Pacific Assets Trust Plc - Final Results

Pacific Assets Trust Plc - Final Results

PR Newswire

London, May 9

LONDON STOCK EXCHANGE ANNOUNCEMENT

Pacific Assets Trust plc

(the "Company" or the "Trust")

Final Results for the Year Ended 31 January 2023

The Company's annual report for the year ended 31 January 2023, which includes the notice of the Company's forthcoming annual general meeting, has been submitted to the UK Listing Authority, and will shortly be available in full, unedited text for inspection on the National Storage Mechanism (NSM): https://data.fca.org.uk/#/nsm/nationalstoragemechanism

The annual report will be posted to shareholders on 17 May 2023. Members of the public may obtain copies by writing to Frostrow Capital LLP, 25 Southampton Buildings, London WC2A 1AL or from the Company's website at www.pacific-assets.co.uk where up to date information on the Company, including daily NAV, share prices and fact sheets, can also be found.

Frostrow Capital LLP, Company Secretary

0203 709 8734

10 May 2023

Company Performance

Performance Summary

	As at	As at
	31 January	31 January
	2023	2022
Shareholders' funds	£473.7m	£450.7m
Market capitalisation	£433.0m	£411.3m

	One year to	One year to
	31 January	31 January
Performance	2023	2022
Share price total return1 2	5.9%	2.9%
Net asset value per share total return1 2	5.7%	9.1%
CPI +6%3	17.3%	11.5%
MSCI All Country Asia ex Japan Index total return, sterling adjusted1	(2.2)%	(9.2)%
Average discount of share price to net asset value per share1 2	10.1%	7.3%
Ongoing charges2	1.1%	1.1%
Revenue return per share4	2.5p	2.0p
Dividend per share	2.3p	1.9p

1 Source: Morningstar

2 Alternative Performance Measure (see Glossary)

3 The Company's Performance Objective (see Glossary)

4 See Glossary

Chairman's Statement

We have seen confiscation of central bank reserves, the freezing of stock markets and the impounding of luxury yachts and assets belonging to nationals of an unfavoured country. We can argue that Russia is exceptional and that our well-managed Asian markets would never be forced to succumb to such international pressure. Yet it wasn't so long ago that mainstream investors were being encouraged to have some diversification into Russia, so blessed with energy and other resources with its technically literate, educated young millennials.

It is not my intention from my vantage point of chairing this Trust to alarm our shareholders. However, one of the more significant developments in recent years has been the weaponisation of the dollar and other Western currencies, and that it has become seemingly legitimate to seize the assets of a country that has crossed a line of political respectability. It can be argued that it was ever thus in emerging markets, but we have seen global polarisation on a somewhat different scale exacerbated by the Ukrainian war. In short, the nature of 'country risk' has altered in the last 12 months.

However, in the end we must do our job in optimising returns from investing in these vibrant Asian countries. You, as shareholders, must consider the exposure that you should have in a part of the world that provides you with something different from what can be found at home.

We are usually agnostic about politics, domestic and global, but we have taken note by introducing a new line of control. Pacific Assets belies its name by having high exposure to India, something which has been helpful to returns in this difficult last year. During the year, the Board agreed with the Portfolio Manager the introduction of an upper limit to weighting in any one country. In particular, no more than 45% of the Company's total assets may be invested in any one country at the time of investment and the Portfolio Manager shall seek to rebalance the portfolio if any country accounts for 49% of total assets at any time. India and China have become so dominant economically and politically in the Asia Pacific region, as have their stock markets. The Trust's portfolio is built from the bottom up which will of course remain the case, but the limit prevents there being accidental overload in a country possibly exposing our shareholders to higher political risk.

The Board is proposing to shareholders at the forthcoming Annual General Meeting ("AGM") that this limit be formalised as part of the Company's investment policy. Further information can be found on pages 98 to 105 of the Annual Report.

Outcomes in the Year

The detailed performance data is to be found above. In absolute terms, Pacific Assets was the only member of its peer group of Asian investment trusts to produce an increase in value for its shareholders, with a rise of 5.7%. While this is satisfactory, the Trust failed to achieve its performance objective of exceeding UK CPI plus 6% (+17.3%). We have noted in the past that the Trust, under the management of Stewart Investors, tends to be able to ride out difficult markets, and this is again vindicated in absolute terms by the outcome of the last 12 months.

To look a little at the longer term, the annualised NAV return of the Trust (and the corresponding CPI plus 6% figure in parantheses) is 11.9% over 3 years (11.9%), 8.8% over 5 years (10.3%), and 10.9% since Stewart Investors began to manage the Trust in June 2010 (9.1%).

It is also worth looking at the MSCI AC Asia ex Japan Index (the "Index") over the longer periods. It is interesting to see how the Index has lagged active managers over both long and short periods. This is an unusual phenomenon in that most market indices, especially in developed markets, tend to be very difficult to overcome. Managers, if they care to do so, can make quite significant choices as to how they differ from the Index within Asia, either by not including some of the larger components (Chinese internet stocks, for instance) or by accentuating positions in one country or another. As the last year has shown, correlations between the two major markets (China and India) can fall to very low levels. Whatever means you use to analyse this, it is rather heartening if you philosophically believe in the powers of active management over passive, and in good stock picking, to find that Asia can still be rewarding in relative terms.

Less so, perhaps, in absolute terms. Both the United States and Europe over the last five years have produced better annualised returns than Asia as a whole. Attempts to explain this could dominate the rest of this Chairman's statement but suffice to say that Asia Pacific markets have not delivered the premium return over developed markets that the asset allocation models suggest should be normal.

Impact

It has been rather bewildering to be associated with Pacific Assets Trust these past ten years, to see the investment industry become fixated on 'sustainability'. It almost suggests that there is a choice once you have excluded the polluters as to whether you invest in a clean manner or not. Those of you who have met our portfolio managers will be only too aware that they simply do not understand whether there should be a distinction or not. Sustainable investing is embedded in their psyche and must be for any new member joining their team. Hence the somewhat confused look when someone asks whether they are ESG compliant, or how they can be accredited as a sustainable investor by an algorithm that is fed by multiple choice answers.

When the Board visits an Asian country with the Portfolio Manager, we participate in an intense programme of company meetings. When meeting one of the world's largest semiconductor manufacturers, the questions were not about earnings growth, but about the use of conflict minerals in the supply chain and their excessive consumption of fresh water. In India, we have met senior board members where the questions are about their personal journey and about the fit of professional managers with the company's founders. I should add that the spreadsheet with the numbers is there as well, but the criteria applied are distinctly long-term in their nature.

