TIDMWKOF 
 
WEISS KOREA OPPORTUNITY FUND LTD. 
LEI 213800GXKGJVWN3BF511 
(Classified Regulated Information, under DTR 6 Annex 1 section 1.1) 
 
The following replaces the RNS 'Annual Financial Report' announcement released 
on 30 April 2020 at 07:00 
 
The statement in the Report of the Directors: "The Board expects to declare an 
interim dividend on 1 May 2020 with a record date on 11 May 2020 for the year 
ended 31 December 2019 based on dividends received primarily from investments 
in South Korean preferred shares." has been replaced to read: "The Board 
expects to declare an interim dividend on 13 May 2020 with a record date on 22 
May 2020 for the year ended 31 December 2019 based on dividends received 
primarily from investments in South Korean preferred shares." 
 
The change has been marked with an asterisk.  All other information remains 
unchanged.  The updated version of the announcement is below: 
 
ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS 
 
FOR THE YEARED 31 DECEMBER 2019 
 
Weiss Korea Opportunity Fund Ltd. (the "Company") has today, released its 
Annual Financial Report for the year ended 31 December 2019. The Report will 
shortly be available for inspection via the 
Company's website www.weisskoreaopportunityfund.com. 
 
For further information, please contact: 
 
N+1 Singer 
James Maxwell - Nominated Adviser      +44 20 7496 3000 
James Waterlow - Sales 
 
Northern Trust International Fund 
Administration Services (Guernsey) 
Limited                                +44 1481 745385 
Samuel Walden 
 
Summary Information 
 
The Company 
Weiss Korea Opportunity Fund Ltd. ("WKOF" or the "Company") was incorporated 
with limited liability in Guernsey, as a closed-ended investment company on 12 
April 2013. The Company's Shares were admitted to trading on the Alternative 
Investment Market ("AIM") of the London Stock Exchange (the "LSE") on 
14 May 2013. 
 
The Company is managed by Weiss Asset Management LP (the "Investment Manager"), 
a Boston-based investment management company registered with the Securities and 
Exchange Commission in the United States of America. 
 
Investment Objective and Dividend Policy 
The Company's investment objective is to provide Shareholders with an 
attractive return on their investment, predominantly through long-term capital 
appreciation. The Company is geographically focussed on South Korean companies. 
Specifically, the Company invests primarily in listed preferred shares issued 
by companies incorporated in South Korea, which in many cases trade at a 
discount to the corresponding common shares of the same companies. Since the 
Company's Admission to AIM, the Investment Manager has assembled a portfolio of 
South Korean preferred shares that it believes are undervalued and could 
appreciate based on the criteria that it selects. The Company may, in 
accordance with its investment policy, also invest some portion of its assets 
in other securities, including exchange-traded funds, futures contracts, 
options, swaps and derivatives related to Korean equities, and cash and cash 
equivalents. The Company does not have any concentration limits. 
 
The Company intends to return to Shareholders all dividends received, net of 
withholding tax, on an annual basis. 
 
Investment Policy 
The Company is geographically focused on South Korean companies. Some of the 
considerations that affect the Investment Manager's choice of securities to buy 
and sell may include the discount at which a preferred share is trading 
relative to its respective common share, its dividend yield, its liquidity, and 
the weighting of its common share (if any) in the MSCI Korea 25/50 Net Total 
Return Index (the "Korea Index"), among other factors. Not all of these factors 
will necessarily be satisfied for particular investments. The Investment 
Manager does not generally make decisions based on corporate fundamentals or 
its view of the commercial prospects of an issuer. Preferred shares are 
selected by the Investment Manager at its sole discretion, subject to the 
overall control of the board of directors of the Company (the "Board"). 
 
The Company purchased certain credit default swaps on the sovereign debt of 
South Korea and put options on iShares MSCI South Korea as general market and 
portfolio hedges, but generally did not hedge its exposure to interest rates or 
foreign currencies during the year ended 31 December 2019 (2018: Nil). Please 
see additional information about the nature of these hedges in the Investment 
Manager's Report within. 
 
Realisation Opportunity 
In accordance with the Company's Articles of Incorporation and its Admission 
Document, the Company offered all Shareholders the right to elect to realise 
some or all of the value of their Ordinary Shares (the "Realisation 
Opportunity"), less applicable costs and expenses, on or prior to the fourth 
anniversary of Company's admission to AIM and, unless it has already been 
determined that the Company be wound-up, every two years thereafter, the most 
recent being 15 May 2019 (the "Realisation Date") and the next Realisation Date 
taking place in May 2021. See Note 18 for further details. 
 
On 20 March 2019, the Company announced that pursuant to the Realisation 
Opportunity, Shareholders who were on the register as at the record date could 
elect, during the Election Period, to redesignate all or part of their Ordinary 
Shares as Realisation Shares. The Election Period commenced on 15 April 2019 
and closed on 8 May 2019. Elections were received from shareholders totalling 
of 2,747,153 Ordinary Shares, representing 3.3 per cent of the Company's issued 
share capital. 
 
Following the Realisation Date, the Ordinary Shares held by the Shareholders 
who elected for Realisation were redesignated as Realisation Shares and the 
Portfolio was split into two separate and distinct Pools, namely the 
Continuation Pool (comprising the assets attributable to the continuing 
Ordinary Shares) and the Realisation Pool (comprising the assets attributable 
to the Realisation Shares). 
 
Share Buybacks 
In addition to the Realisation Opportunity, the Company has authority to 
repurchase on the open market up to 40 percent of its outstanding Ordinary 
Shares. During the year ended 31 December 2019, the Company purchased none 
(2018: Nil) of its own Shares at a consideration of GBPNil (31 December 2018: GBP 
Nil) under its general buyback authority. 
 
For additional information on Share buybacks refer to Note 18. 
 
Shareholder Information 
Northern Trust International Fund Administration Services (Guernsey) Limited 
(the "Administrator") is responsible for calculating the Net Asset Value 
("NAV") per Share of the Company. The unaudited NAV per Ordinary Share is 
calculated on a weekly basis and at the month end by the Administrator, and is 
announced by a Regulatory News Service and is available through the Company's 
website www.weisskoreaopportunityfund.com. 
 
Company financial highlights and performance summary for the year ended 31 
December 2019 
 
                                                               As at              As at 
 
                                                    31 December 2019   31 December 2018 
 
                                                                   GBP                  GBP 
 
Total Net Assets                                         126,988,732        126,489,595 
 
NAV per share                                                 1.5559             1.4993 
 
Basic and diluted earnings/(loss) per                         0.0960           (0.3780) 
share 
 
Mid-Market Share price                                          1.50               1.47 
 
Premium/(discount) to NAV*                                    (3.6%)             (2.0%) 
 
As at close of business on 21 April 2020, the latest published NAV per Share 
had decreased to GBP1.4055 (as at 24 April 2020) and the Share price stood at GBP 
1.27. 
 
*The amount by which the market value exceeds or is less than the face value of 
a stock. 
 
Total expense ratio 
The annualised total expense ratio for the year ended 31 December 2019 was 1.85 
per cent (31 December 2018: 1.89 per cent). The annualised total expense ratio 
includes charges paid to the Investment Manager and other expenses divided by 
the average NAV for the year. See Note 10 for details of such expenses. 
 
Chairman's Review 
Year to 31 December 2019 
 
We are pleased to provide the 2019 Annual Report on the Company. During the 
period from 
31 December 2018 to 31 December 2019 (the "Period"), the Company's NAV 
increased by 6.7 per cent, [1] outperforming the reference MSCI Korea 25/50 Net 
Total Return Index (the "Korea Index"), which increased 4.8 per cent in pounds 
sterling. Since the admission of the Company to AIM in May 2013, the NAV has 
increased by 73.4 per cent including reinvested dividends, [2] or 72.4 per cent 
assuming dividends are not reinvested in the Company, compared to the Korea 
Index returns of 44.3 per cent [3]. A report from the Investment Manager 
follows. 
 
As described in the circular to Shareholders published on 20 March 2019, the 
Company made available its second Realisation Opportunity enabling Shareholders 
to elect to realise all, or a part, of their shareholding.[4] Realisation 
opportunities are now scheduled to occur every two years on or about the 
anniversary of the Company's listing. We are pleased to offer this feature to 
our investors, and proud to note that it has been copied elsewhere in the 
market as a model of good corporate governance. 
 
The Directors declared a dividend of 4.1195 pence Sterling per share, 
Ex-Dividend Date 9 May 2019, to distribute the income received by the Company 
in respect of the year ended 31 December 2018. This dividend was paid to all 
Shareholders on 31 May 2019 regardless of any election made under the 
Realisation Opportunity. 
 
In addition to the Realisation Opportunity, the Company has an active share 
repurchase program as part of its discount management strategy. As the Company 
traded at a narrow discount or premium to NAV during the first half of 2019, 
there were no share repurchases during the Period. The Board is authorised to 
repurchase up to 40 per cent of the Company's outstanding Ordinary Shares in 
issue as at 25 July 2019.[5] Since Admission almost six years ago, and as at 
the date of this document, the Company has repurchased, at a discount to NAV, 
12,590,250 Ordinary Shares of the original 105,000,000 Ordinary Shares issued 
at Admission. The Board also has in place standing instructions with the 
Company's broker, N+1 Singer Advisory LLP, for the repurchase of the Company's 
Shares during closed periods when the Board is not permitted to give individual 
instructions; such closed periods typically occur around the preparation of the 
Annual and Half Yearly Financial Reports. The Board intends to continue to 
aggressively repurchase Shares if the Company's shares are trading at a 
significant discount to NAV. We will continue to keep Shareholders informed of 
any share repurchases through public announcements. 
 
In early March the spread of COVID-19 in South Korea was exponential and 
alarming. The country quickly recorded several thousand cases and the largest 
outbreak outside of China. Currently, nearly 11,000 cases and 250 deaths have 
been reported. At the same time, the rate of new infections has substantially 
declined over that period, from a high of over 800 per day at the end of 
February to less than 20 per day at the end of April. It appears, at this time, 
that the government's swiftly implemented containment policies, that included 
mass testing within infection cluster areas, have been effective at abating the 
spread of the virus. That being said, significant uncertainty about containment 
remains, and there will likely be a substantial disruption to both the supply 
and demand side of the Korean economy. 
 
If you would like to speak with the Investment Manager or learn about potential 
opportunities to meet with them, please contact the Company's broker, N+1 
Singer. I would like to thank Shareholders for their support and look forward 
to the continued success of the Company in the future. 
 
Finally, I would like to congratulate Dr Andrew Weiss for the extraordinary 
recognition his charitable work received in 2019. It is not widely known, but 
for many years Andrew has been making charitable donations through his own 
foundation to improve the lives of poor people in poor countries, and one 
aspect of that has been to fund development research through the Weiss Fund for 
Research in Development Economics. As you would expect, the charity prides 
itself on its efficiency and making every dollar count. His work has achieved 
unusual recognition. The joint winners of the 2019 Nobel Prize for Economics, 
Abhijit Banerjee, Esther Duflo, and Michael Kremer, decided to donate their 
prize money of almost $1m to the Weiss Fund. [6] Congratulations to Andrew and 
his wife Bonnie for their efforts and contributions over many years. 
 
Norman Crighton 
Chairman 
28 April 2020 
 
[1] This return includes the annual cash dividend paid to the Company's 
Shareholders but does not assume such dividends are reinvested. 
 
[2] This return includes all dividends paid to the Company's Shareholders and 
assumes that these dividends were reinvested in WKOF shares at the next date 
for which the Company reports a NAV, at the NAV for that date. 
 
[3] MSCI total return indices are calculated as if any dividends paid by 
constituents are reinvested at their respective closing prices on the ex-date 
of the distribution. 
 
[4] On 8 May 2019, the Election Period for the Realisation Opportunity closed; 
valid elections were received from Shareholders totalling 2,747,153 Ordinary 
Shares, representing approximately 3.3 per cent. of the Company's issued share 
capital. On 15 May 2019, these electing Ordinary Shares were redesignated as 
Realisation Shares, and on 18 June 2019 a full cash redemption was paid out to 
holders of Realisation Shares, and the shares were cancelled. None of the 
Directors and personnel associated with the Investment Manager participated in 
the Realisation Opportunity in respect of all, or any part of, their respective 
shareholdings. Indeed, certain personnel associated with the Investment Manager 
acquired additional shares during the Period. 
 
[5]  On 25 July 2019, the Company had 81,617,828 Ordinary Shares in issue. 
 
[6] Further information can be found in a press release here: https:// 
economics.harvard.edu/news/ 
2019-economics-laureates-donate-nobel-prize-money-invest-next-generation-development 
 
Investment Manager's Report 
For the year ended 31 December 2019 
 
Performance 
In 2019, the Company's NAV gained 6.7 per cent, outperforming the reference 
MSCI South Korea Index [1] (GBP) ("the Index"), which returned 4.8 per cent in 
pounds sterling. From its inception in May 2013, the Company has significantly 
outperformed the Korean market. The total return to an investor in the Company 
since inception was 73.4 per cent [2] including reinvested dividends, or 72.4 
per cent assuming dividends are not reinvested in the Company, compared to 
returns of 45.4 per cent for the Korea Index over the same period. 
 
The outperformance against the Index for 2019 was largely due to discount 
narrowing of preferred shares owned, which contributed 4.9 per cent of the 6.7 
per cent NAV performance as described in the table below. The Company generally 
had less favourable weightings to positive and negative performing sectors than 
the Index. In other words, a portfolio composed of the corresponding common 
shares of equal market value to the preference shares the Company owns would 
have underperformed the index by 3.7 per cent. However, the largest detractor 
from performance, as measured in GBP Sterling, was GBP's 7.2 per cent 
appreciation against the Korean Won ("KRW") over the year. The Company 
generally does not hedge currencies. 
 
Return Attribution Component                             Trailing 12 month Attribution 
 
MSCI South Korea Index (KRW) [3]                                     12.9% 
 
WKOF Common Shares vs Korea Index (KRW) [4]                          -3.7% 
 
Discount Narrowing of Preferred Shares Owned                         4.9% 
 
Excess Dividend Yield of Preferred Shares Owned [5]                  0.7% 
 
Currency (KRW vs. GBP)                                               -7.2% 
 
Fees & Expenses                                                      -1.9% 
 
Other                                                                1.0% 
 
NAV Performance                                                      6.7% 
 
Korea as an Investment 
The broader Korean equity market rebounded in 2019 following a dismal 2018. 
However, no export reliant economy was spared its share of fallout from the 
US-China trade war during the year, and South Korea suffered more than most. 
Sales to the US and China account for approximately 40 per cent of Korea's 
export value, and by year-end, total South Korean exports had fallen by 10.3 
per cent, year over year. Heightened tensions between Korea and Japan over war 
reparations, and Japanese restrictions on Korean exports, resulted in yet more 
bad news for Korean trade. Toward year end, tensions decreased on both fronts. 
In November, Korea reversed a threat made earlier in the year to terminate the 
military intelligence sharing pact between the two countries, followed in 
December by Japan partially reversing recently levied export restrictions on 
raw materials crucial for semiconductor production to Korea. Despite the global 
easing of trade tensions, we remain cautious about future developments in this 
space. 
 
In addition to the potential for further political vicissitudes, demand for 
semiconductors and memory technology is changing. Approximately three quarters 
of the world's market share for Dynamic Random Access Memory ("DRAM") chips is 
held by two Korean manufacturers - Samsung Electronics and SK Hynix - while 
semiconductors comprise approximately 20 per cent of South Korea's exports by 
value. 2017 and 2018 were particularly good years for the semiconductor and 
memory industry, resulting from a pricing "supercycle" driven by increased 
demand and lagging supply for DRAM and NAND memory. Much of this excess demand 
subsided in the second half of 2018 and 2019, as new capacity caught up and 
prices mean reverted. In turn, overseas sales of semiconductors declined by 
nearly 18 per cent year over year from 2018. 
 
Where does this leave us? From a valuation perspective, South Korea looks cheap 
in absolute and relative value terms. Valuations for South Korean companies 
continue to lag global peers. As of 31 December 2019 the price-to-book ratio 
for the KOSPI 200 was 0.9x, while the MSCI All-Country World Index's price to 
book ratio is approximately 2.4x. For an investor in the Company, which has a 
portfolio of preferred shares with a weighted average discount of 42.6 per cent 
to common shares, the implied price to book ratio of the portfolio is a mere 
0.4x (for a portfolio of preferred shares comprised of the corresponding common 
shares owned by the Company the price to book ratio was 0.8x). We continue to 
believe that preferred shares offer an excellent risk/reward investment 
opportunity that is levered both to the fundamentals of the South Korean 
economy and improved corporate governance over time. 
 
