell their reinsurance business, Partner

Re, to Covea. The deal was struck at $9.2bn and completed in July 2022.

Just over half of the capital was paid in dollars, which EXOR have not





investments, with €3.8bn of net cash on hand.



summer of 2022, the widening of EXOR’s discount has been a headwind

to performance over the last year. Unlike many other holding companies,



traded on a c.20% discount in early 2020. A return to such a level from



EXOR

AVI Global Trust plc Annual Report 2022

EXOR / FERRARI N.V.

Ferrari, the Italian luxury sports car

manufacturer, has continued to report record

results in FY22, boasting its strongest ever

order book intake and minimal cancellations.



brand equity – sales growth, margins,

etc. – Ferrari consistently demonstrates its

competitive advantage. We believe investors

recognise its certainty as a business and

award it a relatively high multiple as a result.

% of net assets

7.4%

AVI Global Trust plc Annual Report 2022

47GIR FS OR SISR

Investment Review / Investment Manager’s Report continued

Portfolio Review continued

Classification

Holding Company

% of net assets

5.5%

Discount

-44%

% of investee company

0.2%

Total return on position FY22 (local)

-28.3%

Total return on position FY22 (GBP)

-13.7%

Contribution (GBP)

-75bps

ROI since date of initial purchase

80.4%

 

Weighted returns adjusted for buys and sells over the year.

Figure is an estimate by the managers and sum of contributions will not

equal quoted total return over the financial year.



for further details. * FRE, or Fee-Related Earnings, are management fees less any operating expenses.

DETRACTORS

KKR (Contribution: -0.75%)

KKR was one of the largest contributors to AGT’s returns in the previous



detractors. The company’s share price fell by -29% and ended the period

-48% down from its November 2021 all-time high. By contrast, the S&P





But while KKR does have a large balance sheet of investments in its own

funds, and also operates a capital markets business which is subject to

cyclicality, similarly weak share price performance from balance sheet-light

peers from their November 2021 highs (e.g., Blackstone -40%; Carlyle

-54%) implies that this view extends across much of the listed alternative

asset management (AAMs) sector.

We believe this perception is misplaced. For the most part, the alternative

asset manager’s assets under management (AUM) are not at risk of

redemptions, nor are meaningful proportions of their fees subject to

mark-to-market risk i.e., the vast majority of assets are tied up in

long-term or perpetual fund structures with management fees charged

on committed capital.

In the case of KKR, almost half of its AUM is either perpetual capital or

long-dated strategic investor partnerships (separately managed accounts

in which capital is recycled following exits); just 10% of AUM is from

vehicles with a life of less than eight years at inception.



characteristics of scale-advantaged AAMs with KKR‘s fee-paying AUM



this was entirely driven by a decline in capital markets fees (to which we

assign only a modest multiple in our sum-of-the-parts valuation) with



of shorter gaps between fund raises (due to more rapid deployment) and

the “denominator effect” (under which some institutions have become

overly-allocated to Alternatives due to the fall in public markets) has

resulted in now widespread reports of Limited Partners (LPs) facing

indigestion, spurring fears around fundraising prospects.



environment, both from LPs prioritising relationships with larger managers



referred to above primarily relates to private and growth equity fund raises.



private equity funds over the last couple of years.

Furthermore, just 35% of KKR’s AUM is from private equity funds vs



their Real Assets business (Infrastructure and Real Estate), KKR recently

hosted an analyst presentation at which they highlighted that 30% of

growth in total management fees has come from Real Assets over the

last three years, with the segment’s AUM three times what it was in 2019.

Given that institutional investors are under-allocated to Infrastructure and



Asset business to be an even more material contributor to future growth

on the back of further international expansion and penetration into the still

nascent retail market.

Given its resilience and secular growth prospects, the 8x stub fee-related

earnings multiple* on which we estimate KKR trades (or 13x if we punitively

assign zero value for earnings from carried interest) represents, in our view,

one of the most glaring mispricings in our portfolio.

KKR’s management are convinced that their balance-sheet heavy strategy

is the correct one. And we have a lot of sympathy with their arguments that

the balance sheet – aside from being a generator of attractive long-term

returns in its own right – helps grow AUM and FRE quicker through the

seeding of new funds and through demonstrating a strong alignment to

LPs, and provides optionality around M&A during market downturns when

issuing equity would be expensive.

However, KKR does trade on a very material discount to balance-sheet

light peers, such as Ares and Blackstone. Notwithstanding the above

arguments in favour of their balance sheet approach, our discussions with



they are laser focused on shareholder value. With KKR employees owning





KKR’s co-CEOs were awarded seven-year share options that could see

them receive shares worth up to $1bn if the share price were to hit a target

level 3.2x the current share price (with zero value received unless the share

price more than doubles from here).



KKR’s, is moving ahead with a spin-off of its asset management business.

KKR shareholders and management will be watching how the two parts

trade, with any value creation from the split pointing to a source

of optionality for KKR.

KKR AND CO

AVI Global Trust plc Annual Report 2022

Classification

Closed-ended Fund

% of net assets

3.4%

Discount

-17.0%

% of investee company

3.9%

Total return on position FY22 (local)

-20.7%

Total return on position FY22 (GBP)

-11.7%

Contribution (GBP)

-71bps

ROI since date of initial purchase

44.4%

 

Weighted returns adjusted for buys and sells over the year.

Figure is an estimate by the managers and sum of contributions will not

equal quoted total return over the financial year.



for further details.

DETRACTORS

Third Point Investors Ltd (Contribution: -0.71%)

Third Point Investors Ltd (TPOU) is a London listed closed-end fund

that, via its investment in the unlisted underlying Master Fund, provides

exposure to Third Point’s event-driven opportunistic strategy which it

pursues across listed equity, credit, and venture capital investments.

The listed equity portion of the portfolio includes companies such as

Disney, SentinelOne, and Colgate-Palmolive. Having been our largest





decline of -30% exacerbated by a widening discount (from 15% to 17%)

and resulting in a fall in the share price of -32%. Over the same period,





poor performance for AGT shareholders with the -32% share price fall

in USD translating to an -18% decline in GBP. Two of TPOU’s previously



we estimate that these two stocks were collectively responsible for c.40%

of the total NAV decline over the period. We are more comfortable with

the portfolio composition and balance today than we have been for some

time, with the allocation to credit (one area where we believe the manager

has historically demonstrated an ability to add value) at its highest since

the aftermath of COVID, and we would hope that this will lead to improved

returns from here.

Readers will likely be aware of our public activist campaign in TPOU that

began in mid-2021. This came to an end with the appointment of an

independent director we had proposed to the board.

During the year, AGT participated in the materially accretive exchange

facility offered to TPOU shareholders. This mechanism allowed qualifying

shareholders to exchange a portion of their TPOU shareholding for shares

in the underlying Master Fund at a 2% discount to NAV (vs the double-

digit discount on which TPOU shares were trading at the time), and was

introduced during our campaign. We saw 44% of our position exchanged

for shares in the Master Fund, 25% of which can then be redeemed every





covered by this Annual Report), and intend to do the same at the next

three subsequent quarter-ends.

THIRD POINT INVESTORS LTD

AVI Global Trust plc Annual Report 2022

49GIR FS OR SISR

Investment Review / Investment Manager’s Report continued

THIRD POINT / DISNEY

The Global entertainment company has

been reinventing its Media and Entertainment

segment since 2019, moving away from its

traditional third-party licensing to a direct-to-



While we believe in the long-term future of

streaming, Disney has been heavily investing



Third Point took a $1bn stake in Disney in

2022, pushing for sweeping changes across

the company, including cost-cutting. Disney

has since appointed media veteran Carolyn

Everson to its board of Directors through

negotiations with Third Point. We remain



IP, regardless of Third Point’s success in their

activist endeavours.

* Held through Third Point Investors and

Third Point Master Fund.

% of net assets

%*

Portfolio Review continued

Source / Photo by Kenrick Mills on Unsplash

AVI Global Trust plc Annual Report 2022

Joe Bauernfreund

CEO

Tom Treanor

Head of Research

Outlook



stimulus, 2022 has seen developed economies wake up to the



induced by the monetary tightening required to combat it. As such,



comments and actions of central banks with volatile (and falling)

markets the result. We try not to get caught up in this, aware of our

inability to predict the future macroeconomic landscape, and remain

open minded about what might come next. Rather, our experience

shows that the key to long-term success is to focus on company

fundamentals – earnings resilience, balance sheet strength and



The portfolio weighted average discount has moved from 29% to

38% over the last twelve months, and now stands in-line with levels

observed during previous periods of market stress. Sustained periods

of panic and market decline create compelling opportunities. We

remain nimble and ready to seize them, patiently deploying our capital

to sow the seeds of a powerful recovery for the portfolio as and when

volatility subsides.

Joe Bauernfreund



Asset Value Investors Limited

7 November 2022

AVI Global Trust plc Annual Report 2022

51GIR FS OR SISR

Governance / Directors

Your Board

Date of Appointment:

March 2012

Appointed Chairman:

December 2017

External Appointments:

Chairman of Newton Investment Management

Limited.

Experience and Contribution:

Formerly Chairman of Alliance Trust Investments, an

Associate Director of Manchester Square Partners,

a Director of Alliance Trust plc, a Managing Director

of Goldman Sachs Asset Management, Head of

European Equities and Head of Global Equities.

Also a Director and Senior European Portfolio

Manager at Robert Fleming Asset Management.

Susan’s contribution to the Board derives from her

experience both as an equities portfolio manager

and experience of leading boards as Chairman.

Last re-elected to the Board:

2021

Annual Remuneration:

£50,000

Employment by the Investment Manager:

None

Other connections with the

Company or Investment Manager:

None

Shared Directorships with any

other Company Directors:

None

Shareholding in Company

†

55,150 Ordinary Shares

Susan Noble will retire from the Board at the

AGM in December 2022.

Date of Appointment:

April 2017

Appointed Audit Committee Chairman:

June 2017

External Appointments:

Non-Executive Director and Audit Committee

Chairman of The Diverse Income Trust plc,

The Bank of London and The Middle East plc,

Ghana International Bank plc, abrdn Private

Equity Opportunities Trust plc, and Baring

Emerging EMEA Opportunities plc and Non-

Executive Director of Schroder Unit Trusts

Limited and Schroder Pension Management

Limited. He is also Chairman of The Tarbat

Discovery Centre (a Pictish museum) and a

trustee of Suffolk Wildlife Trust.

Experience and Contribution:





including 21 years as audit partner at Deloitte

LLP, specialising in the asset management sector.

Calum has wide ranging experience in auditing

companies in the asset management sector and

latterly as a non-executive director and audit



the Company’s Audit Committee.

Last re-elected to the Board:

2021

Annual Remuneration:

£39,500

Employment by the Investment Manager:

None

Other connections with the

Company or Investment Manager:

None

Shared Directorships with any

other Company Directors:

None

Shareholding in Company

†

44,490 Ordinary Shares

Date of Appointment:

January 2018

External Appointments:

Chairman of Schroder Japan Growth Fund plc

and The Global Smaller Companies Trust plc,

a member of the Finance and Corporate

Services Committee of Carnegie UK Trust and

Non-Executive Director of Scottish Friendly

Assurance Society.

Experience and Contribution:

Over 20 years’ experience in managing

Japanese and International Equity portfolios for

Stewart Ivory, Baillie Gifford and Axa Framlington.

Previously a trustee of Venture Scotland and

a Non-Executive Director of Martin Currie

Asia Unconstrained Trust plc. Anja brings to

the Board experience of managing Japanese

portfolios, which is particularly relevant to the

Company’s Japanese equity investments, along

with experience of broader international funds

and, in recent years, as a non-executive director.

Last re-elected to the Board:

2021

Annual Remuneration:

£32,000

Employment by the Investment Manager:

None

Other connections with the

Company or Investment Manager:

None

Shared Directorships with any

other Company Directors:

None

Shareholding in Company

†



A M N D A M N D

A M N D

Susan Noble

Independent Non-Executive Chairman

Calum Thomson FCA

Senior Independent Non-Executive Director

Anja Balfour

Independent Non-Executive Director

AVI Global Trust plc Annual Report 2022

Attendance at meetings

Name Board Audit

Management

Engagement Nomination Disclosure

Susan

Noble  4 (4) 2 (2) 2 (2) –

Anja

Balfour  4 (4) 2 (2) 2 (2) –

Neil

Galloway  4 (4) 2 (2) 2 (2) –

Graham

Kitchen  4 (4) 2 (2) 2 (2) –

Nigel

Rich* 2 (2) 2 (2) 0 (0) 1 (1) –

Calum

Thomson  4 (4) 2 (2) 2 (2) –

 

The number in brackets denotes the number of

meetings each was entitled to attend. The Disclosure

Committee did not meet during the period.

† As at 7 November 2022.

Date of Appointment:

January 2019

External Appointments:

Chairman of PPT UK Limited and Trillium Asset

Management UK Ltd, Non-Executive Director of

The Mercantile Investment Trust plc and Places

for People and a member of the Investment

Committee of the charity Independent Age.

Experience and Contribution:

Over 25 years’ experience as an investment

manager at Invesco, Threadneedle and,

until March 2018, Janus Henderson, where

he was Global Head of Equities. He was

previously Chair of the Investment Committee

for the Cancer Research Pension Fund and

Chairman of Invesco Select Trust plc. Graham

is an experienced fund manager and Head of

Investments and brings to the Board experience

both of managing investments and of managing

teams of investment managers.

Last re-elected to the Board:

2021

Annual Remuneration:

£32,000

Employment by the Investment Manager:

None

Other connections with the

Company or Investment Manager:

None

Shared Directorships with any

other Company Directors:

None

Shareholding in Company

†

74,500* Ordinary Shares

* 27,250 held by Jane Kitchen.

Graham Kitchen will become Chairman of the

Company on the conclusion of the AGM

in December 2022.

Date of Appointment:

September 2021

External Appointments:

Executive Vice President of IWG PLC.

Experience and Contribution:

25 years’ experience living and working

internationally. Currently based in London, he

has spent most of his career working in Asia but

also has experience in the Americas, Europe

and the Middle East. Following a successful



management roles, almost entirely with or for



treasury, risk management, legal, IT, projects

and business development, with experience in



in large and complex businesses. He was

previously an Executive Director and CFO of

DFI Retail Group Holdings Limited based in

Hong Kong. His industry experience spans

banking, hospitality, retail (mass market, luxury

and franchise operations), real estate and

services industries.

Elected to the Board:

2021

Annual Remuneration:

£32,000

Employment by the Investment Manager:

None

Other connections with the

Company or Investment Manager:

None

Shared Directorships with any

other Company Directors:

None

Shareholding in Company

†

25,000 Ordinary Shares

Committee membership key

A M N D A M N D

Graham Kitchen

Independent Non-Executive Director

Neil Galloway

Independent Non-Executive Director

Chairman

Member

Audit Committee

Management Engagement Committee

Nomination Committee

Disclosure Committee

AVI Global Trust plc Annual Report 2022

53GIR FS OR SISR

The Directors present their report and the

audited financial statements for the year ended

30 September 2022.

Status

The Company is registered as a public limited company as defined by the

Companies Act 2006 and is an investment company under Section 833 of

the Companies Act 2006. It is a member of the Association of Investment

Companies (AIC).

The Company has been approved as an investment trust under Sections

1158/1159 of the Corporation Tax Act 2010. The Directors are of the

opinion, under advice, that the Company continues to conduct its affairs

as an Approved Investment Trust under the Investment Trust (Approved

Company) (Tax) Regulations 2011.

The Company’s Investment Manager is authorised as an AIFM by the

Financial Conduct Authority under the AIFMD regulations. The Company

has provided disclosures on its website, www.aviglobal.co.uk, incorporating

the requirements of the AIFMD regulations.

Review of the Year

A review of the year and the outlook for the forthcoming year can be found

in the Strategic Report and Investment Manager’s Review.

Investment Objective, Policy and Restrictions

The objective of the Company is to achieve capital growth through

a focused portfolio of investments, particularly in companies whose

shares stand at a discount to estimated underlying net asset value.

Investments are principally in companies listed on recognised stock

exchanges in the UK and/or overseas, which may include investment

holding companies, investment trusts and other companies, the share

prices of which are assessed to be below their estimated net asset value

or intrinsic worth.

Although listed assets make up the bulk of the portfolio, the Company

may also invest in unlisted assets with the prior approval of the Board.

The Company generally invests on a long-only basis but may hedge

exposures through the use of derivative instruments and may also hedge

its foreign currency exposures.

There are no geographic limits on exposure, as the Company invests

wherever it considers that there are opportunities for capital growth.

Risk is spread by investing in a number of holdings, many of which

themselves are diversified companies.

The Company will not invest in any holding that would represent more

than 15% of the value of its total investments at the time of investment.

Potential investments falling within the scope of the Company’s investment

objective will differ over the course of market cycles. The number of

holdings in the portfolio will vary depending upon circumstances and

opportunities within equity markets at any particular time.

The Company is able to gear its assets through borrowings which may

vary substantially over time according to market conditions, but gearing

will not exceed twice the nominal capital and reserves of the Company.

Distribution Policy

Dividend Policy

The Company will ensure that its annual dividend each year will be paid out

of the profits available for distribution and will be at least sufficient to enable

it to qualify as an investment trust under the Corporation Tax Act 2010. The

Board may elect to pay a special dividend if the Company has exceptional

receipts from its investments. The Company’s primary objective is to seek

returns which may come from any combination of increases in the value

of underlying investments, a narrowing of discounts to underlying asset

value and distributions by investee companies. The Board does not set

an income target for the Investment Manager.

Frequency of Dividend Payment

The Company will normally pay two dividends per year: an interim dividend

declared at the time that the half year results are announced, and a final

dividend declared at the time that the annual results are announced.

The final dividend will be subject to shareholder approval at the Annual

General Meeting each year.

Buybacks

The Company may also distribute capital by means of share buybacks

when the Board believes that it is in the best interests of shareholders to

do so. Authority to buy back shares is sought from shareholders at each

Annual General Meeting.

Gearing Levels

The Company’s Investment Policy, as disclosed above, permits

a significant level of gearing, as do the Company’s Articles of Association

and the limits set under AIFMD (see the Company’s website

www.aviglobal.co.uk).

Under normal market conditions, it is expected that the portfolio will be fully

invested, although net gearing levels may fluctuate depending on the value

of the Company’s assets and short-term movements in liquidity.

The Company’s debt as a percentage of total equity as at 30 September

2022 was 12.7%. Long-term debt comprised four tranches of Loan Notes,

of £30m, €30m, €20m and JPY8bn. The Company also has a JPY12.0bn

unsecured multi-currency revolving credit facility. There were no drawings

on the revolving credit facility as at 30 September 2022.

£’000

Current year revenue available for dividends 16,302

Interim dividend of 1.2p per Ordinary Share paid on 15 July 2022 5,999

Recommended final dividend payable on 3 January 2023 to shareholders on the register

as at 2 December 2022 (ex dividend 1 December 2022):

– Final dividend of 2.1p per Ordinary Share 10,685*

16,684

* Based on shares in circulation on 7 November 2022.

Results and Dividends

The Company’s loss for the year was £(111,026,000), which included a profit of £16,302,000 attributable to revenue (2021: profit of £299,563,000 which

included a profit of £14,289,000 attributable to revenue). The profit for the year attributable to revenue has been applied as follows:

Governance / Report of the Directors

AVI Global Trust plc Annual Report 2022

The Company’s capital structure comprises

Ordinary Shares and Loan Notes.

Ordinary Shares

At 30 September 2022, there were 537,052,524 Ordinary Shares of 2p

each in issue (2021: 116,003,133 Ordinary Shares of 10p, equivalent to

580,015,665 Ordinary Shares of 2p adjusted for the Share Split), of which

45,600,956 (2021: 69,449,040*) were held in treasury and therefore the

total voting rights attaching to Ordinary Shares in issue were 491,451,568.

Income entitlement

The profits of the Company (including accumulated revenue reserves)

available for distribution and resolved to be distributed shall be distributed

by way of interim, final and (where applicable) special dividends among

the holders of Ordinary Shares, subject to the payment of interest to the

holders of Loan Notes.

Capital entitlement

After meeting the liabilities of the Company and the amounts due to Loan

Note holders on a winding-up, the surplus assets shall be paid to the

holders of Ordinary Shares and distributed among such holders rateably

according to the amounts paid up or credited as paid up on their shares.

Voting entitlement

Each Ordinary shareholder is entitled to one vote on a show of hands

and, on a poll, to one vote for every Ordinary Share held.

The Notice of Meeting and Form of Proxy stipulate the deadlines for the

valid exercise of voting rights and, other than with regard to Directors not

being permitted to vote their shares on matters in which they have an

interest, there are no restrictions on the voting rights of Ordinary Shares.

Transfers

There are no restrictions on the transfer of the Company’s shares

other than a) transfers by Directors and Persons Discharging Managerial

Responsibilities and their connected persons during closed periods

under the Market Abuse Regulation or which may constitute insider

dealing, b) transfers to more than four joint transferees and c) transfers

of shares which are not fully paid up or on which the Company has a lien

provided that such would not prohibit dealings taking place on an open

and proper basis.

The Company is not aware of any agreements between shareholders

or any agreements or arrangements with shareholders which would

change in the event of a change of control of the Company.

Share Split

Following approval at the AGM in December 2021, each existing Ordinary

Share was replaced by five new Ordinary Shares on 17 January 2022.

Loan Notes

At 30 September 2022, there were in issue fixed rate 20 year unsecured

private placement notes (the Loan Notes). The Loan Notes were issued

in the following tranches:

• on 15 January 2016: £30m 4.184% Series A Sterling Unsecured Loan

Notes 2036

• on 15 January 2016: €30m 3.249% Series B Euro Unsecured Loan

Notes 2036

• on 1 November 2017: €20m 2.93% Euro Senior Unsecured Loan

Notes 2037

• on 6 July 2022: JPY8bn 1.38% Senior Unsecured Loan Notes,

due 6 July 2032

Income entitlement

Interest is payable half-yearly in each case at annual rates of 4.184% on

the £30m Sterling Loan Notes, 3.249% on the €30m Euro Loan Notes,

2.93% on the €20m Euro Senior Loan Notes and 1.38% on the JPY8Bn

Senior Unsecured Loan Notes.

Capital entitlement

The Loan Note holders are entitled to repayment of principal at their par

value and outstanding interest on the redemption date or, if earlier, on the

occurrence of an event of default. The redemption dates are:

• 15 January 2036 for the 4.184% Series A Sterling Unsecured Loan

Notes 2036

• 15 January 2036 for the 3.249% Series B Euro Unsecured Loan

Notes 2036

• 1 November 2037 for the 2.93% Euro Senior Unsecured Loan

Notes 2037

• 6 July 2032 for the 1.38% JPY Senior Unsecured Loan Notes

The Loan Notes are unsecured. If the Company is liquidated, the Loan

Notes are redeemable by the Company at a price which is the higher

of par and:

• for the 4.184% Series A Sterling Unsecured Loan Notes 2036, the

price at which the Gross Redemption Yield on the date of redemption

is equivalent to the yield on a reference UK government bond

• for the 3.249% Series B Euro Unsecured Loan Notes 2036 and for the

2.93% Euro Senior Unsecured Loan Notes 2037, the price at which

the Gross Redemption Yield on the date of redemption is equivalent

to the yield on a reference German government bond.

For the 1.38% JPY Senior Unsecured Loan Notes 2032, 50% of the

notional value of the issued loans could be redeemed at the price at which

the Gross Redemption Yield on the date of redemption is equivalent to

the yield on a reference Japanese government bond, while for the 50%

of swapped notes the redemption price is equivalent to the yield on a

reference US Treasury plus an Applicable Percentage of 0.5%.