The large weighting in Indian companies and the relatively light weighting in China does not result from some strategic decision. It comes down to the availability of companies that meet the criteria of good governance. A few years ago in Shanghai, we visited some interesting companies with the Portfolio Manager which appeared to show considerable potential. Hardly any of these ended up in Pacific Assets' portfolio, with too many having dubious association with government agencies, or alternatively they had unexpectedly diversified into an area that bore no relationship to the company's core business. In India, on the other hand, there is a surprising depth of able companies that display the kind of positive impacts that increasingly investors are looking for. Two of our three largest holdings, Tube Investments and CG Power (together 12.5% of the portfolio) have been outstanding under the stewardship of the Murugappa family, first recognised by Stewart Investors 12 years ago.

Company Balance Sheets and Gearing

To begin with, our Portfolio Manager believes that the cleaner the balance sheet, the more resilient the business in tough times. This does not mean to say that only debt free businesses are owned in the Trust's portfolio, but financial vulnerability must be kept to a minimum. The longer standing businesses in Asia, especially those controlled by multi-generation families, will have seen economic, political, and military turbulence far beyond our own experience in the West. Take, for example, the Lee family who founded Oversea-Chinese Banking Corporation in Singapore in the early 1930s, who still manage a forward looking but conservative leaning bank today. It remains one of the Trust's largest holdings.

Investors may be preoccupied in trying to second guess the world's central banks. However, an over-arching question is what happens further on in this cycle. The longer-term effect of more than a decade of zero or negative interest rates is still not really understood. Within the Asian region, there are questions about the economic sustainability of an indebted China, with its shadow banking system seemingly supported by a network of state inspired safety nets. Is the assumption correct that we must return to negligible interest rates everywhere, with all the effects of supporting zombie companies and entrenching the misallocation of capital? Financial engineering may have distorted true profitability amongst more unscrupulous companies. Off balance sheet finance is another unknown.

I have talked about sustainability, a hard to define concept. Similarly, 'quality' is another which cannot easily or neatly be defined. Looking forward as the post Covid-19 interest rate cycle unravels, and with it, hopefully but not with any certainty, inflation, we may not quickly return to a low-risk world that many investors expect. Financial sustainability is an important aspect of the portfolio of Asian companies that the Trust holds. It also goes some way to answering the question about how the downside is protected during difficult markets such as the last year.

There is linkage here to the use of leverage within the Trust's portfolio. Gearing can be a differentiating factor that is available to investment companies but not to open-ended funds and can be appropriate, especially when secured against a portfolio of soundly financed companies. When used, it will add to the NAV performance of the Company in rising markets but, conversely, detract in falling markets. This has the effect of amplifying market movements but, over time, the intention is that it should enhance the return to shareholders. Last year shareholders approved the use of gearing in principle but, to date, no borrowing facilities have been put in place. Your Board will continue to consider the use of gearing but will be mindful that, among other factors, the prevailing cost of borrowing is relatively unattractive.

Total Return

We think of this when considering the discount that may exist between the share price and the net asset value of the Trust.

The Trust's shares traded at an average discount to the net asset value per share of 10.1% through the 12- month period to the end of January. In line with the investment companies sector overall, the share price discount widened materially at the time of the Russian invasion of Ukraine, and then steadily narrowed over the remainder of the financial year to close at 8.6% (2022: 8.8%). Strong relative performance is assisting investor sentiment, as will the Portfolio Manager's high level of credibility as a sustainable investor, attractive to shareholders who are seeking exposure to Asia through genuinely responsible investing.

The Board is working to introduce improvements to the visibility of the Trust. We wish to see a broader range of shareholders including retail investors who are less present on our shareholder register than we would like. Stewart Investors, on their marketing side, are raising their already high standards of printed materials and electronic communications. All of this will be helpful in ensuring continuing demand for the Trust's shares, but only if the Trust can continue to provide positive relative returns in the way that it has done over the last five years.

Dividend

The Company generated a revenue return of 2.5p per share during the year (2022: 2.0p per share) and, as a result, the Board recommends to shareholders the payment of a final dividend to allow the Company to comply with the investment trust rules regarding distributable income.

Subject to shareholder approval at the AGM, a final dividend of 2.3p per share will be paid on 6 July 2023 to shareholders on the register on 9 June 2023. The associated ex-dividend date will be 8 June 2023.

The Board

We adhere to good corporate governance principles that we should be looking to replace a director after they have served on the Board for over nine years. We do not agree with the assertion that extreme longevity compromises independence, but we do believe that there is room for fresh thinking and approach after a certain time.

I will be leaving the Company at the end of May 2023 having been a director since 2013 and Chairman since 2015. Andrew Impey will take over from me and will be chairing the AGM. His biography is on page 35 of the Annual Report. Andrew brings a lifetime of professional involvement in investment management and is already an experienced leader of an investment company board, and I am sure he will provide capable leadership to Pacific Assets Trust and its Board.

There will be other retirements in subsequent years. The challenge of ensuring continuity of the Board and managing the relationships with the Portfolio Manager and others is something that we are acutely conscious of. We are very focused on successfully managing the transitions with the right individuals and mix of people. We are asking shareholders to approve an increase to the ceiling on Directors' fees collectively to £300,000. Our total combined fees are well below this, but it enables us where necessary, to carry an extra member of a Board to ensure overlap with a new position.

I would like to say in my final Chairman's statement how much I appreciate the professionalism and the skills of our two key service providers, Stewart Investors as the Portfolio Manager and Frostrow, as our AIFM, administrator and company secretary. Although my time in the investment industry now exceeds 50 years, I never stop learning, and it has been a privilege to work with such able people. Where Stewart Investors are concerned, their team of portfolio managers are dedicated to understanding their companies and are fully grafted to a unique investment philosophy. I shall of course continue to be a shareholder, expecting to be well satisfied with what the Trust will offer.

Regulatory Developments

The Company looks forward to the publication of the FCA's policy statement on, and the implementation of, the UK Sustainability Disclosure Requirements ("UK SDR"). Stewart Investors adopt a sustainable investment strategy in selecting the investments that make up the Company's portfolio and aim to generate strong long-term, risk-adjusted returns by investing in the shares of high-quality companies that are particularly well positioned to contribute to and benefit from sustainable development in the Asia Pacific Region. Given this long-standing sustainable investment strategy, the Company will seek to comply with, and report against, a high standard of sustainability disclosures under the UK SDR once the categorisations and requirements of this regime have been confirmed. Although it is not currently expected that the UK SDR will change Stewart Investors' strategy in managing the Company's portfolio, the Board notes that the Company's investment objective and policy may require further amendment, and approval by shareholders, in order to meet the regulatory requirements governing sustainability disclosures going forward. The FCA has stated its intention to publish the UK SDR policy statement in the third quarter of 2023. The Board will provide a further update to shareholders in due course and, to the extent required, seek shareholder approval for any necessary changes to the Company's investment objective and policy once the details of the UK SDR are known.