COVID-19 
It is difficult for us to predict the full effects of COVID-19 at this time. 
Clearly, COVID-19 hurts both global aggregate demand and aggregate supply, and 
we are keeping a close eye on the virus developments in Korea, as well as its 
impacts to the supply chain of our portfolio investments. On the other hand, 
the recent decline in oil prices should generally benefit South Korea, a large 
importer of oil and liquid natural gas, and many Korean industries utilize oil 
as a raw material. It remains to be seen which one of these effects (COVID-19 
vs lower oil prices) will dominate over the long term, and admittedly, we would 
not place high confidence in our estimates of the macro picture three months 
from now. There is considerable uncertainty whether the global pandemic can be 
contained and stabilized during the upcoming summer months. 
 
Increased Shareholder Engagement 
We have continuously maintained that corporate governance improvements tend to 
carry a general pattern of "two steps forward, one step back." True to this 
idiom, in 2019, we observed clear improvements in corporate governance 
standards in Korea, as well as disappointments. It's noteworthy that Korea's 
Stewardship Code ("the Code") that sets forth "Principles on the Stewardship 
Responsibilities of Institutional Investors" continues to garner signatories 
from domestic and foreign asset managers, expanding from 100 signatories in 
July 2019 to 124 at the time of writing. One area where Korea has improved 
significantly since the establishment of the Code is in shareholder engagement. 
 
Both large institutional investors such the National Pension Service ("NPS") 
and small asset managers have been more determined to publicly challenge 
management policies deemed detrimental to shareholder value. Post the adoption 
of the Code there has been an increased proxy vote dissent rate amongst local 
and foreign asset managers from 2.8 per cent to 5.4 per cent. 
 
As described more fully in the Semi-annual report, NPS engagement with company 
management has yielded mixed results, but it has certainly become more 
frequent. NPS asked LG Electronics to increase its dividend payout ratio, and 
during 2019 the company announced an 87 per cent increase to its dividend 
payout; NPS voted against the re-election of the Korean Air Lines chairman, the 
first time NPS has voted against the re-election of a Chaebol head, and the 
Chairman was removed. NPS also pressured Namyang Dairy Products Co Ltd 
("Namyang") to install a dividend committee after also pushing the company to 
increase its dividend payout ratio - ultimately NPS was rebuffed by Namyang. On 
the other hand, NPS' support for Hyundai Motor Co's dividend proposals over 
those of Elliott Management was disappointing, but not unexpected (as both 
major proxy advisory firms ISS and Glass Lewis, also recommended voting in 
favor of the company's proposals). 
 
Separately, no less than 8 domestic and foreign asset managers this year have 
been pressuring their portfolio companies for change and improved governance. 
 
The increased number of shareholder engagements with Korean companies 
reinforces our view that corporate governance in Korea continues to improve 
over time. We reiterate our belief that long run improved corporate governance 
will not only lead to the narrowing of the discount of securities in the 
portfolio, but also add value to the common shares underlying the portfolio's 
preferred shares. At the same time, we don't expect drastic changes to 
corporate governance overnight, and we anticipate short term setbacks, as seen 
in cases where shareholder engagement did not lead to a material change in 
dividends or capital allocation. 
 
Regulatory Changes 
From a regulatory perspective, the Korean Financial Services Commission ("FSC") 
announced that mandatory corporate governance disclosures would be required 
annually for companies with assets greater than 2 trillion KRW (and expected to 
be required for all companies by 2021). Such disclosure will provide 
shareholders with greater transparency into the shareholder base, composition 
of management, the board, internal committees within the board, outside 
directors and detail the appointment of the audit committee and external 
auditor - in turn this information will be disclosed to the public. 
 
The FSC is also cognizant of the need to clarify standards of engagement for 
passive funds. Currently, any investor with an ownership percentage greater 
than 5 per cent of a listed company must announce whether it would like to 
exercise management control ("active") or simply seek investment returns 
("passive"). The stated investment purpose affects the required type, 
formality, and frequency of mandatory shareholder reporting, and investors that 
declare an active stake are subject to more stringent reporting 
responsibilities. For example, active investors holding more than 10 per cent 
of a company are subject to a short-swing profits disgorgement for sales made 
within sixth months of their stock acquisition. 
 
In a development that reflects U.S. regulatory reporting standards, the FSC is 
contemplating creating a new investment purpose category to explicitly allow 
passive investors to engage with management without declaring an investment to 
be "active." The new investment purpose category would be suitable for 
institutional investors who have no intention of obtaining management control, 
but want to pursue active shareholder activities, such as proposals regarding 
dividend payouts. In a similar vein, the FSC is considering abolishing the 
above-mentioned short swing profit rule for 10 per cent holders in order to 
encourage more management engagement amongst pension funds. We believe this 
development would be a meaningful step forward for shareholder rights and 
should increase the pressure on companies to raise their dividend payouts, 
which in turn would be a particular benefit to investors holding preferred 
shares at a discount to the corresponding common shares. 
 
New Preferred Share Issuances 
Following CJ Corp's issuance of a new convertible preferred share in late 2018, 
Amorepacific Group conducted a similar issue in 2019. In both cases the new 
preferred shares convert into the corresponding common share in ten years' 
time. 
 
The CJ preferred share issue carried similar economic and legal rights as a 
typical preferred share in Korea, as well as the right to receive the common 
share dividend plus two percent of par value. These new CJ preferred shares 
listed on the Korean Stock Exchange in August on the back of a bonus issue, 
initially trading at a discount of around 30 per cent to common shares. In the 
case of Amorepacific Group ("Amorepacific") it was a pre-emptive rights 
offering, providing existing shareholders the right to subscribe to a new issue 
of preferred shares convertible into common shares of Amorepacific in ten 
years. 
 
The convertibility clause makes these decidedly different from the majority of 
the existing preferred share universe. We suspect that the discounts for these 
convertible preferred shares will likely widen out during times of market 
stress when the onshore cost of capital increases, potentially giving us 
opportunities to invest at attractive long-term levels. 
 
Discounts 
The Company's preferred share portfolio weighted average discount narrowed from 
43.3 per cent to 42.6 per cent during the year. However, investors should not 
take the year on year change in portfolio discount as a representative measure 
of the discount movements of the Korean preferred share universe because the 
Company's portfolio is neither static nor is it an index of the preferred share 
universe. The portfolio year on year change in discount incorporates 
significant factors such as active management and rebalancing of the portfolio. 
For example, unwinding holdings trading at narrow discounts and reinvesting 
cash into securities at wider discounts would, all else being equal, lead to a 
widening of the portfolio discount. In fact, despite the modest change of the 
portfolio's weighted average discount year on year, discount narrowing of 
preferred shares owned accounted for approximately 4.9 per cent out of the 6.7 
per cent total return for 2019. 
 
Dividends 
The Manager was pleased to observe that the dividend payout ratio for the KOSPI 
200, as reported on 
31 December 2019, was 35 per cent. This is the highest dividend payout ratio on 
record for Korea (available data from Bloomberg begins in 2002), a substantial 
increase on the value reported on the prior year end of 
21 per cent, and nearly three times the payout ratio in 2013 when the Company 
began trading. We believe the increased focus on dividend payouts is a positive 
catalyst for the portfolio as Korean preferred share discounts have been 
correlated with the size of the common share dividend yield. 
 
Hedging 
The Company pursues its investment strategy with a portfolio that is generally 
long only. However, as described more fully in the 2018 year-end report, 
because of political tensions in Northeast Asia, the Board approved a hedging 
strategy in September 2017. The purpose of the hedging strategy is to reduce 
exposure to extreme events that would be catastrophic to the Company. 
Importantly, the Company has limited its use of hedging instruments to 
purchases of credit default swaps and/or put options when deemed cost 
effective: securities that we believe would generate high returns in an 
economic disaster, without introducing material new risks into the portfolio or 
exacerbating existing risks. These catastrophe hedges are not intended to make 
money. We expect that the Company's hedges will lose money most of the time - 
as with any insurance policy. 
 
The table below provides details about the hedges as of 31 December 2019. Note 
that outside of the general market and portfolio hedges described herein, the 
Company has generally not hedged interest rates or currencies. 
 
  Number of Option      Strike Price    Total Cost to    Purchase Date     Expiration 
Contracts Held on EWY      (USD)       Expiration (USD)                       Date 
 
4,000                 $49              $366,155         18 October 2019  17 April 2020 
 
Total Cost                             $366,155 
 
*Each Option Contract gives the right to sell 100 shares at the Strike Price. 
 
Credit Default Notional Value Total Cost to   Annual   Price Paid as  Expiration Duration 
Swaps on South     (USD)       Expiration   Cost (USD) % of Notional     Date     (Years) 
    Korean                        (USD)                  Value (per 
Sovereign Debt                                             annum) 
 
5 yr CDS       $20m           $457,151      $91,430    45bps          2023       5.0 
 
2 yr CDS       $80m           $382,619      $191,309   23bps          2020       2.0 
 
Total Cost                    $839,770      $282,739 
 
Conclusion 
Markets have a short memory. Results are often measured on a quarter by quarter 
or year by year basis. This short-term mindset tends to open up investment 
opportunities for longer term investors, as informational trends can be 
obfuscated by short term volatility. For an investor who observes Korean 
corporate governance only through the lens of occasional media coverage, they 
will miss the significant lengths in which the market has improved compared to 
5 or 10 years ago. While we cannot predict the future, our expectation is that 
this trend will continue, and South Korea in the year 2025 will similarly have 
made cumulative improvements to corporate governance and investor protections. 
Korean preferred shares, in our opinion, provide unique and difficult to 
replicate upside exposure to this return factor. We continue to believe that 
the ability to invest in large-cap, multinational companies at around 50 cents 
on the dollar and double the dividend yield remains an attractive investment 
opportunity. 
 
Weiss Asset Management LP 
28 April 2020 
 
[1] SCI Korea 25/50 Net Total Return Index denominated in GBP. MSCI total 
return indices are calculated as if any dividends paid by constituents are 
reinvested at their respective closing prices on the ex date of the 
distribution. WKOF's performance figures include such distributions, but the 
distributions are not assumed to be reinvested in WKOF when calculating WKOF's 
performance. 
 
[2] Note that this return includes all dividends paid to the Company's 
Shareholders and assumes that these dividends were reinvested in WKOF shares at 
the next date for which the Company reports a NAV, at the NAV for that date. 
 
[3] MSCI Korea 25/50 Net Total Return Index denominated in KRW. 
 
[4] WKOF Common Shares vs Korea Index (KRW) is calculated as the return of a 
portfolio of common shares issued by the same issuers as the preferred shares 
WKOF has owned, as if a hypothetical investor bought or sold an equal quantity 
of those common shares on the same days that WKOF purchased or sold its 
preferred share investments. 
 
[5] Excess dividend yield of preferred shares owned relative to a portfolio of 
the respective common shares. 
 
Directors 
For the year ended 31 December 2019 
 
The Company has three non-executive Directors, all of whom are considered 
independent of the Investment Manager and details are set out below. 
 
Norman Crighton (aged 53) 
Mr Crighton is Chairman of the Company. He is also a non-executive chairman of 
RM Secured Direct Lending plc and AVI Japan Opportunity Trust. Norman was, 
until May 2011, an investment manager at Metage Capital Limited where he was 
responsible for the management of a portfolio of closed-ended funds and has 
almost three decades of experience in closed-ended funds having led teams at 
Olliff and Partners, LCF Edmond de Rothschild, Merrill Lynch, Jefferies 
International Limited and latterly Metage Capital Limited. His experience 
covers analysis and research as well as sales and corporate finance. Norman is 
British and resident in the United Kingdom. Norman was appointed to the Board 
in 2013. 
 
Stephen Charles Coe (aged 54) 
Stephen is Chairman of the Audit Committee. He is also a director (and Chairman 
of the Audit Committee) of Leaf Clean Energy Company and Merian Chrysalis 
Investment Company. He has been involved with offshore investment funds and 
managers since 1990 with significant exposure to property, debt, emerging 
markets, and private equity investments. 
 
He qualified as a Chartered Accountant with Price Waterhouse Bristol in 1990 
and remained in audit practice, specialising in financial services, until 1997. 
From 1997 to 2003 he was a director of the Bachmann Group of fiduciary 
companies and Managing Director of Bachmann Fund Administration Limited, a 
specialist third party fund administration company. From 2003 to 2006 Stephen 
was a director with Investec in Guernsey and Managing Director of Investec 
Trust (Guernsey) Limited and Investec Administration Services Limited. He 
became self-employed in August 2006 providing services to financial services 
clients. Stephen is British and resident in Guernsey. Stephen was appointed to 
the Board in 2013. 
 
Robert Paul King (aged 56) 
Rob is a non-executive director for a number of open and closed-ended 
investment funds including Tufton Oceanic Assets Limited (chairman), Chenavari 
Capital Solutions Limited (chairman), and CIP Merchant Capital Limited. Before 
becoming an independent non-executive director in 2011, he was a director of 
Cannon Asset Management Limited and their associated companies. Prior to this 
he was a director of Northern Trust International Fund Administration Services 
(Guernsey) Limited (formerly Guernsey International Fund Managers Limited) 
where he had worked from 1990 to 2007. He has been in the offshore finance 
industry since 1986 specialising in administration and structuring of offshore 
open and closed-ended investment funds. Rob is British and resident in 
Guernsey. Rob was appointed to the Board in 2013. 
 
Report of the Directors 
For the year ended 31 December 2019 
 
The Directors of the Company present their Annual Report and Audited Financial 
Statements for the year ended 31 December 2019. 
 
Principal Activity 
The Company was incorporated with limited liability in Guernsey on 12 April 
2013 as a company limited by shares and as an authorised closed-ended 
investment company. The Company's Shares were admitted to trading on the AIM of 
the LSE on 14 May 2013. As an existing closed-ended fund, the Company is deemed 
to be granted an authorised declaration in accordance with Section 8 of the 
Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended and Rule 
6.02 of the Authorised Closed Ended Investment Schemes Rules 2008 on the same 
date as the Company obtained consent under the Control of Borrowing (Bailiwick 
of Guernsey) Ordinance 1959 to 1989. 
 
Investment Objective and Investment Policy 
The investment objective and investment policy of the Company is to provide 
Shareholders with an attractive return on their investment, predominantly 
though long-term capital appreciation, by investing primarily in listed South 
Korean preferred shares. The full investment objective and investment policy 
are detailed on Summary Information of the Annual Report. 
 
Going Concern 
Given that the Company has continued in existence following the second 
Realisation Opportunity and will continue to operate as a going concern unless 
a determination to wind up the Company is made, every two years after the 
Realisation Date, the Directors will propose further realisation opportunities 
for Shareholders who have not previously elected to realise all of their 
Ordinary Shares using a similar mechanism used in the previously announced 
Realisation Opportunity. The next Realisation Opportunity will take place 
during 
May 2021. 
 
Based on the fact that the assets currently held by the Company consist mainly 
of securities that are readily realisable, whilst the Directors acknowledge 
that the liquidity of these assets needs to be managed, the Directors believe 
that the Company has adequate financial resources to meet its liabilities as 
they fall due for at least twelve months from the date of this report, and that 
it is appropriate for the Financial Statements to be prepared on a going 
concern basis. 
 
Viability Statement 
In accordance the UK Corporate Governance Code (July 2018) (the "UK Code"), 
published by the Financial Reporting Council in 2018, the Board has assessed 
the prospects of the Company over the three year period to 31 December 2022 
(the "Viability Period"). 
 
On 20 March 2019, the Company announced to offer all Shareholders the right to 
elect, during the Election Period, to realise some or all of the value of their 
Ordinary Shares, less applicable costs and expenses, on or prior to the 
Realisation Date. Shareholders representing a total of 2,747,153 shares elected 
to participate in the realisation. 
 
The Board and the Investment Manager believe that the investment opportunity 
provided by the Company remains compelling, but the viability of the Company is 
clearly contingent on the investment opportunity remaining in place, a matter 
which the Board monitors on an on-going basis. As the South Korean preference 
shares held by the Company trade at a discount compared with ordinary shares 
for the same companies, the Company remains attractive to long term investors 
over the Viability Period. 
 
The Board has been monitoring the development of the pandemic and has 
considered the impact it has had to date and assessing the impact it may have 
in the future. Despite the impact on the Company's share performance, there 
remains continued uncertainty on its development and scale such that predicting 
the impact with any certainty remains challenging.  The Board will continue to 
assess the position. 
 
The Board's assessment of the Company over the Viability Period has been made 
with reference to the Company's current financial position and prospects, the 
Company's strategy, and risk appetite, having considered the Company's 
principal risks and uncertainties detailed below. The Board has also considered 
the Company's likely cash flows and the liquidity of its portfolio. 
 
It is noted that the Company currently has no gearing, though borrowing is 
permitted under its constitution. In the event that the Company did consider 
taking on debt, the Board would carefully assess the Company's ability to meet 
the debt obligations as they become due. 
 
It is possible to imagine a number of scenarios, such as war, pandemic or 
political events, which could severely impact the liquidity of the Company's 
investments. 
 