The estimated fair values of the Loan Notes as at 30 September 2022

were Series A: £25.1m and Series B: £22.7m, Euro Senior: £14.2m and

JPY: £48.6m, being £4.8m, £3.6m, £3.2m and £0.7m respectively below

the amortised values excluding interest.

Had the Company been liquidated on 30 September 2022, the redemption

premium would have amounted to £14.9m over and above the fair values.

Voting entitlement

The holders of the Loan Notes have no right to attend or to vote at general

meetings of the Company.

Debt Covenants

Under the terms of the Loan Notes, covenants require that the net assets

of the Company shall not be less than £300,000,000 and total indebtedness

shall not exceed 30% of net assets. The Company also has a short-term

JPY12bn multi-currency revolving credit facility, the terms of which include

covenants requiring that the net assets shall not be less than £300m and

the adjusted net asset coverage to borrowings shall not be less than 4:1.

Significant agreements

Other than the Loan Notes and the revolving credit facility set out above,

the Company is not aware of any significant agreements to which the

company is a party that take effect, alter or terminate upon a change of

control of the company following a takeover bid.

* Restated for Share Split.

AVI Global Trust plc Annual Report 2022

55GIR FS OR SISR

Governance / Report of the Directors continued

Directors and Board Structure

The Directors of the Company are listed on pages 52 and 53. All served

throughout the period under review. Nigel Rich retired from the Board on

16 December 2021.

Susan Noble will retire as a Director at the conclusion of the forthcoming

AGM. In accordance with the AIC’s Code of Corporate Governance, the

remaining Directors will retire at the forthcoming AGM and offer themselves

for re-election. The Board carries out an annual review of the performance

of each Director, of the Board as a whole and of each of the Board

Committees. In reviewing the contribution of each Director, the Board

considered the experience of each Director, as set out under the individual

Directors’ biographies on pages 52 and 53 and the ways in which they

contributed to the Board during the year. Having considered the findings

of the annual review, the Board considers that all Directors contribute

effectively, possess the necessary skills and experience and continue to

demonstrate commitment to their roles as non-executive Directors of the

Company. It was therefore agreed that, with the exception of Susan Noble,

all Directors should stand for re-election, and the re-election of each of the

Directors is recommended by the Board.

The Company has provided indemnities to the Directors in respect of

costs or other liabilities which they may incur in connection with any claims

relating to their performance or the performance of the Company whilst

they are Directors.

New appointees to the Board are provided with a full induction

programme. The programme covers the Company’s investment strategy,

policies and practices. The Directors are also given key information on the

Company’s regulatory and statutory requirements as they arise, including

information on the role of the Board, matters reserved for its decision, the

terms of reference for the Board Committees, the Company’s corporate

governance practices and procedures and the latest financial information.

It is the Chairman’s responsibility to ensure that the Directors have

sufficient knowledge to fulfil their roles and Directors are encouraged to

participate in training courses where appropriate. The Directors have

access to the advice and services of the Company Secretary through its

appointed representative which is responsible to the Board for ensuring

that Board procedures are followed and that applicable rules and

regulations are complied with. The Company Secretary is also responsible

for ensuring good information flows between all parties.

The Directors, in the furtherance of their duties, may take independent

professional advice at the Company’s expense.

The beneficial interests of the current Directors and their connected

persons in the securities of the Company as at 30 September 2022

are set out in the Directors’ Report on Remuneration Implementation

on page 93.

The general powers of the Directors are contained within the relevant

UK legislation and the Company’s Articles of Association. The Directors

are entitled to exercise all powers of the Company, subject to any

limitations imposed by the Articles of Association or applicable legislation.

The Articles of Association may only be amended by way of a special

resolution of shareholders.

Board Independence

The Chairman and all Directors were considered independent of the

Investment Manager at the time of their appointment and, in line with the

guidelines of the AIC Code of Corporate Governance, all continue to be

considered independent.

Policy on Tenure of Directors

The Board has a policy requiring that Directors should stand down after

a maximum of nine years, but will consider the term of the Chairman

separately, taking account of the need for an orderly transition.

It considers that a long association with the Company and experience

of a number of investment cycles can be valuable to its deliberations and

does not compromise a Director’s independence. However, it does also

recognise the need for progressive refreshing of the Board.

Role and Responsibilities of the Chairman

The Chairman leads the Board and is responsible for its overall

effectiveness in directing the affairs of the Company. Key aspects

of the Chairman’s role and responsibilities are to:

• Act with objective judgement

• Promote a culture of openness and debate

• Facilitate constructive Board relations and the effective contribution

of all Directors

• Working with the Company Secretary, ensure that all Directors receive

accurate and timely information so that they can discharge their duties

• Seek regular engagement with the Company’s shareholders

• Act on the results of the annual evaluation of the performance of the

Board, its Committees and individual Directors.

Both Susan Noble, the current Chairman, and Graham Kitchen, who will

replace her following the AGM, were independent on appointment and

remain independent as set out in the AIC Code.

Role and Responsibilities of the Senior Independent Director

The key elements of the Senior Independent Director’s role are to:

• Act as a sounding board for the Chairman

• Lead the annual evaluation of the Chairman as part of the annual

evaluation process

• In the event of any major difference of opinion on the direction of

the Company, act as an intermediary between the Chairman, other

Directors and the Investment Manager

• Provide a conduit for views of shareholders in the event that the usual

channels are not available or not suitable in the circumstances.

Board Committees

The Board has agreed a schedule of matters specifically reserved for

decision by the full Board, subject to which the Board has delegated

specific duties to Committees of the Board which operate within written

terms of reference. The Board considers that, as it is comprised of

independent non-executive Directors, it is not necessary to establish a

separate Remuneration Committee. Each Director abstains from voting

on their individual remuneration.

Link Company Matters Limited acts as Company Secretary to each

Committee. No persons other than the Committee members are entitled

to attend Committee meetings unless formally invited by the Committee.

Copies of the terms of reference for each Board Committee are available

from the Company Secretary and can be found on the Company’s website.

As the Company has only five Directors, all of whom are non-executive,

it is the Board’s policy that all Directors will sit on all Board Committees.

AVI Global Trust plc Annual Report 2022

Audit Committee

The Audit Committee met four times in the year under review and

comprises the whole Board, being independent Directors. All members

of the Committee have recent and relevant financial experience and the

Committee as a whole has competence relevant to the sector in which

the Company operates. The Audit Committee has set out a formal Report

on pages 87 to 89 of the Annual Report.

The Board notes that the AIC Code permits the Chairman of the

Board to be a member of the Audit Committee of an investment trust.

In light of the fact that the Board consists of only five members and

recognising the Chairman’s long experience in investment management,

the Audit Committee resolved to continue the Chairman’s appointment

to the Committee. For this reason the Directors also consider it appropriate

for Graham Kitchen to continue to be a member of the Audit Committee

when he succeeds Susan Noble as Chairman.

Management Engagement Committee

The Management Engagement Committee meets at least once each year

and comprises the whole Board, being independent Directors. The main

functions of the Committee are to define the terms of the Investment

Management Agreement (IMA), ensuring that the Investment Manager

follows good industry practice, is competitive and continues to act in the

best interests of shareholders. The Committee monitors the Investment

Manager’s compliance with the terms of the IMA and the Investment

Manager’s performance.

The Committee also reviews the services and performance of the Company’s

other third-party service providers. The Committee has a procedure for

formal annual reviews of all service providers and also occasionally carries

out further, ad hoc, reviews as it deems to be necessary.

Nomination Committee

The Nomination Committee comprises the whole Board and convenes

to undertake the annual appraisal of the performance of the Board, its

Committees and the Directors and, if agreed, to propose the re-election

of the Directors, each of whom will retire at the AGM. The Nomination

Committee maintains a matrix which summarises the key skills and

experience of each Director and which is reviewed at least once per year.

This skills matrix is a key element of the process of ensuring that the Board

has an appropriate mix of skills and experience and will be used when

considering longer-term succession plans, as well as identifying any

areas which may require strengthening. The matrix would also be taken

into account when compiling the specification for candidates for new

Board appointments.

The Nomination Committee also meets to consider succession plans and

the appointment of new Directors to the Board. Candidates for nomination

may be sourced from outside the Company using third-party search and

selection services, as well as potential candidates known to Directors

through their extensive knowledge of the industry.

During the year under review, Sapphire Partners have been appointed to

assist with the search for a non-executive Director. An announcement in

respect of the outcome of this search will be made shortly. There is no

connection between the Directors or the Company and Sapphire Partners.

Disclosure Committee

A Disclosure Committee, comprising all Directors, meets when required

to ensure that inside information is identified and disclosed, if necessary,

in a timely fashion in accordance with relevant law and regulation.

Due to the necessity for meetings to be called on short notice, the

quorum for the Committee is two members, one of whom shall be

either the Chairman, the Chairman of the Audit Committee or the

Senior Independent Director.

Diversity

The Company is committed to ensuring that any vacancies arising

are filled by the most qualified candidates. The Board has adopted a

diversity policy, which acknowledges the benefits of diversity, and remains

committed to ensuring that the Company’s Directors bring a wide range

of skills, knowledge, experience, backgrounds and perspectives to the

Board. Whilst the Board does not feel that it would be appropriate to set

targets as all appointments are made on merit, the following objectives

for the appointment of Directors have been established: (i) all Board

appointments will be made on merit, in the context of the skills, knowledge

and experience that are needed for the Board to be effective; and (ii) long

lists of potential non-executive Directors should include diverse candidates

of appropriate merit.

The Board is mindful of the newly introduced Listing Rule 9.8.6R (9)(a)

for companies to include whether certain board diversity targets have

been met on a ‘comply or explain’ basis, which will apply to financial

years commencing 1 January 2022. These targets will be taken into

consideration in respect of the recruitment of all new Directors of the

Company. The Company will report against these new requirements

in the Annual Report for the year ending 30 September 2023.

Management Arrangements

AVI, the Investment Manager, is the Company’s appointed AIFM, and

is engaged under the terms of an IMA dated 17 July 2014. The IMA is

terminable by six months’ notice from either party, other than for “cause”.

During the year under review, the Investment Manager was entitled to

an annual management fee of 0.70% of the net assets of the Company,

up to £1bn and 0.60% for that proportion of assets above £1bn.

J.P. Morgan Europe Limited was appointed as Depositary under an

agreement with the Company and AVI dated 2 July 2014, and is paid

a fee on a sliding scale between 1.00 basis points and 1.95 basis points

based on the assets of the Company. The Depositary Agreement is

terminable on 90 calendar days’ notice from either party.

JPMorgan Chase Bank, National Association, London Branch, has been

appointed as the Company’s Custodian under an agreement dated

2 July 2014. The agreement will continue for so long as the Depositary

Agreement is in effect and will terminate automatically upon termination

of the Depositary Agreement, unless the parties agree otherwise.

Link Company Matters Limited was appointed as corporate Company

Secretary on 1 April 2014. The current annual fee is £77,281, which is

subject to an annual RPI increase. The Agreement may be terminated

by either party on six months’ written notice.

With the Board’s consent, AVI has sub-contracted certain fund administration

services to Link Asset Services. The cost of these sub-contracted services

is borne by AVI from its own resources and not by the Company.

Continuing Appointment of the Investment Manager

The Board keeps the performance of the Investment Manager under

continual review, and the Management Engagement Committee conducts

an annual appraisal of the Investment Manager’s performance, and makes

a recommendation to the Board about the continuing appointment of the

Investment Manager. It is the opinion of the Directors that the continuing

appointment of the Investment Manager is in the interests of shareholders

as a whole. The reasons for this view are that the Investment Manager has

executed the investment strategy according to the Board’s expectations

and has produced positive returns relative to the broader market and the

comparator benchmark.

AVI Global Trust plc Annual Report 2022

57GIR FS OR SISR

Governance / Report of the Directors continued

Corporate Governance

The Listing Rules and the Disclosure Guidance and Transparency Rules

(Disclosure Rules) of the UK Financial Conduct Authority require listed

companies to disclose how they have applied the principles and complied

with the provisions of the corporate governance code to which the issuer is

subject. The provisions of the UK Corporate Governance Code (UK Code)

issued by the Financial Reporting Council (FRC) in July 2018 are applicable

for the year under review. The related Code of Corporate Governance (AIC

Code) issued by the AIC in February 2019 addresses all of the principles

set out in the UK Code, as well as setting out additional principles and

recommendations on issues that are specific to investment trusts. The FRC

has confirmed that AIC member companies which report against the AIC

Code and which follow the AIC Guide will meet the obligations in relation

to the UK Code and associated disclosure requirements of the Disclosure

Rules. The Board considers that the principles and recommendations of

the AIC Code provide the most appropriate framework for the Company’s

governance.

The AIC Code can be viewed at www.theaic.co.uk

The UK Code can be viewed at www.frc.org.uk

The Board considers that reporting against the principles and

recommendations of the AIC Code (which incorporates the UK Code)

provides shareholders with full details of the Company’s Corporate

Governance compliance.

Throughout the year ended 30 September 2022, the Company has

complied with the provisions of the AIC Code and the relevant provisions

of the UK Code, except as set out in this paragraph. As the entire Board

is non-executive and consists of only five members, the Board does

not have a separate Remuneration Committee. The UK Code includes

provisions relating to the role of the Chief Executive, executive Directors’

remuneration and the need for an internal audit function. For the reasons

set out in the AIC Code, and as explained in the UK Code, the Board

considers that these provisions are not relevant to the position of the

Company, being an externally managed investment company. In particular,

all of the Company’s day-to-day management and administrative functions

are outsourced to third parties. As a result, the Company has no executive

Directors, employees or internal operations and as such the Directors do

not determine the need for an internal audit function to be practicable or

necessary. The Company has therefore nothing to report in respect of

these provisions.

The table below sets out information required under Provision 1 of the

UK Code and how it is disclosed in this Annual Report:

How opportunities and risks to the future success of

the business have been considered and addressed

An overview of the Company’s performance is set out in the Chairman’s Statement, and a

more detailed review is set out in the Investment Manager’s Review. A detailed review of risk

management is set out on pages 12 to 15.

The sustainability of the company’s business model The sustainability of the business model is set out in the Viability Statement on page 63.

How its governance contributes to the delivery

of its strategy

The approach to governance is set out in this section of the Annual Report, in particular

the section 172 statement on pages 16 to 18 and the description of the Board structure

on page 56.

Set out below are full details of how the Company has applied the Principles of the AIC Code:

AIC Code Principle Compliance Statement

A A successful company is led by an effective

board, whose role is to promote the long-

term sustainable success of the company,

generating value for shareholders and

contributing to wider society.

In managing the Company, the aim of the Board and of the Investment Manager is always to

ensure the long-term sustainable success of the Company and, therefore, the likely long-term

consequences of any decision are a key consideration.

Both the Board and AVI recognise that social, human rights, community, governance and

environmental issues have an effect on its investee companies. The Board supports AVI in its

belief that good corporate governance will help to deliver sustainable long-term shareholder

value. AVI is an investment management firm that invests on behalf of its clients and its primary

duty is to produce returns for its clients. AVI seeks to exercise the rights and responsibilities

attached to owning equity securities in line with its investment strategy. A key component of AVI’s

investment strategy is to understand and engage with the management of public companies.

More information on the Company’s long-term performance record can be found on page 12

and more details of AVI’s ESG Policy are on pages 26 to 29 of this Report.

B The board should establish the company’s

purpose, values and strategy, and satisfy

itself that these and its culture are aligned.

All directors must act with integrity, lead by

example and promote the desired culture.

The purpose of the Company is to achieve capital growth through a focused portfolio of mainly

listed investments, particularly in companies whose shares stand at a discount to estimated

underlying net asset value.

More information on our culture and how it is aligned with the Company’s purpose and strategy

can be found under Culture and Values on page 16 of this Report.

AVI Global Trust plc Annual Report 2022

AIC Code Principle Compliance Statement

C The board should ensure that the necessary

resources are in place for the company

to meet its objectives and measure

performance against them. The board should

also establish a framework of prudent and

effective controls, which enable risk to be

assessed and managed.

The Directors regularly consider the Company’s financial position in the context of its business

model, the balance sheet, cash flow projections, availability of funding and the Company’s

contractual commitments. The Company’s objective is to achieve capital growth through a

focused portfolio of mainly listed investments, particularly in companies whose shares stand

at a discount to estimated underlying net asset value, therefore one of the measures which the

Board considers is NAV total returns, details of which can be found on page 12.

As explained earlier, the Company is subject to various risks in pursuing its objectives and in

order to effectively assess and manage risk, appropriate controls and policies are in place and

are regularly reviewed and assessed by the Audit Committee. These are detailed in the Strategic

Report on pages 12 to 15, in the Audit Committee Report on page 88 and in note 14 to the

financial statements.

D In order for the company to meet its

responsibilities to shareholders and

stakeholders, the board should ensure

effective engagement with, and encourage

participation from, these parties.

On pages 17 and 18 we describe our key stakeholders, the reason they are important and how

we seek to gain an understanding of their interests and also how the Board engages with them.

F The chair leads the board and is responsible

for its overall effectiveness in directing the

company. They should demonstrate objective

judgement throughout their tenure and

promote a culture of openness and debate.

In addition, the chair facilitates constructive

board relations and the effective contribution

of all non-executive directors, and ensures

that directors receive accurate, timely and

clear information.

The role and responsibilities of the Chairman are described on page 56. The Company recognises

that the Chairman leads the Board and is responsible for its overall effectiveness in directing the

affairs of the Company.

The annual evaluation of the Board’s effectiveness always considers the performance of the

Chairman, and whether she has performed her role effectively. The Directors, led by the SID,

have concluded that the Chairman has fulfilled her role and performed well to support the

effective functioning of the Board. Further information on our culture can be found on page 16.

G The board should consist of an appropriate

combination of directors (and, in particular,

independent non-executive directors)

such that no one individual or small group

of individuals dominates the board’s

decision-making.

During the year under review, the Board consisted only of non-executive Directors and all of the

Directors are deemed to be independent of the Investment Manager. In the Board’s opinion, each

Director continues to provide constructive challenge and robust scrutiny of matters that come

before the Board.

The Board also considers the composition of the Board, as well as the longer-term succession

plans. As a Board, we aim to be as well-equipped as a Board of any large investment trust to

effectively give direction to, and exercise scrutiny of, the Company’s activities.

H Non-executive directors should have sufficient

time to meet their board responsibilities.

They should provide constructive challenge,

strategic guidance, offer specialist advice and

hold third-party service providers to account.

The Board considers the required time commitment annually and, during the year under review,

the Board concluded that all Directors continued to devote sufficient time to the business of the

Company. Through their contributions in meetings, as well as outside of the usual meeting cycle,

the Directors share their experience and guidance with, as well as constructively challenge,

the Investment Manager.

The Board, supported by the Management Engagement Committee, regularly assesses the

performance of all third-party service providers. More details on the work of the Management

Engagement Committee can be found on page 57.

AVI Global Trust plc Annual Report 2022

59GIR FS OR SISR

Governance / Report of the Directors continued

AIC Code Principle Compliance Statement

I The board, supported by the company

secretary, should ensure that it has the

policies, processes, information, time and

resources it needs in order to function

effectively and efficiently.

The Board’s responsibilities are set out in the schedule of Matters Reserved for the full Board

and certain responsibilities are delegated to its Committees, so that it can operate effectively and

efficiently. Supported by its Committees, the Board has overall responsibility for purpose, strategy,

business model, performance, asset allocation, capital structure, approval of key contracts,

the framework for risk management and internal controls and governance matters, as well as

engagement with shareholders and other key stakeholders.

A number of Board policies are reviewed on a regular basis. Directors are also provided with

any relevant information and have access to the Company Secretary and independent advisers,

if required.

J Appointments to the board should be

subject to a formal, rigorous and transparent

procedure, and an effective succession plan

should be maintained. Both appointments

and succession plans should be based on

merit and objective criteria and, within this

context, should promote diversity of gender,

social and ethnic backgrounds, cognitive

and personal strengths.

The Company is committed to ensuring that any vacancies arising are filled by the most qualified

candidates. The Board has adopted a Diversity Policy, which acknowledges the benefits of diversity,

and remains committed to ensuring that the Company’s Directors bring a wide range of skills,

knowledge, experience, backgrounds and perspectives to the Board. The Company’s policy on the

tenure of Directors also helps to guide long-term succession plans, and recognises the need and

value of progressive refreshing of the Board.

Both policies are described in more detail on pages 56 and 57.

K The board and its committees should have

a combination of skills, experience and

knowledge. Consideration should be given to

the length of service of the board as a whole

and membership regularly refreshed.

The Nomination Committee, which comprises the whole Board, is responsible for identifying

and recommending to the Board the appointment of new Directors. The Nomination Committee

maintains a matrix which summarises the key skills and experience of each Director and the

matrix is reviewed at least once per year. This skills matrix is a key element of the process of

ensuring that the Board has an appropriate mix of skills and experience and will be used when

considering longer-term succession plans.

L Annual evaluation of the board should

consider its composition, diversity and how

effectively members work together to achieve

objectives. Individual evaluation should

demonstrate whether each director continues

to contribute effectively.

An annual evaluation of the performance of the Board, its Committees and individual Directors

takes place every year, and an independent review is undertaken every three years. An externally

facilitated performance evaluation last took place in 2020 and the next independent review is

scheduled to take place in 2023. During the year under review, the Board has carried out an internal

performance evaluation by way of questionnaires specifically designed to assess the strengths and

independence of the Board and the Chairman and the performance of its Committees.

M The board should establish formal and

transparent policies and procedures to

ensure the independence and effectiveness

of external audit functions and satisfy itself

on the integrity of financial and narrative

statements.

The Audit Committee supports the Board in fulfilling its oversight responsibilities by reviewing

the performance of the external Auditor, audit quality, as well as the Auditor’s objectivity and

independence. The Committee also reviews the integrity and content of the financial statements,

including the ongoing viability of the Company. More details can be found in the Committee’s

report on pages 87 to 89.

N The board should present a fair, balanced and

understandable assessment of the company’s

position and prospects.

The Audit Committee supports the Board in assessing that the Company Annual Report presents

a fair, balanced and understandable assessment of the Company’s position and prospects.

Please refer to the Report of the Audit Committee on pages 87 to 89 for further information.

AVI Global Trust plc Annual Report 2022

AIC Code Principle Compliance Statement

O The board should establish procedures to

manage risk, oversee the internal control

framework, and determine the nature and

extent of the principal risks the company is

willing to take in order to achieve its long-term

strategic objectives.

The work of the Audit Committee, that supports the Board through its independent oversight of

the financial reporting process, including the financial statements, the system of internal control

and management of risk, the appointment and ongoing review of the quality of the work and

independence of the Company’s external Auditor, as well as the procedures for monitoring

compliance, is described in pages 87 to 89.

P Remuneration policies and practices should

be designed to support strategy and promote

long-term sustainable success.

The Directors are all non-executive and independent of the Investment Manager. They receive

fees and no component of any Director’s remuneration is subject to performance factors.

Whilst there is no requirement under the Company’s Articles of Association or letters of

appointment for Directors to hold shares in the Company, all of the Directors do have shares

in the Company and the details of their shareholdings are set out on page 93.

Q A formal and transparent procedure

for developing a policy for remuneration

should be established. No director

should be involved in deciding their

own remuneration outcome.

As the Company has no employees and the Board is comprised wholly of non-executive

Directors, the Board has not established a separate Remuneration Committee. Directors’

remuneration is determined by the Board as a whole, at its discretion within an aggregate ceiling

as set out in the Company’s Articles of Association. Each Director abstains from voting on their

own individual remuneration.

The details of the Remuneration Policy and Directors’ fees can be found on pages 90 to 93.

The terms and conditions of the Directors’ appointments are set out in Letters of Appointment,

which are available for inspection on request at the registered office of the Company.

R Directors should exercise independent

judgement and discretion when authorising

remuneration outcomes, taking account of

company and individual performance, and

wider circumstances.