The Annual General Meeting

This year's Annual General Meeting will be held at 12 noon on Monday, 3 July 2023, at the offices of Stewart Investors, Finsbury Circus House, 15 Finsbury Circus, London EC2M 7EB. As well as the formal proceedings, there will be an opportunity for shareholders to meet the Board and the Portfolio Manager, and to receive an update on the Company's strategy and its key investments.

I encourage all shareholders to exercise their right to vote at the AGM. The Board strongly encourages shareholders to register their votes online in advance. Registering your vote in advance will not restrict shareholders from attending and voting at the meeting in person should they wish to do so. As investors we take corporate governance seriously among the companies that we own in the Trust's portfolio, and we urge you, our shareholders, to follow suit and vote on the resolutions that are proposed, as we directors intend to do ourselves.

The Outlook

Our investment universe covers an area that contains over 60% of the world's population, and an ever growing proportion of global GDP. Generalising about such varied countries is always hazardous, which makes predicting the short-term future hard. However, we note that the anxieties about interest rates, inflation, and financial accidents seem to diminish the further you move away from the developed world. There can be no isolation from difficult global trends, but there is a feeling of greater self-sufficiency in Asia than there was a few years ago. Our goal is to invest for the long term alongside successful and experienced local business leaders. The rewards that will accrue come from satisfying the needs of a huge and growing middle class, from exploitation of technological inventiveness, and from skilful management.

James Williams
Chairman

9 May 2023

Investment Portfolio

as at 31 January 2023

Company	Country	MSCI Sector	Market valuation £'000	% Net assets
CG Power & Industrial Solutions	India	Industrials	33,106	7.0%
Mahindra & Mahindra	India	Consumer Discretionary	28,591	6.0%
Tube Investments of India	India	Consumer Discretionary	25,997	5.5%
Unicharm	Japan	Consumer Staples	15,805	3.3%
Oversea-Chinese Banking
Corporation	Singapore	Financials	15,454	3.3%
Marico	India	Consumer Staples	13,204	2.8%
Voltronic Power Technology	Taiwan	Industrials	12,698	2.7%
Shenzhen Inovance Technology	China	Industrials	11,595	2.5%
Hoya	Japan	Health Care	11,581	2.4%
Techtronic Industries	Hong Kong	Industrials	11,513	2.4%
Top 10 Investments			179,544	37.9%
Koh Young Technology	South Korea	Information Technology	11,139	2.3%
Vitasoy International	Hong Kong	Consumer Staples	10,787	2.3%
Housing Development Finance Corporation	India	Financials	10,449	2.2%
Elgi Equipments	India	Industrials	9,827	2.1%
Vinda International	China	Consumer Staples	9,654	2.0%
Tata Consumer Products	India	Consumer Staples	9,382	2.0%
PT Kalbe Farma	Indonesia	Health Care	8,905	1.9%
Taiwan Semiconductor Manufacturing	Taiwan	Information Technology	8,657	1.8%
Humanica	Thailand	Information Technology	8,545	1.8%
Shanthi Gear	India	Industrials	7,634	1.6%
Top 20 Investments			274,522	57.9%
Sheng Siong Group	Singapore	Consumer Staples	7,631	1.6%
Aavas Financiers	India	Financials	7,402	1.6%
Glodon	China	Information Technology	7,369	1.6%
Kotak Mahindra Bank	India	Financials	7,174	1.5%
Chroma ATE	Taiwan	Information Technology	7,108	1.5%
Delta Electronics	Taiwan	Information Technology	6,454	1.4%
Advanced Energy Solution	Taiwan	Industrials	6,405	1.3%
Bank OCBC NISP	Indonesia	Financials	6,310	1.3%
Selamat Sempurna	Indonesia	Consumer Discretionary	6,285	1.3%
Advantech	Taiwan	Information Technology	6,246	1.3%
Top 30 Investments			342,908	72.3%

Company	Country	MSCI Sector	Market valuation £'000	% Net assets
Cholamandalam Financial	India	Financials	6,217	1.3%
Tata Consultancy Services	India	Information Technology	6,213	1.3%
Vitrox	Malaysia	Information Technology	5,943	1.3%
Godrej Consumer Products	India	Consumer Staples	5,800	1.2%
PT Unilever Indonesia	Indonesia	Consumer Staples	5,665	1.2%
Amoy Diagnostics	China	Health Care	5,414	1.1%
Unicharm Indonesia	Indonesia	Consumer Staples	5,161	1.1%
Tokyo Electron	Japan	Information Technology	4,848	1.0%
Philippine Seven	Philippines	Consumer Staples	4,835	1.0%
Guangzhou Kingmed Diagnostics	China	Health Care	4,496	1.0%
Top 40 Investments			397,501	83.8%
PT Industri Jamu dan Farmasi Sido Muncul	Indonesia	Consumer Staples	4,393	0.9%
Dr Lal Pathlabs	India	Health Care	4,364	0.9%
Infosys	India	Information Technology	4,339	0.9%
Dabur India	India	Consumer Staples	4,328	0.9%
Public Bank	Malaysia	Financials	4,288	0.9%
Tarsons Products	India	Health Care	4,265	0.9%
Tata Communications	India	Communication Services	4,121	0.9%
Pigeon Corporation	Japan	Consumer Staples	3,926	0.8%
Centre Testing International Group	China	Industrials	3,834	0.8%
Kasikornbank	Thailand	Financials	3,456	0.7%
Top 50 Investments			438,813	92.5%
Airtac International	Taiwan	Industrials	3,394	0.7%
Silergy	China	Information Technology	3,317	0.7%
Dr. Reddy's Laboratories	India	Health Care	3,309	0.7%
Indiamart Intermesh	India	Industrials	3,309	0.7%
Yifeng Pharmacy Chain	China	Consumer Staples	3,284	0.7%
Tech Mahindra	India	Information Technology	3,280	0.7%
Marico Bangladesh	Bangladesh	Consumer Staples	3,240	0.7%
Syngene International	India	Health Care	2,668	0.6%
Foshan Haitian Flavouring & Food	China	Consumer Staples	1,988	0.4%
DBH Finance	Bangladesh	Financials	1,960	0.4%
Info Edge	India	Communication Services	1,918	0.4%
Zhejiang Supor	China	Consumer Discretionary	1,831	0.4%
Pentamaster International	Malaysia	Information Technology	1,181	0.3%
Brac Bank	Bangladesh	Financials	906	0.2%
Total Investments			474,399	100.0%

Portfolio Manager's Review

The Company is managed with a long-term philosophy that values capital preservation alongside capital growth. We do not believe that the respect given to downside protection constrains the long-term potential to grow the net asset value of the Trust in any way. Rather, we see it as a vital component in the ability to generate long-term growth.