The Board has assumed that the regulatory and fiscal regimes under which the 
Company operates will continue in broadly the same form during the Viability 
Period. The Board speaks with its Broker and legal advisers on a regular basis 
to understand issues impacting the Company's regulatory and fiscal structure. 
 
The Board have carried out a robust assessment of the risks outlined below and 
they confirm they have a reasonable expectation that the Company will be able 
to continue in operation to serve shareholder appropriately and meet its 
liabilities as they fall due over the three year period to December 2022. 
 
The Board however remain conscious that, should either: 
 
(a)   the aggregate Net Asset Value of the continuing Ordinary Shares at the 
close of business on the last Business Day before the next Realisation Date, 
(this being May 2021) be less than GBP50 million; or 
 
(b)  the mean Weighted Average Discount on the Portfolio is less than 25 per 
cent. Over any 90 day period, 
 
the Board will need to reassess the Company's position and may propose an 
ordinary resolution for the winding up of the Company. 
 
Notice period of Investment Manager 
The Board has assumed that the Investment Manager will remain in place during 
the Viability Period; however, the Board acknowledges the risk of the 
Investment Manager serving a twelve month notice period under the Investment 
Management Agreement ("IMA"). To mitigate this risk, the Board meets and 
communicates regularly with the Investment Manager to review its performance 
and the Board's relationship with the Investment Manager. 
 
Failure of the Custodian to carry out its obligations to the Company 
The Company's assets are held in accounts maintained by the Company's 
Custodian. Failure by the Custodian to carry out its obligations to the Company 
in accordance with the terms of the Custodian Agreement could have an impact on 
the viability of the Company. To mitigate this risk, the Board regularly 
receives reports from the Custodian, and through the Management and Engagement 
Committee, monitors the relationship with the Custodian. 
 
Loss of license or listing 
The Board has assumed that the Company will retain its regulatory status and 
listing throughout the Viability Period. The Company Secretary, Administrator, 
and Broker report to the Board at least quarterly on regulatory matters and 
confirm compliance with listing and other regulatory requirements. 
 
Failure to implement and poor execution of the investment strategy 
The Company maintains an investment policy as discussed on Summary Information. 
The policy states that the Company must invest primarily in listed South Korean 
preference shares, and also states that investments in other types of 
securities are allowed as long as the investments track South Korean companies 
or the South Korean market as a whole. Failure to implement the investment 
strategy or poor execution by the Investment Manager would have an effect on 
the viability of the Company. The Board ensures that the policy is being 
implemented in the quarterly Board Meetings, where the Investment Manager 
presents reports to the Board detailing the current portfolio and investment 
performance. 
 
The risks specifically associated with the South Korean economic and political 
climate are discussed on the Investment Manager's Report. 
 
Based on the Company's processes for monitoring operating costs, the Share 
price discount, the Investment Manager's compliance with the investment 
objective, asset allocation, the portfolio risk profile, liquidity risk, and 
the robust assessment of the principal risks and uncertainties facing the 
Company, the Board has concluded that there is a reasonable expectation that 
the Company will be able to continue in operation and meet its liabilities as 
they fall due over the Viability Period to 31 December 2022. 
 
International Tax Reporting 
For purposes of the US Foreign Accounts Tax Compliance Act, the Company 
registered with the US Internal Revenue Service ("IRS") as a Guernsey reporting 
Foreign Financial Institution ("FFI") in November 2014, received a Global 
Intermediary Identification Number (2A7KNV.99999.SL.831), and can be found on 
the IRS FFI list. 
 
The Common Reporting Standard ("CRS") is a global standard for the automatic 
exchange of financial account information developed by the Organisation for 
Economic Co-operation and Development ("OECD"), which has been adopted by 
Guernsey and which came into effect on 1 January 2016. 
 
The Board takes the necessary actions to ensure that the Company is compliant 
with Guernsey regulations and guidance in this regard. 
 
Results and Dividends 
The results for the year ended 31 December 2019 are set out in the Statement of 
Comprehensive Income. An annual dividend of 4.1195 pence per Share (GBP3,475,416) 
was approved on 1 May 2019 and paid on 
31 May 2019 in respect of the year ended 31 December 2018. An annual dividend 
of 3.4155 pence per Share (GBP2,881,486) was approved on 8 June 2018 and paid on 
13 July 2018 in respect of the year ended 
31 December 2017. 
 
*The Board expects to declare an interim dividend on 13 May 2020 with a record 
date on 22 May 2020 for the year ended 31 December 2019 based on dividends 
received primarily from investments in South Korean preferred shares. 
 
Shareholder Information 
Further Shareholder information can be found in the Summary Information. 
 
Investment Management 
The Investment Manager of the Company is Weiss Asset Management LP, a Delaware 
limited partnership formed on 10 June 2003 (the "Investment Manager"). The key 
terms of the IMA and specifically the fee charged by the Investment Manager are 
set out in Note 19 of the Financial Statements. The Board believes that the 
investment management fee is competitive with other investment companies with 
similar investment mandates. 
 
The Board reviews, on an on-going basis, the performance of the Investment 
Manager and considers whether the investment strategy utilised is likely to 
achieve the Company's investment objective. 
 
Having considered the portfolio performance and investment strategy, the Board 
has unanimously agreed that the interests of the Shareholders as a whole are 
best served by the continuing appointment of the Investment Manager on the 
terms agreed. 
 
Directors 
The details of the Directors of the Company during the year and at the date of 
this Report are set out on Directors section. 
 
Directors' Interests 
The Directors who held office at 31 December 2019 and up to the date of this 
Report held the following numbers of Ordinary Shares beneficially: 
 
                                       As at 31 December 2019     As at 31 December 2018 
 
                                      Ordinary    % of issued    Ordinary    % of issued 
 
                                        Shares          share      Shares          share 
                                                      capital                    capital 
 
Norman Crighton                         20,000          0.02%      20,000          0.02% 
 
Stephen Coe                             10,000          0.01%      10,000          0.01% 
 
Robert King                             15,000          0.02%      15,000          0.02% 
 
There have been no changes in the interests of the above Directors during the 
year. 
 
Substantial Interests 
Disclosure and Transparency Rules ("DTRs") are now comprised in the Financial 
Conduct Authority handbook. Section 5, the only section of the DTRs which 
applies to AIM-listed companies, requires substantial Shareholders to make 
relevant holding notifications to the Company. The Company must then 
disseminate this information to the wider market. Details of major Shareholders 
in the Company are shown below. 
 
                                                                 As at 31 December 2019 
 
                                                                            % of issued 
 
Shareholders                                                      Shares          share 
                                                                                capital 
 
Standard Life Aberdeen                                        13,058,100         16.00% 
 
Ruffer LLP                                                    11,500,000         14.09% 
 
Banque Degroof Luxembourg                                     10,125,000         12.41% 
 
City of London Investment Management Co.                       8,723,893         10.69% 
 
Merrill Lynch Pierce                                           7,000,000          8.58% 
Fenner & Smith 
 
Andrew M. Weiss                                                6,486,888          7.95% 
 
Lepercq de Neuflize Asset                                      5,746,077          7.04% 
Management 
 
EdenTree Investment                                            5,170,000          6.33% 
Management 
 
Mount Capital                                                  4,279,000          5.24% 
 
At the date of signing, 28 April 2020, City of London Investment Management Co. 
have increased their holding to 20,796,520 shares, representing 25.48 per cent 
of issued share capital and Lepercq de Neuflize Asset Management have fully 
redeemed their holding of 5,746,077 shares. 
 
There have been no other notifications of significant changes to the 
substantial shareholdings at 28 April 2020. 
 
                                                                 As at 31 December 2018 
 
                                                                            % of issued 
 
Shareholders                                                      Shares          share 
                                                                                capital 
 
Standard Life Aberdeen                                        13,148,100         15.58% 
 
Ruffer LLP                                                    11,500,000         13.63% 
 
Banque Degroof Luxembourg                                     10,125,000         12.00% 
 
Mount Capital                                                  8,000,000          9.48% 
 
Merrill Lynch Pierce Fenner & Smith                            7,000,000          8.30% 
 
Andrew M. Weiss                                                6,486,888          7.69% 
 
City of London Investment                                      6,022,626          7.14% 
Management Co. 
 
Lepercq de Neuflize Asset                                      5,746,077          6.81% 
Management 
 
EdenTree Investment Management                                 5,170,000          6.13% 
 
Corporate Governance 
The Company does not have a Main Market Listing on the LSE, and as such, the 
Company is not required to comply with the UK Code as issued by the Financial 
Reporting Council. However, the Board is committed to high standards of 
corporate governance and has implemented a framework for corporate governance 
which it considers to be appropriate for an investment company in order to 
comply with the main principles of the UK Code. By complying with the main 
principles of the UK Code, the Company is deemed to comply with the Code of 
Corporate Governance (the "GFSC Code") issued by the Guernsey Financial 
Services Commission. 
 
The Board has considered the principles and recommendations of the UK Code, and 
considers that reporting against the UK Code will provide better information to 
Shareholders. To ensure on-going compliance with these principles, the Board 
receives a report from the Company Secretary at each quarterly meeting, 
identifying how the Company is in compliance and identifying any changes that 
might be necessary. 
 
The Board considers that it has maintained procedures during the year ended 31 
December 2019 and up to the date of this Report to ensure that it complies with 
the UK Code, except as explained elsewhere in this Annual Report and Financial 
Statements. 
 
Role of the Board 
The Board is the Company's governing body and has overall responsibility for 
maximising the Company's success by directing and supervising the affairs of 
the business and meeting the appropriate interests of Shareholders and relevant 
stakeholders, while enhancing the value of the Company and also ensuring 
protection of investors. A summary of the Board's responsibilities is as 
follows: 
 
  * statutory obligations and public disclosure; 
  * strategic matters and financial reporting; 
  * risk assessment and management including reporting compliance, governance, 
    monitoring, and control; and 
  * other matters having a material effect on the Company. 
 
The Board's responsibilities for the Annual Report are set out in the Statement 
of Directors' Responsibilities. 
 
Although the Company is domiciled in Guernsey, the Board has considered the 
requirements of Section 172 of the Companies Act 2006 in the UK. Section 172 of 
the Companies Act requires that the Directors of the Company act in the way 
they consider, in good faith, is most likely to promote the success of the 
Company for the benefit of all stakeholders, including suppliers, customers and 
shareholders. The Board has engaged external companies to undertake the 
investment management, administrative, and custodial activities of the Company. 
Documented contractual arrangements are in place with these companies which 
define the areas where the Board has delegated responsibility to them. 
 
The Board needs to ensure that the Annual Report and Financial Statements, 
taken as a whole, are fair, balanced, and understandable and provide the 
information necessary for Shareholders to assess the Company's performance, 
business model, and strategy. 
 
In seeking to achieve this, the Directors have set out the Company's investment 
objective and investment policy, have explained how the Board and its delegated 
committees operate, have explained how the Directors review the risk 
environment within which the Company operates, and have set appropriate risk 
controls. Furthermore, throughout the Annual Report and Financial Statements, 
the Board has sought to provide further information to enable Shareholders to 
better understand the Company's business and financial performance. 
 
Composition and Independence of the Board 
The Board currently comprises three non-executive Directors, all of whom are 
considered independent of the Investment Manager. The Directors of the Company 
are listed on the Directors section. 
 
The Chairman is Mr Crighton. Biographies for Mr Crighton and all other 
Directors appear on the Directors section. In considering the independence of 
the Chairman, the Board has taken note of the provisions of the UK Code 
relating to independence, and has determined that Mr Crighton is an Independent 
Director. 
 
The Board believes it has a good balance of skills and experience to ensure it 
operates effectively. The Chairman is responsible for leadership of the Board 
and ensuring its effectiveness. 
 
As the Chairman is an Independent Director, no appointment of a Senior 
Independent Director has been made. The Company has no employees and therefore 
there is no requirement for a Chief Executive or a whistleblowing policy. 
 
The Company holds a minimum of four Board Meetings per year to discuss general 
management, structure, finance, corporate governance, marketing, risk 
management, compliance, asset allocation and gearing, contracts, and 
performance. The quarterly Board Meetings are the principal source of regular 
information for the Board, enabling it to determine policy and to monitor 
performance, compliance, and controls. These meetings are supplemented by 
communication and discussions throughout the year. 
 
A representative of the Investment Manager, Administrator, and Company 
Secretary may attend each Board Meeting either in person or by telephone, thus 
enabling the Board to fully discuss and review the Company's operations and 
performance. Each Director has direct access to the Investment Manager and 
Company Secretary and may, at the expense of the Company, seek independent 
professional advice on any matter. 
 
The UK Corporate Governance Code limits the tenure of a Board member to nine 
years, with additional explanations to be provided should the nine year 
recommendation be exceeded. No Director has reached this length of service at 
the date of these Financial Statements. 
 
Attendance at the Board and other Committee Meetings during the year was as 
follows: 
 
                                         Number of       Norman      Robert     Stephen 
 
                                          Meetings     Crighton        King         Coe 
                                              held 
 
Quarterly Board                                  4            4           4           4 
Meetings 
 
Audit Committee                                  3            3           3           3 
Meetings 
 
Management Engagement Committee                  1            1           1           1 
Meetings 
 
Ad-hoc Board Meetings                            5            3           4           2 
 
Board Diversity 
The Board considers the composition of the Board on an on-going basis. 
 
Re-election 
The Articles of Incorporation provide that one-third of the Directors retire by 
a voluntary rotation basis at each Annual General Meeting ("AGM"). However, in 
order to meet the highest standards of corporate governance, the Directors have 
agreed to stand for election annually. 
 
The Directors may at any time appoint any person to be a Director either to 
fill a casual vacancy or as an addition to the existing Directors. Any Director 
so appointed shall hold office only until, and shall be eligible for 
re-election at, the next AGM following their appointment, but shall not be 
taken into account in determining the Directors or the number of Directors who 
are to retire by a voluntary rotation basis at that meeting if it is an AGM. 
 
Although the Company looks at not retaining the Chairman of the Board in the 
post beyond nine years from date of first appointment on the Board, the Board 
have not set such a formal policy in place since the Company shareholders 
decide, on an annual basis, whether or not to support the continuation of the 
Chairman. 
 
Board Performance 
The Board undertakes an evaluation of its own performance and that of 
individual Directors on an annual basis. In order to review its effectiveness, 
the Board carries out a process of formal self-appraisal. The Board considers 
how it functions as a whole and also reviews the individual performance of its 
members. This process is conducted by the respective Chairman reviewing each 
members' performance, contributions, and commitment to the Company by verbal 
discussion. 
 
The Board considers it has a breadth of experience relevant to the Company, and 
the Directors believe that any changes to the Board's composition can be 
managed without undue disruption. 
 
In accordance with the UK Code, when 20 per cent or more of Shareholder votes 
have been cast against a Board recommendation for a resolution, the Company 
should explain, when announcing voting results, what actions it intends to take 
to consult Shareholders in order to understand the reasons behind the result. 
An update on the views received from shareholders and actions taken should be 
published no later than six months after the Shareholder meeting. The Board 
should then provide a final summary in the annual report and, if applicable, in 
the explanatory notes to resolutions at the next shareholder meeting, on what 
impact the feedback has had on the decisions the Board has taken and any 
actions or resolutions now proposed. During the year, no resolution recommended 
by the Board received more than 20 per cent of votes against it. 
 
Committees of the Board 
The Board has established an Audit Committee and a Management and Engagement 
Committee. All Terms of Reference for both Committees are available from the 
Company Secretary upon request or on the Company's website, 
www.weisskoreaopportunityfund.com. 
 
Audit Committee 
The Company has established an Audit Committee with formally delegated duties 
and responsibilities within written terms of reference. The Audit Committee is 
chaired by Mr Coe. The Audit Committee's other members are Mr Crighton and Mr 
King. The Audit Committee meets formally at least twice a year. Due to the 
small size of the Board, the Board considers it appropriate that all Directors 
should be members of the Audit Committee. 
 
Appointment to the Audit Committee is for a period of up to three years, which 
may be extended for two further three year periods. 
 
The table on Corporate Governance section of the Director's Report sets out the 
number of Audit Committee Meetings held during the year ended 31 December 2019 
and the number of such meetings attended by each Audit Committee member. 
 
A report of the Audit Committee detailing responsibilities and activities is 
presented on the Audit Committee Report 
 
Management and Engagement Committee 
The Company has established a Management and Engagement Committee with formally 
delegated duties and responsibilities within written terms of reference. The 
Management and Engagement Committee is chaired by Mr King. The Management and 
Engagement Committee's other members are Mr Crighton and Mr Coe. The Management 
and Engagement Committee meets formally once a year. 
 
The principal duties of the Management and Engagement Committee are to review 
the performance of and contractual arrangements with the Investment Manager and 
all other service providers to the Company (other than the External Auditor). 
 
During the Management and Engagement Committee meeting held on 14 November 
2019, the quality of the services provided by the Investment Manager as well as 
the other service providers was reviewed. The Management and Engagement 
Committee also reviewed the fees of all other service providers (other than the 
External Auditor). 
 