The process of reviewing the Directors’ fees is described on page 92, although there are no

performance related elements of the remuneration, there is therefore very little scope for the

exercise of discretion or judgement.

UK Corporate Governance Code Principle E relates to the treatment of employees and so is generally not applicable to companies under the AIC Code

if, as in the case of the Company, there are no employees.

Interests in Share Capital

Information on the structure, rights and restrictions relating to share capital is given on page 55.

At 30 September 2022 and 3 November 2022, the following holdings representing more than 3% of the Company’s voting rights had been reported

to the Company:

Number held at Percentage held at Percentage held at

30 September 2022* 30 September 2022 3 November 2022

Interactive Investor 31,027,965 6.31% 6.34%

Hargreaves Lansdown Asset Management Limited 29,161,670 5.93% 5.96%

1607 Capital Partners, LLC 27,212,520 5.54% 5.56%

Halifax Share Dealing Limited 27,137,420 5.52% 5.55%

Lazard Asset Management LLC 26,161,380 5.32% 5.35%

Charles Stanley & Co Limited 24,833,470 5.05% 5.08%

Smith & Williamson Investment Management Limited 18,909,950 3.85% 3.86%

No other changes have been notified.

* Restated for Share Split since receipt of the notifications.

AVI Global Trust plc Annual Report 2022

61GIR FS OR SISR

Governance / Report of the Directors continued

Financial Risk Management

The principal risks and uncertainties facing the Company are set out on

pages 12 to 15. The principal financial risks and the Company’s policies for

managing these risks are set out in note 14 to the financial statements.

Greenhouse Gas Emissions and TCFD reporting

The Company’s environmental statements are set out in the Strategic

Report on page 19. The Company has no greenhouse gas emissions

to report from the operations of the Company, nor does it have

responsibility for any other emissions producing sources reportable

under the Companies Act 2006 (Strategic Report and Directors’ Report)

Regulations 2013.

As an investment trust without employees, the Company is also not

required to report against the TCFD framework. However, understanding

and managing climate-related risks and opportunities based on the TCFD’s

recommendations is a fundamental part of AVI’s investment approach,

as discussed on pages 26 to 29.

Anti-Bribery and Corruption Policy

The Company has adopted an Anti-Bribery and Corruption Policy

and has reviewed the statements regarding compliance with the Bribery

Act 2010 by the Company’s Investment Manager and key service

providers. These statements are reviewed regularly by the Management

Engagement Committee.

Disclosure of Information to the Auditor

The Directors who held office at the date of approval of the Report of the

Directors confirm that, so far as they are aware, there is no relevant audit

information of which the Company’s Auditor is unaware; and each Director

has taken all of the steps that he/she ought to have taken as a Director to

make himself/herself aware of any relevant audit information and establish

that the Company’s Auditor is aware of that information.

Requirements of the Listing Rules

Listing Rule 9.8.4 requires the Company to include specified information in

a single identifiable section of the Annual Report or a cross reference table

indicating where the information is set out. The Directors confirm that no

disclosures are required in relation to Listing Rule 9.8.4.

Auditor

KPMG LLP have indicated their willingness to continue in office and

Resolutions will be proposed at the forthcoming AGM to re-appoint them

as Auditor and to authorise the Directors to determine their remuneration.

However, the Board will run a tender process during the financial year to

30 September 2023 and may appoint a replacement auditor during the

year. Further information about the Company’s external Auditor, including

tenure, can be found in the Audit Committee’s Report on pages 87 to 89.

Annual General Meeting

The Notice of the AGM to be held on 20 December 2022 (the Notice) is set

out on pages 98 to 101. Further information on the resolutions comprising

special business being put to shareholders at the forthcoming AGM is set

out below:

Resolution 11 – Authority to allot shares

The Directors seek to renew the general and unconditional authority to

allot Ordinary Shares up to an aggregate nominal value of £3,262,032,

representing approximately one-third of the issued Ordinary Share capital

(excluding shares held in treasury). The Directors will only exercise this

authority if they consider it to be in the best interests of the Company and

would only issue shares at a price at or above the prevailing NAV per share

at the time of issue. This authority would expire 15 months after the date of

the passing of the resolution or, if earlier, at the next AGM of the Company.

No shares were issued in the year.

As at 7 November 2022, 45,600,956 shares were held in treasury,

representing 8.53% of the issued share capital.

Resolution 12 – Authority to issue shares outside of pre-emption rights

The Directors seek to renew the authority to allot, other than on a

pre-emptive basis, Ordinary Shares (including the grant of rights to

subscribe for, or to convert any securities into Ordinary Shares) for cash

up to a maximum aggregate nominal value of £489,304, representing

up to approximately 5% of the Ordinary Shares (excluding shares held in

treasury) in issue as at 7 November 2022, and to transfer or sell Ordinary

Shares held in treasury.

The Directors will only exercise this authority if they consider it to be

advantageous to the Company and its shareholders. Shares will not

be issued or sold from treasury other than at a price equal to or above

the prevailing NAV per share.

No shares were issued in the year to 30 September 2022.

Resolution 13 – Share buyback facility

At the AGM held on 16 December 2021, the Directors were authorised

to make market purchases of up to 14.99% of the shares in circulation

at the date of that meeting. During the year, 19,115,057* shares have

been bought back under this authority (nominal value £382,301.14*),

representing 3.56% of the issued capital as at the year end. These shares

were bought back in order to limit any significant widening of the discount.

As at the year end, authority to buy back a further 59,480,018 Ordinary

Shares remained.

At the forthcoming AGM, the Directors will seek to renew the authority

for up to 14.99% of Ordinary Shares in issue (excluding shares held

in treasury), representing Ordinary Shares up to a nominal value of

£1,466,935, to be bought back. Purchases would be made in accordance

with the relevant provisions of the Companies Act and Listing Rules.

The authority will expire 15 months after the date of the passing of the

resolution or, if earlier, at the next AGM of the Company.

Details of shares bought back during the year under review can be found

in note 12 to the financial statements.

Ordinary Shares bought back may be held in treasury for cancellation

or sale at a future date rather than being cancelled upon purchase. The

Directors will not exercise the authority granted under this resolution unless

they consider it to be in the best interests of shareholders and shares

would only be bought back at a discount to the prevailing NAV per share.

Resolution 14 – Notice period for general meetings

This resolution will allow the Company to hold general meetings (other than

an AGM) on 14 clear days’ notice. The notice period for general meetings

of the Company is 21 clear days unless: (i) shareholders approve a shorter

notice period, which cannot however be less than 14 clear days; and

(ii) the Company offers the facility for all shareholders to vote by electronic

means. AGMs must always be held on at least 21 clear days’ notice. It is

intended that the flexibility offered by this resolution will only be used for

time sensitive, non-routine business and where merited in the interests of

shareholders as a whole. The approval will be effective until the Company’s

next AGM, when it is intended that a similar resolution will be proposed.

Recommendation

The Directors consider that all of the resolutions to be proposed at the

AGM are in the best interests of the Company and its members as a

whole. The Directors unanimously recommend that shareholders vote

in favour of all of the resolutions, as they intend to do in respect of their

own beneficial holdings.

* Restated for Share Split.

AVI Global Trust plc Annual Report 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.

In making the assessment, the Directors of the Company have considered

the likely impacts of international and economic uncertainties on the

Company, operations and the investment portfolio. These include, but are

not limited to, the impact of COVID-19, the war in Ukraine, political and

economic instability in the UK, supply shortages and inflationary pressures.

The Directors noted that the Company, with the current cash balance and

holding a portfolio of liquid listed investments, is able to meet the obligations

of the Company as they fall due. The surplus cash plus borrowing facilities

enables the Company to meet any funding requirements and finance future

additional investments. The Company is a closed-ended 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 in market value and income with associated cash flows.

In making this assessment, they have considered plausible downside

scenarios and simulated a 50% reduction in NAV during January 2023.

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 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, the Investment Manager and other service providers have

put in place contingency plans to minimise disruption. Furthermore,

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,

borrowing facilities and investment commitments (of which there are none

of significance). Therefore, the financial statements have been prepared

on the going concern basis.

Viability

The Directors consider viability as part of their continuing programme

of monitoring risk. The Directors have made a robust assessment of

the principal and emerging risks. The Directors believe five years to

be a reasonable time horizon to consider the continuing viability of the

Company, reflecting a balance between a longer-term investment horizon

and the inherent shorter-term uncertainties within equity markets, although

they do have due regard to viability over the longer term and particularly

to key points outside this time frame, such as the due dates for the

repayment of long-term debt. The Company is an investment trust whose

portfolio is invested in readily realisable listed securities and with some

short-term cash deposits. The following facts support the Directors’ view

of the viability of the Company:

• In the year under review, expenses (including finance costs and

taxation) were adequately covered by investment income.

• The Company has a liquid investment portfolio.

• The Company has long-term debt of £30m and €30m which both fall

due for repayment in 2036, €20m which falls due for repayment in

2037 and JPY8bn which falls due for repayment in 2032. This debt

was covered approximately 9 times as at the end of September 2022

by the Company’s total assets. The Directors are of the view that,

subject to unforeseen circumstances, the Company will have sufficient

resources to meet the costs of annual interest and eventual repayment

of principal on this debt.

• The Company has an unsecured JPY 12bn multi-currency revolving

credit facility. At present the Company has no drawings under

this facility.

The Company has a large margin of safety over the covenants on its

debt. The Company’s viability depends on the global economy and

markets continuing to function. The Directors also consider the possibility

of a wide-ranging collapse in corporate earnings and/or the market value

of listed securities. To the latter point, it should be borne in mind that

a significant proportion of the Company’s expenses are in ad valorem

investment management fees, which would reduce if the market value

of the Company’s assets were to fall.

In arriving at its conclusion, the Board has taken account of the potential

effects of COVID-19, the war in Ukraine, political and economic instability

in the UK, supply shortages and inflationary pressures on the value of

the Company’s assets, income from those assets and the ability of the

Company’s key suppliers to maintain effective and efficient operations.

As set out in the Going Concern statement, in assessing the potential

effects of these international and economic uncertainties, the Directors

have completed stress tests which included plausible downside scenarios

and simulated a 50% reduction in NAV during January 2023.

In order to maintain viability, the Company has a robust risk control framework

which, following guidelines from the FRC, has the objectives of reducing the

likelihood and impact of: poor judgement in decision-making; risk-taking that

exceeds the levels agreed by the Board; human error; or control processes

being deliberately circumvented.

Taking the above into account, and the potential impact of the principal

and emerging risks as set out on pages 12 to 15, the Directors have

a reasonable expectation that the Company will be able to continue in

operation and meet its liabilities as they fall due for a period of five years

from the date of approval of this Annual Report.

Approval

The Report of the Directors has been approved by the Board.

By Order of the Board

Link Company Matters Limited

Corporate Secretary

7 November 2022

AVI Global Trust plc Annual Report 2022

63GIR FS OR SISR

Governance / Report of the Directors continued

Statement of Directors’ Responsibilities in Respect of the Annual

Report and the Financial Statements

The Directors are responsible for preparing the Annual Report and financial

statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for

each financial year. Under that law they are required to prepare the financial

statements in accordance with UK-adopted international accounting

standards and applicable law.

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 its profit or loss 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, relevant and reliable;

• state whether they have been prepared in accordance with UK-adopted

international accounting standards;

• assess the Company’s ability to continue as a going concern, disclosing,

as applicable, matters related to going concern; and

• use the going concern basis of accounting unless they either intend

to liquidate the Company or to cease operations, or have no realistic

alternative but to do so.

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 Companies Act 2006. They are responsible for such

internal control as they determine is necessary to enable the preparation

of financial statements that are free from material misstatement, whether

due to fraud or error, and have general responsibility for taking such steps

as are reasonably open to them to safeguard the assets of the Company

and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for

preparing a Strategic Report, Directors’ Report, Directors’ Remuneration

Report and Corporate Governance Statement that complies with that law

and those regulations.

In accordance with Disclosure Guidance and Transparency Rule 4.1.14R,

the financial statements will form part of the annual financial report

prepared using the single electronic reporting format under the TD ESEF

Regulation. The auditor’s report on these financial statements provides

no assurance over the ESEF format.

The financial statements of the Company are published on the Company’s

website at www.aviglobal.co.uk. The Directors are responsible for the

maintenance and integrity of the corporate and financial information

included on the Company’s website. Legislation in the UK governing the

preparation and dissemination of financial statements may differ from

legislation in other jurisdictions.

Responsibility Statement of the Directors in Respect of the Annual

Financial Report

We confirm that to the best of our knowledge:

• 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 profit or loss of the Company; 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 the

Company faces.

We consider the Annual Report and Accounts, 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.

Susan Noble

Chairman

7 November 2022

AVI Global Trust plc Annual Report 2022

2022 2022 2021 2021

Revenue Capital 2022 Revenue Capital 2021

return return Total return return Total

Notes £’000 £’000 £’000 £’000 £’000 £’000

Income

Investment income 2 23,113 – 23,113 20,376 27 20,403

(Losses)/gains on financial assets and

financial liabilities held at fair value 8 – (120,670) (120,670) – 289,398 289,398

Exchange gains on currency balances – 1,839 1,839 – 705 705

23,113 (118,831) (95,718) 20,376 290,130 310,506

Expenses

Investment management fee 3 (2,295) (5,355) (7,650) (2,138) (4,988) (7,126)

Other expenses (including irrecoverable VAT) 3 (2,594) (32) (2,626) (1,735) – (1,735)

Profit/(loss) before finance costs and taxation 18,224 (124,218) (105,994) 16,503 285,142 301,645

Finance costs 4 (963) (2,272) (3,235) (955) (2,248) (3,203)

Exchange (losses)/gains on loan revaluation 4 – (838) (838) – 2,385 2,385

Profit/(loss) before taxation 17,261 (127,328) (110,067) 15,548 285,279 300,827

Taxation 5 (959) – (959) (1,259) (5) (1,264)

Profit/(loss) for the year 16,302 (127,328) (111,026) 14,289 285,274 299,563

Earnings per Ordinary Share 7 3.24p (25.30p) (22.06p) 2.74p* 54.62p* 57.36p*

* Restated for Share Split.

The total column of this statement is the Income Statement of the Company prepared in accordance with international accounting standards in conformity

with the requirements of the Companies Act 2006. The supplementary revenue return and capital return columns are presented in accordance with the

Statement of Recommended Practice issued by the Association of Investment Companies (AIC SORP).

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period.

There is no other comprehensive income, and therefore the profit for the year after tax is also the total comprehensive income.

The accompanying notes are an integral part of these financial statements.

Financial Statements / Statement of Comprehensive Income

For the year ended 30 September 2022

AVI Global Trust plc Annual Report 2022

65GIR FS OR SISR

Ordinary Capital

share redemption Share Capital Merger Revenue

capital reserve premium reserve* reserve reserve** Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000

For the year ended 30 September 2022

Balance as at 30 September 2021 11,600 7,335 28,078 1,016,881 41,406 27,922 1,133,222

Ordinary Shares bought back and held in treasury – – – (7,997) – – (7,997)

Ordinary Shares held in treasury cancelled (555) 555 – – – – –

Ordinary Shares bought back for cancellation (304) 304 – (28,681) – – (28,681)

Cost of Share Split – – – (36) – – (36)

Total comprehensive income for the year – – – (127,328) – 16,302 (111,026)

Ordinary dividends paid (see note 6) – – – – – (16,683) (16,683)

Prior years’ dividends cancelled (see note 6) – – – – – 709 709

Balance as at 30 September 2022 10,741 8,194 28,078 852,839 41,406 28,250 969,508

For the year ended 30 September 2021

Balance as at 30 September 2020 11,600 7,335 28,078 764,245 41,406 30,941 883,605

Ordinary Shares bought back and held in treasury – – – (32,638) – – (32,638)

Total comprehensive income for the year – – – 285,274 – 14,289 299,563

Ordinary dividends paid (see note 6) – – – – – (17,308) (17,308)

Balance as at 30 September 2021 11,600 7,335 28,078 1,016,881 41,406 27,922 1,133,222

* Within the balance of the capital reserve, £757,415,000 relates to realised gains (2021: £757,120,000) which under the Articles of Association is distributable by way

of dividend. The remaining £95,424,000 relates to unrealised gains and losses on financial instruments (2021: £259,761,000) and is non-distributable.

** Revenue reserve is fully distributable by way of dividend.

The accompanying notes are an integral part of these financial statements.

Financial Statements / Statement of Changes in Equity

For the year ended 30 September 2022

AVI Global Trust plc Annual Report 2022

2022 2021

Notes £’000 £’000

Non-current assets

Investments held at fair value through profit or loss 8 986,431 1,196,201

986,431 1,196,201

Current assets

Investments held at fair value through profit or loss 8 22,359 –

Other receivables 9 25,217 4,572

Cash and cash equivalents 67,274 68,418

114,850 72,990

Total assets 1,101,281 1,269,191

Current liabilities

Total return swap liabilities 8, 10 – (1,091)

Revolving credit facility 10 – (59,821)

Other payables 10 (8,880) (2,358)

(8,880) (63,270)

Total assets less current liabilities 1,092,401 1,205,921

Non-current liabilities

4.184% Series A Sterling Unsecured Loan 2036 11 (29,913) (29,906)

3.249% Series B Euro Unsecured Loan 2036 11 (26,235) (25,715)

2.93% Euro Unsecured Loan 2037 11 (17,430) (17,078)

1.38% JPY Senior Unsecured Loan Note 2032 (49,315) –

(122,893) (72,699)

Net assets 969,508 1,133,222

Equity attributable to equity shareholders

Ordinary Share capital 12 10,741 11,600

Capital redemption reserve 8,194 7,335

Share premium 28,078 28,078

Capital reserve 852,839 1,016,881

Merger reserve 41,406 41,406

Revenue reserve 28,250 27,922

Total equity 969,508 1,133,222

Net asset value per Ordinary Share – basic and diluted 13 197.27p 221.95p*

Number of shares in issue excluding Treasury 12 491,451,568 510,566,625*

* Restated for Share Split.

These financial statements were approved and authorised for issue by the Board of AVI Global Trust plc on 7 November 2022 and were signed

on its behalf by:

Susan Noble

Chairman

The accompanying notes are an integral part of these financial statements.

Registered in England & Wales No. 28203

Financial Statements / Balance Sheet

As at 30 September 2022

AVI Global Trust plc Annual Report 2022

67GIR FS OR SISR

2022 2021

£’000 £’000

Reconciliation of (loss)/profit before taxation to net cash inflow from operating activities

(Loss)/profit before taxation (110,067) 300,827

Losses/(gains) on investments held at fair value through profit or loss 120,670 (289,398)

Decrease/(increase) in other receivables 2,083 (2,438)

Decrease in other payables (127) (438)

Taxation paid (739) (1,138)

Exchange gains on Loan Notes and revolving credit facility (3,813) (5,304)

Amortisation of loan issue expenses 24 20

Net cash inflow from operating activities 8,031 2,131

Investing activities

Purchases of investments (355,855) (655,244)

Sales of investments 404,053 716,184

Cash inflow from investing activities 48,198 60,940

Financing activities

Dividends paid (16,679) (17,308)

Cancelled dividends 704 –

Payments for Ordinary Shares bought back (35,330) (32,371)

Cost of Share Split (36) –

Net (repayment)/drawdown of revolving credit facility (55,149) 23,426

Issue of loans net of costs 49,311 –

Cash outflow from financing activities (57,179) (26,253)

(Decrease)/increase in cash and cash equivalents (950) 36,818

Reconciliation of net cash flow movements in funds:

Cash and cash equivalents at beginning of year 68,418 31,596

Exchange rate movements (194) 4

(Decrease)/increase in cash and cash equivalents (950) 36,818

(Decrease)/increase in net cash (1,144) 36,822

Cash and cash equivalents at end of year 67,274 68,418

The accompanying notes are an integral part of these financial statements.

Financial Statements / Statement of Cash Flows

For the year ended 30 September 2022

AVI Global Trust plc Annual Report 2022

1. General information and accounting policies

AVI Global Trust plc is a company incorporated and registered in England and Wales. The principal activity of the Company is that of an investment trust

company within the meaning of Sections 1158/1159 of the Corporation Tax Act 2010 and its investment approach is detailed in the Strategic Report.

The Company’s financial statements have been prepared in accordance with international accounting standards in conformity with the requirements

of the Companies Act 2006. The financial statements have also been prepared in accordance with the AIC SORP for the financial statements of

investment trust companies and venture capital trusts.

Basis of preparation

The functional currency of the Company is Pounds Sterling because this is the currency of the primary economic environment in which the Company

operates. The financial statements are also presented in Pounds Sterling rounded to the nearest thousand, except where otherwise indicated.

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.

In making the assessment, the Directors of the Company have considered the likely impacts of international and economic uncertainties on the

Company, operations and the investment portfolio. These include, but are not limited to, the impact of COVID-19, the war in Ukraine, political and

economic instability in the UK, supply shortages and inflationary pressures.

The Directors noted that the Company, with the current cash balance and holding a portfolio of listed investments, is able to meet the obligations of the

Company as they fall due. The current cash balance plus additional borrowing, through the revolving credit facility, enables the Company to meet any

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 in market value and income with associated cash flows. In making this

assessment, they have considered plausible downside scenarios and simulated a 50% reduction in NAV during January 2023. 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, and changes in expenses, 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, the Investment Manager and other service providers have put in place contingency plans to minimise disruption. Furthermore, 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, borrowing

facilities and investment commitments (of which there are none of significance). 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 companies listed in the UK and on other recognised international exchanges.

Accounting developments

In the year under review, the Company has applied amendments to IFRS issued by the IASB adopted in conformity with UK adopted international

accounting standards. These include annual improvements to IFRS, changes in standards, legislative and regulatory amendments, changes in disclosure

and presentation requirements. This incorporated:

• Interest Rate Benchmark Reform – IBOR ‘phase 2’ (Amendments to IFRS 9, IAS 39 and IFRS 7).

The adoption of the changes to accounting standards has had no material impact on these or prior years’ financial statements. There are amendments

to IAS/IFRS that will apply from 1 October 2022 as follows:

• Classification of liabilities as current or non-current (Amendments to IAS 1);

• Onerous contracts – Cost of Fulfilling a Contract (Amendments to IAS 37);

• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);

• Definition of Accounting Estimates (Amendments to IAS 8);

• Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction – Amendments to IAS 12 Income Taxes; and

• Annual improvements to IFRS Standards.

The Directors do not anticipate that the adoption of these will have a material impact on the financial statements.

Financial Statements / Notes to the Financial Statements

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1. General information and accounting policies continued

Critical accounting judgements and key sources of estimation uncertainty

The preparation of financial statements in conformity with international accounting standards requires management to make judgements, estimates

and assumptions that affect the application of policies and the reported amounts in the Balance Sheet, the Statement of Comprehensive Income and

the disclosure of contingent assets and liabilities at the date of 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 relate to the determination of the carrying value of unquoted

investments at fair value through profit or loss. The policies for these are set out in the notes to the financial statements below. The Company values

unquoted investments by following the International Private Equity Venture Capital Valuation (IPEV) guidelines. Further areas are recognising and

classifying unusual or special dividends received as either capital or revenue in nature; and the level of deferred tax.

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. There were no significant judgements or estimates which had a significant impact on these financial statements.

Investments

The Company’s business is investing in financial assets with a view to capital growth. The portfolio of financial assets is managed and its performance

evaluated on a fair value basis in accordance with the documented investment strategy and information is provided internally on that basis to the

Company’s Board of Directors.

The investments held by the Company are designated “at fair value through profit or loss”. All gains and losses are allocated to the capital return

within the Statement of Comprehensive Income as “Gains or losses on investments held at fair value through profit or loss”. Also included within this

heading are transaction costs in relation to the purchase or sale of investments. When a purchase or sale is made under a contract, the terms of which

require delivery within the time frame of the relevant market, the investments concerned are recognised or derecognised on the trade date.