There are common characteristics that companies which fail to protect and grow capital share with one another. These include, but are not limited to, a history of corruption, short-time horizons, government connections, bad capital allocation, poor sustainability positioning, lack of pricing power, unproven business models, mountains of debt and fragile cash flows.

We aim to filter out these poor-quality features as we believe their presence increases the vulnerability of the business, its stream of cash flows, and ultimately its share price. The presence of such characteristics by no means guarantees that a company will automatically fall foul of some universal law of failure, only that it will tend to fail our quality threshold criteria and desire to own the company for the next ten years.

An emphasis on capital preservation allows us to quickly eliminate many companies across the region, leaving a far smaller set of companies with which to study quality in greater detail. From here, we spend the vast majority of our time trying to understand the people that make up a business, whether that be the ultimate owner, the management team or the culture that proliferates the whole organisation. We do so because we believe it is the quality of the people and the decisions they make on a daily basis that creates, and protects the pricing power, exceptional returns on capital or enduring growth outcomes enjoyed by quality businesses. Simply, it is people who impact the long-term success or failure of a business. Importantly we do not rely on auditors, ESG scores or other outside entities to tell us who to trust.

A consequence of looking for people we trust to take a long-term view and behave in the best interests of stakeholders is that 90% of companies in the Trust have a long-term owner at the helm. These stewards have their own capital invested alongside the Trust while also sharing the Trust's time horizon and philosophy of long-term capital protection and growth. For those companies without a long-term steward, we are looking for cultures that exhibit the same values. Because we are free from having to use a benchmark index as a starting point when constructing our portfolio, there is no pressure for us to expose the Trust's capital to a particular company, sector or country if we believe the risk of capital loss is too high.

Macroeconomic Volatility

Much has been written, and forecast, about the direction of travel for interest rates and inflation. We aim to avoid falling into the trap of allowing top-down noise to distract and shorten time horizons. If we are true to our philosophy and build a diversified portfolio of high-quality businesses at reasonable valuations, there should be little need for us to alter geographic or sector exposure on account of a shift in economic rhetoric. We invest in companies not countries. This was the case last year and over every period Stewart Investors has had the privilege of managing the Trust. As stewards, we would not be fulfilling our obligation to shareholders if we built a portfolio with a high likelihood of severe capital loss should there be any slight variation in the macroeconomic environment.

A bottom-up approach to filtering out poor quality companies leads us to companies which should have a greater ability than most to survive, and prosper, across macroeconomic cycles. The Trust is home to companies who enjoy attractive margins and long track records of pricing power. The average age of the companies in the Trust is 45; inflation is not new to these businesses. Institutional memory of years when inflation sat at levels materially higher than today ensures these businesses are purposefully robust. These businesses should also be relatively resilient to changes in interest rates. The vast majority of the companies in the Trust have more cash than debt on their balance sheets and can fund investment in future growth through their own cash flow generation. This offers freedom from the pressure to appease banks and capital markets - stakeholders who tend to be very short-term.

Political Volatility

Unanticipated political change is not new to Asian markets but last year perhaps marked one of the most significant junctures in the region's history. With Xi Jingping being confirmed as President of the Chinese Communist Party ("CCP") for an unprecedented third term, his preferences, fears and ambitions will be those that drive China for the foreseeable future. The Trust has had minimal exposure to Chinese listed companies over the course of the last ten years. This is not the result of a top-down view of politics, or growth, or demographics but due to an inability to find companies that meet our quality and valuation thresholds. Most companies in China are either state-controlled or state-owned so are easily avoided by us on 'quality of people' grounds; misalignment with controlling shareholders, especially governments, is an easy way of losing capital.

The Trust now owns nine Chinese companies: each has a private entrepreneur, family or steward behind it who we trust to continue their track record of treating minority investors fairly while building unique and enduring franchises. A consequence of our lens of asking "what could go wrong?" as well as "what can go right?" has been our need to appraise how businesses in China are aligned with the objectives and aims of Xi and his CCP. This focus on capital protection allowed the Trust to avoid the redrawing of the rules in the Chinese education and fintech sectors. Again, thanks to our ability to be truly bottom up, we can be very picky in the companies we choose to own in China. If we were to see a deterioration in the industries in which our companies operate, greater political involvement or stretched valuations there should be no surprise if the Trust's exposure to China were to fall again.

Investment Returns

Over the year to 31 January, the net asset value of the Trust returned 5.7%. Using the MSCI All Country Asia ex Japan Index (the "Index") as a reference point, the chart on page 15 of the Annual Report provides one way of visualising the Trust's track record. Every one-year rolling period since Stewart Investors started managing the Trust is represented by a dot (taken at quarterly intervals). Every dot below the line represents a year of underperformance against the Index, every dot above the line, outperformance. Focusing only on years where the Index has delivered returns of less than 0% highlights the ability of companies owned within the Trust to survive and prosper under most periods of stress.

The chart also shows that the Trust tends to, more often than not, underperform fast rising markets; these are often markets where the types of poor-quality companies we aim to avoid are in favour. It may not be the most exciting proposition, growing wealth over the long term by focusing on the downside, but we believe it offers shareholders an attractive way to gain exposure to the fantastic opportunities available in the Asian region.

Markets with <0% return (rolling 1yr basis)	%
Pacific Assets Trust NAV Total Return - average %	-1.1
MSCI AC Asia ex Japan Index - average %	-9.6

Extending the frame of performance to three, five and seven years - time periods more in-line with our investment horizon - the Trust has delivered satisfactory levels of capital appreciation.