As at 31 December 2019, Directors' fees were: GBP30,000 payable to Mr Crighton as 
Chairman of the Board, GBP27,500 to Mr Coe as Chairman of the Audit Committee, 
and GBP24,000 to Mr King. 
 
                                       For the year ended         For the year ended 
 
                                             31 December 2019           31 December 2018 
 
                                                            GBP                          GBP 
 
Norman Crighton                                        30,000                     30,000 
 
Stephen Coe                                            27,500                     27,500 
 
Robert King                                            24,000                     24,000 
 
Nomination Committee 
The Board does not have a separate Nomination Committee. The Board as a whole 
fulfils the function of a Nomination Committee. Any proposal for a new Director 
will be discussed and approved by the Board. The Board will determine whether 
an external search consultancy or open advertising is used in the appointments 
of non-executive Directors in the future. 
 
Remuneration Committee 
In view of its non-executive and independent nature, the Board considers that 
it is not appropriate for there to be a Remuneration Committee as anticipated 
by the UK Code because this function is carried out as part of the regular 
Board business. A Remuneration Report prepared by the Board is contained within 
the Director's Remuneration Report. Directors' remuneration is considered on an 
annual basis. 
 
Environmental, Social and Governance Matters 
As an investment company, WKOF's own direct environmental impact is minimal. 
Other than short flights of approximately 160 miles made by the Chairman to 
attend quarterly board meetings, the Company has no greenhouse gas emissions to 
report from its operations, nor does it have responsibility for any other 
emissions producing sources under the Companies Act 2006 (Strategic Reporting 
and Directors' Reports) Regulations 2013 or the Companies (Directors' Report) 
and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. 
 
The Company's operations are delegated to third party service providers, and 
the Company has no employees. The Board seeks assurances, at least annually, 
from its main counterparties that they comply with the provisions of the UK 
Modern Slavery Act 2015 and maintain adequate safeguards in keeping with the 
provisions of the Bribery Act 2010 and Criminal Finances Act 2017. 
 
The Board and Weiss Asset Management LP "WAM" recognise that governance issues 
have an effect on its investee companies. The Board supports WAM in its belief 
that good corporate governance will help deliver long term Shareholder value. 
Since inception of the Company, improved corporate governance has been one of 
the main drivers of value, as some Korean companies have improved the 
efficiency of their balance sheets by buying back preference shares and 
improving dividend payouts. The Board and WAM will continue to support these 
changes in its investee companies and expect these governance improvements to 
continue in Korea. 
 
Internal Controls 
The Board is ultimately responsible for establishing and maintaining the 
Company's system of internal controls and for maintaining and reviewing the 
system's effectiveness. The Company's risk matrix continues to be the basis of 
the Company's risk management process in establishing the Company's system of 
internal financial and reporting controls. The risk matrix is prepared and 
maintained by the Board, which initially identifies the risks facing the 
Company and then collectively assesses the likelihood of each risk, the impact 
of those risks, and the strength of the controls operating over each risk. The 
Company's system of internal controls is designed to manage rather than to 
eliminate the risk of failure to achieve the Company's objectives, and by the 
internal controls' nature, can only provide reasonable and not absolute 
assurance against misstatement and loss. These controls aim to ensure that: 
assets of the Company are safeguarded; proper accounting records are 
maintained; and the financial information for publication is reliable. 
 
The UK Code requires Directors to conduct at least annually a review of the 
Company's system of internal controls, covering all controls including 
financial, operational, compliance, and risk management. The Board has 
evaluated the Company's system of internal controls. In particular, it has 
prepared a process for identifying and evaluating the significant risks 
affecting the Company and the policies by which these risks are managed. The 
process has resulted in a low to medium risk assessment. 
 
The Board has delegated the management of the Company's investment portfolio, 
administration, registrar, and corporate secretarial functions, which includes 
the independent calculation of the Company's NAV and the production of the 
audited Annual Report and Financial Statements. Whilst the Board delegates 
these functions, it remains responsible for the functions it delegates and for 
the systems of internal control. Formal contractual agreements have been put in 
place between the Company and providers of these services. On an on-going 
basis, Board reports are provided at each quarterly Board Meeting from the 
Investment Manager, Administrator, Registrar, and Company Secretary, and a 
representative from the Investment Manager is asked to attend these meetings. 
 
In common with most investment companies, the Company does not have an internal 
audit function. All of the Company's management functions are delegated to the 
Investment Manager, Administrator, Registrar, and Company Secretary, which have 
their own internal audit and/or risk assessment functions. 
 
The Company's risk exposure and the effectiveness of its risk management and 
internal control systems are reviewed by the Audit Committee at its meetings 
and annually by the Board. The Board believes that the Company has adequate and 
effective systems in place to identify, mitigate, and manage the risks to which 
it is exposed. 
 
Emerging Risks 
In order to recognise any new risks that may impact the Company and to ensure 
that appropriate controls are in place to manage those risks, the Audit 
Committee undertakes a regular review of the Company's Risk Matrix. This review 
took place on three occasions during the year. 
 
COVID-19 
The Board has been monitoring the development of the pandemic and has 
considered the impact it has had to date and assessing the impact it may have 
in the future. Despite the impact on the Company's share performance, there 
remains continued uncertainty on its development and scale such that predicting 
the impact with any certainty remains challenging.  The Board will continue to 
assess the position. 
 
Principal Risks and Uncertainties 
In respect to the Company's system of internal controls and reviewing its 
effectiveness, the Directors: 
 
  * are satisfied that they have carried out a robust assessment of the 
    principal risks facing the Company, including those that would threaten its 
    business model, future performance, solvency, or liquidity; and 
 
  * have reviewed the effectiveness of the risk management and internal control 
    systems, including material financial, operational, and compliance controls 
    (including those relating to the financial reporting process) and no 
    significant failings or weaknesses were identified. 
 
The principal risks and uncertainties which have been identified and the steps 
which are taken by the Board to mitigate them are as follows: 
 
Investment Risks 
The Company is exposed to the risk that its portfolio fails to perform in line 
with its investment objective and policy if markets move adversely or if the 
Investment Manager fails to comply with the investment policy. The Board 
reviews reports from the Investment Manager at the quarterly Board Meetings, 
with a focus on the performance of the portfolio in line with its investment 
policy. The Administrator is responsible for ensuring that all transactions are 
in accordance with the investment restrictions. 
 
Operational Risks 
The Company is exposed to the risk arising from any failures of systems and 
controls in the operations of the Investment Manager, Administrator, and the 
Custodian. The Board and its Committees regularly review reports from the 
Investment Manager and the Administrator on their internal controls. The 
Administrator will report to the Investment Manager any valuation issues which 
will be brought to the Board for final approval as required. 
 
Accounting, Legal and Regulatory Risks 
The Company is exposed to the risk that it may fail to maintain accurate 
accounting records, fail to comply with requirements of its Admission Document, 
and fail to meet listing obligations. The accounting records prepared by the 
Administrator are reviewed by the Investment Manager. The Administrator, 
Broker, and Investment Manager provide regular updates to the Board on 
compliance with the Admission Document and changes in regulation. 
 
Discount Management 
The Company is exposed to Shareholder dissatisfaction through inability to 
manage the Share price discount to NAV. The Board and its Broker monitor the 
Share price discount (or premium) continuously and have engaged in Share 
buybacks from time to time to help minimise any such discount. The Board 
believes that it has access to sufficiently liquid assets to help manage the 
Share price discount. The Company's discount management programme is described 
within Note 18. 
 
Liquidity of Investments 
The Korean preferred shares typically purchased by the Company generally have 
smaller market capitalisations and lower levels of liquidity than their common 
share counterparts. These factors, among others, may result in more volatile 
price changes in the Company's assets as compared to the South Korean stock 
market or other more liquid asset classes. This volatility could cause the NAV 
to go up or down dramatically. 
 
In order to realise its investments, the Company will likely need to sell its 
holdings in the secondary market, which could prove difficult if adequate 
liquidity does not exist at the time, and could result in the values received 
by the Company being significantly less than their holding values. The 
liquidity of the market for preferred shares may vary materially over time. 
There can be no guarantee that a liquid market for the Company's assets will 
exist or that the Company's assets can be sold at prices similar to the 
published NAV. Illiquidity could also make it difficult or costly for the 
Company to purchase securities, and this could result in the Company holding 
more cash than anticipated. Furthermore, it is possible that South Korea could 
impose currency-exchange or capital controls on foreign investors, making it 
difficult or impossible for the Company to repatriate funds. The Investment 
Manager considers the liquidity of secondary trading in assessing and managing 
the liquidity of the Company's investments. The Board reviews the Company's 
resources and obligations on a regular basis with a view to ensuring that 
sufficiently liquid assets are held for the expected day to day operations of 
the Company. However, if the Company were required to liquidate a substantial 
portion of its assets at a single time, it is likely that the market impact of 
the necessary sale transactions would impact the value of the portfolio 
materially. 
 
Fraud Risk 
The Company is exposed to fraud risk. The Audit Committee continues to monitor 
the fraud, bribery, and corruption policies of the Company. The Board receives 
an annual confirmation from all service providers that there have been no 
instances of fraud or bribery. 
 
Financial Risks 
The financial risks, including market, credit, and liquidity risks, faced by 
the Company are set out in Note 20 of the Financial Statements. These risks and 
the controls in place to reduce the risks are reviewed at the quarterly Board 
Meetings. 
 
Coronavirus Risk("COIVD-19") 
The Board has been in contact with its principal service providers to determine 
that their operations remain effective during the time of the pandemic. To date 
there has been no discernible impact on the operations of the Company. 
 
Shareholder Engagement 
The Directors welcome Shareholders' views and place great importance on 
communication with the Company's Shareholders. Shareholders wishing to meet 
with the Chairman and other Board members should contact the Company's 
Administrator. 
 
The Investment Manager and Broker maintain a regular dialogue with 
institutional Shareholders, the feedback from which is reported to the Board. 
 
The Company's AGM provides a forum for Shareholders to meet and discuss issues 
of the Company and provides Shareholders with the opportunity to vote on the 
resolutions as specified in the Notice of AGM. The Notice of AGM and the 
results are released to the London Stock Exchange in the form of an 
announcement. 
 
In addition, the Company maintains a website which contains comprehensive 
information, including links to regulatory announcements, Share price 
information, financial reports, investment objective, and investor contacts. 
 
Auditor 
The Auditor, KPMG Channel Islands Limited, has indicated their willingness to 
continue in office. Accordingly, a resolution for their reappointment will be 
proposed at the forthcoming AGM. 
 
Statement of Directors' Responsibilities 
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 have elected to prepare the Financial 
Statements in accordance with International Financial Reporting Standards 
("IFRS") as adopted by the European Union and applicable law. 
 
Under Company law the Directors must not approve the Financial Statements 
unless they are satisfied that the Financial Statements 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 applicable accounting standards have been followed, subject 
    to any material departures disclosed and explained in the Financial 
    Statements; 
  * 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 proper 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 the Directors to ensure that the Financial Statements comply with the 
Companies (Guernsey) Law, 2008. 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. 
 
The Directors are responsible for the maintenance and integrity of the 
corporate and financial information included on the Company's website. 
Legislation in Guernsey governing the preparation and dissemination of 
Financial Statements may differ from legislation in other jurisdictions. 
 
The Directors confirm that they have complied with the above requirements in 
preparing the Annual Report and Financial Statements and that to their best 
knowledge and belief: 
 
  * 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 Directors' Report includes a fair review of the development and 
    performance of the business and the position of the issuer, together with a 
    description of the principal risks and uncertainties that they face. 
 
We consider the Annual Report and Financial Statements, taken as a whole, to be 
fair, balanced, and understandable and provides the information necessary for 
Shareholders to assess the Company's position and performance, business model, 
and strategy. 
 
The Board of Directors confirms that, throughout the period covered by the 
Financial Statements, the Company complied with the GFSC Code through its 
compliance with the UK Code. 
 
Disclosure of Information to the Auditor 
The Directors who hold office at the date of approval of this Directors' Report 
confirm that, so far as they are aware, there is no relevant audit information 
of which the Company's auditor is unaware, and that each Director has taken all 
the steps he ought to have taken as a Director to make himself aware of any 
relevant audit information and to establish that the Company's auditor is aware 
of that information. 
 
Signed on behalf of the Board by: 
 
Norman Crighton 
Chairman 
28 April 2020 
 
Stephen Coe 
Director 
28 April 2020 
 
Directors' Remuneration Report 
For the year ended 31 December 2019 
 
Introduction 
An ordinary resolution for the approval of the Directors' Remuneration Report 
will be put to the Shareholders at the AGM to be held on 24 July 2020. 
 
Remuneration Policy 
All Directors are non-executive and a Remuneration Committee has not been 
established. The Board as a whole considers matters relating to the Directors' 
remuneration. No advice or services were provided by any external person in 
respect of the Board's consideration of the Directors' remuneration. 
 
The Company's policy is that the fees payable to the Directors should reflect 
the time spent by the Directors on the Company's affairs and the 
responsibilities borne by the Directors, and be sufficient to attract, retain, 
and motivate Directors of a quality required to run the Company successfully. 
The Chairman of the Board is paid a higher fee in recognition of his additional 
responsibilities, as is the Chairman of the Audit Committee. The policy is to 
review fee rates periodically, although such a review will not necessarily 
result in any changes to the rates, and account is taken of fees paid to 
directors of comparable companies. The Directors of the Company are remunerated 
for their services at such a rate as the Directors determine, provided that the 
aggregate amount of such fees does not exceed GBP150,000 per annum. 
 
There are no long term incentive schemes provided by the Company and no 
performance fees are paid to Directors. 
 
None of the Directors have a service contract with the Company, but each of the 
Directors is appointed by a letter of appointment which sets out the main terms 
of their appointment. Directors hold office until they retire by rotation or 
cease to be a Director in accordance with the Articles of Incorporation, by 
operation of law, or until they resign. 
 
Remuneration 
Directors are remunerated in the form of fees, payable quarterly in arrears, to 
the Director personally. No Director has been paid additional remuneration 
outside their normal Directors' fees and expenses. 
 
As at 31 December 2019, Directors' fees were: GBP30,000 payable to Mr Crighton as 
Chairman of the Board, GBP27,500 to Mr Coe as Chairman of the Audit Committee, 
and GBP24,000 to Mr King. 
 
                                       For the year ended         For the year ended 
 
                                             31 December 2019           31 December 2018 
 
                                                            GBP                          GBP 
 
Norman Crighton                                        30,000                     30,000 
 
Stephen Coe                                            27,500                     27,500 
 
Robert King                                            24,000                     24,000 
 
Signed on behalf of the Board by: 
 
Norman Crighton 
Chairman 
28 April 2020 
 
Stephen Coe 
Director 
28 April 2020 
 
Audit Committee Report 
For the year ended 31 December 2019 
 
Dear Shareholders, 
 
We present the Audit Committee's Report for 2019, setting out the 
responsibilities of the Audit Committee and its key activities in 2019. 
 
The Audit Committee has reviewed the Company's financial reporting, significant 
areas of judgement and estimation within the Company's Financial Statements, 
the independence and effectiveness of the External Auditor, and the internal 
control and risk management systems of the Company's service providers. The 
Audit Committee considered whether the Annual Report and Financial Statements 
are fair, balanced, and understandable, and whether they provided the necessary 
information for Shareholders to assess the Company's performance, business 
model, and strategy before recommending them to the Board for approval. In 
order to assist the Audit Committee in discharging these responsibilities, 
regular reports are received from the Investment Manager, Administrator, and 
External Auditor. Following its review of the independence and effectiveness of 
the Company's External Auditor, the Audit Committee has recommended to the 
Board that KPMG Channel Islands Limited be reappointed as Auditor, which the 
Board has submitted for approval to the Company's Shareholders. 
 
A member of the Audit Committee will continue to be available at each AGM to 
respond to any Shareholder questions on the activities of the Audit Committee. 
 
Responsibilities 
The Audit Committee reviews and recommends the approval of the Financial 
Statements of the Company to the Board and is the forum through which the 
External Auditor reports to the Board of Directors. The External Auditor and 
the Audit Committee will meet together without representatives of either the 
Administrator or Investment Manager being present if either considers this to 
be necessary. 
 
The role of the Audit Committee includes: 
 
  * monitoring the integrity of the published Financial Statements of the 
    Company; 
  * reviewing and reporting to the Board on the significant issues, judgements, 
    and estimates made in the preparation of the Company's published Financial 
    Statements; 
  * monitoring and reviewing the quality and effectiveness of the External 
    Auditor and their independence; 
  * considering and making recommendations to the Board on the appointment, 
    reappointment, replacement, and remuneration to the Company's External 
    Auditor; 
  * reviewing the Company's procedures for prevention, detection and reporting 
    of fraud, bribery, and corruption; and 
  * monitoring and reviewing the internal control and risk management systems 
    of the service providers. 
 