All investments are designated upon initial recognition as held at fair value through profit or loss, and are measured at subsequent reporting dates at fair value,

which is either the bid price or closing price for Stock Exchange Electronic Trading Service – quotes and crosses (SETSqx). The Company derecognises a

financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all of the risks

and rewards of ownership of the asset to another entity. On derecognition of a financial asset, the difference between the asset’s carrying amount and the

sum of the consideration received and receivable and the cumulative gain or loss that had been accumulated is recognised in profit or loss.

Fair values for unquoted investments, or for investments for which the market is inactive, are established by using various valuation techniques in

accordance with the International Private Equity and Venture Capital (the IPEV) guidelines. These may include recent arm’s length market transactions,

the current fair value of another instrument that is substantially the same, net asset value, discounted cash flow analysis, option pricing models and

reference to similar quoted companies. Where there is a valuation technique commonly used by market participants to price the instrument and that

technique has been demonstrated to provide reliable estimates of prices obtained in actual market transactions, that technique is utilised. Where no

reliable fair value can be estimated for such instruments, they are carried at cost. These are constantly monitored for value. The values, if any, are

approved by the Board.

All investments for which a fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy levels in note 14.

A transfer between levels may result from the date of an event or a change in circumstances.

Foreign currency

Transactions denominated in currencies other than Pounds Sterling are recorded at the rates of exchange prevailing on the date of the transaction.

Items which are denominated in foreign currencies are translated at the rates prevailing on 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 capital reserve or the revenue

account depending on whether the gain or loss is capital or revenue in nature.

Cash and cash equivalents

Cash comprises cash in hand and demand deposits. Cash equivalents are short-term, highly liquid investments and money market funds, that are

readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value.

For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of

outstanding bank overdrafts when applicable.

Other receivables and payables

Trade receivables, trade payables and short-term borrowings are measured at amortised cost and balances revalued for exchange rate movements.

Revolving credit facility

The revolving credit facility is recognised at amortised cost and revalued for exchange rate movements.

Income

Dividends receivable on quoted equity shares are taken to revenue on an ex-dividend basis. Dividends receivable on equity shares where no

ex-dividend date is quoted are brought into account when the Company’s right to receive payment is established. Fixed returns on non-equity

shares are recognised on a time-apportioned basis. Dividends from overseas companies are shown gross of any withholding taxes which are

disclosed separately in the Statement of Comprehensive Income.

Special dividends are taken to the revenue or capital account depending on their nature. In deciding whether a dividend should be regarded as

a capital or revenue receipt, the Board reviews all relevant information as to the reasons for the sources of the dividend on a case-by-case basis.

Financial Statements / Notes to the Financial Statements continued

AVI Global Trust plc Annual Report 2022

When the Company has elected to receive scrip dividends in the form of additional shares rather than in cash, the amount of the cash dividend forgone

is recognised as income. Any excess in the value of the cash dividend is recognised in the capital column.

Interest income on fixed interest securities is recognised in the Statement of Comprehensive Income based on the effective yield to maturity of the fixed

interest security.

Underwriting income is recognised upon completion of underwriting of a share issue. Where shares are received rather than cash, the value of the cash

foregone is recognised as income. Any excess in the value of the underwriting is recognised in the capital column.

All other income is accounted on a time-apportioned accruals basis and is recognised in the Statement of Comprehensive Income.

Expenses and finance costs

All expenses are accounted on an accruals basis. On the basis of the Board’s expected long-term split of total returns in the form of capital and revenue

returns of 70% and 30% respectively, the Company charges 70% of its management fee and finance costs to capital.

Expenses incurred directly in relation to arranging debt finance are amortised over the term of the finance.

Expenses incurred in buybacks of shares are charged to the capital reserve through the Statement of Changes in Equity.

Taxation

The charge for taxation is based on the net revenue for the year and takes into account taxation deferred or accelerated because of temporary

differences between the treatment of certain items for accounting and taxation purposes.

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amount

for financial reporting purposes at the reporting date. 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 timing differences can be deducted. In line with the recommendations of the SORP, the allocation

method used to calculate the tax relief on expenses charged to capital is the “marginal” basis. Under this basis, if taxable income is capable of being

offset entirely by expenses charged through the revenue account, then no tax relief is transferred to the capital account.

Dividends payable to shareholders

Dividends to shareholders are recognised as a liability in the period in which they are paid or approved in general meetings and are taken to the

Statement of Changes in Equity. Dividends declared and approved by the Company after the Balance Sheet date have not been recognised as a liability

of the Company at the Balance Sheet date.

Non-current liabilities: Loan Notes

The non-current liabilities are valued at amortised cost. Costs in relation to arranging the debt finance have been capitalised and are amortised over the

term of the finance. Hence, amortised cost is the par value less the amortised costs of issue.

The Euro Loan Notes are shown at amortised cost with the exchange difference on the principal amounts to be repaid reflected. Any gain or loss arising

from changes in the exchange rate between Euro and Sterling is included in the capital reserves and shown in the capital column of the Statement of

Comprehensive Income.

Further details of the non-current liabilities are set out in note 11.

Capital redemption reserve

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

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 reserve

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

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

• gains and losses on the disposal of investments;

• amortisation of issue expenses of Loan Notes;

• costs of share buybacks;

• exchange differences of a capital nature; and

• expenses, together with the related taxation effect, allocated to this reserve in accordance with the above policies.

Capital reserve – investment holding gains, not distributable:

• increase and decrease in the valuation of investments held at the year end.

Merger reserve

The merger reserve represents the share premium on shares issued on the acquisition of Selective Assets Trust plc on 13 October 1995 and

is not distributable.

Revenue reserve

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

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2. Income

2022 2021

£’000 £’000

Income from investments

UK dividends 524 255

UK REIT dividends – 390

Overseas dividends 21,821 20,045

Income from debt securities 97 –

22,442 20,690

Other income

Deposit interest 669 12

Total return swap interest* (22) (200)

Underwriting commission – 1

Exchange gains/(losses) on receipt of income** 24 (127)

23,113 20,376

Capital dividend*** – 27

23,113 20,403

* Net income (paid)/received on underlying holdings in total return swaps.

** Exchange movements arise from ex-dividend date to payment date.

*** Dividend received is attributed to a distribution of capital.

3. Investment management fee and other expenses

2022 2022 2021 2021

Revenue Capital 2022 Revenue Capital 2021

return return Total return return Total

£’000 £’000 £’000 £’000 £’000 £’000

Management fee 2,295 5,355 7,650 2,138 4,988 7,126

Other expenses:

Directors’ emoluments – fees 183 – 183 171 – 171

Auditor’s remuneration – audit 45 – 45 40 – 40

Marketing 570 – 570 411 – 411

Printing and postage costs 71 – 71 49 – 49

Registrar fees 108 – 108 91 – 91

Custodian fees 263 – 263 272 – 272

Depositary fees 144 – 144 140 – 140

Advisory and professional fees 560 32 592 343 – 343

Costs associated with dividend receipts 14 – 14 5 – 5

Irrecoverable VAT 101 – 101 76 – 76

Regulatory fees 89 – 89 76 – 76

Directors’ insurances & other expenses 88 – 88 61 – 61

Charitable donations 358 – 358 – – –

2,594 32 2,626 1,735 – 1,735

The management fee calculated in accordance with the IMA amounted to 0.7% of net assets for assets up to £1bn and 0.6% of net assets over £1bn

calculated on a quarterly basis.

Details of the IMA and fees paid to the Investment Manager are set out in the Report of the Directors.

Financial Statements / Notes to the Financial Statements continued

AVI Global Trust plc Annual Report 2022

4. Finance costs

2022 2022 2021 2021

Revenue Capital 2022 Revenue Capital 2021

return return Total return return Total

£’000 £’000 £’000 £’000 £’000 £’000

Loan, debenture and revolving credit facility interest

4.184% Series A Sterling Unsecured Loan Notes 2036 377 879 1,256 376 879 1,255

3.249% Series B Euro Unsecured Loan Notes 2036 247 578 825 252 588 840

2.93% Euro Senior Unsecured Loan Notes 2037 150 349 499 152 355 507

1.38% JPY Senior Unsecured Loan Notes 2032 48 113 161 – – –

JPY Revolving credit facility 91 215 306 139 325 464

913 2,134 3,047 919 2,147 3,066

Amortisation

4.184% Series A Sterling Unsecured Loan Notes 2036 – 7 7 – 7 7

3.249% Series B Euro Unsecured Loan Notes 2036 – 5 5 – 5 5

2.93% Euro Senior Unsecured Loan Notes 2037 – 7 7 – 7 7

1.38% JPY Senior Unsecured Loan Notes 2032 – 4 4 – – –

JPY Revolving credit facility 49 113 162 31 71 102

49 136 185 31 90 121

Bank interest

Bank debit interest 1 2 3 5 11 16

Total 963 2,272 3,235 955 2,248 3,203

Exchange (losses)/gains on Loan Notes* – (838) (838) – 2,385 2,385

* Revaluation of Euro and JPY Loan Notes.

The JPY12.0bn unsecured revolving credit facility was entered into on 4 April 2019. Nil was drawn down as at 30 September 2022 (2021: JPY9.0bn).

5. Taxation

Year ended 30 September 2022 Year ended 30 September 2021

Revenue Capital Revenue Capital

return return Total return return Total

£’000 £’000 £’000 £’000 £’000 £’000

Analysis of charge for the year

Overseas tax not recoverable* 1,769 – 1,769 1,259 5 1,264

Withholding tax received previously written off (810) – (810) – – –

Tax charge for the year 959 – 959 1,259 5 1,264

* Tax deducted on payment of overseas dividends by local tax authorities.

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5. Taxation continued

The taxation assessed for the year is higher (2021: lower) than the standard rate of corporation tax in the UK of 19% (2021: 19%). The differences are

explained below:

Year ended 30 September 2022 Year ended 30 September 2021

Revenue Capital Revenue Capital

return return Total return return Total

£’000 £’000 £’000 £’000 £’000 £’000

Profit/(loss) before taxation 17,261 (127,328) (110,067) 15,548 285,279 300,827

Profit/(loss) before taxation multiplied by the standard rate

of corporation tax of 19% (2021: 19%) 3,280 (24,192) (20,912) 2,954 54,203 57,157

Effects of:

– UK dividend income (99) – (99) (48) – (48)

– Tax – exempt overseas investment income (4,151) – (4,151) (3,785) (5) (3,790)

– Losses/(gains) on investments, exchange losses

on capital items and movement on fair value or

derivative financial instruments – 22,737 22,737 – (55,572) (55,572)

– Current period tax losses not utilised 746 1,455 2,201 615 1,375 1,990

– Corporate interest restriction 93 – 93 264 – 264

– Withholding tax received previously written off (810) – (810) – – –

– Overseas tax not recoverable 1,769 – 1,769 1,259 5 1,264

– Disallowed expenses 85 – 85 – – –

– Offshore income gains 46 – 46 – – –

Tax charge for the year 959 – 959 1,259 5 1,264

At 30 September 2022, the Company had unrelieved management expenses of £87,430,000 (30 September 2021: £78,252,000), a non-trade loan

relationship deficit of £22,093,000 (30 September 2021: £20,071,000) and carried forward disallowed interest expense of £6,783,000 (30 September

2021: £6,314,000) that are potentially available to offset future taxable revenue. A deferred tax asset of £29,076,000 (30 September 2021: £26,159,000),

based on the enacted UK corporation tax rate of 25% that applies from 1 April 2023, has not been recognised because the Company is not expected

to generate sufficient taxable income in future periods that the carried forward tax losses and disallowed interest expense can be utilised against.

Deferred tax is not provided on capital gains and losses arising on the revaluation or disposal of investments because the Company meets (and intends

to continue for the foreseeable future to meet) the conditions to maintain its approval as an investment trust company.

The unrelieved management expenses and deferred tax disclosures for the prior year have been updated to be consistent with the current year.

Financial Statements / Notes to the Financial Statements continued

AVI Global Trust plc Annual Report 2022

6. Dividends

2022 2021

£’000 £’000

Amounts recognised as distributions to equity holders in the year:

Final dividend for the year ended 30 September 2021 of 2.10p (2020: 2.10p*) per Ordinary Share 10,685 11,041

Interim dividend for the year ended 30 September 2022 of 1.20p (2021: 1.20p*) per Ordinary Share 5,999 6,267

16,684 17,308

During the year £709k was received in respect of prior years’ dividends cancelled

†

Set out below are the interim and final dividends paid or proposed on Ordinary Shares in respect of the financial year, which is the basis on which the

requirements of Section 1159 of the Corporation Tax Act 2010 are considered.

2022 2021

£’000 £’000

Interim dividend for the year ended 30 September 2022 of 1.20p (2021: 1.20p*) per Ordinary Share 5,999 6,267

Proposed final dividend for the year ended 30 September 2022 of 2.10p (2021: 2.10p*) per Ordinary Share 10,275** 10,685

16,274 16,952

* Restated for Share Split.

** Based on shares in circulation on 4 November 2022.

† This includes the disposal of 66,648 ordinary 10p shares from dividend proceeds reinvested, realising £709,000.

7. Earnings per Ordinary Share

The earnings per Ordinary Share is based on the Company’s net loss after tax of £111,026,000 (2021: net profit of £299,563,000) and on 503,274,200

(2021: 522,293,338*) Ordinary Shares, being the weighted average number of Ordinary Shares in issue (excluding shares in treasury) during the year.

The earnings per Ordinary Share detailed above can be further analysed between revenue and capital as follows:

30 September 2022 30 September 2021

Basic and diluted Revenue Capital Total Revenue Capital Total

Net profit/(loss) (£’000) 16,302 (127,328) (111,026) 14,289 285,274 299,563

Weighted average number of Ordinary Shares 503,274,200* 522,293,338*

Earnings per Ordinary Share 3.24p (25.30)p (22.06)p 2.74p* 54.62p* 57.36p*

* Restated for Share Split.

There are no dilutive instruments issued by the Company (2021: none).

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8. Investments held at fair value through profit or loss

30 September 2022 30 September 2021

Debt Debt

Equities securities Total Equities securities Total

£’000 £’000 £’000 £’000 £’000 £’000

Financial assets held at fair value

Opening book cost 934,242 – 934,242 865,047 – 865,047

Opening investment holding gains 260,868 – 260,868 94,662 – 94,662

Opening fair value 1,195,110 – 1,195,110 959,709 – 959,709

Movement in the year:

Purchases at cost 371,443 20,893 392,336 655,676 – 655,676

Sales/Close – Proceeds (457,986) – (457,986) (709,673) – (709,673)

– realised gains on equity sales and

close of total return swaps 41,255 – 41,255 123,192 – 123,192

(Decrease)/increase in investment holding gains (163,391) 1,466 (161,925) 166,206 – 166,206

Closing fair value of investments 986,431 22,359 1,008,790 1,195,110 – 1,195,110

Closing book cost 888,954 20,893 909,847 934,242 – 934,242

Closing investment holding gains 97,477 1,466 98,943 260,868 – 260,868

Closing fair value 986,431 22,359 1,008,790 1,195,110 – 1,195,110

Financial assets held at fair value

30 September 30 September

2022 2021

£’000 £’000

Equities 986,431 1,196,201

Fixed interest securities 22,359 –

Total return swaps – (1,091)

1,008,790 1,195,110

Year ended Year ended

30 September 30 September

2022 2021

£’000 £’000

Transaction costs

Cost on acquisition 304 433

Cost on disposals 402 480

706 913

Analysis of capital gains

Gains on sales/close out of financial assets based on historical cost 41,255 123,192

Movement in investment holding gains for the year (161,925) 166,206

Net gains on investments (120,670) 289,398

The Company received £457,986,000 (2021: £709,673,000) from investments sold in the year. The book cost of these investments when they were

purchased was £416,731,000 (2021: £586,481,000). These investments have been revalued over time and until they were sold any unrealised gains or

losses were included in the fair value of the investments.

Financial Statements / Notes to the Financial Statements continued

AVI Global Trust plc Annual Report 2022

9. Other receivables

2022 2021

£’000 £’000

Sales for future settlement 22,948 –

Tax recoverable 306 524

Prepayments and accrued income 1,914 4,008

VAT recoverable 49 40

25,217 4,572

Tax recoverable relates to withholding tax in a number of countries, some of which is past due, but is in the process of being reclaimed by the Custodian

through local tax authorities and also tax deducted on UK REIT dividends, which the Company expects to receive in due course.

No other receivables are past due or impaired.

10. Current liabilities

2022 2021

£’000 £’000

Total return swap – 1,091

Revolving credit facility – 59,821

Other payables

Purchases for future settlement 5,734 432

Amounts owed for share buybacks 2,058 710

Interest payable 657 856

Other payables 431 360

Total other payables 8,880 2,358

Total current liabilities 8,880 63,270

Revolving credit facility

On 29 April 2019, the Company entered into an agreement with Scotiabank Europe Plc for a JPY4.0bn (£27,700,000) unsecured revolving credit facility

(the facility) for a period of three years.

The facility was increased to JPY9.0bn and converted to a multi-currency facility with drawings available in Japanese Yen, Pounds Sterling, US Dollars

and Euros on 5 March 2020, with an interest rate of 0.75% over LIBOR on any drawn balances.

On 26 August 2021 the facility was further increased to JPY12.0bn. The agreement was additionally novated in reference to the relevant changes

in interest calculations with the discontinuation of LIBOR and extended to 26 August 2024.

The interest chargeable will be the appropriate risk free rate (RFR)* plus the additional margin:

• Japanese Yen 1.025% margin over the Tokyo unsecured overnight rate (TONAR);

• Pounds Sterling 1.42% margin over SONIA (sterling overnight index average);

• US Dollars 1.25% margin above the secured overnight financing rate (SOFR); and

• Euros 1.25% margin above the Euro short-term rate (€ STR).

Undrawn balances below JPY2.0bn are charged at 0.35% and any undrawn portion above this is charged at 0.30%.

Under the terms of the facility, the covenant requires that the net assets shall not be less than £300m and the adjusted net asset coverage to borrowings

shall not be less than 4:1.

The facility is shown at amortised cost and revalued for exchange rate movements. Any gain or loss arising from changes in exchange rates is included

in the capital reserves and shown in the capital column of the Statement of Comprehensive Income. Interest costs are charged to capital and revenue

in accordance with the Company’s accounting policies.

* Risk free rate (RFR) – is the rate of return from an investment with zero risk. This is calculated by deducting the inflation rate from the yield of the relevant Treasury bond.

The Treasury bond issued in the relevant currency is equivalent to zero risk.

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11. Non-current liabilities 2022 2021

£’000 £’000

4.184% Series A Sterling Unsecured Loan Notes 2036 29,913 29,906

3.249% Series B Euro Unsecured Loan Notes 2036 26,235 25,715

2.93% Euro Senior Unsecured Loan Notes 2037 17,430 17,078

1.38% JPY Senior Unsecured Loan Notes 2032 49,315 –

Total 122,893 72,699

The amortised costs of issue expenses are set out in note 4.

The fair values of the Loan Notes are set out in note 14.

The Company issued two Loan Notes on 15 January 2016:

£30,000,000 4.184% Series A Sterling Unsecured Loan Notes due 15 January 2036

€30,000,000 3.249% Series B Euro Unsecured Loan Notes due 15 January 2036

The Company issued further Loan Notes on 1 November 2017:

€20,000,000 2.93% Euro Senior Unsecured Loan Notes due 1 November 2037

The Company issued further Loan Notes on 6 July 2022:

¥8,000,000,000 1.38% JPY Senior Unsecured Loan Notes due 6 July 2032

Under the terms of the Loan Notes, the covenant requires that the net assets of the Company shall not be less than £300,000,000 and total indebtedness

shall not exceed 30% of net assets.

Further information on the Loan Notes is set out on page 55.

12. Called-up share capital

Nominal

Number value

of shares £’000

Allotted, called up and fully paid

Ordinary Shares of 2p each (2021: 10p)

Balance at beginning of the year 116,003,133 11,600

Shares issued through Share Split 464,012,532 –

Treasury shares cancelled (27,737,419) (555)

Ordinary Shares bought back and cancelled (15,225,722) (304)

Balance at end of the year 537,052,524 10,741

Treasury shares

Balance at beginning of the year 13,889,808

Buyback of Ordinary Shares into treasury prior to Share Split 606,929

Shares issued through Share Split 57,986,948

Buyback of Ordinary Shares into treasury after Share Split 854,690

Cancellation of Treasury shares (27,737,419)

Balance at end of the year 45,600,956

Total Ordinary Share capital excluding treasury shares 491,451,568

At 30 September 2022, the Company held 45,600,956 shares in treasury, with a nominal value of £912,019.

Financial Statements / Notes to the Financial Statements continued

AVI Global Trust plc Annual Report 2022

Ordinary Shares of 10p each

During the period to 17 January 2022, 606,929 (year to 30 September 2021: 687,681) Ordinary Shares of 10 pence were bought back and placed

in treasury for an aggregate consideration of £6,274,000 (year to 30 September 2021:£32,638,000).

No Ordinary Shares of 10 pence each were cancelled during the period to 17 January 2022 (year to 30 September 2021: nil).

Share Split

On 17 January 2022, the Company completed the sub-division (the Share Split) of each Ordinary Share of 10 pence each into 5 Ordinary Shares

of 2 pence each, which was approved by shareholders at the Annual General Meeting held on Thursday, 16 December 2021.

Following the 5 for 1 sub-division of the 10 pence Ordinary Shares into 2 pence Ordinary Shares, the values reported with effect from close of business

on 17 January 2022 are calculated in accordance with the new Ordinary Shares in issue of 2 pence each. The comparative figures in the Financial

Statements and Notes have been restated where indicated to reflect the Share Split.

Ordinary Shares of 2p each

During the period from 17 January 2022 to 8 February 2022, 854,690 Ordinary Shares of 2 pence were bought back and placed in treasury for an

aggregate consideration of £1,723,000.

The Company’s Board elected on 8 February 2022 to reduce the number of shares in treasury, by cancelling 27,737,419 of the shares held in treasury.

From 8 February 2022, 15,225,722 Ordinary Shares of 2 pence were bought back and cancelled for an aggregate consideration of £28,681,000.

The allotted, called up and fully paid shares at 30 September 2022 consisted of 537,052,524 Ordinary Shares of 2 pence each in issue, and 45,600,956

Ordinary Shares held in treasury. The total voting rights attaching to Ordinary Shares in issue and ranking for dividends consisted of 491,451,568 as at

30 September 2022.

13. Net asset value

The net asset value per Ordinary Share and the net asset value attributable to the Ordinary Shares at the year end are calculated in accordance with

their entitlements in the Articles of Association and were as follows:

30 September 2022 30 September 2021

NAV per Net asset value NAV per Net asset value

Ordinary Share attributable Ordinary Share attributable

Pence £’000 Pence £’000

Basic and diluted 197.27 969,508 221.95* 1,133,222

Net asset value per Ordinary Share is based on net assets and on 491,451,568 Ordinary Shares (2021: 510,566,625*), being the number of Ordinary

Shares in issue excluding Treasury Shares at the year end.

* Restated for Share Split.

14. Financial instruments and capital disclosures

Investment objective and policy

The Company’s investment objective and policy are detailed on page 54.

The Company’s financial instruments comprise equity and fixed-interest investments, cash balances, receivables, payables and borrowings. The Company

makes use of borrowings to achieve improved performance in rising markets. The risk of borrowings may be reduced by raising the level of cash balances

or fixed-interest investments held.

Risks

The risks identified arising from the financial instruments are market risk (which comprises market price risk, interest rate risk and foreign currency risk),

liquidity risk and credit and counterparty risk. The Company may also enter into derivative transactions to manage risk.

The Board and Investment Manager consider and review the risks inherent in managing the Company’s assets which are detailed below.