Annual Performance	12mths to	12mths to	12mths to	12mths to	12mths to
(% in GBP) to 31 January 2023	31/01/23	31/01/22	31/01/21	31/01/20	31/01/19
NAV	5.7	9.0	21.8	4.1	4.7
Share Price	5.9	2.9	25.8	-0.8	8.1
CPI + 6%	17.3	11.9	6.8	7.5	8.4
MSCI AC Asia ex Japan Index (Net)	-2.2	-9.2	30.7	5.0	-7.7

Cumulative Performance	Since inception	7 years	5 years	3 years	1 year
(% in GBP) to 31 January 2023	(01/07/2010)
NAV	270.2%	118.5%	52.9%	40.3%	5.7%
Share Price	274.5%	102.7%	47.0%	37.1%	5.9%
CPI + 6%	199.7%	92.5%	63.3%	40.1%	17.3%
MSCI AC Asia ex Japan Index (Net)	134.7%	95.3%	12.5%	16.0%	-2.2%

These figures refer to the past. Past performanceis not indicative of future performance. For investors based in countries with currencies other than GBP, the return may increase or decrease as a result of currency fluctuations. Source for Pacific Assets Trust plc: Lipper IM/Bloomberg/Trust Administrator. The NAV performance data is calculated on a net basis after deducting all fees (e.g. investment management fee) and costs (e.g. transaction and custody costs) incurred by the Trust. The NAV includes dividends reinvested on a net of tax basis. Source for comparator benchmark index: FactSet. Table data is shown versus the MSCI AC Asia ex Japan Index, calculated on an income reinvested net of tax basis. Source for Consumer Price Index (CPI) + 6% data: FactSet. CPI data is quoted on a one month lag. Performance calculated from when Stewart Investors became Portfolio Manager of the Trust on 1 July 2010.

Contributors

During the year under review, the Trust's material ownership of Indian companies, especially those with exposure to a return of capital spending and industrial growth, was a key contributor to absolute performance.

CG Power & Industrial Solutions

(India: Industrials)

Contribution: 3.3%

We acquired CG Power in the first quarter of 2021, very quickly after Tube Investments took a controlling stake. Previous owners had abused their power resulting in their creditors taking control of the company, putting it up for sale, and Tube Investments subsequently taking ownership. CG Power is the leading manufacturer of motors in India, a high-quality franchise with fantastic long-term avenues for growth. It has performed well thanks to a greater appreciation of the opportunities under Tube Investment's ownership as well as very attractive levels of underlying growth. Had we not followed the actions of quality people we trust we would not have found nor invested in CG Power. It certainly would not have appeared in a very favourable light had it been put through a quantitative screen.

Mahindra & Mahindra Ltd

(India: Consumer Discretionary)

Contribution: 2.6%

The Trust has owned this company for more than five years and, again, a change in the management team drove us to increase our position size. During the depths of the Covid-19 pandemic, Mahindra & Mahindra appointed a new CEO with the remit to address issues stemming from historically poor capital allocation. Since then we have seen material improvement in the quality of the business, continued dominance of the tractor market and the development of ambitious plans for their farm equipment and electric mobility businesses.

Tube Investments of India

(India: Consumer Discretionary)

Contribution: 2.6%

The Trust has owned Tube for close to ten years but materially increased its position in 2017 when a new CEO took over this fourth generation family company. His intention was to evolve Tube away from its existing businesses - parts for the auto and rail industries, as well as bicycles - to an industrial conglomerate with leadership positions across higher value industries. This was to be done in a manner similar to that achieved by the high performing conglomerates we have studied in the US or Europe: taking free cash flow from existing businesses and expanding, both organically and through mergers and acquisitions ("M&A"), into higher quality industries. Since 2017, Tube has grown its sales at more than 20% a year, its free cash flow at a higher rate, while improving its return on capital employed ("ROCE") from 22% to 47%¹. We have also seen the company embark on high quality M&A while organically entering the fields of electric mobility and manufacturing in the IT industry.

1 Source: Tube Investments, 2021-22 Annual Report and FactSet

Detractors

Aavas Financiers

(India: Financial Services)

Contribution: -0.7%

The Trust has owned Aavas since 2020 as we believe the company to be a very well run, conservative provider of mortgages to low income households in India. The share price looks to have come under pressure as Aavas has chosen to constrain short-term profitability as they invest in scaling the business. We are very comfortable with this approach as the long-term potential remains vast and this kind of behaviour is usually emblematic of a patient mindset. We have added to the position in recent months.

NAVER Corp.

(South Korea: Information Technology)

Contribution: -0.7%

NAVER has struggled to find new avenues for profitable growth as it seeks to diversify away from its core search business. We sold the position during the year as we failed to gain conviction in the long-term growth profile of the company as well as their capital discipline.

Dr Lal Pathlabs

(India: Healthcare)

Contribution: -0.4%

Like so many other companies that enjoyed spectacular growth on the back of Covid-19-induced tailwinds, Dr Lal's earnings growth has deteriorated dramatically over the short term. Alongside the reversal of unsustainable growth in testing volumes, the Indian diagnostic industry has also experienced increased intensity of pricing: this combination of headwinds has led to heightened levels of uncertainty in the sector. We remain long-term owners of the company as we believe Dr Lal's brand and scale advantages should allow them to survive the current period of stress and become a long-term winner as the market consolidates around trusted players.

Significant Transactions

Over the course of the year, the turnover of the Trust was 16%. The majority of the turnover was driven by the need to control the weight of the largest positions namely, Tube Investments and CG Power. Without intervention, these two positions would have run to more than 20% of the portfolio. Although we believe in a portfolio that honestly reflects our conviction, we do not want the Trust to become overly exposed to a few companies, particularly if they operate in similar industries.

We initiated positions in six new companies last year with the purchases of Public Bank (Malaysia: Financials), Kalbe Farma (Indonesia: Healthcare) and Oversea-Chinese Banking Corporation (Singapore: Financials) being discussed in the Company's last half year report. The most significant new holding in the second half of the year was Advanced Energy Solutions ("AES") (Taiwan: Industrials), a company focused on the design and manufacture of battery packs used in electric bikes, electric vehicles and servers. Despite the very obvious tailwinds created by growing demand and investment in electric mobility, as well as lithium batteries, we have struggled to find companies that meet our quality threshold. AES bucks that trend with robust margins and attractive returns thanks to long-standing relationships with customers who trust AES to build a valuable input that has a significant bearing on the quality and performance of the end product.

As discussed earlier, the Trust's exposure to India had a positive contribution to performance last year. With that outperformance came some extended valuations that required reducing position sizes. Holdings in consumer names such as Dabur India (India: Consumer Staples) and Marico (India: Consumer Staples) were trimmed as was the large holding in the air compressor manufacturer Elgi Equipments (India: Industrials). The relative weakness in Chinese markets offered the opportunity to add to some of our favourite names: ShenzhenInovance (Industrials), Kingmed Diagnostics (Health Care), Glodon (Information Technology) and AmoyDiagnostics (Health Care).

Looking Forward

As always, we remain excited about the potential for the long-term, active investor in the Asian region. Our continued focus on owning high-quality companies run by high-quality people should continue to provide capital preservation in times of stress while allowing the Trust to participate in the exceptional long-term growth opportunities that Asia offers.