The Audit Committee's full terms of reference can be obtained by contacting the 
Company's Secretary or on the Company's website, 
www.weisskoreaopportunityfund.com. 
 
Key Activities of the Audit Committee 
The following sections discuss the assessments made by the Audit Committee 
during the year: 
 
Financial Reporting 
The Audit Committee's review of the Annual Report and Audited Financial 
Statements focused on the following significant areas: 
 
Valuation of Investments 
The Company's financial investments had a fair value of GBP117,853,987 as at 31 
December 2019 and represent the vast majority of the net assets of the Company. 
The vast majority of the investments are listed and traded, and the valuation 
is by reference to the fair value measurement required by IFRS. The Audit 
Committee considered the fair value of the investments held by the Company as 
at 31 December 2019 to be reasonable from a review of the information provided 
by the Investment Manager and Administrator. All prices have been confirmed by 
the Administrator to independent pricing sources as at 31 December 2019. 
 
The Investment Manager and Administrator confirmed to the Audit Committee that 
they were not aware of any material misstatements including matters relating to 
the Financial Statements' presentation, nor were they aware of any fraud or 
bribery relating to the Company's activities. Furthermore, the External Auditor 
reported to the Audit Committee that no material misstatements were found in 
the course of their work. 
 
Following a review of the presentations and reports from the Administrator and 
consulting where necessary with the External Auditor, the Audit Committee is 
satisfied that the Financial Statements appropriately address the critical 
judgements and key estimates made in the preparation of the Financial 
Statements (both in respect to the amounts reported and the disclosures). The 
Audit Committee is also satisfied that the significant assumptions used for 
determining the value of assets and liabilities have been appropriately 
scrutinised and challenged and are sufficiently robust. 
 
Risk Management 
The Audit Committee continued to consider the process for managing the risk of 
the Company and its service providers. Risk management procedures for the 
Company, as detailed in the Company's risk assessment matrix, were reviewed and 
approved by the Audit Committee. A review of the risk matrix took place during 
the Audit Committee meeting of the 14 November 2019. Following the review, 
minor amendments were made. 
 
Fraud, Bribery and Corruption 
The Audit Committee continues to monitor the fraud, bribery, and corruption 
policies of the Company. The Board receives a confirmation from all service 
providers that there have been no instances of fraud or bribery. 
 
The External Auditor 
Independence, Objectivity and Fees 
The independence and objectivity of the External Auditor are reviewed by the 
Audit Committee, which also reviews the terms under which the External Auditor 
is appointed to perform non-audit services. The Audit Committee has established 
pre-approval policies and procedures for the engagement of the External Auditor 
to provide audit and assurance services. 
 
The External Auditor may not provide a service which: 
 
  * places them in a position to audit their own work; 
  * creates a mutuality of interest; 
  * results in the External Auditor developing close relationships with service 
    providers of the Company, in respect of services to the Company; 
  * results in the External Auditor functioning as a manager or employee of the 
    Company; and 
  * puts the External Auditor in the role of advocate of the Company. 
 
As a general rule, the Company does not utilise the External Auditor for 
internal audit purposes, secondments, or valuation advice. Services such as tax 
compliance, tax structuring, private letter rulings, accounting advice, 
quarterly reviews, and disclosure advice are normally permitted but will be 
pre-approved by the Audit Committee. 
 
The following table summarises the remuneration payable to KPMG Channel Islands 
Limited and to other KPMG member firms for audit and non-audit services: 
 
                                        For the year ended         For the year ended 
 
                                              31 December 2019           31 December 2018 
 
KPMG Channel Islands Limited                                 GBP                          GBP 
 
Annual audit                                            32,000                     28,300 
 
KPMG LLP 
 
Tax fees (UK Reporting Fund Status)                      9,750                      5,000 
 
The Audit Committee does not consider KPMG Channel Islands Limited's 
independence to be under threat. In making this assessment, the Audit Committee 
has concluded that the non-audit fees, disclosed above, do not relate to 
prohibited services. In approving the non-audit services, the Audit Committee 
considered the safeguards put in place by KPMG Channel Islands Limited to 
reduce the threats to independence and objectivity to an acceptable level. 
 
For the year ended 31 December 2019 the Company has engaged KPMG LLP to provide 
tax services, a separate entity to KPMG Channel Islands Limited. 
 
KPMG Channel Islands Limited has been the External Auditor from the date of the 
initial listing on the London Stock Exchange. The UK Code introduced a 
recommendation that the external audit be put out to tender every ten years. 
The Audit Committee has noted this and will develop a plan for tendering at the 
appropriate time. 
 
The Audit Committee has examined the scope and results of the audit, its cost 
effectiveness, and the independence and objectivity of the External Auditor, 
with particular regard to non-audit fees, and considers KPMG Channel Islands 
Limited, as External Auditor, to be independent of the Company. 
 
Performance and Effectiveness 
During the year, when considering the effectiveness of the External Auditor, 
the Audit Committee has taken into account the following factors: 
 
  * The audit plan presented to it before the audit; 
  * Changes in audit personnel; 
  * The post audit report including variations from the original plan, if any; 
  * The External Auditor's report on independence; and 
  * Feedback from both the Investment Manager and Administrator. 
 
Further to the above, at the conclusion of the 2019 audit fieldwork, the Audit 
Committee performed specific evaluation of the performance of the External 
Auditor through discussion with the Administrator and Investment Manager, as 
well as the audit team itself. 
 
There were no significant adverse findings from this evaluation. 
 
Reappointment of External Auditor 
Consequent to this review process, the Audit Committee has recommended to the 
Board that a resolution be put to the 2020 AGM for the reappointment of KPMG 
Channel Islands Limited as External Auditor. The Board has accepted this 
recommendation. 
 
Internal Control and Risk Management Systems 
After consultation with the Investment Manager, Administrator, and External 
Auditor, the Audit Committee has considered the impact of the risk of the 
override of controls by its service providers, the Investment Manager, and 
Administrator. 
 
The Audit Committee reviews externally prepared assessments of the control 
environment in place at the Administrator, with the Administrator providing a 
Service Organisation Controls Report on a bi-annual basis. The Audit Committee 
noted that the Management and Engagement Committee received a self-assessment 
from the Investment Manager and no issues were identified in this. 
Additionally, representatives of the Investment Manager meet with the Board of 
Directors annually to discuss and review the controls in place at the 
Investment Manager. No significant failings or weaknesses were identified in 
these reviews. 
 
The Audit Committee has also reviewed the need for an internal audit function. 
The Audit Committee has decided that the systems and procedures employed by the 
Investment Manager, as well as the Administrator's internal audit function 
provide sufficient assurance that a sound system of internal control, which 
safeguards the Company's assets, is maintained. An internal audit function 
specific to the Company is therefore considered unnecessary. 
 
In finalising the Financial Statements for recommendation to the Board for 
approval, the Audit Committee is satisfied that, taken as a whole, the Annual 
Report and Financial Statements are fair, balanced, and understandable. The 
Board has accepted this approval. 
 
For any questions on the activities of the Audit Committee not addressed in the 
foregoing, a member of the Audit Committee remains available to attend each AGM 
to respond to such questions. 
 
The Audit Committee Report was approved by the Board on 28 April 2020 and 
signed on behalf of the Audit Committee by: 
 
Stephen Coe 
Chairman, Audit Committee 
28 April 2020 
 
Independent Auditor's Report 
To the Members of Weiss Korea Opportunity Fund Ltd. 
 
Our opinion is unmodified 
We have audited the financial statements of Weiss Korea Opportunity Fund Ltd. 
(the "Company"), which comprise the statement of financial position as at 31 
December 2019, the statements of comprehensive income, changes in equity and 
cash flows for the year then ended, and notes, comprising significant 
accounting policies and other explanatory information. 
 
In our opinion, the accompanying financial statements: 
 
  * give a true and fair view of the financial position of the Company as at 31 
    December 2019, and of the Company's financial performance and cash flows 
    for the year then ended; 
  * are prepared in accordance with International Financial Reporting Standards 
    as adopted by the EU ("IFRS"); and 
  * comply with the Companies (Guernsey) Law, 2008. 
 
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 have fulfilled our ethical responsibilities under, and are 
independent of the Company in accordance with, UK ethical requirements 
including FRC Ethical Standards, as applied to listed entities. We believe that 
the audit evidence we have obtained is a sufficient and appropriate basis for 
our opinion. 
 
Key audit matters: our assessment of the risks of material misstatement 
Key audit matters are those matters that, in our professional judgment, 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. These matters were addressed in the context 
of our audit of the financial statements as a whole, and in forming our opinion 
thereon, and we do not provide a separate opinion on these matters.  In 
arriving at our audit opinion above, the key audit matter was as follows 
(unchanged from 2018): 
 
                                       The risk                    Our response 
 
Valuation of financial       Basis:                        Our audit procedures 
assets at fair value through As at 31 December 2019 the    included but were not 
profit or loss               Company had invested 92.8% of limited to: 
("Investments")              its net assets in listed 
                             preferred shares and other    Control Evaluation: 
GBP117,853,987; (2018:  GBP      financial instruments issued  We evaluated the design, 
120,312,836)                 by companies incorporated and implementation and operating 
                             listed in South Korea, which  effectiveness of the 
Refer to the Audit Committee in certain cases may trade at relevant controls over the 
Report, note 2f accounting   a discount to the             valuation of investments. 
policy and notes 12 and 21   corresponding common shares 
disclosures.                 of the same companies.        Valuation procedures 
                                                           including use of a KPMG 
                             The Company's listed          Specialist: 
                             investments are valued based  We have used our own 
                             on bid-market prices at the   valuation specialist to 
                             close of business of the      independently price 
                             relevant stock exchange on    investments to a third party 
                             the reporting date obtained   data source and assessed the 
                             from third party pricing      trading volumes behind such 
                             providers.                    prices. 
 
                             Risk:                         Assessing disclosures: 
                             The valuation of the          We also considered the 
                             Company's investments, given  Company's investment 
                             they represent the majority   valuation policies and their 
                             of the Company's net assets   application as described in 
                             as at 31 December 2019, is a  note 2f to the financial 
                             significant area of our       statements for compliance 
                             audit.                        with IFRS in addition to the 
                                                           adequacy of disclosures in 
                                                           notes 12 and 21. 
 
Our application of materiality and an overview of the scope of our audit 
Materiality for the financial statements as a whole was set at GBP2,427,000, 
determined with reference to a benchmark of net assets of GBP124,544,734, of 
which it represents approximately 2.0% (2018: 3.0%). 
 
We reported to the Audit Committee any corrected or uncorrected identified 
misstatements exceeding GBP121,000, in addition to other identified misstatements 
that warranted reporting on qualitative grounds. 
 
Our audit of the Company was undertaken to the materiality level specified 
above, which has informed our identification of significant risks of material 
misstatement and the associated audit procedures performed in those areas as 
detailed above. 
 
We have nothing to report on going concern 
We are required to report to you if we have anything material to add or draw 
attention to in relation to the directors' statement in note 2(c) 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 a period of at least twelve months from the date of 
approval of the financial statements.  We have nothing to report in this 
respect. 
 
Other information 
The directors are responsible for the other information. The other information 
comprises the information included in the annual report but does not include 
the financial statements and our auditor's report thereon. Our opinion on the 
financial statements does not cover the other information and we do not express 
an audit opinion or any form of assurance conclusion thereon. 
 
In connection with our audit of the financial statements, our responsibility is 
to read the other information and, in doing so, consider whether the other 
information is materially inconsistent with the financial statements or our 
knowledge obtained in the audit, or otherwise appears to be materially 
misstated. If, based on the work we have performed, we conclude that there is a 
material misstatement of this other information, we are required to report that 
fact. We have nothing to report in this regard. 
 
Disclosures of emerging and principal risks and longer term viability 
Based on the knowledge we acquired during our financial statements audit, we 
have nothing material to add or draw attention to in relation to: 
 
  * the directors' confirmation within the Viability Statement 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 or liquidity; 
  * the Principal Risks disclosures describing these risks and explaining how 
    they are being managed or mitigated; 
  * the directors' explanation in the Viability Statement as to how they have 
    assessed the prospects of the Company, over what period they have done so 
    and why they consider 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. 
 
Corporate governance disclosures 
We are required to report to you if: 
 
  * we have identified material inconsistencies between the knowledge we 
    acquired during our financial statements audit and 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; or 
  * the section of the annual report describing the work of the Audit Committee 
    does not appropriately address matters communicated by us to the Audit 
    Committee. 
 
We have nothing to report to you in these respects. 
 
We have nothing to report on other matters on which we are required to report 
by exception 
We have nothing to report in respect of the following matters where the 
Companies (Guernsey) Law, 2008 requires us to report to you if, in our opinion: 
 
  * the Company has not kept proper accounting records; or 
  * the financial statements are not in agreement with the accounting records; 
    or 
  * we have not received all the information and explanations, which to the 
    best of our knowledge and belief are necessary for the purpose of our 
    audit. 
 
Respective responsibilities 
 
Directors' responsibilities 
As explained more fully in the Report of the Directors, 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 purpose of this report and restrictions on its use by persons other than 
the Company's members as a body 
 
This report is made solely to the Company's members, as a body, in accordance 
with section 262 of the Companies (Guernsey) Law, 2008.  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 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. 
 
KPMG Channel Islands Limited 
Chartered Accountants 
Guernsey 
29 April 2020 
 
Statement of Financial Position 
As at 31 December 2019 
 
                                                                     As at          As at 
 
                                                               31 December    31 December 
 
                                                                      2019           2018 
 
                                                     Notes               GBP              GBP 
 
Assets 
 
Current assets 
 
Financial assets at fair value through               12,21     117,853,987    120,312,836 
profit or loss 
 
Derivative financial assets                          16,21          33,218      1,706,418 
 
Other receivables                                      15        2,445,789      2,636,504 
 
Cash and cash equivalents                              13        6,430,069      1,304,537 
 
Margin account                                         14        1,435,750      2,252,688 
 
Total assets                                                   128,198,813    128,212,983 
 
Liabilities 
 
Current liabilities 
 
Derivative financial liabilities                     16,21         704,019      1,209,227 
 
Other payables                                         17          506,062        514,161 
 
Total liabilities                                                1,210,081      1,723,388 
 
Net assets                                                     126,988,732    126,489,595 
 
Represented by: 
 
Shareholders' equity and 
reserves 
 
Share capital                                          18       68,124,035     72,080,642 
 
Other reserves                                         2t       58,864,697     54,408,953 
 
Total shareholders' equity                                     126,988,732    126,489,595 
 
Net assets per share                                   6            1.5559         1.4993 
 
The Notes form an integral part of these Financial Statements. 
 
The Financial Statements were approved and authorised for issue by the Board of 
Directors on 28 April 2020. 
 
Norman Crighton 
Chairman 
 
Stephen Coe 
Director 
 
Statement of Comprehensive Income 
For the year ended 31 December 2019 
 
                                                 For the year ended   For the year ended 
 
                                                   31 December 2019     31 December 2018 
 
                                         Notes                    GBP                    GBP 
 
Income 
 
Net changes in fair value of               7              8,105,875         (32,710,234) 
financial assets at fair value 
through profit or loss 
 
Net changes in fair value of               8                123,038              607,612 
derivative financial instruments 
through profit or loss 
 
Net foreign currency (losses)/gains        7              (496,260)              164,874 
 
Other income                               9              4,325,414            4,437,519 
 
Total income/(loss)                                      12,058,067         (27,500,229) 
 
Expenses 
 
Operating expenses                        10            (3,161,724)          (3,418,829) 
 
Total operating expenses                                (3,161,724)          (3,418,829) 
 
Profit/(loss) for the year before tax                     8,896,343         (30,919,058) 
 
Withholding tax                           2s              (965,183)            (974,141) 
 
Profit/(loss) for the year                                7,931,160         (31,893,199) 
after tax 
 
Profit/(loss) and total comprehensive                     7,931,160         (31,893,199) 
income/(loss) for the year 
 
Basic and diluted earnings/(loss) per      5                 0.0960             (0.3780) 
Share 
 
All items derive from continuing activities. 
 
The Notes form an integral part of these Financial Statements. 
 
Statement of Changes in Equity 
For the year ended 31 December 2019 
 
                                                         Share        Other 
 
                                                       capital     reserves        Total 
 
                                           Notes             GBP            GBP            GBP 
 
Balance at 1 January 2019                           72,080,642   54,408,953  126,489,595 
 
Total comprehensive income for the year                      -    7,931,160    7,931,160 
 
Transactions with Shareholders, recorded 
directly in equity 
 
Redemption of Realisation Shares             18    (3,956,607)            -  (3,956,607) 
 
Distributions paid                           3               -  (3,475,416)  (3,475,416) 
 
Balance at 31 December 2019                         68,124,035   58,864,697  126,988,732 
 
For the year ended 31 December 2018 
 
Balance at 1 January 2018                           72,080,642   89,183,638  161,264,280 
 
Total comprehensive loss for the year                        - (31,893,199) (31,893,199) 
 
Transactions with Shareholders, recorded 
directly in equity 
 
Distributions paid                           3               -  (2,881,486)  (2,881,486) 
 
Balance at 31 December 2018                         72,080,642   54,408,953  126,489,595 
 
The Notes form an integral part of these Financial Statements. 
 