Market risk

Market risk arises mainly from uncertainty about future prices of financial instruments used in the Company’s business. It represents the potential loss

which the Company might suffer through holding market positions by way of price movements, interest rate movements, exchange rate movements and

systematic risk (risk inherent to the market, reflecting economic and geopolitical factors). The Investment Manager assesses the exposure to market risk

when making each investment decision and these risks are monitored by the Investment Manager on a regular basis and the Board at quarterly meetings

with the Investment Manager.

Market price risk

Market price risk (i.e. changes in market prices other than those arising from currency risk or interest rate risk) may affect the value of investments.

Adherence to investment policies mitigates the risk of excessive exposure to any particular type of security or issuer. The portfolio is managed with

an awareness of the effects of adverse price movements through detailed and continuing analysis with the objective of maximising overall returns to

shareholders. The assessment of market risk is based on the Company’s portfolio as held at the year end. The Company has experienced volatility in

the fair value of investments during recent years due to COVID-19 and Brexit. Further additional volatility during the year has resulted from the Russian

invasion of Ukraine, UK political instability, and inflation. The Company has used 20% to demonstrate the impact of a significant reduction/increase

in the fair value of the investments and the impact upon the Company that might arise from future significant events.

AVI Global Trust plc Annual Report 2022

79GIR FS OR SISR

14. Financial instruments and capital disclosures continued

Market price risk continued

If the fair value of the listed equity investments at the year end of £961,000,000 (2021: £1,193,120,000) decreased or increased by 20%, then it would

have had an adverse/positive impact on the Company’s capital return and equity of £192,200,000 (2021: £238,624,000).

As at 30 September 2022, £25,341,000 (2021: £3,081,000) of the Company’s investments are in unquoted companies held at fair value. A change in

market inputs that would result in a 20% decrease in the fair value of the unquoted investments at 30 September 2022 would have decreased the net

assets attributable to the Company’s shareholders by £5,068,000 (30 September 2021: £616,000); an equal change in the opposite direction would

have increased the net assets attributable to the Company’s shareholders and reduced the loss for the year by an equal amount.

The fixed interest security as at 30 September 2022 £22,359,000 (2021: nil) matures within 3 months. Whilst market changes may increase or decrease

the fair value the length to maturity is such this will have a negligible impact on the fair value to maturity.

Foreign currency

The value of the Company’s assets and the total return earned by the Company’s shareholders can be significantly affected by foreign exchange rate

movements, as most of the Company’s assets are denominated in currencies other than Pounds Sterling, the currency in which the Company’s financial

statements are prepared. Income denominated in foreign currencies is converted to Pounds Sterling upon receipt.

A 5% rise or decline of Sterling against foreign currency denominated (i.e. non Pounds Sterling) assets and liabilities held at the year end would have

increased/decreased the net asset value by £40,462,000 (2021: £48,114,000).

The currency exposure is as follows:

Currency risk

GBP EUR USD SEK JPY NOK INR Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

At 30 September 2022

Other receivables 795 15,034 8,337 – 1,051 – – 25,217

Cash and cash equivalents 67,274 – – – – – – 67,274

Other payables (7,351) (392) – (106) (1,031) – – (8,880)

4.184% Series A Sterling Unsecured Loan Notes 2036 (29,913) – – – – – – (29,913)

3.249% Series B Euro Unsecured Loan Notes 2036 – (26,235) – – – – – (26,235)

2.93% Euro Senior Unsecured Loan Notes 2037 – (17,430) – – – – – (17,430)

1.38% JPY Senior Unsecured Loan Notes 2032 – – – – (49,315) – – (49,315)

Revolving credit facility – – – – – – – –

Currency exposure on net monetary items 30,805 (29,023) 8,337 (106) (49,295) – – (39,282)

Investments held at fair value through profit or loss – equities 129,463 163,571 379,535 13,989 186,945 101,232 34,055 1,008,790

Total net currency exposure 160,268 134,548 387,872 13,883 137,650 101,232 34,055 969,508

This exposure is representative at the Balance Sheet date and may not be representative of the year as a whole. The balances are of the holding

investment and may not represent the actual exposure of the subsequent underlying investment.

GBP EUR USD SEK JPY NOK CHF HKD INR Other Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

At 30 September 2021

Other receivables 487 252 1,496 – 1,472 – 269 596 – – 4,572

Cash and cash equivalents 55,068 – 13,350 – – – – – – – 68,418

Other payables (1,269) (384) (66) – (639) – – – – – (2,358)

Total return swaps – – (1,091) – – – – – – – (1,091)

4.184% Series A Sterling

Unsecured Loan Notes 2036 (29,906) – – – – – – – – – (29,906)

3.249% Series B Euro

Unsecured Loan Notes 2036 – (25,715) – – – – – – – – (25,715)

2.93% Euro Senior

Unsecured Loan Notes 2037 – (17,078) – – – – – – – – (17,078)

Revolving credit facility – – – – (59,821) – – – – – (59,821)

Currency exposure on net

monetary items 24,380 (42,925) 13,689 – (58,988) – 269 596 – – (62,979)

Investments held at fair value

through profit or loss – equities 146,572 141,276 357,263 65,753 324,014 48,244 – 22,639 39,060 51,380 1,196,201

Total net currency exposure 170,952 98,351 370,952 65,753 265,026 48,244 269 23,235 39,060 51,380 1,133,222

Financial Statements / Notes to the Financial Statements continued

AVI Global Trust plc Annual Report 2022

Interest rate risk

Interest rate movements may affect:

• the fair value of investments in fixed-interest rate securities;

• the level of income receivable on cash deposits;

• the interest payable on variable rate borrowings; and

• the fair value of the Company’s long-term debt.

The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making

investment decisions.

The Loan Notes issued by the Company pay a fixed rate of interest and are carried in the Company’s Balance Sheet at amortised cost rather than

at fair value. Hence, movements in interest rates will not affect net asset values, as reported under the Company’s accounting policies, but may have

an impact on the Company’s share price and discount/premium. The fair value of the debt and its effect on the Company’s assets is set out below.

The exposure at 30 September of financial assets and financial liabilities to interest rate risk is shown by reference to floating interest rates.

At At

30 September 30 September

2022 2021

£’000 £’000

Exposure to floating interest rates:

Fixed interest securities 22,359 –

Cash and cash equivalents 67,274 68,418

JPY revolving credit facility – (59,821)

If the above level of cash was maintained for a year, a 1% increase in interest rates would increase the revenue return and net assets by £673,000

(2021: increase by £86,000). Management proactively manages cash balances. If there was a fall of 1% in interest rates, it would potentially impact

the Company by turning positive interest to negative interest. The total effect would be a revenue reduction/cost increase of £673,000 (2021: revenue

reduction/cost increase of £86,000). The fixed interest security matures within 3 months whilst increased interest rates will depress the fair value the

length to maturity is such this has a negligible impact. Due to interest rate volatility an increase of interest rates of 3% would potentially increase returns

on surplus cash by £2,019,000.

30 September 2022 30 September 2021

Book cost Fair value Book cost Fair value

£’000 £’000 £’000 £’000

4.184% Series A Sterling Unsecured Loan Notes 2036 29,913 25,127 29,906 36,519

3.249% Series B Euro Unsecured Loan Notes 2036 26,235 22,668 25,715 31,779

2.93% Euro Senior Unsecured Loan Notes 2037 17,430 14,214 17,078 20,700

1.38% JPY Senior Unsecured Loan Notes 2032 49,315 48,640 – –

Total 122,893 110,649 72,699 88,998

The impact of holding the Loan Notes at fair value would be to increase the Company's net assets by £12,244,000 (2021: reduce by £16,299,000).

The fair value of the Company’s Loan Notes at the year end was £110,649,000 (2021: £88,998,000). The interest rates of the non-current liabilities

(Loan Notes) are fixed. A 1% increase in market interest rates would be expected to decrease the fair value of the non-current liabilities by approximately

-£10.3m (2021: -£9.8m), all other factors being equal. A 1% decrease would increase the fair values by £11.6m (2021: £11.3m).

AVI Global Trust plc Annual Report 2022

81GIR FS OR SISR

14. Financial instruments and capital disclosures continued

Liquidity risk

Liquidity risk is mitigated by the fact that the Company has £67,274,000 (2021: £68,418,000) cash at bank, the assets are readily realisable and further

short-term flexibility is available through the use of bank borrowings. The Company is a closed-ended fund, assets do not need to be liquidated to meet

redemptions, and sufficient liquidity is maintained to meet obligations as they fall due.

The remaining contractual payments on the Company’s financial liabilities at 30 September, based on the earliest date on which payment can be required

and current exchange rates at the Balance Sheet date, were as follows:

In more than In more than In more than

1 year but 2 years but 3 years but

In 1 year not more not more not more In more

or less than 2 years than 3 years than 10 years than 10 years Total

£’000 £’000 £’000 £’000 £’000 £’000

At 30 September 2022

4.184% Series A Sterling Unsecured Loan Notes 2036 (1,255) (1,255) (1,255) (8,786) (34,393) (46,944)

3.249% Series B Euro Unsecured Loan Notes 2036 (855) (855) (855) (5,982) (29,293) (37,840)

2.93% Euro Senior Unsecured Loan Notes 2037 (514) (514) (514) (3,596) (20,360) (25,498)

1.38% JPY Senior Unsecured Loan Notes 2032 (683) (683) (683) (54,275) – (56,324)

Other payables (8,880) – – – – (8,880)

(12,187) (3,307) (3,307) (72,639) (84,046) (175,486)

In more than In more than In more than

1 year but 2 years but 3 years but

In 1 year not more not more not more In more

or less than 2 years than 3 years than 10 years than 10 years Total

£’000 £’000 £’000 £’000 £’000 £’000

At 30 September 2021

†

4.184% Series A Sterling Unsecured Loan Notes 2036 (1,255) (1,255) (1,255) (8,786) (35,648) (48,199)

3.249% Series B Euro Unsecured Loan Notes 2036 (838) (838) (838) (5,865) (29,557) (37,936)

2.93% Euro Senior Unsecured Loan Notes 2037 (504) (504) (504) (3,526) (20,465) (25,503)

Total return swap liabilities (1,091) – – – – (1,091)

Revolving credit facility (59,821) – – – – (59,821)

Other payables (2,358) – – – – (2,358)

(65,867) (2,597) (2,597) (18,177) (85,670) (174,908)

† The Company has represented the liquidity note for the prior year to be consistent with the current year.

Credit risk

Credit risk is mitigated by diversifying the counterparties through which the Investment Manager conducts investment transactions. The credit standing

of all counterparties is reviewed periodically, with limits set on amounts due from any one counterparty. As at the year end cash is held with JP Morgan

(A2*) and Morgan Stanley in the Liquidity Fund (AAA*).

The total credit exposure represents the carrying value of fixed-income investments, cash and receivable balances and totals £114,850,000

(2021: £72,990,000). The fixed interest security is a US Treasury short dated security rated AAA*.

Fair values of financial assets and financial liabilities

Valuation of financial instruments

The Company measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements.

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the

relevant assets as follows:

• Level 1 – valued using quoted prices unadjusted in active markets for identical assets or liabilities.

• Level 2 – valued by reference to valuation techniques using observable inputs for the asset or liability other than quoted prices included within Level 1.

• Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data for the asset or liability.

Financial Statements / Notes to the Financial Statements continued

* Moody’s credit ratings.

AVI Global Trust plc Annual Report 2022

The tables below set out fair value measurements of financial instruments as at the year end, by the level in the fair value hierarchy into which the fair

value measurement is categorised.

Level 1 Level 2 Level 3 Total

Financial assets at fair value through profit or loss at 30 September 2022 £’000 £’000 £’000 £’000

Equity investments 961,000 – 25,431 986,431

Fixed interest securities 22,359 – – 22,359

983,359 – 25,431 1,008,790

Level 1 Level 2 Level 3 Total

Financial assets at fair value through profit or loss at 30 September 2021 £’000 £’000 £’000 £’000

Equity investments 1,193,120 – 3,081 1,196,201

1,193,120 – 3,081 1,196,201

Fair value of Level 3 investments

30 September 30 September

2022 2021

£’000 £’000

Opening fair value of investments 3,081 2,616

Acquisition 31,179 –

Transfer from Level 1 to Level 3 in the year – 394

Sales – proceeds (8,249) (616)

Realised gain/(loss) on equity sales 441 (24)

Movement in investment holding gains (1,021) 711

Closing fair value of investments 25,431 3,081

The fair values of the Level 3 investments are valued with reference to the net asset value.

Financial liabilities

Valuation of Loan Notes

The Company’s Loan Notes are measured at amortised cost, with the fair values set out below. Other financial assets and liabilities of the Company are

carried in the Balance Sheet at an approximation to their fair value.

At 30 September 2022 At 30 September 2021

Book value Fair value Book value Fair value

£’000 £’000 £’000 £’000

4.184% Series A Sterling Unsecured Loan Notes 2036 (29,913) (25,127) (29,906) (36,519)

3.249% Series B Euro Unsecured Loan Notes 2036 (26,235) (22,668) (25,715) (31,779)

2.93% Euro Senior Unsecured Loan Notes 2037 (17,430) (14,214) (17,078) (20,700)

1.38% JPY Senior Unsecured Loan Notes 2032 (49,315) (48,640) – –

Total (122,893) (110,649) (72,699) (88,998)

There is no publicly available price for the Company’s Loan Notes. Their fair market value has been derived by calculating the relative premium

(or discount) of the loan versus the publicly available market price of the reference market instrument and exchange rates. As this price is derived

by a model, using observable inputs, it would be categorised as Level 2 under the fair value hierarchy.

AVI Global Trust plc Annual Report 2022

83GIR FS OR SISR

14. Financial instruments and capital disclosures continued

Financial liabilities continued

Valuation of Loan Notes continued

The financial liabilities in the table below are shown at their fair value, being the amount at which the liability may be transferred in an orderly transaction

between market participants. The costs of early redemption of the Loan Notes are set out in the Glossary on page 104.

Level 1 Level 2 Level 3 Total

Financial liabilities at 30 September 2022 £’000 £’000 £’000 £’000

Loan Notes – (110,649) – (110,649)

Total return swap liabilities – – – –

– (110,649) – (110,649)

Level 1 Level 2 Level 3 Total

Financial liabilities at 30 September 2021 £’000 £’000 £’000 £’000

Loan Notes – (88,998) – (88,998)

Total return swap liabilities – (1,091) – (1,091)

– (90,089) – (90,089)

The fair value of the total return swaps is derived using the market price of the underlying instruments and exchange rates and therefore would be

categorised as Level 2.

Capital management policies and procedures

The structure of the Company’s capital is described on page 55 and details of the Company’s reserves are shown in the Statement of Changes in Equity

on page 66.

The Company’s capital management objectives are:

• to ensure that it will be able to continue as a going concern;

• to achieve capital growth through a focused portfolio of investments, particularly in companies whose share prices stand at a discount to estimated

underlying net asset value, through an appropriate balance of equity capital and debt; and

• to maximise the return to shareholders while maintaining a capital base to allow the Company to operate effectively and meet obligations as they fall due.

The Board, with the assistance of the Investment Manager, regularly monitors and reviews the broad structure of the Company’s capital on an ongoing

basis. These reviews include:

• the level of gearing, which takes account of the Company’s position and the Investment Manager’s views on the market; and

• the extent to which revenue in excess of that which is required to be distributed should be retained.

The Company’s objectives, policies and processes for managing capital are unchanged from last year.

The Company is subject to externally imposed capital requirements:

a) as a public company, the Company is required to have a minimum share capital of £50,000; and

b) in accordance with the provisions of Sections 832 and 833 of the Companies Act 2006, the Company, as an investment company:

(i) is only able to make a dividend distribution to the extent that the assets of the Company are equal to at least one and a half times its liabilities

after the dividend payment has been made; and

(ii) is required to make a dividend distribution with respect to each accounting year such that it does not retain more than 15% of the income that

it derives from shares and securities in that year.

These requirements are unchanged since last year and the Company has complied with them at all times.

Financial Statements / Notes to the Financial Statements continued

AVI Global Trust plc Annual Report 2022

15. Derivatives

The Company may use a variety of derivative contracts, including total return swaps, to enable it to gain long exposure to individual securities.

Derivatives are valued by reference to the underlying market value of the corresponding security.

At At

30 September 30 September

2022 2021

£’000 £’000

Total return swaps

Current assets – –

Current liabilities – (1,091)

Net value of derivatives – (1,091)

The gross positive exposure on total return swaps as at 30 September 2022 was £nil (30 September 2021: £38,396,000) and the total negative exposure

of total return swaps was £nil (30 September 2021: £39,487,000). The liabilities are secured against assets held with Jefferies Hoare Govett (the prime

broker). The collateral held as at 30 September 2022 was £nil (30 September 2021: £13,349,000), which is included in cash and cash equivalents in the

Balance Sheet.

16. Contingencies, guarantees and financial commitments

At 30 September 2022, the Company had £nil financial commitments (2021: £nil).

At 30 September 2022, the Company had £nil contingent liability in respect of any investments carrying an obligation for future subscription or underwriting

commitments (2021: £nil).

17. Related party transactions and transactions with the Investment Manager

Fees paid to the Company’s Directors are disclosed in the Report on Remuneration Implementation on page 92. At the year end, £24,000 was

outstanding due to Directors (2021: £nil).

The transaction pursuant to the IMA with AVI is set out in the Report of the Directors on page 57. Management fees for the year amounted

to £7,650,000 (2021: £7,126,000).

As at the year end, the following amounts were outstanding in respect of management fees: £nil (2021: £nil).

18. Post balance sheet events

Since the year end, the Company has bought back 2,146,720 Ordinary Shares with a nominal value of £42,934 at a total cost of £3,864,000.

AVI Global Trust plc Annual Report 2022

85GIR FS OR SISR

The Company’s AIFM is Asset Value Investors Limited.

The AIFMD requires certain information to be made available to

investors in AIFs before they invest and requires that material changes

to this information be disclosed in the annual report of each AIF. Those

disclosures that are required to be made pre-investment are included

within an AIFMD Investor Disclosure Document. This, together with

other necessary disclosures required under AIFMD, can be found on the

Company’s website www.aviglobal.co.uk.

All authorised AIFMs are required to comply with the AIFMD Remuneration

Code. The AIFM’s remuneration disclosures can be found on the

Company’s website www.aviglobal.co.uk.

Leverage:

For the purposes of the AIFMD, leverage is any method which increases

the Company’s exposure, including the borrowing of cash and the use

of derivatives.

This is expressed as a ratio between the Company’s exposure and its net

asset value, and is calculated under the Gross and Commitment Methods

in accordance with AIFMD. Under the Gross Method, exposure represents

the sum of the Company’s positions without taking account of any netting

or hedging arrangements. Under the Commitment Method, exposure is

calculated after certain hedging and netting positions are offset against

each other.

The Company is required to state its maximum and actual leverage levels,

calculated as prescribed by the AIFMD as at 30 September 2022. This

gives the following figures:

Leverage Exposure Gross Method Commitment Method

Maximum Limit 150% 130%

Actual Level 113% 113%

Other Reports / AIFMD Disclosures (Unaudited)

AVI Global Trust plc Annual Report 2022

Role of the Audit Committee

The Audit Committee’s main functions are:

• To monitor the internal financial control and risk management systems

on which the Company is reliant.

• To consider whether there is a need for the Company to have its own

internal audit function.

• To monitor the integrity of the half year and annual financial

statements of the Company by reviewing and challenging, where

necessary, the actions and judgements of the Investment Manager

and the Administrator.

• To review the proposed audit programme and the subsequent Audit

Report of the external Auditor and to assess the effectiveness and

quality of the audit process, the nature of the non-audit work and

the levels of fees paid in respect of both audit and non-audit work,

in compliance with the Company’s Non Audit Services Policy.

• To make recommendations to the Board in relation to the

appointment, re-appointment or removal of the Auditor, and to

negotiate their remuneration and terms of engagement on audit

and non-audit work.

• To monitor and review annually the external Auditor’s independence,

objectivity, effectiveness, resources and qualifications.

Composition of the Audit Committee

The Audit Committee comprises the whole Board, being independent

Directors. Calum Thomson, a qualified chartered accountant with over

25 years’ experience, has chaired the Audit Committee throughout the

year. All members of the Committee have recent and relevant financial

experience, and the Committee as a whole has competence relevant to

the investment trust sector. The Audit Committee operates within defined

terms of reference, which are available on the Company’s website.

Activities During the Year:

• Review of the Half Year Report for the period to 31 March 2022,

recommending its approval to the Board;

• Consideration of the external Auditor’s plan for the audit of the year

end financial statements;

• Review of the Company’s internal controls and risk management

system, including an annual assessment of emerging and principal

risks facing the Company;

• Review of the service levels provided by the Company’s Custodian

and Depositary;

• Review of the controls reports issued by the Company’s outsourced

service providers, including those issued by the Company’s

Administrator, Depositary, Custodian and Investment Manager;

• Review of the year end financial statements, including a review to

ensure that the financial statements issued by the Company are

considered fair, balanced and understandable, and discussion of

the findings of the external audit with KPMG. Several sections of the

Annual Accounts are not subject to formal statutory audit, including the

Strategic Report and Investment Manager’s Review; and the checking

process for the financial information in these sections was considered

by the Audit Committee, and by the Auditor;

• Assessment and recommendation to the Board on whether it was

appropriate to prepare the Company’s financial statements on a going

concern basis. This review included challenging the assumptions on

viability of the Company and reviewing stress tests focused on its

ability to continue to meet its viability. The Board’s conclusions are

set out in the Report of the Directors on page 63;

• Consideration of a statement by the Directors on the long-term viability

of the Company. That statement can be found on page 63;

• Recommendation of a final dividend for the year ended 30 September

2022 and an interim dividend for the period to 31 March 2022;

• Review of special dividends received in the year to determine their

allocation to the revenue or capital account in the Statement of

Comprehensive Income;

• Review of the Investment Manager’s Business Continuity Plan; and

• Review of the Committee’s terms of reference.

Significant Areas of Focus

The Committee considers in detail the annual and interim statements and

its key focus in its work on the Annual Report and Accounts is that the

financial statements are fair, balanced and understandable and provide

the information necessary for shareholders to assess the Company’s

position and performance, business model and strategy. The Committee

also carefully considers the most significant issues, both operational

and financial, likely to impact on the Company’s financial statements.

The key area of focus for the Committee was the valuation of the

investment portfolio: 97.4% of the equity investment portfolio at the

year end can be verified against daily market prices and observable

price movements. The remaining 2.6% uses methodologies not based

on observable inputs.

The following other areas of focus were considered throughout the year

and as part of the annual audit:

• The possibility of management override of controls, because

individuals have access to the Company’s assets and accounting

records in order to fulfil their roles. The Board, through the Audit

Committee, is responsible for ensuring that suitable internal control

systems to prevent and detect fraud and error are designed and

implemented by the third-party service providers to the Company and

is also responsible for reviewing the effectiveness of such controls.

• Valuation of assets: Most of the Company’s assets are listed and

regularly traded and so values for these assets can be verified from

market sources. In the case of unlisted investments the Committee

challenges management to ensure that valuations are reasonable

and appropriate given the circumstances and information available.

Valuations are also verified as part of the audit process.

• Revenue recognition: Dividends are accounted for on an ex-dividend

basis and occasionally the Company receives special dividends.

All revenues are reconciled and there is separation of duties between

the Investment Manager and Administrator.

• Management fees: The Investment Manager’s fee is the largest

expense item. The Administrator ensures that each fee payment is

independently verified and the amounts paid are further verified as part

of the audit process.

• Debt covenants: Compliance with debt covenants is verified by the

Administrator at each month end and certified to lenders and notified

to the Directors.

• Going Concern and Viability: During the year and as part of the

year-end review the Committee considered the Company’s ability to

continue to operate and its future viability. Stress tests were carried out,

examining the effects of substantial falls in asset value and revenues.