Stewart Investors
Portfolio Manager

9 May 2023

Sustainability and ESG

Environmental, Social & Governance Policy

The Board believes that consideration of environmental, social and governance ("ESG") issues within the Company's operations is of importance to shareholders and other stakeholders, not least because long-term returns are much more likely to be generated by companies that have embedded corporate governance strengths, and which respect the environment and the society in which they operate. The Board believes that this investment approach is readily applicable in the markets in Asia in which the Company invests.

As the Company delegates the management of the portfolio to Stewart Investors, the Board has chosen to adopt and endorse their approach to integrating sustainability into portfolio construction and investee company engagement. This approach is described in detail in this section. As part of this focus on sustainability, the Board expects ESG concerns to be a key topic of engagement with investee companies. The Company expects to maintain, through its Portfolio Manager, a continuous constructive dialogue with the owners and the managers of the companies where it owns shares. Such a relationship is enhanced by the long-term nature of the investment inherent in the Portfolio Manager's investment approach, reassuring companies of stability.

In the same way as the Board expects the Portfolio Manager to test investee companies on their ESG adherence, the Board will also assess the Company's principal service providers. The Board asks for assurances that a service provider has taken the necessary steps to mitigate any negative environmental impact their operations might have, to ensure that their internal governance is compliant with expected high standards, and that they strive to avoid negative social impacts resulting from their activities.

Similarly, the Board itself strives to uphold the highest ESG standards. The Board's operations mainly consist of governance-related matters, where it is important to the Directors to be at the forefront of best practice.

As best practice, regulation and disclosure are evolving rapidly in this area both for the Company and for the companies in which it invests, the Board regularly discusses sustainability, including ESG policy and practice, with the Portfolio Manager, encouraging where possible further enhancements in both the policy and in reporting to shareholders.

Stewart Investors' Approach to Sustainable Investing and ESG

Sustainability is core to Stewart Investors' investment philosophy and integrated into their investment process. They do not have a separate team that looks at sustainability - every investment team member analyses the sustainability positioning of a business and is also responsible for engaging and voting activities.

Stewart Investors only invest in high-quality companies that contribute to, and benefit from, sustainable development. They define development as sustainable if it furthers human development and has an ecological footprint that respects planetary boundaries. All members of the investment team sign the Stewart Investors, Hippocratic Oath¹, pledging to uphold the principles of stewardship.

1 https://www.stewartinvestors.com/uk/en/private-investor/how-we-invest/sustainable-investing/our-hippocratic-oath.html

They approach sustainability as a means to mitigate risks and as a driver of investment returns. Integrating sustainability into their analysis is a natural extension of having a long-term investment horizon; the sustainability headwinds and tailwinds that affect companies are different from the shorter-term risks that businesses face.

Their consideration of sustainability is holistic; it includes ESG but is more than ESG. They consider financial sustainability - conservatism around the balance sheet, for example - and stewardship by management - the treatment of all stakeholders through a crisis, for example - to be as essential to the sustainability positioning of a company as the product or service the company sells.

When assessing a company's sustainability they ask themselves the following questions:

• Products and services - Do the products and services make a valuable contribution to sustainable development?
• Context - Can the company benefit from sustainability tailwinds and negative headwinds?
• Company ethos - Do the culture and values embody sustainability and continuous improvement?
• Operational impact - Is the company trying to reduce impacts from its operations?

They avoid companies that do not contribute to sustainable development and engage with companies to improve sustainability outcomes.

Stewart Investors has established a materiality threshold for harmful or controversial activities at 5% of revenues - 0% for tobacco production and controversial weapons. They explicitly seek to invest in companies that are making a positive contribution to society. Full details of the activities and practices Stewart Investors finds inconsistent with their investment philosophy are available on their website².

2 https://www.stewartinvestors.com/uk/en/private-investor/insights/our-position-on-harmful-and-controversial-products-and-services.html

Stewart Investors employ the services of an external ESG research provider to provide a quarterly check on the Trust to ensure companies meet global norms for best practices and raise no exceptions against their thresholds for harmful activities. They also receive controversy reporting from RepRisk.

Issues such as climate change, biodiversity and water, human rights and modern slavery, and diversity and inclusion are integrated into Stewart Investors' investment selection and engagement and voting processes. Their approach to climate change is explained in detail in their climate statement³ and recently published climate report⁴. Their approach to biodiversity and water is reflected in their selection of companies that mitigate their impact on the natural environment or provide services/products that improve efficiencies. They have engaged on a number of related issues such as palm oil, deforestation, plastic waste and the use of harmful chemicals. Human rights and modern slavery are a risk throughout the supply chain of their investee companies. Their approach is to focus on quality companies that treat their employees well and manage the risks in their supply chain effectively. Where they identify problems they engage. Their recent collaborative engagement on conflict minerals in the semi-conductor supply chain is a good example of this. Their approach to diversity is explained in their statement⁵ and article⁶ about what they have done so far. They will provide updates on these issues, amongst others, in their quarterly shareholder updates.

3 https://www.stewartinvestors.com/uk/en/private-investor/insights/climate-change-statement.html

4 https://www.stewartinvestors.com/content/dam/pacific-assets/trust-information/climate-report/PASSET-Climate-2021.pdf

5 https://www.stewartinvestors.com/uk/en/private-investor/insights/diversity-statement.html

6 https://www.stewartinvestors.com/uk/en/private-investor/insights/diversity-what-have-we-done.html

Transparency

As part of their focus on improved transparency, Stewart Investors have developed a Portfolio Explorer tool⁹ which provides four views of sustainable development for the Trust:

Map: This global view provides detailed company information including investment rationales, risks and engagement priorities.

Sustainable Development Goals ("SDGs"): The 17 SDGs are globally agreed goals that countries have committed to achieving by 2030. The SDGs offer a vision for the future towards which sustainable investment efforts can be directed.

Climate solutions: Companies are mapped to Project Drawdown's c.90 climate change solutions, which if scaled up, can deliver the Paris Agreement's 1.5^oC temperature goal. Project Drawdown is a non-profit organisation providing analysis of the solutions which can help the world reach 'drawdown' - i.e. the future point in time when levels of greenhouse gases in the atmosphere stop climbing and start to decline. The solutions are diverse and cross-cutting, and show the systemic change needed to avoid catastrophic warming. The full set of solutions along with the research that backs them are publically available on www.drawdown.org.

Human development pillars: Stewart Investors have developed 10 human development pillars inspired by the UN Human Development Index that they believe are essential for lifting people out of poverty and empowering them to achieve their potential.

Sustainable Finance Disclosure Regulation

The Portfolio Manager reports on how the Trust has met its sustainable investment objective, in accordance with the requirements of the Sustainable Finance Disclosure Regulation ("SFDR"), beginning on page 82 of the Annual Report.

Case Study - CG Power

Website:https://www.cgglobal.com

Company profile: Motors and transmission equipment.