Statement of Cash Flows 
For the year ended 31 December 2019 
 
                                                   For the year      For the year ended 
                                                          ended 
 
                                               31 December 2019        31 December 2018 
 
                                       Notes                  GBP                       GBP 
 
Cash flows from operating activities 
 
Profit/(loss) for the year                            7,931,160            (31,893,199) 
 
Adjustments for: 
 
Net change in fair value of financial    7          (7,609,615)              32,545,360 
assets held at fair value through 
profit or loss 
 
Net change in fair value of derivative   8            (123,038)             (1,399,458) 
financial instruments held at fair 
value through profit or loss 
 
Net change in NAV of Realisation                       (41,049)                       - 
Shares 
 
Realised loss on closure of                                   -                 791,846 
derivatives in the year 
 
Effect of foreign exchange rate                       (496,260)                 164,874 
fluctuations 
 
Decrease/(increase) in debtors           15             190,715               (273,396) 
 
(Decrease)/increase in creditors         17             (8,099)                 143,938 
 
Net cash (used in)/generated from                     (156,186)                  79,965 
operating activities 
 
Cash flows from investing activities 
 
Purchase of financial assets at fair                (8,239,027)            (23,512,302) 
value through profit or loss 
 
Open of derivative financial                          (593,087)               (967,526) 
instruments 
 
Proceeds from the sale of financial                  18,803,752              23,877,567 
assets at fair value through profit or 
loss 
 
Closure of derivative financial                       1,884,115                 122,665 
instruments 
 
Decrease in margin account                              816,938               1,156,352 
 
Net cash generated from investing                    12,672,691                 676,756 
activities 
 
Cash flows from financing activities 
 
Redemption of Realisation Shares                    (3,915,557)                       - 
 
Distributions paid                       3          (3,475,416)             (2,881,486) 
 
Net cash used in financing activities               (7,390,973)             (2,881,486) 
 
Net increase/(decrease) in cash and                   5,125,532             (2,124,765) 
cash equivalents 
 
Cash and cash equivalents at the                      1,304,537               3,429,302 
beginning of the year 
 
Cash and cash equivalents at the end                  6,430,069               1,304,537 
of the year 
 
The Notes form an integral part of these Financial Statements. 
 
Notes to the Financial Statements 
For the year ended 31 December 2019 
 
1.   General information 
 
The Company was incorporated with limited liability in Guernsey, as a 
closed-ended investment company on 12 April 2013. The Company's Shares were 
admitted to trading on AIM of the LSE on 14 May 2013. 
 
The Investment Manager of the Company is Weiss Asset Management LP. 
 
At the AGM held on 27 July 2016, the Board approved the adoption of the new 
Articles of Incorporation in accordance with Section 42(1) of the Companies 
(Guernsey) Law, 2008 (the "Law"). 
 
2.   Significant accounting policies 
 
a)  Statement of compliance 
 
The Financial Statements of the Company for the year ended 31 December 2019 
have been prepared in accordance with IFRS adopted by the European Union and 
the AIM Rules of the London Stock Exchange. They give a true and fair view and 
are in compliance with the Law. 
 
b)  Basis of preparation 
 
The Financial Statements are prepared in pounds sterling (GBP), which is the 
Company's functional and presentational currency. They are prepared on a 
historical cost basis modified to include financial assets at fair value 
through profit or loss. 
 
c)  Going concern 
 
The Company has continued in existence following the second Realisation 
Opportunity and will continue to operate as a going concern unless a 
determination to wind up the Company is made. Given this, the Directors will 
propose further realisation opportunities for Shareholders who have not 
previously elected to realise all of their Ordinary Shares. Such opportunities 
will be made using a similar mechanism to previously announced Realisation 
Opportunities. The next Realisation Opportunity will take place during May 
2021. 
 
Based on the fact that the assets currently held by the Company consist mainly 
of securities that are readily realisable, whilst the Directors acknowledge 
that the liquidity of these assets needs to be managed, the Directors believe 
that the Company has adequate financial resources to meet its liabilities as 
they fall due for at least twelve months from the date of this report, and that 
it is appropriate for the Financial Statements to be prepared on a going 
concern basis. 
 
d)  Standards, amendments and interpretations not yet effective 
 
A number of new standards, amendments to standards and interpretations are 
effective for annual periods beginning after 1 January 2020, and have not been 
early adopted in preparing these financial statements. None of these are 
expected to have a material effect on the financial statements of the Company. 
 
e)  Standards, amendments and interpretations effective during the year 
 
There are no new standards effective in the current year which impact the 
Company. 
 
f)   Financial instruments 
 
i)   Classification 
 
Financial assets are classified into the following categories: financial assets 
at fair value through profit or loss and amortised cost. 
 
The classification depends on the business model in which a financial asset is 
managed and its contractual cash flows. 
 
Financial liabilities are classified as either financial liabilities at fair 
value through profit or loss or other financial liabilities at amortised cost. 
 
ii)  Recognition and measurement 
 
Financial assets at fair value through profit or loss ("investments") 
 
Financial assets and derivatives are recognised in the Company's Statement of 
Financial Position when the Company becomes a party to the contractual 
provisions of the instrument. 
 
Purchases and sales of investments are recognised on the trade date (the date 
on which the Company commits to purchase or sell the investment). Investments 
purchased are initially recorded at fair value, being the consideration given 
and excluding transaction or other dealing costs associated with the 
investment. 
 
Subsequent to initial recognition, investments are measured at fair value. 
Gains and losses arising from changes in the fair value of investments and 
gains and losses on investments that are sold are recognised through profit 
 
or loss in the Statement of Comprehensive Income within net changes in fair 
value of financial assets at fair value through profit or loss. 
 
Financial assets at fair value through profit or loss ("derivatives: credit 
default swaps and options") 
 
Subsequent to initial recognition at fair value, credit default swaps and 
options are measured at fair value through profit and loss. 
 
The fair values of the credit default swaps and options are based on traded 
prices. The valuation of the credit default swaps' and options' fair values 
means fluctuations will be reflected in the net changes in fair value of 
derivative instruments. 
 
Derivatives are presented in the Statement of Financial Position as financial 
assets when their fair value is positive and as financial liabilities when 
their fair value is negative. 
 
Other financial instruments 
 
For other financial instruments, including other receivables and other 
payables, the carrying amounts as shown in the Statement of Financial Position 
approximate the fair values due to the short term nature of these financial 
instruments. 
 
iii) Fair Value Measurement 
 
Fair value is the price that would be received to sell an asset or paid to 
transfer a liability in an orderly transaction between market participants at 
the measurement date. Investments traded in active markets are valued at the 
latest available bid prices ruling at midnight, Greenwich Mean Time ("GMT"), on 
the reporting date. The Directors are of the opinion that the bid-market prices 
are the best estimate of fair value. Gains and losses arising from changes in 
the fair value of financial assets and financial liabilities at fair value 
through profit and loss are shown as net gains or losses on financial assets 
through profit or loss in Note 12 and are recognised in the Statement of 
Comprehensive Income in the period in which they arise. Gains and losses 
arising from changes in the fair value of derivative financial instruments are 
shown as net gains or losses on financial derivatives through profit or loss in 
Note 16 and are recognised in the Statement of Comprehensive Income in the 
period in which they arise. 
 
iv) Derecognition of financial instruments 
 
A financial asset is derecognised when: (a) the rights to receive cash flows 
from the asset have expired; (b) the Company retains the right to receive cash 
flows from the asset, but has assumed an obligation to pay them in full without 
material delay to a third party under a "pass through arrangement"; or (c) the 
Company has transferred substantially all the risks and rewards of the asset, 
or has neither transferred nor retained substantially all the risks and rewards 
of the asset, but has transferred control of the asset. 
 
On derecognition of a financial asset, the difference between the carrying 
amount of the asset using the average cost method and the consideration 
received (including any new asset obtained, less any new liability assumed) is 
recognised in profit or loss. 
 
A financial liability is derecognised when the obligation under the liability 
is discharged, cancelled, or expired. 
 
f)   Net changes in fair value of financial assets at fair value through profit 
or loss 
 
Net changes in fair value of financial assets at fair value through profit or 
loss includes all realised and unrealised fair value changes and foreign 
exchange differences, but excludes dividend income. 
 
g)  Income 
 
Dividend income from equity investments is recognised through profit or loss in 
the Statement of Comprehensive Income when the relevant investment is quoted 
ex-dividend. 
 
h)  Expenses 
 
All expenses are accounted for on an accruals basis. Expenses incurred on the 
acquisition of financial assets at fair value through profit or loss and 
management fees are charged to the Statement of Comprehensive Income. 
 
i)   Cash and cash equivalents 
 
Cash comprises cash in hand and demand deposits. Cash equivalents, which can 
include bank overdrafts and margin accounts, are short term, highly liquid 
investments that are readily convertible to known amounts of cash and which are 
subject to insignificant changes in value. Cash, deposits with banks, and bank 
overdrafts are stated at their principal amount. 
 
j)   Share capital 
 
Ordinary Shares are classified as equity. Incremental costs directly 
attributable to the issue of these Shares are shown in equity as a deduction, 
net of tax, from the proceeds and disclosed in the Statement of Changes in 
Equity. 
 
k)  Foreign currency translations 
 
Functional and presentation currency 
 
The Financial Statements of the Company are presented in the currency of the 
primary economic environment in which the Company operates (its "functional 
currency"). The Directors have considered the currency in which the original 
capital was raised, distributions will be made, and ultimately the currency in 
which capital would be returned in a liquidation. 
 
On the Statement of Financial Position date, the Directors believe that pounds 
sterling best represents the functional currency of the Company. For the 
purpose of the Financial Statements, the results and financial position of the 
Company are expressed in pounds sterling, which is the presentational currency 
of the Company. Monetary assets and liabilities, denominated in foreign 
currencies, are translated into pounds sterling at the exchange rate at the 
reporting date. Non-monetary assets denominated in foreign currencies that are 
measured at fair value are translated in pounds sterling at the exchange rate 
at the date on which the fair value was determined. Realised and unrealised 
gains or losses on currency translation are recognised in the Statement of 
Comprehensive Income. Foreign currency differences relating to investments at 
fair value through profit or loss are included within net changes in fair value 
of financial assets at fair value through profit or loss. 
 
l)   Treasury shares 
 
Where the Company purchases its own share capital, the consideration paid, 
which includes any directly attributable costs, is deducted through share 
capital. The difference between the total consideration and the total nominal 
value of all Shares purchased is recognised through other reserves, which is a 
distributable reserve. 
 
If such Shares are subsequently sold or reissued, any consideration received, 
net of any directly attributable incremental transaction costs and the related 
income tax effects, is recognised as an increase in equity and the resulting 
surplus or deficit on the transaction is transferred to or from other reserves. 
 
Where the Company cancels treasury shares, no further adjustment is required to 
the share capital account at the time of cancellation. Shares held in treasury 
are excluded from calculations when determining NAV per Share and earnings per 
Share. 
 
m) Operating segments 
 
The Board has considered the requirements of IFRS 8 'Operating Segments' and is 
of the view that the Company is engaged in a single segment of business, being 
an investment strategy tied to listed preferred shares issued by companies 
incorporated in South Korea. The Board, as a whole, has been determined as 
constituting the chief operating decision maker of the Company. 
 
The key measure of performance used by the Board to assess the Company's 
performance and to allocate resources is the total return on the Company's NAV, 
as calculated under IFRS, and therefore no reconciliation is required between 
the measure of profit or loss used by the Board and that contained in these 
Audited Financial Statements. 
 
The Board of Directors is charged with setting the Company's investment 
strategy in accordance with the investment policy. They have delegated the day 
to day implementation of this strategy to the Company's Investment Manager but 
retain responsibility to ensure that adequate resources of the Company are 
directed in accordance with their decisions. The investment decisions of the 
Investment Manager are reviewed on a regular basis to ensure compliance with 
the policies and legal responsibilities of the Board. The Investment Manager 
has been given full authority to act on behalf of the Company, including the 
authority to purchase and sell securities and other investments on behalf of 
the Company and to carry out other actions as appropriate to give effect 
thereto. 
 
Whilst the Investment Manager may make the investment decisions on a day to day 
basis regarding the allocation of funds to different investments, any changes 
to the investment strategy or major allocation decisions have to be approved by 
the Board, even though they may be proposed by the Investment Manager. 
 
The Board therefore retains full responsibility as to the major decisions made 
on an on-going basis. The Investment Manager will always act under the terms of 
the Admission Document which cannot be significantly changed without the 
approval of the Board of Directors and where necessary, Shareholders. 
 
o)  Other receivables 
 
Other receivables are amounts due in the ordinary course of business. Other 
receivables are recognised initially at fair value and subsequently measured at 
amortised cost using the effective interest method, less provision for 
impairment. 
 
p)  Other payables 
 
Other payables are obligations to pay for services that have been acquired in 
the ordinary course of business. Other payables are recognised initially at 
fair value and subsequently measured at amortised cost using the effective 
interest method. 
 
q)  Due from and due to brokers 
 
Amounts due from and due to brokers represent receivables for securities sold 
and payables for securities purchased that have been contracted for but not yet 
settled or delivered on the Statement of Financial Position date, respectively. 
 
r)  Dividend distribution 
 
Dividend distribution to the Company's Shareholders is recognised as a 
liability in the Company's Financial Statements and disclosed in the Statement 
of Changes in Equity in the period in which the dividends are proposed and 
approved by the Board. 
 
s)   Taxation 
 
The Company has been granted Exempt Status under the terms of The Income Tax 
(Exempt Bodies) (Guernsey) Ordinance, 1989 to income tax in Guernsey. Its 
liability is an annual fee of GBP1,200 (2018: GBP1,200). 
 
The amounts disclosed as taxation in the Statement of Comprehensive Income 
relate solely to withholding tax levied in South Korea on distributions from 
South Korean companies at an offshore rate of 22 per cent. 
 
t)   Other reserves 
 
Total comprehensive income for the year is transferred to Other Reserves. 
 
3.   Dividends to Shareholders 
 
Dividends, if any, will be paid annually each year. An annual dividend of 
4.1195 pence per Share (GBP3,475,416) was approved on 1 May 2019 and paid on 
31 May 2019 in respect of the year ended 31 December 2018. 
 
An annual dividend of 3.4155 pence per Share (GBP2,881,486) was approved on 8 
June 2018 and paid on 13 July 2018 in respect of the year ended 31 December 
2017. 
 
4.   Significant accounting judgements, estimates and assumptions 
 
The preparation of the Financial Statements in conformity with IFRS requires 
management to make judgements, estimates, and assumptions that affect the 
application of policies and the reported amounts of assets and liabilities, 
income and expense, and the accompanying disclosures. Uncertainty about these 
assumptions and estimates could result in outcomes that require a material 
adjustment to the carrying amount of assets or liabilities affected in future 
periods. 
 
The estimates and underlying assumptions are reviewed on an on-going 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 revision and future periods if the revision affects both current and future 
periods. 
 
Judgements 
 
In the process of applying the Company's accounting policies, management has 
made the following judgements, which have the most significant effect on the 
amounts recognised in the Annual Financial Statements: 
 
Functional currency 
 
As disclosed in Note 2l, the Company's functional currency is the pound 
sterling. Pound sterling is the currency in which the original capital was 
raised, distributions will be made, and ultimately the currency in which 
capital would be returned in a liquidation. 
 
5.   Basic and diluted loss/earnings per Share 
 
The basic and diluted earnings per Share of GBP0.0960 (31 December 2018: loss per 
Share of GBP0.3780) for the Company has been calculated based on the total 
comprehensive profit for the year of GBP7,931,160 (for the year ended 31 December 
2018: GBP31,893,199 loss) and the weighted average number of Ordinary Shares in 
issue during the year of 82,633,898 (for the year ended 31 December 2018: 
84,364,981). 
 
6.   Net asset value per Ordinary Share 
 
The NAV of each Share of GBP1.5559 (as at 31 December 2018: GBP1.4993) is 
determined by dividing the net assets of the Company attributed to the Ordinary 
Shares of GBP126,988,732 (as at 31 December 2018: GBP126,489,595) by the number of 
Ordinary Shares in issue at 31 December 2019 of 81,617,828 (as at 31 December 
2018: 84,364,981 Ordinary Shares in issue). 
 