Throughout the year, the Audit Committee has also dedicated time to

considering the likely economic effects and the impact on the Company

of COVID-19, the war in Ukraine, political and economic instability in the

UK, supply shortages and inflationary pressures.

• Compliance with the Companies Act and Listing Rules: Reports on

compliance are received and reviewed at each quarterly Board meeting.

• Investment Trust Status: A report on compliance with the requirements

to maintain investment trust status is received and reviewed at each

Board meeting. As part of the year-end process, the Audit Committee

reviews the requirements to retain investment trust status, and in

particular the minimum dividend distribution which must be made

with respect to the year under review.

Other Reports / Report of the Audit Committee

AVI Global Trust plc Annual Report 2022

87GIR FS OR SISR

Significant Areas of Focus continued

A further significant risk control is to ensure that the investment portfolio

accounted for in the financial statements reflects physical ownership of

the relevant securities. The Company uses the services of an independent

Custodian (JPMorgan Chase Bank, NA) to hold the assets of the Company.

The investment portfolio is reconciled regularly by the Administrator to the

Custodian’s records. The systems and controls operated by the Custodian

are also monitored by the Depositary, J.P. Morgan Europe Limited, whose

responsibilities include oversight of the safekeeping of the Company’s

assets. The Audit Committee meets with the Depositary, as necessary,

to review the work of the Depositary, and to consider the effectiveness

of the internal controls at the Custodian.

Given the nature of the Company’s investments, substantial funds can be

received from corporate actions at investee companies. The implementation

of the corporate actions can be complex and challenging. The Committee

reviews such corporate actions, and takes advice where necessary.

The Committee reviews the analysis of corporate actions provided by

the Investment Manager and ensures that the treatment in the financial

statements is appropriate.

The Company suffers withholding tax on many of its dividends received,

some of which is irrecoverable. The Audit Committee and the Investment

Manager aim to ensure that any recoverable withholding tax is received

in a timely manner. However, such recovery can be difficult in some

jurisdictions, and the Company has incurred professional service fees

in this area.

At each Audit Committee meeting, the members discussed the emerging

risks that may have an impact on the Company. Topics discussed in

the year under review included the continuing effects of the COVID-19

pandemic, the effects of both Brexit and the pandemic on world trade

and particularly disruption to supply chains, the effects of the Russian

invasion of Ukraine and in particular increasing levels of inflation and the

growing prominence of climate change.

Internal Controls

The Board confirms that there is an ongoing process for identifying,

evaluating and managing the emerging and principal risks faced by the

Company in line with the FRC’s Guidance on Risk Management, Internal

Control and Related Financial and Business Reporting published in

September 2014 and the FRC’s Guidance on Audit Committees published

in April 2016. This process has been in place for the year under review and

up to the date of approval of this report, and accords with the guidance.

In particular, it has reviewed and updated the process for identifying and

evaluating the significant risks affecting the Company and policies by

which these risks are managed. The risks of any failure of such controls are

identified in a Risk Matrix and a schedule of Key Risks, which are regularly

reviewed by the Board and which identify the likelihood and severity of the

impact of such risks and the controls in place to minimise the probability

of such risks occurring. Where reliance is made on third parties to manage

identified risks, those risks are matched to appropriate controls reported

in the relevant third-party service provider’s annual report on controls.

The principal risks identified by the Board are set out in the Strategic

Report on pages 12 to 15.

The following are the key components which the Company has in place

to provide effective internal control:

• The Board has agreed clearly defined investment criteria, which specify

levels of authority and exposure limits. Reports on compliance with

these criteria are regularly reviewed by the Board.

• The Board has a procedure to ensure that the Company can continue

to be approved as an investment company by complying with sections

1158/1159 of the Corporation Tax Act 2010.

• The Investment Manager and Administrator prepare forecasts

and management accounts which allow the Board to assess the

Company’s activities and to review its performance.

• The contractual agreements with the Investment Manager and

other third-party service providers, and adherence to them, are

regularly reviewed.

• The services and controls at the Investment Manager and at other

third-party suppliers are reviewed at least annually.

• The Audit Committee receives and reviews assurance reports on the

controls of all third-party service providers, including the Custodian

and Administrator, undertaken by professional service providers.

• The Audit Committee seeks to ensure that the Company is recovering

withholding tax on overseas dividends to the fullest extent possible.

• The Investment Manager’s Compliance Officer continually reviews

the Investment Manager’s operations. The Investment Manager also

employs an independent compliance consultant. Compliance reports

are submitted to the Committee at least annually.

Internal control systems are designed to meet the Company’s particular

needs and the risks to which it is exposed. They do not eliminate the risk of

failure to achieve business objectives and, by their nature, can only provide

reasonable and not absolute assurance against misstatement or loss.

As the Company has no employees, it does not have a whistle-blowing

policy and procedure in place. The Company delegates its main functions

to third-party providers, each of whom report on their policies and

procedures to the Audit Committee.

The Audit Committee believes that the Company does not require an

internal audit function, principally because the Company delegates its

day-to-day operations to third parties, which are monitored by the

Committee, and which provide control reports on their operations

at least annually.

External Audit Process

The Audit Committee meets at least twice a year with the Auditor.

The Auditor provides a planning report in advance of the preparation

of the Annual Report and a report on the annual audit. The Audit

Committee has an opportunity to question and challenge the Auditor

in respect of each of these reports. In addition, the Audit Committee

Chairman discusses the audit plan and results of the audit with the external

Auditor prior to the relevant Audit Committee meeting. After each audit, the

Audit Committee reviews the audit process and considers its effectiveness.

The review of the 2022 audit concluded that the audit process had

worked well, and that the key matters had been adequately addressed.

At least once a year, the Audit Committee has an opportunity to discuss

any aspect of the Auditor’s work with the Auditor in the absence of the

Investment Manager and administrators.

The Audit Committee specifically considered and discussed with the

Auditor the extent and nature of procedures undertaken on withholding

tax reclaims and the unlisted investments, as part of concluding on

those balances.

Other Reports / Report of the Audit Committee continued

AVI Global Trust plc Annual Report 2022

Auditor Assessment and Independence

The Audit Committee has reviewed KPMG’s independence policies

and procedures, including quality assurance procedures. It was

considered that those policies and procedures remained fit for purpose.

John Waterson is the Audit Partner allocated to the Company. The audit

of the financial statements for the year to 30 September 2022 is his first

as Audit Partner. The Committee has also taken into consideration the

standing, skills and experience of the audit firm and the audit team,

and is satisfied that KPMG is both independent and effective in carrying

out their responsibilities.

The Audit Committee has discussed the findings of the FRC’s recent

2022 Audit Quality Report on the quality of audits performed by KPMG

and questioned the audit team on any particular areas of the findings

that caused them to change their audit approach and was relevant to the

audit of the Company. The Committee has satisfied itself that none of the

shortcomings identified are directly relevant to the audit of the Company.

Fees Payable to the Auditor

Total fees payable to the Auditor were £45,000 (2021: £40,000). Of the

total fees, the fees for audit services were £45,000 (2021: £40,000).

The Audit Committee has approved and implemented a policy on the

engagement of the Auditor to supply non-audit services, taking into

account the recommendations of the FRC, and does not believe there

to be any impediment to the Auditor’s objectivity and independence.

All non-audit work to be carried out by the Auditor must be approved

by the Audit Committee in advance. The cost of non-audit services

provided by the Auditor for the financial year ended 30 September 2022

was £nil (2021: £nil). The Audit Committee is satisfied that KPMG remains

independent.

Re-appointment of the Auditor

Taking into account the performance and effectiveness of the Auditor

and the confirmation of their independence, the Committee recommends

that KPMG LLP be re-appointed as Auditor to the Company. However,

the Committee will carry out a tender process in respect of the 2023 year

end, which may result in a different auditor being appointed.

Audit Tender CMA Order

The audit was put out to competitive tender in 2016, following which

KPMG were appointed as the Company’s Auditor in respect of the financial

year ended 30 September 2017. In accordance with the Statutory Audit

Services Order 2014, issued by the Competition and Markets Authority

(CMA Order), a competitive audit tender must be carried out at least every

ten years. The Company is therefore required to carry out a tender no later

than in respect of the financial year ending 30 September 2027.

CMA Order

AGT has complied throughout the year ended 30 September 2022

with the provisions of the CMA Order.

Calum Thomson

Audit Committee Chairman

7 November 2022

AVI Global Trust plc Annual Report 2022

89GIR FS OR SISR

This Remuneration Policy provides details of the remuneration policy for

the Directors of the Company. All Directors are independent and non-

executive, appointed under the terms of Letters of Appointment, and none

has a service contract. The Company has no employees.

A resolution to approve this Remuneration Policy, which was last

approved at the AGM of the Company held in 2019, will be proposed at

the forthcoming AGM. If passed, the policy will apply until it is next put

to shareholders for renewal of that approval at the Company’s AGM

in 2025. Any variation of the policy prior to the 2025 AGM would have

to be submitted for shareholder approval.

The non-executive Directors of the Company are entitled to such rates of

annual fees as the Board at its discretion shall from time to time determine.

In addition to the annual fee, under the Company’s Articles of Association,

if any Director is requested to perform extra or special services, they will

be entitled to receive such additional remuneration as the Board may think

fit, and such remuneration may be either in addition to or in substitution for

any other remuneration that they may be entitled to receive.

Total remuneration paid to Directors is subject to an annual aggregate limit

of £300,000, as set out in the Company’s Articles of Association.

No component of any Director’s remuneration is subject to performance

factors.

The rates of fees per Director are reviewed annually. Annual fees are

pro-rated where a change takes place during a financial year.

Table of Directors’ Remuneration Components*

Component Director Rate at 30 September 2022 Purpose of reward Operation

Annual Fee All Directors £32,000 For commitment as Directors Determined by the Board

of a public company at its discretion (see note 1)

Additional Fee Chairman £18,000 For additional responsibility Determined by the Board

of the Board and time commitment at its discretion (see note 1)

Additional Fee Chairman of the £5,000 For additional responsibility Determined by the Board

Audit Committee and time commitment at its discretion (see note 1)

Additional Fee Senior Independent £2,500 For additional responsibility Determined by the Board

Director and time commitment at its discretion (see note 1)

Additional Fee All Directors Discretionary For performance of extra or Determined by the Board

special services in their role at its discretion

as a Director (see notes 1 and 2)

Expenses All Directors N/A Reimbursement of expenses paid Reimbursement upon

by them in order to perform submission of appropriate

their duties invoices

Notes:

The Board only exercises its discretion in setting rates of fees after an analysis of fees paid to Directors of other companies having similar profiles to that of the

Company, and consultation with third-party advisers. Individual Directors do not participate in discussions relating to their own remuneration.

Additional fees would only be paid in exceptional circumstances in relation to the performance of extra or special duties. No such fees were paid in the year

to 30 September 2022.

The Company has no employees. Accordingly, there are no differences in policy on the remuneration of Directors and the remuneration of employees. No Director is entitled

to receive any remuneration which is performance-related. As a result, there are no performance conditions in relation to any elements of the Directors’ remuneration in

existence to set out in this Remuneration Policy.

Other Reports / Directors’ Remuneration Policy

AVI Global Trust plc Annual Report 2022

Views of Shareholders

Any views expressed by shareholders on the fees being paid to Directors

would be taken into consideration by the Board when reviewing levels

of remuneration.

Recruitment Remuneration Principles

1. The remuneration package for any new Chairman or non-executive

Director will be the same as the prevailing rates determined on the bases

set out above. The fees and entitlement to reclaim reasonable expenses

will be set out in Directors’ Letters of Appointment.

2. The Board will not pay any introductory fee or incentive to any person

to encourage them to become a Director, but may pay the fees of

search and selection specialists in connection with the appointment

of any new non-executive Director.

3. The Company intends to appoint only non-executive Directors for the

foreseeable future.

4. The maximum aggregate fees currently payable to all Directors is

£300,000.

Service Contracts

None of the Directors has a service contract with the Company.

Non-executive Directors are engaged under Letters of Appointment

and are subject to annual re-election by shareholders.

Loss of Office

Directors’ Letters of Appointment expressly prohibit any entitlement

to payment on loss of office.

Scenarios

The Chairman’s and non-executive Directors’ remuneration is fixed at

annual rates, and there are no other scenarios where remuneration will

vary unless there are payments for extra or special services in their role as

Directors. It is accordingly not considered appropriate to provide different

remuneration scenarios for each Director.

Statement of Consideration of Conditions Elsewhere in the Company

As the Company has no employees, a process of consulting with

employees on the setting of the Remuneration Policy is not relevant.

Other Items

None of the Directors has any entitlement to pensions or pension-related

benefits, medical or life insurance schemes, share options, long-term

incentive plans or performance-related payments. No Director is entitled

to any other monetary payment or any assets of the Company except

in their capacity (where applicable) as shareholders of the Company.

Directors’ and Officers’ liability insurance cover is maintained by the

Company, at its expense, on behalf of the Directors.

The Company has also provided indemnities to the Directors in respect

of costs or other liabilities which they may incur in connection with any

claims relating to their performance or the performance of the Company

whilst they are Directors.

The Directors’ interests in contractual arrangements with the Company

are as shown in the Report of the Directors. Except as noted in the Report

of the Directors, no Director was interested in any contracts with the

Company during the period or subsequently.

Review of the Remuneration Policy

The Board has agreed that there would be a formal review before any

change to the Remuneration Policy; and, at least once a year, the

Remuneration Policy will be reviewed to ensure that it remains appropriate.

AVI Global Trust plc Annual Report 2022

91GIR FS OR SISR

The Directors who served during the year received the following emoluments:

Single Total Figure Table (audited information)

Fees paid (£)

Taxable benefits (£) Total (£) Percentage change (%)

Name of Director 2022 2021 2022 2021 2022 2021 2021-2022 2020-2021

Susan Noble 47,500 45,000 1,287 – 48,787 45,000 5.6 3.9

Anja Balfour 30,500 29,000 4,450 404 34,950 29,404 5.2 3.4

Neil Galloway

30,500 2,417 – – 30,500 2,417 5.2 –

Graham Kitchen 30,500 29,000 877 – 31,377 29,000 5.2 3.4

Nigel Rich

6,704 31,500 – – 6,704 31,500 – 4.3

Calum Thomson 37,490 34,000 1,211 386 38,701 34,386 10.3

3.4

183,194 170,917 7,825 790 191,019 171,707

* Reimbursement of travel expenses.

The average percentage change over the previous financial years. Fees for Directors who were appointed or resigned during the year were calculated on a pro-rata basis,

in order to provide a meaningful figure.

Appointed 1 September 2021.

Retired 16 December 2021.

Mr Thomson was appointed as Senior Independent Director with effect from 16 December 2021 and since then received the additional fee for this function.

This Report is prepared in accordance with Schedule 8 of the Large

and Medium-sized Companies and Groups (Accounts and Reports)

(Amendment) Regulations 2013.

A resolution to approve this Report on Remuneration Implementation will be

proposed at the AGM of the Company to be held on 20 December 2022.

Statement from the Chairman

As the Company has no employees and the Board is comprised wholly

of non-executive Directors, the Board has not established a separate

Remuneration Committee. Directors’ remuneration is determined by

the Board as a whole, at its discretion within an aggregate ceiling of

£300,000 per annum. Each Director abstains from voting on their own

individual remuneration.

During the year, the Board carried out a review of the level of Directors’

fees in accordance with the Remuneration Policy and considered the level

of fees being paid to non-executive directors of investment trusts with

assets of around £1bn, as well as to the Company’s peer group. This

review concluded that the fees being paid to the Company’s Directors

were below the average. As reported in the 2021 Annual Report, fees were

increased with effect from 1 April 2022 to £50,000 (previously £45,000) per

annum for the Chairman and £32,000 (previously £29,000) per annum for

other Directors. The additional fees payable to the Chairman of the Audit

Committee and to the Senior Independent Director remained unchanged,

at £5,000 and £2,500 per annum respectively.

The Board is satisfied that the changes to the remuneration of the

Directors are compliant with the Directors’ Remuneration Policy approved

by shareholders at the AGM held on 19 December 2019.

There will be no significant change in the way that the Remuneration Policy

will be implemented in the course of the next financial year, once approved.

Directors’ Emoluments (audited information)

Directors are only entitled to fees at such rates as are determined by

the Board from time to time and in accordance with the Directors’

Remuneration Policy as approved by the shareholders.

None of the Directors has any entitlement to pensions or pension-related

benefits, medical or life insurance schemes, share options, long-term

incentive plans or performance-related payments. No Director is entitled

to any other monetary payment or any assets of the Company.

Accordingly the Single Total Figure table below does not include columns

for any of these items or their monetary equivalents.

As the Company does not have a Chief Executive Officer or any executive

Directors, there are no percentage increases to disclose in respect of

their total remuneration, and it has not reported on those aspects of

remuneration that relate to executive Directors.

Directors’ & Officers’ liability insurance is maintained and paid for by the

Company on behalf of the Directors.

In line with market practice, the Company has agreed to indemnify

the Directors in respect of costs, charges, losses, liabilities, damages

and expenses, arising out of any claims or proposed claims made for

negligence, default, breach of duty, breach of trust or otherwise, or relating

to any application under Section 1157 of the Companies Act 2006,

in connection with the performance of their duties as Directors of the

Company. The indemnities would also provide financial support from the

Company should the level of cover provided by the Directors’ & Officers’

liability insurance maintained by the Company be exhausted.

Voting at AGM

A binding Ordinary Resolution approving the Directors’ Remuneration

Policy was approved by shareholders at the AGM held on 19 December

2019 and a non-binding Ordinary Resolution adopting the Directors’

Report on Remuneration Implementation for the year ended 30 September

2021 was approved by shareholders at the AGM held on 16 December

2021. The votes cast by proxy were as follows:

Remuneration Policy (AGM 2019)

For – % of votes cast 99.74%

Against – % of votes cast 0.15%

At Chairman’s discretion – % of votes cast 0.11%

Total votes cast 44,140,907

Number of votes withheld 109,933

Report on Remuneration Implementation (AGM 2021)

For – % of votes cast 99.62%

Against – % of votes cast 0.28%

At Chairman’s discretion – % of votes cast 0.10%

Total votes cast 36,508,955

Number of votes withheld 86,232

Other Reports / Report on Remuneration Implementation

AVI Global Trust plc Annual Report 2022

Sums Paid to Third Parties (audited information)

None of the fees referred to in the above table were paid to any third party

in respect of the services provided by any of the Directors.

Other Benefits

Taxable benefits – Article 100 of the Company’s Articles of Association

provides that Directors are entitled to be reimbursed for reasonable

expenses incurred by them in connection with the performance of their

duties and attendance at Board and General Meetings.

Pensions related benefits – Article 101 permits the Company to provide

pension or similar benefits for Directors and employees of the Company.

However, no pension schemes or other similar arrangements have been

established and no Director is entitled to any pension or similar benefits.

Share Price Total Return

The chart below illustrates the total shareholder return for a holding

in the Company’s shares, as compared to the MSCI All Country World

ex-US Index (£ adjusted total return), which the Board has adopted as the

measure for both the Company’s performance and that of the Investment

Manager for the year.

Statement of Directors’ Shareholding and Share Interests

(audited information)

Neither the Company’s Articles of Association nor the Directors’

Letters of Appointment require a Director to own shares in the Company.

The interests of the Directors and their connected persons in the equity

and debt securities of the Company at 30 September 2022 (or date of

retirement if earlier or date of appointment, if later) are shown in the table

below:

Ordinary Shares

Director 2022 2021*

Susan Noble 55,150 68,325

Anja Balfour 36,500 36,500

Neil Galloway

†

– –

Graham Kitchen 74,500

54,500

Nigel Rich

††

90,000

Calum Thomson 44,490 44,490

Includes 27,250 shares held by Jane Kitchen as at 30 September 2022 (as at 30

September 2021: 17,250*).

Included 15,000 shares held by Cynthia Rich.

†

Appointed 1 September 2021.

††

Retired 16 December 2021.

Since 30 September 2022, Neil Galloway has purchased a total of 25,000

shares in the Company. There have been no other changes to Directors’

interests between 30 September 2022 and the date of this Report.

Annual Statement

On behalf of the Board and in accordance with Part 2 of Schedule 8

of the Large and Medium-sized Companies and Groups (Accounts and

Reports) (Amendment) Regulations 2013, I confirm that the above Report

on Remuneration Implementation summarises, as applicable, for the year

to 30 September 2022:

(a) the major decisions on Directors’ remuneration;

(b) any substantial changes relating to Directors’ remuneration made

during the year; and

been taken.

Susan Noble

Chairman

7 November 2022

AGT Share Price Total Return

AGT NAV Total Return

MSCI All Country World ex-US Total Return

Sep

2012

Sep

2013

Sep

2014

Sep

2015

Sep

2022

Sep

2021

Sep

2020

Sep

2019

Sep

2018

Sep

2017

Sep

2016

100

150

200

250

300

350

Ten years to 30 September 2022

Relative Importance of Spend on Pay

The table below shows the proportion of the Company’s income spent

on pay.

2022 2021 Difference

Spend on Directors’ fees* £183,000 £171,000 7.0%

Management fee and

other expenses £10,276,000 £8,861,000 16.0%

Distribution to shareholders:

(a) dividends £16,683,000 £17,308,000 (3.6)%

(b) share buybacks £36,678,000 £32,638,000 12.4%

* As the Company has no employees the total spend on remuneration comprises

only the Directors’ fees.

Note: the items listed in the table above are as required by the Large and

Medium-sized Companies and Groups (Accounts and Reports) (Amendment)

Regulations 2013 ss.20, with the exception of the management fee and other

expenses, which has been included because the Directors believe that it will help

shareholders’ understanding of the relative importance of the spend on pay.

The figures for this measure are the same as those shown in note 3 to the

financial statements.

* Restated for Share Split.

AVI Global Trust plc Annual Report 2022

93GIR FS OR SISR

1. Our opinion is unmodified

We have audited the financial statements of AVI Global Trust plc

(“the Company”) for the year ended 30 September 2022 which comprise

the Statement of Comprehensive Income, Statement of Changes in Equity,

Balance Sheet, Statement of Cash Flows and the related notes, including

the accounting policies in note 1.

In our opinion the financial statements:

• give a true and fair view of the state of the Company’s affairs as at

30 September 2022 and of its return for the year then ended;

• have been properly prepared in accordance with UK-adopted

international accounting standards; and

• have been prepared in accordance with the requirements of the

Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on

Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are

described below. We believe that the audit evidence we have obtained

is a sufficient and appropriate basis for our opinion. Our audit opinion is

consistent with our report to the audit committee.

We were first appointed as auditor by the Directors on 20 December 2016.

The period of total uninterrupted engagement is for the six financial years

ended 30 September 2022. We have fulfilled our ethical responsibilities

under, and we remain independent of the Company in accordance with,

UK ethical requirements including the FRC Ethical Standard as applied

to listed public interest entities. No non-audit services prohibited by that

standard were provided.

Overview

Materiality:

financial statements

as a whole

£11.0m (2021: £12.6m)

1% (2021: 1%) of total assets

Key audit matters Versus 2021

Recurring risk

Carrying amount of 

quoted investments

2. Key audit matters: our assessment of risks of material misstatement

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include the

most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on: the

overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. We summarise below the key audit matter

(unchanged from 2021), in arriving at our audit opinion above, together with our key audit procedures to address this matter and our findings from those

procedures in order that the Company’s members, as a body, may better understand the process by which we arrived at our audit opinion. This matter was

addressed, and our findings are based on procedures undertaken, in the context of, and solely for the purpose of, our audit of the financial statements as a

whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on this matter.

The risk Our response

Carrying amount of quoted

investments

(£983m; 2021: £1,193m)

Refer to page 87 and 88 (Audit

Committee Report), page 70

(accounting policy) and page

76 and page 83 (financial

disclosures).