Stewardship: Family. Majority-owned by Tube Investments, which is part of the Murugappa family.

What Stewart Investors like:

• A reasonable quality franchise which is now well placed to return to its former glory under the quality stewardship of its new owners Tube Investments. The company was earlier driven to bankruptcy by its previous owners due to fraud and poor governance.
• A long overdue revival in India's industrial cycle could potentially fast track this turnaround.
• CG Power's products (motors, switchgears and transmission equipment) are crucial to the building and maintenance of key sustainable infrastructure in the subcontinent.

Risks: Stewart Investors believe that risks for the company include the new owners discovering more skeletons in the closet; and Indian industrial capex growth is lower than expected in the coming decade.

How the company is contributing to environmental outcomes

CG Power has developed ester oil filled transformers as a more sustainable alternative to mineral oil transformers, and are manufacturing polymer insulators instead of porcelain ones which are more prone to environmental destruction. The company's industrial systems segment includes electric motor products including for electric vehicles, electric buses, drives and industrial automation solutions and railways including traction equipment, traction electronics and signalling.

How the company is contributing to social outcomes:

CG Power is in the business of designing and manufacturing power generation and transmission products. Their transformers and motors are required in furthering access to uninterrupted electricity. They have also developed a Controlled Switching Device which limits inrush of current and helps protect infrastructure.

Relevant Sustainable Development Goals ("SDGs"):

SDG No. 9 - Industry, innovation and infrastructure

CG Power provide a comprehensive range of products, solutions and services for energy, water, infrastructure and agriculture industries, as well as many others.

SDG No. 11 - Sustainable cities and communities

CG Power supply high quality, "smart" electrical, industrial and consumer products and solutions all over the world helping customers to reduce emissions, noise and cost, as well as improving the reliability and safety of their operations.

Thematic Engagement Example - Conflict Minerals

Stewart Investors are progressing with a collaborative engagement initiative on conflict minerals (tantalum, tin, tungsten, gold and cobalt) in the semiconductor supply chain. These minerals are vital materials for the semicon-ductor industry. Poor traceability along complex supply chains can lead to the inadvertent financing of armed conflict and the abuse of human rights.

The initiative is supported by 160 investors representing US$6.6 trillion of assets under management. In 2022 Stewart Investors wrote to 29 companies encouraging them to develop and invest in traceability technology, to increase transparency/reporting from mine to product, to collaborate to improve industry practices, to impose/ enforce harsher sanctions on non-compliance and to reduce demand for new materials by improving recycling. To date they have received responses from 22 companies, and met with 13 of them.

As part of the engagement, Stewart Investors have engaged with industry and civil bodies. They attended the Responsible Minerals Initiative (RMI) annual conference, and understand they are the first known investor to have done so. In addition, Stewart Investors have met with Global Witness to discuss their report: The ITSCI Laundro-mat: How a due diligence scheme appears to launder conflict minerals⁷. A summary of the findings is available in a short interview with Alex Kopp, an investigator at Global Witness⁸.

It is extremely early days for this multi-year engagement but it is clear that tracing mineral provenance is a complex challenge and progress is likely to be slow.

7 https://www.globalwitness.org/documents/20347/The_ITSCI_Laundromat_-_April_2022.pdf

8 https://www.stewartinvestors.com/eea/en/professional/conflict-minerals-interview.html

9 https://www.stewartinvestors.com/uk/en/private-investor/our-strategies/pacific-assets-trust.html?tabs-anchor=Pacific%20 Assets%25Trust&active-tab=Portfolio%20Explorer

Business Review

The Strategic Report, set out on pages 1 to 33 of the Annual Report, contains a review of the Company's business model and strategy, an analysis of its performance during the financial year and its future developments as well as details of the principal risks and challenges it faces. Its purpose is to inform shareholders and help them to assess how the Directors have performed their duty to promote the success of the Company.

The Strategic Report contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this report. Such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

Business Model

The Company is an externally managed investment trust and its shares are listed on the premium segment of the Official List and traded on the main market of the London Stock Exchange.

The purpose of the Company is to achieve long-term growth in our shareholders' wealth by providing a vehicle for investors to gain exposure to a portfolio of companies in the Asia Pacific region and the Indian sub-continent (but excluding Japan, Australia and New Zealand), through a single investment.

The Company's strategy is to create value for shareholders by addressing its investment objective.

As an externally managed investment trust, all of the Company's day-to-day management and administrative functions are outsourced to service providers. As a result, the Company has no executive directors, employees or internal operations.

The Company employs Frostrow Capital LLP ("Frostrow") as its Alternative Investment Fund Manager (AIFM) and they provide corporate management, risk management, company secretarial and administrative services. The Company employs Stewart Investors as its Portfolio Manager.

The Board remains responsible for all aspects of the Company's affairs, including setting the parameters for monitoring the investment strategy and the review of investment performance and policy. It also has responsibility for all strategic policy issues, including share issuance and buybacks, share price and discount/ premium monitoring, corporate governance matters, dividends and gearing.

Further information on the Board's role and the topics it discusses with the Portfolio Manager is provided in the Corporate Governance report beginning on page 36 of the Annual Report.

Investment Objective and Policy

The Company aims to achieve long-term capital growth through investment in selected companies in the Asia Pacific region and the Indian sub-continent, but excluding Japan, Australia and New Zealand (the "Asia Pacific Region"). Up to a maximum of 20% of the Company's total assets (at the time of investment) may be invested in companies incorporated and/or listed outside the Asia Pacific Region (as defined above); at least 25% of their economic activities (at the time of investment) are within the Asia Pacific Region with this proportion being expected to grow significantly over the long term.

The Company invests in companies which Stewart Investors believe will be able to generate long-term growth for shareholders.

The Company invests principally in listed equities although it is able to invest in other securities, including preference shares, debt instruments, convertible securities and warrants. In addition, the Company may invest in open and closed-ended investment funds and companies.

The Company is only able to invest in unlisted securities with the Board's prior approval. It is the current intention that such investments are limited to those which are expected to be listed on a stock exchange or which cease to be listed and the Company decides to continue to hold or is required to do so.

Risk is diversified by investing in different countries, sectors and stocks within the Asia Pacific Region. There are no defined limits on countries or sectors but no single investment may exceed 7.5% of the Company's total assets at the time of investment. This limit is reviewed from time to time by the Board and may be revised as appropriate.

No more than 10% of the Company's total assets may be invested in other listed closed-ended investment companies unless such investment companies themselves have published investment policies to invest no more than 15% of their total assets in other closed-ended investment companies, in which case the limit is 15%.