7.   Net changes in fair value on financial assets at fair value through profit 
or loss 
 
                                                   For the year ended        For the year 
                                                                                    ended 
 
                                                     31 December 2019    31 December 2018 
 
                                                                    GBP                   GBP 
 
Realised gain on                                            6,830,858           4,905,671 
investments 
 
Realised loss on foreign currency                           (232,536)            (32,938) 
 
Movement in unrealised gain/(loss) on                       1,275,017        (37,615,905) 
investments 
 
Movement in unrealised exchange (loss)/gain on              (263,724)             197,812 
foreign currency 
 
Net changes in fair value on financial assets               7,609,615        (32,545,360) 
at fair value through profit or loss 
 
8.   Net changes in fair value on derivative financial instruments at fair 
value through profit or loss 
 
                                                For the year ended        For the year 
                                                                                 ended 
 
                                                  31 December 2019    31 December 2018 
 
                                                                 GBP                   GBP 
 
Realised gain/(loss) on                                    668,601           (226,513) 
options 
 
Realised loss on credit default swaps                            -           (565,333) 
 
Movement in unrealised (loss)/gain on                  (1,050,771)             923,716 
options 
 
Movement in unrealised gain/(loss) on                      505,208             475,742 
credit default swaps 
 
Net changes in fair value on financial 
derivatives at fair value through profit                   123,038             607,612 
or loss 
 
9.   Other income 
 
                                                       For the year       For the year 
                                                              ended              ended 
 
                                                   31 December 2019   31 December 2018 
 
                                                                  GBP                  GBP 
 
Dividend                                                  4,325,414          4,437,519 
income 
 
10. Operating expenses 
 
                                                           For the year     For the year 
                                                                  ended            ended 
 
                                                            31 December      31 December 
                                                                   2019             2018 
 
                                                                      GBP                GBP 
 
Investment Management fee (Note 19c)                          1,860,960        2,108,383 
 
Custodian fees                                                   46,965           60,401 
 
Audit fees                                                       33,788           28,300 
 
Administration and Secretarial fees                              98,314           99,315 
 
Directors' fees (Note 19a)                                       81,500           81,500 
 
Tax services                                                      9,750            5,000 
 
Professional fees                                                68,137          154,485 
 
Transaction costs¹                                              103,063          136,536 
 
Sundry expenses                                                  96,632          116,260 
 
Derivative                                                      762,615          628,649 
expense¹ 
 
Total                                                         3,161,724        3,418,829 
Operating 
Expenses 
 
1. Excluded from the TER calculation. 
 
11. Operating segments 
 
Information on realised gains and losses derived from sales of investments is 
disclosed in Note 7 of the Financial Statements. The Company is domiciled in 
Guernsey. Substantially all of the Company's income is from its investment in 
listed preferred shares issued by companies incorporated in South Korea. 
 
The Company has no assets classified as non-current assets. The Company is 
likely to have a high degree of portfolio concentration as South Korean 
preferred shares are concentrated with a small number of issuers. 
 
12. Financial assets at fair value through profit or loss 
 
                                                               As at              As at 
 
                                                    31 December 2019   31 December 2018 
 
                                                                   GBP                  GBP 
 
Cost of investments at beginning of the                  110,153,284        106,460,720 
year 
 
Purchases of investments in the year                       8,239,027         20,717,121 
 
Disposal of investments in the year                     (18,803,751)       (21,930,228) 
 
Realised gain on disposal of investments                   6,830,858          4,905,671 
in the year 
 
Cost of investments held at end of the                   106,419,418        110,153,284 
year 
 
Unrealised gain on investments                            11,434,569         10,159,552 
 
Financial assets at fair value through                   117,853,987        120,312,836 
profit or loss 
 
Financial assets are valued at the bid-market prices ruling as at the close of 
business at the Statement of Financial Position date, net of any accrued 
interest which is included in the Statement of Financial Position as an income 
related item. The Directors are of the opinion that the bid-market prices are 
the best estimate of fair value in accordance with the requirements of IFRS 13 
'Fair Value Measurement'. Movements in fair value are included in the Statement 
of Comprehensive Income. 
 
13. Cash and cash equivalents 
 
                                                                       As at              As at 
 
                                                            31 December 2019   31 December 2018 
 
                                                                           GBP                  GBP 
 
Cash at bank                                                       6,430,069          1,304,537 
 
Cash at bank earns interest at floating rates based on daily bank deposit 
rates. The carrying value of cash at bank approximates the fair values due to 
the short term nature. 
 
14. Margin account 
 
                                                                As at              As at 
 
                                                     31 December 2019   31 December 2018 
 
                                                                    GBP                  GBP 
 
Margin account                                              1,435,750          2,252,688 
 
The margin account represents a margin deposit of collateral held by Credit 
Suisse Securities (USA) LLC in relation to the credit default swaps. The 
carrying value of the margin account approximates the fair values due to the 
short term nature. 
 
15. Other receivables 
 
                                                                   As at          As at 
 
                                                             31 December    31 December 
                                                                    2019           2018 
 
                                                                       GBP              GBP 
 
Dividends receivable                                           2,443,998      2,632,690 
 
Prepaid expenses                                                   1,791          3,814 
 
Total Other                                                    2,445,789      2,636,504 
Receivables 
 
The Directors consider that the carrying amount of receivables approximate 
their fair value. 
 
Dividends are presented net of withholding tax of GBP689,333 (2018: GBP742,554). 
 
16. Derivative financial instruments 
 
                                                              As at              As at 
 
                                                   31 December 2019   31 December 2018 
 
                                                                  GBP                  GBP 
 
Cost of derivatives at beginning of the year              (552,309)          (605,324) 
 
Open of derivatives in the                                  593,087            967,526 
year 
 
Closure of derivatives in the                           (1,884,116)          (122,665) 
year 
 
Realised gain/(loss) on closure of derivatives              668,601          (791,846) 
in the year 
 
Net cost of derivatives held at end of the              (1,174,737)          (552,309) 
year 
 
Net changes in fair value on derivative                     503,936          1,049,500 
financial instruments at fair value through 
profit or loss 
 
Net fair value on derivative financial                    (670,801)            497,191 
instruments at fair value through profit or loss 
 
The following are the composition of the Company's derivative financial 
instruments at year end: 
 
                                                 As at                          As at 
 
                                      31 December 2019               31 December 2018 
 
                             Assets        Liabilities      Assets        Liabilities 
 
Derivatives held for              GBP                  GBP           GBP                  GBP 
trading: 
 
Options                      33,218                  -   1,706,418                  - 
 
Credit default swaps              -          (704,019)           -        (1,209,227) 
 
Total                        33,218          (704,019)   1,706,418        (1,209,227) 
 
17. Other payables 
 
                                                                        As at              As at 
 
                                                             31 December 2019   31 December 2018 
 
                                                                            GBP                  GBP 
 
Investment management fees payable (Note                              310,841            316,144 
19c) 
 
Administration fee                                                     34,876             18,138 
payable 
 
Custody fee payable                                                     3,900             15,993 
 
Co-sec and Listing fee payable                                         12,499              2,561 
 
Audit fees payable                                                     33,000             22,800 
 
Other payables                                                        110,946            138,525 
 
Total Other Payables                                                  506,062            514,161 
 
The Directors consider that the carrying amount of payables approximate their 
fair value. 
 
18. Share capital 
 
The share capital of the Company consists of an unlimited number of Ordinary 
Shares of no par value. 
 
                                                          As at                As at 
 
                                               31 December 2019     31 December 2018 
 
Authorised 
 
Unlimited Ordinary Shares at no par                           -                    - 
value 
 
Issued at no par 
value 
 
81,617,828 (2018: 84,364,981) unlimited                       -                    - 
Ordinary Shares at no par value 
 
Reconciliation of number of Shares 
 
                                                          As at                As at 
 
                                               31 December 2019     31 December 2018 
 
                                                  No. of Shares        No. of Shares 
 
Ordinary Shares at the beginning of the              84,364,981           84,364,981 
year 
 
Purchase of Realisation Shares                      (2,747,153)                    - 
 
Total Ordinary Shares in issue at the                81,617,828           84,364,981 
end of the year 
 
Share capital 
account 
 
                                                          As at                As at 
 
                                               31 December 2019     31 December 2018 
 
                                                              GBP                    GBP 
 
Share capital at the beginning of the                72,080,642           72,080,642 
year 
 
Purchase of Realisation Shares                      (3,956,607)                    - 
 
Total Share capital at the end of the                68,124,035           72,080,642 
year 
 
Ordinary Shares 
 
The Company has a single class of Ordinary Shares, which were issued by means 
of an initial public offering on 14 May 2013, at 100 pence per Share. 
 
The rights attached to the Ordinary Shares are as follows: 
 
a)  The holders of Ordinary Shares shall confer the right to all dividends in 
accordance with the Articles of Incorporation of the Company. 
 
b)  The capital and surplus assets of the Company remaining after payment of 
all creditors shall, on winding-up or on a return (other than by way of 
purchase or redemption of own Ordinary Shares) be divided amongst the 
Shareholders on the basis of the capital attributable to the Ordinary Shares at 
the date of winding up or other return of capital. 
 
c)  Shareholders present in person or by proxy or (being a corporation) present 
by a duly authorised representative at a general meeting have, on a show of 
hands, one vote and, on a poll, one vote for every Share. 
 
d)  On 20 March 2019, being 46 days before the Subsequent Realisation Date, the 
Company published a circular pursuant to the Realisation Opportunity, entitling 
the Shareholders to serve a written notice during the election period (a 
"Realisation Election") requesting that all or a part of their Ordinary Shares 
be re-designated to Realisation Shares, subject to the aggregate NAV of the 
continuing Ordinary Shares on the last business day before the Reorganisation 
Date being not less than GBP50 million. As Shareholders elected to participate in 
the Realisation Opportunity, the Company's portfolio was divided into two 
pools: the Continuation Pool; and the Realisation Pool. 
 
e)  On 15 May 2019, 2,747,153 Ordinary Shares, which represented 3.3 per cent 
of the Company's issued Ordinary Share capital were redesignated as Realisation 
Shares. On the 7 June 2019 the Board approved the compulsory redemption of the 
Realisation Shares in issue. The redemption price was 142.53 pence per 
Realisation Share, being the net assets of the Realisation Pool of GBP3,915,557, 
divided by the number of outstanding Realisation Shares in issue, being 
2,747,153 Realisation Shares. The redemption proceeds were paid to the 
Realisation Shareholders on 18 June 2019, after which the Realisation Shares 
were cancelled and were no longer in issue. 
 
Share buyback and cancellation 
 
During the year ended 31 December 2019, the Company purchased Nil of its own 
Shares (31 December 2018: Nil) at a consideration of GBPNil (31 December 2018: GBP 
Nil) under the Share buyback authority originally granted to the Company in 
2014. 
 
The Company has 81,617,828 Ordinary Shares in issue as at 31 December 2019 (as 
at 31 December 2018: 84,364,981). 
 
At the AGM held on 25 July 2019, Shareholders approved the authority of the 
Company to buy back up to 40 per cent of the issued Ordinary Shares to 
facilitate the Company's discount management. Any Ordinary Shares bought back 
may be cancelled or held in treasury. 
 
19. Related party transactions and material agreements 
 
Related party transactions 
 
a)    Directors' remuneration and expenses 
 
During the year ended 31 December 2019, Directors' fees of GBP81,500 (31 December 
2018: GBP81,500) were charged to the Company and GBPNil remained payable at the 
year-end (as at 31 December 2018: GBPNil). For additional information refer to 
the Directors' Remuneration Report. 
 
b)    Shares held by related parties 
 
The Directors' Interests are set out in the Report of the Directors. 
 
The Investment Manager is principally owned by Dr Andrew Weiss and certain 
members of the Investment Manager's senior management team. 
 
As at 31 December 2019, Dr Andrew Weiss and his immediate family members held 
an interest in 6,486,888 Ordinary Shares (as at 31 December 2018: 6,486,888) 
representing 7.95 per cent. (as at 31 December 2018: 7.69 per cent.) of the 
issued share capital of the Company. 
 
As at 31 December 2019, employees of the Investment Manager, their respective 
immediate family members or entities controlled by them or their immediate 
family members held an interest in 2,844,333 Ordinary Shares (as at 31 December 
2018: 2,718,333) representing 3.48 per cent. (as at 31 December 2018: 3.22 per 
cent.) of the issued share capital of the Company. 
 
Material agreements 
 
c)    Investment management fee 
 
The Company's Investment Manager is Weiss Asset Management LP. In consideration 
for its services provided by the Investment Manager under the IMA dated 8 May 
2013, the Investment Manager is entitled to an annual management fee of 1.5 per 
cent of the Company's NAV accrued daily and payable within 14 days after each 
month end. The Investment Manager is also entitled to reimbursement of certain 
expenses incurred by it in connection with its duties. 
 
The IMA will continue in force until terminated by the Investment Manager or 
the Company, giving to the other party thereto not less than 12 months' notice 
in writing. 
 
For the year ended 31 December 2019, investment management fees and charges of 
GBP1,860,960 (for the year ended 31 December 2018: GBP2,108,383) were charged to 
the Company and GBP310,841 (as at 31 December 2018: GBP316,144) remained payable at 
the year-end. 
 
Additionally, investment management fees of GBP5,630 were charged to the 
Realisation pool up until its closure. 
 
20. Financial risk management 
 
The Company's objective in managing risk is the creation and protection of 
Shareholder value. Risk is inherent in the Company's activities, but it is 
managed through an on-going process of identification, measurement, and 
monitoring. 
 
The main risks arising from the Company's financial instruments are market 
risk, foreign currency risk, interest rate risk, credit risk, and liquidity 
risk. The techniques and instruments utilised for the purposes of efficient 
portfolio management are those which are reasonably believed by the Board to be 
economically appropriate to the efficient management of the Company. 
 
Market risk 
 
Market risk is the risk that the fair value or future cash flows of a financial 
instrument will fluctuate because of changes in market prices. The Company's 
activities expose it primarily to the market risks of changes in market prices, 
interest rates, and foreign currency exchange rates. The Company's investments 
are heavily concentrated in South Korean securities. As the Company's 
investments are heavily concentrated in South Korean securities, the Company 
has entered into certain portfolio hedge positions which are intended to 
provide some level of protection against potential adverse geopolitical and 
macroeconomic conditions in South Korea. 
 
Market price risk 
 
The Company's NAV is sensitive to movements in market prices. As at 31 December 
2019, if market prices had been 5 per cent higher or 5 per cent lower with all 
other variables held constant, then the increase/decrease in NAV would have 
been GBP5,892,699 (as at 31 December 2018: GBP6,039,161). Actual trading results 
may differ from the above sensitivity analysis and those differences may be 
material. 
 
Were there to be a major change in the political or economic environment in 
South Korea, the movement in market prices may be significantly and materially 
higher than the above. Refer to Investment Manager's Report for a discussion of 
potential political and economic changes. 
 
Foreign currency risk 
 
Foreign currency risk is the risk that the value of a financial instrument will 
fluctuate due to changes in foreign exchange rates. 
 
The Company does not hedge its exposure to foreign currency (predominantly 
Korean won (KRW)) and NAV per Share will fluctuate with movements in foreign 
exchange rates. 
 
As at 31 December 2019, the Company held the following assets and liabilities 
in foreign currencies: 
 
                                                             As at                         As at 
 
                                                  31 December 2019              31 December 2018 
 
Amounts in Sterling                           KRW              USD          KRW              USD 
 
Assets 
 
Monetary assets                         7,942,503        1,717,106    3,402,192        2,611,598 
 
Non-monetary assets                   117,853,986           33,218  120,312,836        1,706,418 
 
                                      125,796,489        1,750,324  123,715,028        4,318,016 
 
Liabilities 
 
Non-monetary liabilities                        -        (704,019)            -      (1,209,227) 
 
Total                                           -        (704,019)            -      (1,209,227) 
 
Amounts in the above table are based on the carrying value of monetary assets 
and liabilities. 
 
The table below summarises the sensitivity of the Company's monetary and 
non-monetary assets and liabilities to changes in foreign exchange movements at 
31 December 2019. 
 
                                       Reasonable        As at   Reasonable        As at 
 
                                         possible  31 December     possible  31 December 
 
                                         shift in         2019     shift in         2018 
                                             rate                      rate 
 
                                             2019            GBP         2018            GBP 
 
Currency 
 
KRW 
 
Monetary assets                            +/- 5%      397,125       +/- 5%      170,110 
 
Non-monetary assets                        +/- 5%    5,892,699       +/- 5%    6,015,642 
 
US Dollars 
 
Monetary assets                            +/- 5%       85,855       +/- 5%      130,580 
 
Non-monetary assets                        +/- 5%        1,661       +/- 5%       85,321 
 
Non-monetary liabilities                   +/- 5%     (35,201)       +/- 5%     (60,461) 
 
Interest rate risk 
 
The Company holds limited cash and margin balances in interest-bearing accounts 
of GBP7,865,819 as at 
31 December 2019 (as at 31 December 2018: GBP3,557,225) and does not invest in 
interest-bearing securities and instruments. Accordingly, interest rate risk is 
considered very low. 
 