Low risk, high value:

The Company’s portfolio of quoted investments

makes up 89% (2021: 94.0%) of the Company’s total

assets (by value) and is the key driver of results.

We do not consider these investments to be at a high

risk of significant misstatement, or to be subject to a

significant level of judgement because they comprise

liquid, quoted investments.

However, due to their materiality in the context of the

financial statements as a whole, they are considered

to be the area which had the greatest effect on our

overall audit strategy and allocation of resources in

planning and completing our audit.

We performed the detailed tests below rather than

seeking to rely on controls, because the nature

of the balance is such that we would expect to

obtain audit evidence primarily through the detailed

procedures described below.

Our procedures included:

— Test of detail: Agreed the valuation of 100% of

quoted investments in the portfolio to externally

quoted prices; and

— Enquiry of custodian: Agreed 100% of

quoted investment holdings in the portfolio to

independently received third-party confirmations

from investment custodian.

Our findings

We found no differences from the third-party

holdings’ confirmations nor from the externally

quoted prices of a size to require reporting to the

audit committee (2021: no differences from the

third-party holdings’ confirmations nor from the

externally quoted prices of a size to require reporting

to the audit committee).

Other Reports / Independent Auditor’s Report

To the Members of AVI Global Trust plc

AVI Global Trust plc Annual Report 2022

We considered whether these risks could plausibly affect the liquidity or

covenant compliance in the going concern period by assessing the degree

of downside assumption that, individually and collectively, could result

in a liquidity issue, taking into account the Company’s liquid investment

position (a reverse stress test).

We considered whether the going concern disclosure in note 1 to the

financial statements gives a full and accurate description of the Directors’

assessment of going concern, including the identified risks and related

sensitivities.

Our conclusions based on this work:

— we consider that the Directors’ use of the going concern basis

of accounting in the preparation of the financial statements is

appropriate;

— we have not identified, and concur with the Directors’ assessment

that there is not, a material uncertainty related to events or conditions

that, individually or collectively, may cast significant doubt on the

Company’s ability to continue as a going concern for the going

concern period;

— we have nothing material to add or draw attention to in relation to the

Directors’ statement in note 1 to the financial statements on the use of

the going concern basis of accounting with no material uncertainties

that may cast significant doubt over the Company’s use of that

basis for the going concern period, and we found the going concern

disclosure in note 1 to be acceptable; and

— the related statement under the Listing Rules set out on page 63

is materially consistent with the financial statements and our audit

knowledge.

However, as we cannot predict all future events or conditions and as

subsequent events may result in outcomes that are inconsistent with

judgements that were reasonable at the time they were made, the above

conclusions are not a guarantee that the Company will continue in

operation.

4. The impact of climate change on our audit

In planning our audit we have considered the potential impacts of climate

change on the Company’s financial statements.

We have performed a risk assessment of how the impact of climate

change may affect the financial statements and our audit. Level 1 listed

investments make up 89% of the Company’s total assets, for which fair

value is determined as the quoted market price. Therefore there was no

significant impact of climate change on our key audit matter.

We have read the disclosure of climate-related narrative in the front half

of the financial statements and considered consistency with the financial

statements and our audit knowledge.

5. Going concern

The Directors have prepared the financial statements on the going concern

basis as they do not intend to liquidate the Company or to cease its

operations, and as they have concluded that the Company’s financial

position means that this is realistic. They have also concluded that there

are no material uncertainties that could have cast significant doubt over its

ability to continue as a going concern for at least a year from the date of

approval of the financial statements (“the going concern period”).

We used our knowledge of the Company, its industry, and the general

economic environment to identify the inherent risks to its business model

and analysed how those risks might affect the Company’s financial

resources or ability to continue operations over the going concern period.

The risks that we considered most likely to adversely affect the Company’s

available financial resources and its ability to operate over this period were:

— the impact of a significant reduction in the valuation of investments and

the implications for the Company’s debt covenants;

— the liquidity of the investment portfolio and its ability to meet the

liabilities of the Company as and when they fall due; and

— the operational resilience of key service organisations.

3. Our application of materiality and an overview of the scope

of our audit

Materiality for the financial statements as a whole was set at £11.0m

(2021: £12.6m), determined with reference to a benchmark of Total Assets,

of which it represents 1% (2021: 1%).

In line with our audit methodology, our procedures on individual

account balances and disclosures were performed to a lower threshold,

performance materiality, so as to reduce to an acceptable level the risk

that individually immaterial misstatements in individual account balances

add up to a material amount across the financial statements as a whole.

Performance materiality was set at 75% (2021: 75%) of materiality for the

financial statements as a whole, which equates to £8.3m (2021: £9.5m).

We applied this percentage in our determination of performance materiality

because we did not identify any factors indicating an elevated level of risk.

We agreed to report to the Audit Committee any corrected or uncorrected

identified misstatements exceeding £550k (2021: £630k), in addition to other

identified misstatements that warranted reporting on qualitative grounds.

Our audit of the Company was undertaken to the materiality and

performance materiality levels specified above and was performed by a

single audit team.

The scope of the audit work performed was fully substantive as we did not

rely upon the Company’s internal control over financial reporting.

£11.0m

Whole financial

statements materiality

(2021: £12.6m)

£8.3m

Performance materiality

(2021: £9.5m)

£550k

Misstatements reported

to the Audit Committee

(2021: £630k)

Materiality

£11.0m (2021: £12.6m)

Total assets

£1,101m (2021: £1,269.2m)

Total assets

Materiality

AVI Global Trust plc Annual Report 2022

95GIR FS OR SISR

6. Fraud and breaches of laws and regulations – ability to detect

Identifying and responding to risks of material misstatement

due to fraud

To identify risks of material misstatement due to fraud (“fraud risks”) we

assessed events or conditions that could indicate an incentive or pressure

to commit fraud or provide an opportunity to commit fraud. Our risk

assessment procedures included:

— Enquiring of Directors as to the Company’s high-level policies and

procedures to prevent and detect fraud, as well as whether they have

knowledge of any actual, suspected or alleged fraud.

— Assessing the segregation of duties in place between the Directors,

the Administrator and the Company’s Investment Manager; and

— Reading Board and Audit Committee minutes.

We communicated identified fraud risks throughout the audit team and

remained alert to any indications of fraud throughout the audit.

As required by auditing standards, we perform procedures to address

the risk of management override of controls, in particular to the risk that

management may be in a position to make inappropriate accounting

entries. We evaluated the design and implementation of the controls

over journal entries and other adjustments and made inquiries of the

Administrator about inappropriate or unusual activity relating to the

processing of journal entries and other adjustments. We did not identify

any material post-closing entries and, based on the results of our risk

assessment procedures and understanding of the process, including

the segregation of duties between the Directors and the Administrator,

no further high-risk journal entries or other adjustments were identified.

On this audit we do not believe there is a fraud risk related to revenue

recognition because the revenue is non-judgemental and straightforward,

with limited opportunity for manipulation particularly in light of the

segregation of duties. We did not identify any additional fraud risks.

Identifying and responding to risks of material misstatement

related to compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be

expected to have a material effect on the financial statements from our

general commercial and sector experience and through discussion with

the Directors, the Investment Manager and the Administrator (as required

by auditing standards), and discussed with the Directors the policies

and procedures regarding compliance with laws and regulations. As

the Company is regulated, our assessment of risks involved gaining an

understanding of the control environment including the entity’s procedures

for complying with regulatory requirements.

We communicated identified laws and regulations throughout our team

and remained alert to any indications of non-compliance throughout the

audit.

The potential effect of these laws and regulations on the financial

statements varies considerably.

Firstly, the Company is subject to laws and regulations that directly affect

the financial statements including financial reporting legislation (including

related companies legislation), distributable profits legislation and its

qualification as an Investment Trust under UK taxation legislation, any

breach of which could lead to the Company losing various deductions

and exemptions from UK corporation tax. We assessed the extent of

compliance with these laws and regulations as part of our procedures

on the related financial statement items.

Secondly, the Company is subject to many other laws and regulations

where the consequences of non-compliance could have a material effect

on amounts or disclosures in the financial statements, for instance through

the imposition of fines or litigation. We identified the following areas as

those most likely to have such an effect: money laundering, data protection,

bribery and corruption legislation and certain aspects of company legislation

recognising the financial and regulated nature of the Company’s activities

and its legal form. Auditing standards limit the required audit procedures to

identify non-compliance with these laws and regulations to enquiry of the

Directors, the Investment Manager and the Administrator and inspection

of regulatory and legal correspondence, if any. Therefore if a breach of

operational regulations is not disclosed to us or evident from relevant

correspondence, an audit will not detect that breach.

Context of the ability of the audit to detect fraud or breaches

of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable

risk that we may not have detected some material misstatements in

the financial statements, even though we have properly planned and

performed our audit in accordance with auditing standards. For example,

the further removed non-compliance with laws and regulations is from the

events and transactions reflected in the financial statements, the less likely

the inherently limited procedures required by auditing standards would

identify it.

In addition, as with any audit, there remained a higher risk of non-

detection of fraud, as fraud may involve collusion, forgery, intentional

omissions, misrepresentations, or the override of internal controls. Our

audit procedures are designed to detect material misstatement. We are

not responsible for preventing non-compliance or fraud and cannot be

expected to detect non-compliance with all laws and regulations.

7. We have nothing to report on the other information in the

Annual Report

The Directors are responsible for the other information presented in the

Annual Report together with the financial statements. Our opinion on the

financial statements does not cover the other information and, accordingly,

we do not express an audit opinion or, except as explicitly stated below,

any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider

whether, based on our financial statements audit work, the information

therein is materially misstated or inconsistent with the financial statements

or our audit knowledge. Based solely on that work we have not identified

material misstatements in the other information.

Strategic Report and Directors’ Report

Based solely on our work on the other information:

— we have not identified material misstatements in the Strategic Report

and the Directors’ Report;

— in our opinion the information given in those reports for the financial

year is consistent with the financial statements; and

— in our opinion those reports have been prepared in accordance with

the Companies Act 2006.

Directors’ remuneration report

In our opinion the part of the Directors’ Remuneration Report to be audited

has been properly prepared in accordance with the Companies Act 2006.

Disclosures of emerging and principal risks and longer-term

viability

We are required to perform procedures to identify whether there is a

material inconsistency between the Directors’ disclosures in respect of

emerging and principal risks and the viability statement, and the financial

statements and our audit knowledge.

Other Reports / Independent Auditor’s Report continued

To the Members of AVI Global Trust plc

AVI Global Trust plc Annual Report 2022

Based on those procedures, we have nothing material to add or draw

attention to in relation to:

— the Directors’ confirmation within the Viability statement page 63

that they have carried out a robust assessment of the emerging and

principal risks facing the Company, including those that would threaten

its business model, future performance, solvency and liquidity;

— the Emerging and Principal Risks disclosures describing these risks

and how emerging risks are identified, and explaining how they are

being managed and mitigated; and

— the Directors’ explanation in the viability statement of how they have

assessed the prospects of the Company, over what period they have

done so and why they considered that period to be appropriate, and

their statement as to whether they have a reasonable expectation

that the Company will be able to continue in operation and meet

its liabilities as they fall due over the period of their assessment,

including any related disclosures drawing attention to any necessary

qualifications or assumptions.

We are also required to review the Viability statement, set out on page

63 under the Listing Rules. Based on the above procedures, we have

concluded that the above disclosures are materially consistent with the

financial statements and our audit knowledge.

Our work is limited to assessing these matters in the context of only the

knowledge acquired during our financial statements audit. As we cannot

predict all future events or conditions and as subsequent events may result

in outcomes that are inconsistent with judgements that were reasonable

at the time they were made, the absence of anything to report on these

statements is not a guarantee as to the Company’s longer-term viability.

Corporate governance disclosures

We are required to perform procedures to identify whether there is a

material inconsistency between the Directors’ corporate governance

disclosures and the financial statements and our audit knowledge.

Based on those procedures, we have concluded that each of the following

is materially consistent with the financial statements and our audit

knowledge:

— the Directors’ statement that they consider that 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;

— the section of the Annual Report describing the work of the Audit

Committee, including the significant issues that the Audit Committee

considered in relation to the financial statements, and how these

issues were addressed; and

— the section of the Annual Report that describes the review of the

effectiveness of the Company’s risk management and internal control

systems.

We are required to review the part of the Corporate Governance Statement

relating to the Company’s compliance with the provisions of the UK

Corporate Governance Code specified by the Listing Rules for our review.

We have nothing to report in this respect.

8. We have nothing to report on the other matters on which

we are required to report by exception

Under the Companies Act 2006, we are required to report to you if,

in our opinion:

— adequate accounting records have not been kept, or returns adequate

for our audit have not been received from branches not visited by us; or

— the financial statements and the part of the Directors’ Remuneration

Report to be audited are not in agreement with the accounting records

and returns; or

— certain disclosures of Directors’ remuneration specified by law are not

made; or

— we have not received all the information and explanations we require

for our audit.

We have nothing to report in these respects.

9. Respective responsibilities

Directors’ responsibilities

As explained more fully in their statement set out on page 64, the Directors

are responsible for: the preparation of the financial statements including

being satisfied that they give a true and fair view; such internal control

as they determine is necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to fraud

or error; assessing the Company’s ability to continue as a going concern,

disclosing, as applicable, matters related to going concern; and using the

going concern basis of accounting unless they either intend to liquidate the

Company or to cease operations, or have no realistic alternative but to

do so.

Auditor’s responsibilities

Our objectives are to obtain reasonable assurance about whether the

financial statements as a whole are free from material misstatement,

whether due to fraud or error, and to issue our opinion in an auditor’s

report. Reasonable assurance is a high level of assurance, but does not

guarantee that an audit conducted in accordance with ISAs (UK) will

always detect a material misstatement when it exists. Misstatements can

arise from fraud or error and are considered material if, individually or in

aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC’s website

at www.frc.org.uk/auditorsresponsibilities.

The Company is required to include these financial statements in an

annual financial report prepared using the single electronic reporting format

specified in the TD ESEF Regulation. This auditor’s report provides no

assurance over whether the annual financial report has been prepared in

accordance with that format.

10. The purpose of our audit work and to whom we owe our

responsibilities

This report is made solely to the Company’s members, as a body, in

accordance with Chapter 3 of Part 16 of the Companies Act 2006 and

the terms of our engagement by the Company. Our audit work has been

undertaken so that we might state to the Company’s members those

matters we are required to state to them in an auditor’s report, and the

further matters we are required to state to them in accordance with the

terms agreed with the Company, and for no other purpose. To the fullest

extent permitted by law, we do not accept or assume responsibility to

anyone other than the Company and the Company’s members, as a body,

for our audit work, for this report, or for the opinions we have formed.

John Waterson (Senior Statutory Auditor)

for and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants

Saltire Court

20 Castle Terrace

Edinburgh

EH1 2EG

7 November 2022

AVI Global Trust plc Annual Report 2022

97GIR FS OR SISR

This Document is Important and Requires your Immediate Attention

If you are in any doubt about the action to take, you should consult your

stockbroker, bank manager, solicitor, accountant or other independent

professional adviser authorised under the Financial Services and Markets

Act 2000 (as amended) without delay. If you have sold or transferred all of

your Ordinary Shares in the capital of AVI Global Trust plc (the Company)

and, as a result, no longer hold any Ordinary Shares in the Company,

please send this document and the accompanying Form of Proxy as

soon as possible to the purchaser or transferee or to the person through

whom the sale or transfer was effected for transmission to the purchaser

or transferee.

Notice is hereby given that the One Hundred and Thirty Third Annual

General Meeting of AVI Global Trust plc will be held at 11 Cavendish

Square, London W1G 0AN at 11.00am on Tuesday, 20 December 2022

to consider the following business.

The resolutions numbered 1 to 11 are proposed as ordinary resolutions,

which must each receive more than 50% of the votes cast in order to

be passed. Resolutions numbered 12 to 14 are proposed as special

resolutions, which must each receive at least 75% of the votes cast in

order to be passed.

1. To receive and adopt the financial statements of the Company

for the financial year ended 30 September 2022 together with the

Strategic Report and the Reports of the Directors and Auditor.

2. To approve a final ordinary dividend of 2.1p per Ordinary Share.

3. To re-elect Anja Balfour as a Director of the Company.

4. To re-elect Neil Galloway as a Director of the Company.

5. To re-elect Graham Kitchen as a Director of the Company.

6. To re-elect Calum Thomson as a Director of the Company.

7. To re-appoint KPMG LLP as the Company’s Auditor.

8. To authorise the Audit Committee to determine the Auditor’s

remuneration.

9. To approve the Directors’ Report on Remuneration Implementation

for the year ended 30 September 2022.

10. To approve the Directors’ Remuneration Policy.

11. THAT the Directors of the Company be and are hereby generally

and unconditionally authorised in accordance with Section 551 of

the Companies Act 2006 (the Act) to exercise all of the powers of

the Company to allot Ordinary Shares in the capital of the Company

(Ordinary Shares) and to grant rights to subscribe for or to convert

any security into Ordinary Shares in the Company up to a maximum

nominal value of £3,262,032 provided that such authority shall expire

on the date which is 15 months after the date of the passing of this

resolution or, if earlier, at the conclusion of the next Annual General

Meeting of the Company, save that the Company may before such

expiry make offers or agreements which would or might require

Ordinary Shares to be allotted, or rights to be granted, after such

expiry and the Directors may allot Ordinary Shares, or grant such

rights, in pursuance of such offers or agreements as if the authority

conferred hereby had not expired; and all unexercised authorities

previously granted to the Directors to allot Ordinary Shares be and

are hereby revoked.

12. THAT, subject to the passing of resolution 11 above, the Directors of

the Company be and are hereby generally authorised and empowered

pursuant to Sections 570 and 573 of the Companies Act 2006

(the Act) to allot equity securities (as defined in Section 560 of the

Act) (including the grant of rights to subscribe for, or to convert any

securities into, Ordinary Shares in the capital of the Company (Ordinary

Shares) and the sale of Ordinary Shares held by the Company in

treasury) wholly for cash pursuant to any existing authority given in

accordance with Section 551 of the Act, as if Section 561 of the Act

did not apply to any such allotment, provided that this power shall be

limited to the allotment of equity securities:

(a) in connection with an offer of such securities by way of rights

to holders of Ordinary Shares on the register of members of the

Company on a fixed record date in proportion (as nearly as may

be practicable) to their respective holdings of Ordinary Shares but

subject to such exclusions or other arrangements as the Directors

may deem necessary or expedient in relation to treasury shares,

fractional entitlements or any legal or practical problems arising under

the laws of, or the requirements of, any territory or any regulatory or

governmental body or authority or stock exchange; and

(b) otherwise than pursuant to sub-paragraph (a) above, equating to

a maximum nominal value of £489,304 being approximately 5%

of the equity share capital in issue as at 7 November 2022, and

the authority hereby granted shall expire on the date which is 15

months after the date of the passing of this resolution or, if earlier,

the date of the next Annual General Meeting of the Company,

save that the Company may before such expiry make an offer

or agreement which would or might require equity securities to

be allotted after such expiry and the Directors may allot equity

securities and sell Treasury Shares in pursuance of such an offer

or agreement as if the power conferred hereby had not expired.

Shareholder Information / Notice of Annual General Meeting

AVI Global Trust plc Annual Report 2022

13. THAT the Company be and is hereby generally and unconditionally

authorised for the purposes of Section 701 of the Companies Act

2006 (the Act) to make one or more market purchases (within the

meaning of Section 693(4) of the Act) of Ordinary Shares in the capital

of the Company (Ordinary Shares) either for cancellation or to hold

as Treasury Shares (within the meaning of Section 724 of the Act)

provided that:

(a) the maximum aggregate nominal value of Ordinary Shares hereby

authorised to be purchased is £1,466,935;

(b) the Directors be authorised to determine at their discretion that any

Ordinary Shares purchased be cancelled or held by the Company

as Treasury Shares;

nominal value of that share (exclusive of associated expenses);

(d) the maximum price which may be paid for an Ordinary Share shall

be the higher of: (i) 5% above the average of the middle market

quotations of the Ordinary Shares (as derived from the Daily Official

List of the London Stock Exchange) for the five business days

immediately preceding the date on which the relevant share is

contracted to be purchased (exclusive of associated expenses);

and (ii) the higher of the price of the last independent trade and

the highest current independent bid for an Ordinary Share of the

Company on the London Stock Exchange; and

(e) unless previously varied, revoked or renewed, the authority

hereby conferred shall expire on the date which is 15 months

after the date of the passing of this resolution or, if earlier, the

date of the next Annual General Meeting of the Company save

that the Company may prior to such expiry enter into a contract

or arrangement to purchase Ordinary Shares under this authority

which will or may be completed or executed wholly or partly after

the expiry of this authority and may make a purchase of Ordinary

Shares pursuant to any such contract or arrangement as if the

authority hereby conferred had not expired.

14. THAT a general meeting other than an Annual General Meeting may

be called on not less than 14 clear days’ notice.

By Order of the Board

Link Company Matters Limited

Corporate Secretary

Registered Office:

Beaufort House

51 New North Road

Exeter, Devon EX4 4EP

7 November 2022

AVI Global Trust plc Annual Report 2022

99GIR FS OR SISR

Notes

1. Attending the AGM in Person

If you wish to attend the AGM in person, you should sign the admission

card enclosed with this document and hand it to the Company’s Registrars

on arrival at the AGM.

2. Appointment of Proxy

Members are entitled to appoint a proxy to exercise all or any of their

rights to attend and to speak and vote on their behalf at the meeting.

A shareholder may appoint more than one proxy in relation to the AGM

provided that each proxy is appointed to exercise the rights attached

to a different share or shares held by that shareholder. A proxy need not

be a shareholder of the Company.

3. Appointment of Proxy

A proxy form which may be used to make such appointment and give

proxy instructions accompanies this notice. Where two or more valid

appointments of proxy are received in respect of the same share in relation

to the same meeting, the one which is last sent shall be treated as

replacing and revoking the other or others. If the Company is unable to

determine which is last sent, the one which is last received shall be so

treated. If the Company is unable to determine either which is last sent or

which is last received, none of such appointments shall be treated as valid

in respect of that share. The termination of the authority of a person to act

as proxy must be notified to the Company in writing.

To be valid, any proxy form or other instrument appointing a proxy

must be received by post or (during normal business hours only) by

hand at the Company’s Registrars, Equiniti Limited, Aspect House,

Spencer Road, Lancing, West Sussex BN99 6DA by 11.00am on Friday,

16 December 2022. In determining the time for delivery of proxies pursuant

to the Articles of Association, no account has been taken of any part of a

day that is not a working day. Alternatively, you may send any document

or information relating to proxies to the electronic address indicated on the

form of proxy.

The return of a completed proxy form, other such instrument or any

CREST Proxy Instruction (as described in paragraph 8 below) will not

prevent a shareholder attending the AGM and voting in person if he/she

wishes to do so.

If you require additional proxy forms, please contact the Registrar’s helpline

on 0371 384 2490 (+44 371 384 2490 from outside the UK). Lines are

open 8.30am to 5.30pm Monday to Friday (excluding public holidays in

England and Wales).

Alternatively, you may, if you wish, register the appointment of a proxy

electronically by logging on to www.sharevote.co.uk. To use this service

you will need your Voting ID, Task ID and Shareholder Reference Number

printed on the accompanying Form of Proxy. Full details of the procedure

are given on the website.

To be valid, the appointment of a proxy electronically must be made by

11.00am on Friday, 16 December 2022. In determining the time for

electronic appointment of proxies pursuant to the Articles of Association,

no account has been taken of any part of a day that is not a working day.

4. Appointment of Proxy by Joint Shareholders

In the case of joint shareholders, where more than one of the joint

shareholders purports to appoint one or more proxies, only the purported

appointment submitted by the most senior holder will be accepted.

Seniority is determined by the order in which the names of the joint

shareholders appear in the Company’s register of members in respect

of the joint shareholding, with the first named being the most senior.

5. Nominated Persons

Any person to whom this notice is sent who is a person nominated

under Section 146 of the Companies Act 2006 to enjoy information rights

(a Nominated Person) may, under an agreement between him/her and the

shareholder by whom he/she was nominated, have a right to be appointed

(or to have someone else appointed) as a proxy for the AGM. If a Nominated

Person has no such proxy appointment right or does not wish to exercise it,

he/she may, under any such agreement, have a right to give instructions to

the shareholder as to the exercise of voting rights.

The statement of the rights of shareholders in relation to the appointment

of proxies does not apply to Nominated Persons as such rights can only

be exercised by registered shareholders of the Company.

6. Entitlement to Attend and Vote

To be entitled to attend and vote at the AGM (and for the purpose of the

determination by the Company of the votes they may cast), shareholders

must be registered in the Register of Members of the Company at 6.30pm

on Friday, 16 December 2022 (or, in the event of any adjournment, 6.30pm

on the date which is two business days before the time of the adjourned

meeting). Changes to the Register of Members after the relevant deadline

shall be disregarded in determining the rights of any person to attend and

vote at the meeting.

7. Issued Share Capital and Total Voting Rights

As at 7 November 2022, the Company’s issued share capital consisted of

534,905,804 Ordinary Shares, carrying one vote each, of which 45,600,956

were in treasury. Therefore, the voting rights in the Company as at

7 November 2022 equate to a total of 489,304,848 votes. Treasury shares

represented 8.53% of the issued share capital as at 7 November 2022.

8. CREST Members

CREST members who wish to appoint a proxy or proxies through the

CREST electronic proxy appointment service may do so by using the

procedures described in the CREST Manual. CREST Personal Members

or other CREST sponsored members, and those CREST members who

have appointed a service provider(s), should refer to their CREST sponsor

or voting service provider(s), who will be able to take the appropriate action

on their behalf.

In order for a proxy appointment or instruction made using the CREST

service to be valid, the appropriate CREST message (a CREST Proxy

Instruction) must be properly authenticated in accordance with Euroclear

UK & Ireland Limited’s specifications, and must contain the information

required for such instruction, as described in the CREST Manual (available

via www.euroclear.com). The message, regardless of whether it constitutes

the appointment of a proxy or is an amendment to the instruction given

to a previously appointed proxy must, in order to be valid, be transmitted

so as to be received by the issuer’s agent (ID RA19) by 11.00am on Friday,

16 December 2022. For this purpose, the time of receipt will be taken to be

the time (as determined by the time stamp applied to the message by the

CREST Application Host) from which the issuer’s agent is able to retrieve

the message by enquiry to CREST in the manner prescribed by CREST.

After this time any change of instructions to proxies appointed through

CREST should be communicated to the appointee through other means.

Shareholder Information / Notice of Annual General Meeting continued

100

AVI Global Trust plc Annual Report 2022

CREST members and, where applicable, their CREST sponsors, or voting

service providers should note that Euroclear UK & Ireland Limited does not

make available special procedures in CREST for any particular message.

Normal system timings and limitations will, therefore, apply in relation to the

input of CREST Proxy Instructions. It is the responsibility of the CREST

member concerned to take (or, if the CREST member is a CREST personal

member, or sponsored member, or has appointed a voting service provider,

to procure that his CREST sponsor or voting service provider(s) take(s)) such

action as shall be necessary to ensure that a message is transmitted by

means of the CREST system by any particular time. In this connection,

CREST members and, where applicable, their CREST sponsors or voting

system providers are referred, in particular, to those sections of the CREST

Manual concerning practical limitations of the CREST system and timings.

The Company may treat as invalid a CREST Proxy Instruction in the

circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities

Regulations 2001.

You may not use any electronic address provided either in this Notice

of Meeting or any related documents (including the Form of Proxy) to

communicate with the Company for any purposes other than those

expressly stated.

9. Proxymity

If you are an institutional investor you may be able to appoint a proxy

electronically via the Proxymity platform, a process which has been agreed

by the Company and approved by the Registrar. For further information

regarding Proxymity, please go to www.proxymity.io. Your proxy must

be lodged by 11.00am on Friday, 16 December 2022 in order to be

considered valid. Before you can appoint a proxy via this process you

will need to have agreed to Proxymity’s associated terms and conditions.

It is important that you read these carefully, as you will be bound by them

and they will govern the electronic appointment of your proxy.

10. Corporate Members

Any corporation which is a member can appoint one or more corporate

representatives who may exercise on its behalf all of its powers as a

member provided that they do not do so in relation to the same shares.

To be able to attend and vote at the meeting, corporate representatives

will be required to produce, prior to their entry to the meeting, evidence

satisfactory to the Company of their appointment.

11. Rights to Publish Statements under Section 527 of the

Companies Act 2006

Under Section 527 of the Companies Act 2006, members meeting the

threshold requirements set out in that section have the right to require

the Company to publish on a website a statement setting out any matter

relating to:

(i) the audit of the Company’s financial statements (including the Auditor’s

Report and the conduct of the audit) that are to be laid before the AGM; or

(ii) any circumstance connected with an Auditor of the Company ceasing

to hold office since the previous meeting at which annual financial

statements and reports were laid in accordance with Section 437

of the Companies Act 2006.

The Company may not require the shareholders requesting any such

website publication to pay its expenses in complying with Sections 527 or

528 of the Companies Act 2006. Where the Company is required to place

a statement on a website under Section 527 of the Companies Act 2006,

it must forward the statement to the Company’s Auditor not later than the

time when it makes the statement available on the website. The business

which may be dealt with at the AGM includes any statement that the

Company has been required under Section 527 of the Companies Act

2006 to publish on a website.

12. Questions and Answers

Any member attending the meeting has the right to ask questions.

The Company must cause to be answered any such question relating

to the business being dealt with at the meeting but no such answer need

be given if (a) to do so would interfere unduly with the preparation for

the meeting or involve the disclosure of confidential information, (b) the

answer has already been given on a website in the form of an answer

to a question, or (c) it is undesirable in the interests of the Company

or the good order of the meeting that the question be answered.

However, where appropriate, the Chairman may offer to provide an answer

to a question after the conclusion of the AGM.

If you are unable to attend the AGM in person and have any

questions about the Annual Report, the investment portfolio or any

other matter relevant to the Company, please write to us either via

email at agm@aviglobal.co.uk or by post to AVI Global Trust PLC,

Beaufort House, 51 New North Road, Exeter, Devon, EX4 4EP.

13. Information on the Company’s Website

In accordance with Section 311A of the Companies Act 2006, the contents

of this notice of meeting and, if applicable, any members’ statements,

members’ resolutions or members’ matters of business received by the

Company after the date of this notice will be available on the Company’s

website www.aviglobal.co.uk.

14. Display Documents

None of the Directors has a contract of service with the Company.

Copies of the Letters of Appointment of the Directors will be available for

inspection at the registered office of the Company during usual business

hours on any weekday (except weekends and public holidays) until the

date of the meeting and at the place of the meeting for a period of

15 minutes prior to and during the meeting.

15. Electronic Address

Any electronic address provided either in this notice or in any related

documents (including the Form of Proxy) may not be used to communicate

with the Company for any purposes other than those expressly stated.

AVI Global Trust plc Annual Report 2022

101GIR FS OR SISR

Dividends

Shareholders who wish to have dividends paid directly into a bank

account rather than by cheque to their registered address can complete

a mandate form for the purpose. Mandate forms may be obtained from

Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99

6DA on request or downloaded from Equiniti’s website www.shareview.com.

The Company operates the BACS system for the payment of dividends.

Where dividends are paid directly into shareholders’ bank accounts, dividend

tax vouchers are sent to shareholders’ registered addresses.

Share Prices

The Company’s Ordinary Shares are listed on the London Stock

Exchange under ‘Investment Trusts’. Prices are published daily in

The Financial Times, The Times, The Daily Telegraph, The Scotsman

and The Evening Standard.

Change of Address

Communications with shareholders are mailed to the last address held



Equiniti Limited at the address given above, under the signature of the

registered holder.

Daily Net Asset Value

The net asset value of the Company’s shares can be obtained by

contacting Customer Services on 0845 850 0181 or via the website:

www.aviglobal.co.uk.

Provisional Financial Calendar 2022/2023

20 December 2022 Annual General Meeting

3 January 2023 Final dividend paid on Ordinary Shares

May 2023 Announcement of half year results

June 2023 Interim dividend paid on Ordinary Shares

November 2023 Announcement of annual results

November 2023 Posting of Annual Report

December 2023 Annual General Meeting

Shareholder Information / Shareholder Information

102

AVI Global Trust plc Annual Report 2022

AIFM

The AIFM, or Alternative Investment Fund Manager, is Asset Value Investors, which manages the portfolio on behalf of AGT shareholders. The current

approach to investment used by Asset Value Investors was adopted in June 1985.

NAV total return since inception of strategy in June 1985 (annualised)

30 September

2022

30 September

2021

Closing NAV per share (p) 30 September 2022 199.76 218.76 a

Dividends paid out (p) 42.20 38.90 b

Benefits from re-investing dividends (p) 96.13 106.97 c

Adjusted NAV per share (p) 338.08 364.63 d = a + b + c

Opening NAV per share (p) – June 1985 5.94 5.94 e

Annualised NAV total return (%) 11.4% 12.0% ((d/e) ^ (1/37.25)) - 1

Closing adjusted NAV 338.08 364.63

Alternative Performance Measure (APM)

An APM is a numerical measure of the Company’s current, historical or future financial performance, financial position or cash flows, other than a financial

measure defined or specified in the applicable financial framework. In selecting these Alternative Performance Measures, the Directors considered the

key objectives and expectations of typical investors in an investment trust such as the Company.

Comparator Benchmark

The Company’s Comparator Benchmark is the MSCI All Country World ex-US Total Return Index, expressed in Sterling terms. The benchmark is

an index which measures the performance of global equity markets, both developed and emerging. The weighting of index constituents is based

on their market capitalisation.

Dividends paid by index constituents are assumed to be reinvested in the relevant securities at the prevailing market price. The Investment Manager’s

investment decisions are not influenced by whether a particular company’s shares are, or are not, included in the benchmark. The benchmark is used

only as a yard stick to compare investment performance.

Cost

The book cost of each investment is the total acquisition value, including transaction costs, less the value of any disposals or capitalised distributions

allocated on a weighted average cost basis.

Currency

GBP EUR USD SEK JPY NOK CHF HKD BRL RON INR

Pounds

Sterling

Euro US Dollar Swedish

Krona

Japanese

Yen

Norwegian

Krone

Swiss Franc Hong Kong

Dollar

Brazilian

Real

Romanian

Lei

Indian

Rupee

Discount/Premium (APM)

If the share price is lower than the NAV per share, it is said to be trading at a discount. The size of the Company’s discount is calculated by subtracting

the share price of 179.00p (2021: 204.00p*) from the NAV per share (with debt at fair value) of 199.8p (2021: 218.8p*) and is usually expressed

as a percentage of the NAV per share, 10.4% (2021: 6.7%). If the share price is higher than the NAV per share, this situation is called a premium.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA)

A proxy for the cash flow generated by a business – it is most commonly used for businesses that do not (yet) generate operating or shareholder profits.

Gearing (APM)

Gearing refers to the ratio of the Company’s debt to its equity capital. The Company may borrow money to invest in additional investments for its portfolio.

If the Company’s assets grow, the shareholders’ assets grow proportionately more because the debt remains the same. But if the value of the Company’s

assets falls, the situation is reversed. Gearing can therefore enhance performance in rising markets but can adversely impact performance in falling markets.

Using debt at par value, the gross gearing of 12.7% (2021: 11.7%) represents borrowings of £122,893,000 (2021: £132,520,000) expressed as a

percentage of shareholders’ funds of £969,508,000 (2021: £1,133,222,000). Using debt at fair value, gross gearing is 11.3% (2021: 13.3%).

Net gearing, which accounts for cash balances and uses debt at par value, is 1.7% (2021: 5.5%). Using debt at fair value, net gearing is 0.5% (2021: 7.0%).

Shareholder Information / Glossary

* Restated for Share Split.

AVI Global Trust plc Annual Report 2022

103GIR FS OR SISR

Gearing (APM) continued

The gross and net gearing reconciliation calculations are provided below:

Gross Gearing (Debt at Par) 2022 2021

Debt -122,893,000 -132,519,573 a

NAV 969,508,000 1,133,222,163 b

Gross Gearing 12.7% 11.7% =a/b

Net Gearing (Debt at Par) 2022 2021

Assets (inc. Cash) 114,849,611 72,989,679 c

Liabilities -8,880,079 -2,357,964 d

Net -16,923,468 -61,887,858 e=a+c+d

Net Gearing 1.7% 5.5% =e/b

Gross Gearing (Debt at Fair) 2022 2021

Debt -110,649,000 -148,819,000 a

NAV 981,752,000 1,116,923,000 b

Gross Gearing 11.3% 13.3% =a/b

Net Gearing (Debt at Fair) 2022 2021

Assets (inc. Cash) 114,849,611 72,989,679 c

Liabilities -8,880,079 -2,357,964 d

Net -4,679,468 -78,187,285 e=a+c+d

Net Gearing 0.5% 7.0% =e/b

The current values of the Loan Notes and revolving credit facility consist of the following:

30 September 2022 30 September 2021

JPY

revolving JPY

2036 2036 2037 credit 2032 2036 2036 2037 revolving

GBP loan EUR loan EUR loan facility JPY loan Total GBP loan EUR loan EUR loan credit facility Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Value of issue 30,000 22,962 17,526 – 49,516 120,004 30,000 22,962 17,526 61,201 131,689

Unamortised issue costs (87) (66) (105) – (179) (437) (94) (71) (113) – (278)

Exchange movement – 3,339 9 – (22) 3,326 – 2,824 (335) (1,380) 1,109

Amortised book cost 29,913 26,235 17,430 – 49,315 122,893 29,906 25,715 17,078 59,821 132,520

Fair value 25,127 22,668 14,214 – 48,640 110,649 36,519 31,779 20,700 59,821 148,819

Redemption costs 4,899 7,144 5,016 – (2,124) 14,935 5,167 6,547 4,804 – 16,518

Redemption value 30,026 29,812 19,230 – 46,516 125,584 41,686 38,326 25,504 59,821 165,337

The fair values of the Loan Notes are calculated using net present values of future cash flows and the yields, taking account of exchange rates.

The redemption value includes the penalty payable on early redemption.

Internal Rate of Return (IRR)

The IRR is the annualised rate of return earned by an investment, adjusted for dividends, purchases and sales, since the holding was first purchased.

Net Asset Value (NAV)

The NAV is shareholders’ funds expressed as an amount per individual share. Shareholders’ funds are the total value of all the Company’s assets, at

current market value, having deducted all liabilities including debt at amortised cost revalued for exchange rate movements. The total NAV per share

is calculated by dividing shareholders’ funds of £969,508,000 (2021: £1,133,222,000) by the number of Ordinary Shares in issue excluding Treasury

Shares of 491,451,568 (2021: 510,566,625*) at the year end.

Shareholder Information / Glossary continued

* Restated for Share Split.

104

AVI Global Trust plc Annual Report 2022

Net Asset Value (debt at fair value) (APM)

The adjusted NAV per share (debt at fair value) incorporates the debt at fair value instead of at amortised cost, increasing the NAV by £12,244,000

(2021: £16,298,000 decrease). This is calculated by the original NAV of £969,508,000 (2021: £1,133,222,000) less the debt at amortised cost

£122,893,000 (2021: £72,699,000), adding back the debt at fair value £110,649,000 (2021: £88,998,000). The adjusted NAV (debt at fair value)

is £957,264,000 (2021: £1,116,924,000) divided by the number of Ordinary Shares in issue excluding Treasury Shares of 491,451,568 (2021:

510,566,625*) at the year end provides the adjusted NAV per share (debt at fair value).

Ongoing Charges Ratio / Expense Ratio (APM)

As recommended by the AIC in its current guidance, the Company’s Ongoing Charges Ratio is the sum of: (a) its Expense Ratio; and (b) the Ongoing

Charges Ratios incurred at the underlying funds in which the Company has investments, weighted for the value of the investment in each underlying fund

as a percentage of the Company’s NAV. For a detailed discussion of the Expense Ratio, please see the discussion of Key Performance Indicators on

page 12 of the Annual Report.

The Company’s Expense Ratio is its annualised expenses (excluding finance costs and certain non-recurring items) of £9,577,000 (2021: £8,820,000)

(being investment management fees of £7,650,000 (2021: £7,126,000) and other expenses of £2,594,000 (2021: £1,735,000) less non-recurring

expenses of £667,000 (2021: £41,000)) expressed as a percentage of the average month-end net assets of £1,089,555,000 (2021: £1,058,575,000)

during the year as disclosed to the London Stock Exchange.

A reconciliation of the Ongoing Charges to the Expense Ratio is provided below:

30 September 30 September

2022 2021

Expense Ratio (a Key Performance Indicator) a 0.88% 0.83%

Underlying Charges Ratio b 1.34% 1.27%

Ongoing Charges Ratio = a + b 2.22% 2.10%

% of investee company

AGT’s economic exposure to each investee company, as estimated by AVI.

Return on Investment (ROI)

The ROI is the total profits earned to date on an investment divided by the total cost of the investment.

Shares Bought Back

The Company may repurchase its own shares, reducing the freely traded shares ranking for dividends and enhancing returns and earnings per Ordinary

Share to the remaining shareholders. When the Company repurchases its shares, it does so at a total cost below the prevailing NAV per share.

The estimated percentage added to NAV per share from buybacks of 0.4% (2021: 0.3%) is derived from the repurchase of shares in the market at a

discount to the prevailing NAV at the point of repurchase. The shares were bought back at a weighted average discount of 10.3% (2021: 8.2%).

30 September 30 September

2022 2021

Weighted average discount of buybacks 10.3% 8.2% a

Percentage of shares bought back 3.7% 3.3% b

NAV accretion from buyback 0.4% 0.3% (a * b) / (1 – b)

Total Assets

Total assets include investments, cash, current assets and all other assets. An asset is an economic resource, being anything tangible or intangible that

can be owned or controlled to produce positive economic value. The total assets less all liabilities is equivalent to total shareholders’ funds.

Total Return (APM)

Total return statistics enable the investor to make performance comparisons between investment trusts with different dividend policies. The total return

measures the combined effect of any dividends paid, together with the rise or fall in the share price or NAV. This is calculated by the movement in the

NAV or share price plus dividend income reinvested by the Company at the prevailing NAV or share price.

NAV Total Return (APM)

NAV total return is calculated by assuming that dividends paid out are re-invested into the NAV on the ex-dividend date. This is accounted for in the

“benefits from re-investing dividends” line. The NAV used here includes debt marked to fair value and is inclusive of accumulated income.

Where an “annualised” figure is quoted, this means that the performance figure quoted is not a standard one-year figure, and therefore has been

converted into an annual return figure in order to ease comparability. For example, if AGT’s NAV increased by +100% over a ten-year period, this would

become an annualised NAV return of 7.2%.

* Restated for Share Split.

AVI Global Trust plc Annual Report 2022

105GIR FS OR SISR

NAV Total Return (APM) continued

NAV total return over 1 year

30 September 30 September

Page 2022 2021

Closing NAV per share (p) 199.76 218.76 a

Dividends paid out (p) 75 3.30 3.30 b

Benefits from re-investing dividends (p) -0.23 0.50 c

Adjusted NAV per share (p) 202.83 222.56 d = a+b+c

Opening NAV per share (p) 218.76 163.41 e

NAV total return (%) -7.3% 36.2% = (d/e)-1

Closing adjusted NAV 202.83 222.56

NAV total return over 10 years (annualised)

Closing NAV per share (p) – September 2022 199.76 218.76 a

Dividends paid out (p) 28.24 28.24 b

Benefits from re-investing dividends (p) 15.69 21.72 c

Adjusted NAV per share (p) 243.69 268.73 d = a + b + c

Opening NAV per share (p) – 30 September 2012 99.64 92.07 e

Annualised NAV total return (%) 9.4% 11.3% ((d/e) ^ (1/10)) - 1

Closing adjusted NAV 243.69 268.73 e

Share Price Total Return (APM)

Share price total return is calculated by assuming that dividends paid out are re-invested into new shares on the ex-dividend date. This is accounted for

in the “benefits from re-investing dividends” line.

Share price total return over 1 year

30 September 30 September

Page 2022 2021

Closing price per share (p) 179.00 1,020.00 a

Dividends paid out (p) 75 3.30 16.500 b

Benefits from re-investing dividends (p) -0.27 2.64 c

Adjusted price per share (p) 182.03 1,039.14 d = a+b+c

Opening price per share (p) 204.00 741.00 e

Share price total return (%) -10.8% 40.2% = (d/e)-1

Treasury share

When a share is bought back it may be cancelled immediately or held (at zero value) as a Treasury Share. Shares that are held in treasury can be

reissued for cash at minimal cost. The Company will only reissue shares from treasury at a price at or above the prevailing NAV per share.

Total Return Swap

A total return swap is a financial contract between two parties, whereby each party agrees to “swap” a series of payments. AGT has previously entered

into a swap on Pershing Square Tontine Holdings ‘PSTH’ with a well-known investment bank. Effectively, AGT was paid the total return on PSTH, and

in return agreed to pay a series of floating-rate interest payments to the investment bank.

Weight

Weight is defined as being each position’s value as a percentage of net assets.

Weighted-average Discount (APM)

The weighted-average discount is calculated as being the sum of the products of each holding’s weight in AGT’s portfolio times its discount.

AVI calculates an estimated sum-of-the-parts NAV per share for each holding in AGT’s portfolio. This NAV is compared with the share price of the holding

in order to calculate a discount.

Weighted Average Shares (APM)

The weighted average shares outstanding is calculated by multiplying the outstanding number of shares after each share issue and buy back of

shares during the year with the time weighted portion. The total of the weighted average of shares in issue excluding Treasury shares during the year

is 503,274,200 adjusted for the share split.

Shareholder Information / Glossary continued

106

AVI Global Trust plc Annual Report 2022

Directors

Susan Noble (Chairman)

Anja Balfour

Neil Galloway

Graham Kitchen

Calum Thomson

Secretary

Link Company Matters Limited

Beaufort House

51 New North Road

Exeter

Devon EX4 4EP

Tel: 01392 477500

Registered Office

Beaufort House

51 New North Road

Exeter

Devon EX4 4EP

Registered in England & Wales

No. 28203

Investment Manager and AIFM

Asset Value Investors Limited

2 Cavendish Square

London W1G 0PU

Registrar and Transfer Office

Equiniti Limited

Aspect House

Spencer Road

Lancing

West Sussex BN99 6DA

Registrar’s Shareholder Helpline

Tel. 0371 384 2490

Lines are open 8.30am to 5.30pm,

Monday

to Friday.

Registrar’s Broker Helpline

Tel. 0906 559 6025

Calls to this number cost £1 per minute

from a BT landline, other providers’ costs

may vary. Lines are open 8.30am to 5.30pm,

Monday to Friday.

Corporate Broker

Jefferies Hoare Govett

100 Bishopsgate

London EC2N 4JL

Auditor

KPMG LLP

Saltire Court

20 Castle Terrace

Edinburgh

EH1 2EG

Depositary

J.P. Morgan Europe Limited

25 Bank Street

London E14 5JP

Banker and Custodian

JPMorgan Chase Bank NA

125 London Wall

London EC2Y 5AJ

HOW TO INVEST

AGT is a closed-ended investment trust with shares listed on the

London Stock Exchange and part of the FTSE 250 index. Shares

in AGT can be bought directly on the London Stock Exchange or

through platforms.

Shareholder Information / Company Information

Design and Production

www.carrkamasa.co.uk

For more information visit:

www.aviglobal.co.uk

AVI Global Trust plc Annual Report 2022

107GIR FS OR SISR