The tables below summarise the Company's exposure to interest rate risk as of 
31 December 2019: 
 
                                                                                  Total 
 
                                      Floating      Fixed Non-Interest            As at 
 
                                          rate       rate      bearing 31 December 2019 
 
                                             GBP          GBP            GBP                GBP 
 
Financial Assets 
 
Investments designated at 
fair value 
 
through profit or loss                       -          -  117,853,987      117,853,987 
 
Derivative financial assets                  -          -       33,218           33,218 
 
Other receivables                            -          -    2,445,789        2,445,789 
 
Cash and cash equivalents            6,430,069          -            -        6,430,069 
 
Margin account                       1,435,750          -            -        1,435,750 
 
Total                                7,865,819          -  120,332,994      128,198,813 
 
                                                                                  Total 
 
                                      Floating      Fixed Non-Interest            As at 
 
                                          rate       rate      bearing 31 December 2019 
 
                                             GBP          GBP            GBP                GBP 
 
Financial Liabilities 
 
Derivative financial                         -          -      704,019          704,019 
liabilities 
 
Other payables                               -          -      506,062          506,062 
 
Total                                        -          -    1,210,081        1,210,081 
 
The tables below summarise the Company's exposure to interest rate risk as of 
31 December 2018: 
 
                                                                                  Total 
 
                                      Floating      Fixed Non-Interest            As at 
 
                                          rate       rate      bearing 31 December 2019 
 
                                             GBP          GBP            GBP                GBP 
 
Financial Assets 
 
Investments designated at 
fair value 
 
through profit or loss                       -          -  120,312,836      120,312,836 
 
Derivative financial assets                  -          -    1,706,418        1,706,418 
 
Other receivables                            -          -    2,636,504        2,636,504 
 
Cash and cash equivalents            1,304,537          -            -        1,304,537 
 
Margin account                       2,252,688          -            -        2,252,688 
 
Total                                3,557,225          -  124,655,758      128,212,983 
 
                                                                                  Total 
 
                                      Floating      Fixed Non-Interest            As at 
 
                                          rate       rate      bearing 31 December 2018 
 
                                             GBP          GBP            GBP                GBP 
 
Financial Liabilities 
 
Derivative financial                         -          -    1,209,227        1,209,227 
liabilities 
 
Other payables                               -          -      514,161          514,161 
 
Total                                        -          -    1,723,388        1,723,388 
 
Credit risk 
 
Credit risk is the risk that an issuer or counterparty will be unable or 
unwilling to meet a commitment that it has entered into with the Company. 
Credit risk is limited to the carrying value of financial assets at 
31 December 2019 as follows: 
 
                                                                          As at            As at 
 
                                                               31 December 2019 31 December 2018 
 
                                                                              GBP                GBP 
 
Other receivables                                                     2,445,789        2,636,504 
 
Cash and cash equivalents                                             6,430,069        1,304,537 
 
Margin account                                                        1,435,750        2,252,688 
 
Total                                                                10,311,608        6,193,729 
 
The Company is exposed to material credit risk in respect of cash and cash 
equivalents. The credit risk from cash and cash equivalents is mitigated as 
cash is placed within a margin account held with Credit Suisse Securities (USA) 
LLC, a subsidiary of Credit Suisse (USA), Inc ("CS"). As at 31 December 2019, 
CS had a credit rating of A+ (as at 31 December 2018: A) from Standard & Poor's 
and A1 (as at 31 December 2018: A1) from Moody's. Other cash and cash 
equivalents are held with Northern Trust (Guernsey) Limited which is a wholly 
owned subsidiary of The Northern Trust Corporation ("TNTC"). TNTC is publicly 
traded and a constituent of the S&P 500. As at 31 December 2019, TNTC had a 
credit rating of A+ (as at 31 December 2018: A+) from Standard & Poor's and A2 
(as at 31 December 2018: A2) from Moody's. 
 
Liquidity risk 
 
Liquidity risk is the risk that the Company may not be able to generate 
sufficient cash resources to settle its obligations in full as they fall due or 
can only do so on terms that are materially disadvantageous. 
 
The Company's investments are relatively liquid and the Company holds 
sufficient cash balances (or liquid investments) to meet its obligations as 
they fall due. The Board reviews its resources and obligations on a regular 
basis to ensure sufficient liquid assets are held. 
 
As at 31 December 2019, the Company had no significant financial liabilities 
other than payables arising directly from investing activity: 
 
                                                                                    Total 
 
                                    Less than 1                                     As at 
 
                                          month  1-3 months  3-12 months 31 December 2019 
 
                                              GBP           GBP            GBP                GBP 
 
Derivative financial                    704,019           -            -          704,019 
liabilities 
 
Other payables                          506,062           -            -          506,062 
 
Total                                 1,210,081           -            -        1,210,081 
 
                                                                                    Total 
 
                                    Less than 1                                     As at 
 
                                          month  1-3 months  3-12 months 31 December 2018 
 
                                              GBP           GBP            GBP                GBP 
 
Derivative financial                  1,209,227           -            -        1,209,227 
liabilities 
 
Other payables                          514,161           -            -          514,161 
 
Total                                 1,723,388           -            -        1,723,388 
 
Capital risk management 
 
The fair value of the Company's financial assets and liabilities approximate 
their carrying amounts at the reporting date. 
 
The Company's objective when managing capital is to maintain an optimal capital 
structure in order to reduce the cost of capital. The Company may borrow 
capital, but as at 31 December 2019 there were no borrowings (as at 31 December 
2018: GBPNil). 
 
The gearing ratio below is calculated as total liabilities divided by total 
equity. 
 
                                                                          As at            As at 
 
                                                               31 December 2019 31 December 2018 
 
                                                                              GBP                GBP 
 
Total assets                                                        128,198,813      128,212,983 
 
Less: Total liabilities                                             (1,210,081)      (1,723,388) 
 
Net Asset Value                                                     126,988,732      126,489,595 
 
Gearing Ratio                                                             0.95%            1.36% 
 
The Board considers the above gearing ratio to be adequate, since total 
borrowings refer only to amounts due to brokers, derivative liabilities, and 
other payables. 
 
Share buybacks 
 
The Directors have general Shareholder authority to purchase in the market up 
to 40 per cent. of the Ordinary Shares in issue from time to time following 
Admission. The Directors intend to seek annual renewal of this authority from 
Shareholders at each general meeting of the Company. 
 
Pursuant to this authority, and subject to Guernsey law and discretion of the 
Directors, the Company may repurchase Ordinary Shares in the market on an 
on-going basis at a discount to NAV with a view to increasing the NAV per 
Ordinary Share and assisting in controlling the discount to NAV per Ordinary 
Share in relation to the price at which such Ordinary Shares may be trading. 
 
Purchases by the Company will be made only at prices below the estimated 
prevailing NAV per Ordinary Share based on the last published NAV but taking 
account of movements in investments, stock markets, and currencies, in 
consultation with the Investment Manager and at prices where the Directors 
believe such purchases will result in an increase in the NAV per Ordinary Share 
of the remaining Ordinary Shares. 
 
The Directors will consider repurchasing Ordinary Shares when the price per 
Ordinary Share plus the pro forma cost to the Company per Share repurchased is 
less than 95 per cent. of the NAV per Ordinary Share. The pro forma cost per 
Share should include any brokerage commission payable and costs of realising 
portfolio securities to fund the purchase. The Directors may, at their 
discretion, also consider repurchasing Ordinary Shares at a smaller discount to 
NAV per Ordinary Share, provided that such purchase would be accretive to NAV 
per Ordinary Share for any continuing Shareholders. 
 
Realisation Opportunity 
 
On 20 March 2019, the Company announced that pursuant to the Realisation 
Opportunity, Shareholders who are on the register as at the record date may 
elect, during the Election Period, to redesignate all or part (provided that 
such part be rounded up to the nearest whole Ordinary Share) of their Ordinary 
Shares as Realisation Shares, subject to the aggregate NAV of the continuing 
Ordinary Shares at the close of business on the last Business Day before the 
Realisation Date being not less than GBP50 million. The Ordinary Shares held by 
the Shareholders who elected for Realisation were redesignated as Realisation 
Shares and the Portfolio was split into two separate and distinct Pools, namely 
the Continuation Pool (comprising the assets attributable to the continuing 
Ordinary Shares) and the Realisation Pool (comprising the assets attributable 
to the Realisation Shares). 
 
With effect from the Realisation Date, the assets in the Realisation Pool were 
managed in accordance with an orderly realisation programme with the aim of 
making progressive returns of cash, as soon as practicable, to those 
Shareholders who elected to receive Realisation Shares. Ordinary Shares held by 
Shareholders who did not submit a valid and complete election in accordance 
with the Articles during the Election Period remained as Ordinary Shares. 
 
The creation and subsequent redemption of the Realisation Shares resulted in 
the redemption of 2,747,153 Shares at a value of GBP3,956,607. 
 
Unless it has already been determined that the Company will be wound-up, every 
two years after the Realisation Date, the Directors will propose further 
realisation opportunities for Shareholders who have not previously elected to 
realise their Ordinary Shares using a similar mechanism to that described 
above. 
 
If the weighted average discount on the Portfolio is less than 25 per cent over 
any 90-day period, then the Directors shall propose an ordinary resolution for 
the winding up of the Company. If one or more Realisation Elections are duly 
made and the NAV of the continuing Ordinary Shares at the close of business on 
the last Business Day before the Reorganisation Date is less than GBP50 million, 
the Directors may propose an ordinary resolution for the winding up of the 
Company and may pursue a liquidation of the Company instead of splitting the 
Portfolio into the Continuation Pool and the Realisation Pool. 
 
21. Fair value measurement 
 
IFRS 13 'Fair Value Measurement' requires the Company to establish a fair value 
hierarchy that prioritises the inputs to valuation techniques used to measure 
fair value. The hierarchy gives the highest priority to unadjusted quoted 
prices in active markets for identical assets or liabilities (Level 1 
measurements) and the lowest priority to unobservable inputs (Level 3 
measurements). 
 
The three levels of the fair value hierarchy under IFRS 13 'Fair Value 
Measurement' are set as follows: 
 
  * Level 1 Quoted prices (unadjusted) in active markets for identical assets 
    or liabilities; 
 
  * Level 2 Inputs other than quoted prices included within Level 1 that are 
    observable for the asset or liability either directly (that is, as prices) 
    or indirectly (that is, derived from prices); and 
 
  * Level 3 Inputs for the asset or liability that are not based on observable 
    market data (that is, unobservable inputs). 
 
The level in the fair value hierarchy within which the fair value measurement 
is categorised in its entirety is determined on the basis of the lowest level 
input that is significant to the fair value measurement. For this purpose, the 
significance of an input is assessed against the fair value measurement in its 
entirety. 
 
If a fair value measurement uses observable inputs that require significant 
adjustment based on unobservable inputs, that measurement is a Level 3 
measurement. Assessing the significance of a particular input to the fair value 
measurement requires judgement, considering factors specific to the asset or 
liability. 
 
The determination of what constitutes 'observable' requires significant 
judgement by the Company. The Company considers observable data to be that 
market data that is readily available, regularly distributed or updated, 
reliable and verifiable, not proprietary, and provided by independent sources 
that are actively involved in the relevant market. 
 
The following table presents the Company's financial assets and liabilities by 
level within the valuation hierarchy as of 31 December 2019: 
 
                                                                                   Total 
 
                                                                                   As at 
 
                                          Level 1      Level 2      Level 3  31 December 
                                                                                    2019 
 
                                                GBP            GBP            GBP            GBP 
 
Financial assets/(liabilities) at 
fair value through 
 
profit or loss: 
 
    Korean preferred shares           117,853,988            -            -  117,853,988 
 
    Financial derivative                   33,218            -            -       33,218 
assets 
 
    Financial derivative                        -    (704,019)            -    (704,019) 
liabilities 
 
Total net assets                      117,887,206    (704,019)            -  117,183,187 
 
                                                                                   Total 
 
                                                                                   As at 
 
                                          Level 1      Level 2      Level 3  31 December 
                                                                                    2018 
 
                                                GBP            GBP            GBP            GBP 
 
Financial assets/(liabilities) at 
fair value through 
 
profit or loss: 
 
    Korean preferred shares           120,312,836            -            -  120,312,836 
 
    Financial derivative                1,706,418            -            -    1,706,418 
assets 
 
    Financial derivative                        -  (1,209,227)            -  (1,209,227) 
liabilities 
 
Total net assets                      122,019,254  (1,209,227)            -  120,810,027 
 
The Company recognises transfers between levels of the fair value hierarchy as 
of the end of the reporting year during which the transfers have occurred. 
During the year ended 31 December 2019, financial assets of GBPNil were 
transferred from Level 1 to Level 2 (for the year ended 31 December 2018: GBP 
Nil). 
 
Investments whose values are based on quoted market prices in active markets, 
and are therefore classified within Level 1, include Korean preference shares 
and exchange traded options. 
 
The Company holds investments in derivative financial instruments which are 
classified as Level 2 within the fair value hierarchy. These consist of credit 
default swaps with a fair value of (GBP704,019) 
(as at 31 December 2018: (GBP1,209,227)). 
 
The following tables analyse within the fair value hierarchy the Company's 
assets and liabilities not measured at fair value at 31 December 2019 and 31 
December 2018 but for which fair value is disclosed. 
 
                                                                                   Total 
 
                                                                                   As at 
 
                                                                        31 December 2019 
 
Assets                                  Level 1     Level 2     Level 3                GBP 
 
Cash and cash equivalents             6,430,069           -           -        6,430,069 
 
Margin account                        1,435,750           -           -        1,435,750 
 
Other receivables                     2,443,998       1,791           -        2,445,789 
 
Total                                10,309,817       1,791           -       10,311,608 
 
Liabilities 
 
Other payables                                -     506,062           -          506,062 
 
Total                                         -     506,062           -          506,062 
 
                                                                                   Total 
 
                                                                                   As at 
 
                                                                        31 December 2018 
 
Assets                                  Level 1     Level 2     Level 3                GBP 
 
Cash and cash equivalents             1,304,537           -           -        1,304,537 
 
Margin account                        2,252,688           -           -        2,252,688 
 
Other receivables                     2,632,690       3,814           -        2,636,504 
 
Total                                 6,189,915       3,814           -        6,193,729 
 
Liabilities 
 
Other payables                                -     514,161           -          514,161 
 
Total                                         -     514,161           -          514,161 
 
The assets and liabilities included in the above table are carried at amortised 
cost; their carrying values are a reasonable approximation of fair value. 
 
Cash and cash equivalents include cash in hand and deposits held with banks. 
 
Amounts due to brokers and other payables represent the contractual amounts and 
obligations due by the Company for settlement of trades and expenses. Amounts 
due from brokers and other receivables represent the contractual amounts and 
rights due to the Company for settlement of trades and income. 
 
22. NAV reconciliation 
 
The Company announces its NAV to the LSE after each weekly and month end 
valuation point. The following is a reconciliation of the NAV per Share 
attributable to participating Shareholders as presented in these Financial 
Statements, using IFRS to the NAV per Share reported to the LSE: 
 
                                        As at 31 December 2019    As at 31 December 2018 
 
                                                       NAV per                   NAV per 
 
                                                 Participating             Participating 
 
                                             NAV         Share         NAV         Share 
 
                                               GBP             GBP           GBP             GBP 
 
Net Asset Value reported to          124,536,322        1.5258 123,860,752        1.4682 
the LSE 
 
Adjustment to accruals and                 8,412        0.0001     (3,847)             - 
cash 
 
Adjustment for dividend                2,443,998        0.0300   2,632,690        0.0312 
income 
 
Net Assets Attributable to           126,988,732        1.5559 126,489,595        1.4994 
Shareholders per Financial 
Statements 
 
 
The published NAV per Share of GBP1.5258 (as at 31 December 2018: GBP1.4682) is 
different from the accounting NAV per Share of GBP1.5559 (as at 31 December 2018: 
GBP1.4993) due to the adjustments noted above. 
 
23. Subsequent events 
 
These Financial Statements were approved for issuance by the Board on 28 April 
2020. Subsequent events have been evaluated until this date. 
 
Since the start of 2020, the outbreak of COVID-19 has adversely impacted global 
commercial activities and financial markets. The rapid development and fluidity 
of this situation precludes any prediction as to its ultimate impact, which may 
have a continued adverse impact on economic and market conditions and may 
trigger a period of global economic slowdown. The Company, consistent with 
other in the industry, does not believe there is any impact to the financial 
statements as of 31 December 2019 as a result of this subsequent event. No 
additional events or transactions require further disclosure. 
 
As at 21 April 2020, the published NAV per share was GBP1.4055. This represents a 
drop of 7.88 per cent from the 31 December 2019 published NAV per share, which 
movement was mostly attributable to the impact of COVID-19 on the global 
markets. 
 
 
 
END 
 

(END) Dow Jones Newswires

May 05, 2020 08:18 ET (12:18 GMT)

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