When deemed appropriate, the Company may borrow for investment purposes up to the equivalent of 10% of the net asset value of the Company at the time of drawdown of such borrowing.

The use of derivatives is permitted with prior Board approval and within agreed limits. However, Stewart Investors are unlikely to use derivatives as they do not form part of their investment strategy.

Proposed Change to Investment Policy

As noted in the Chairman's Statement, the Board is proposing to formalise an internal limit that was agreed with the Portfolio Manager during the year, to limit exposure to a single country or jurisdiction to 45% of total assets at the time of investment and 49% of total assets at any time.

Accordingly, an ordinary resolution to approve this amendment to the investment policy is included in the Notice of AGM, beginning on page 98 of the Annual Report, and the full text of the proposed new investment policy can be found in the explanatory notes on pages 103 and 104 of the Annual Report. For the avoidance of doubt, the formalisation of the single country investment limit is the only proposed change to the Company's investment policy. The proposed amendment has been approved in principle by the Financial Conduct Authority in accordance with the requirements of the Listing Rules.

Performance Measurement

The Board measures Stewart Investors' performance against a performance objective, which is to provide shareholders with a net asset value total return in excess of the UK Consumer Price Index ("CPI") plus 6% (calculated on an annual basis) measured over three to five years (the "Performance Objective"). The Board also monitors the Company's performance against its peer group. Please refer to the Chairman's Statement and the Glossary for further information.

Dividend Policy

It is the Company's policy to pursue capital growth for shareholders with income being a secondary consideration. This reflects that the Portfolio Manager is frequently drawn to companies whose future growth profile is more important than the generation of dividend income for shareholders.

The Company complies with the United Kingdom's investment trust rules which require investment trusts to retain no more than 15% of their distributable income each year. The Company's dividend policy is that the Company will pay a dividend as a minimum to maintain investment trust status.

The Board

At the date of this report, the Board of the Company comprises James Williams (Chairman), Charlotta Ginman, Sian Hansen, Robert Talbut, Edward Troughton and Andrew Impey. All of these Directors are non-executive, independent Directors. They all served throughout the year except for Andrew Impey who was appointed to the Board with effect from 1 August 2022.

Further information on the Directors can be found on pages 34 and 35 of the Annual Report and information on the Board's diversity can be found in the Corporate Governance Report on page 42 of the Annual Report.

Key Performance Indicators

The Board of Directors reviews performance against the following measures ("KPIs"). The KPIs are unchanged from the prior year.

• NAV total return against the Consumer Price Index +6% (the "Performance Objective")^{*^}
• NAV per share total return against the peer group*^
• Average discount/premium of share price to NAV per share over the year^{^}
• Ongoing charges ratio^{^}

• Calculated on an annual basis and measured over three to five years

^{^} Alternative Performance Measure (see Glossary)

NAV per share total return - Performance Objective

The Directors regard the Company's net asset value total return as being the overall measure of value generated by the Portfolio Manager over the long term. Total return reflects both the net asset value growth of the Company and the dividends paid to shareholders. The performance objective of the Company is inflation (represented by the Consumer Price Index) plus 6%, measured over three to five years. The 6% represents what the Board considers to be a reasonable premium on investors' capital, which investing in the faster growing Asian economies ought to provide over time. The Performance Objective is designed to reflect that the Portfolio Manager's approach does not consider index composition when building and monitoring the portfolio. During the year under review, the NAV per share total return was 5.7% underperforming the Performance Objective by 11.6% (2022: NAV per share total return of 9.1%, underperforming the Performance Objective by 2.4%). Over the past three years, the annualised NAV per share total return was 11.9%, matching the Performance Objective. Over five years, the annualised NAV per share total return was 8.8%, underperforming the Performance Objective by 1.5% per annum.

A full description of performance during the year under review is contained in the Portfolio Manager's Review.

NAV total return - peer group

The Board also monitors the Company's performance against its peer group of five other investment trusts with similar investment mandates and one exchange traded fund ("ETF").

Over the three and five years ended 31 January 2023, the Company ranked second in its peer group. The Company's performance is discussed in the Chairman's Statement; further information can be found in the Portfolio Manager's Review.

Average discount/premium of share price to NAV per share

The Board believes that the principal drivers of an investment trust's share price discount or premium over the long term are investment performance and a proactive marketing strategy. However, there can be volatility in the discount or premium during the year. Therefore, the Board takes powers each year to buy back and issue shares with a view to limiting the volatility of the share price discount or premium, in normal market conditions.

During the year under review no new shares were issued by the Company and no shares were bought back by the Company. The Company's share price discount to the NAV per share was at times wider than the peer group average and the Board kept this under close review.

Average discount of share price to NAV per share*^ during the year ended

31 January 202331 January 2022

10.1% 7.3%

Peer group average Peer group average

discount 8.9% discount 5.0%

* Source: Morningstar

^{^} Alternative Performance Measure (see Glossary)

Ongoing charges ratio

Ongoing charges represent the costs that the Company can reasonably expect to pay from one year to the next, under normal circumstances. The Board continues to be conscious of expenses and seeks to maintain a sensible balance between high quality service and costs.

The Board therefore considers the ongoing charges ratio to be a KPI and reviews the figure both in absolute terms and in relation to the Company's peers.

Ongoing charges ratio^

31 January 202331 January 2022

1.1% 1.1%

Peer group average 0.9% Peer group average 0.9%

• Alternative Performance Measure (see Glossary).

The Board believes that the Company's relatively low turnover, and the absence of any cost of capital associated with gearing, will mean that the Company's overall running costs - should these costs be factored into the calculation - are not necessarily as high as some other investment vehicles. It should also be noted that the Trust does not have a performance fee. Performance fees are not included in the peer group average ongoing charges ratio.

Risk Management

The Board is responsible for managing the risks faced by the Company. Through delegation to the Audit Committee, the Board has established procedures to manage risk, to review the Company's internal control framework and to establish the level and nature of the principal risks the Company is prepared to accept in order to achieve its long-term strategic objective. The Board, meeting as the Audit Committee, has carried out a robust assessment of the principal and emerging risks facing the Company with the assistance of the AIFM. A process has been established to identify and assess risks, their likelihood and the possible severity of their impact.

These principal risks are set out on the following pages with a high-level summary of their management through mitigation and status arrows to indicate any change in assessment during the year. The risks faced by the Company have been categorised under three headings as follows:

• Investment and financial risks
• Strategic risks
• Operational risks

A summary of these risks and their mitigation is set out below:

Principal Risks and Uncertainties	Mitigation
InvestmentandFinancial Risks
Market and Foreign Exchange Risk
The Company's portfolio is exposed to fluctuations in market prices (from both individual security prices and foreign exchange rates) in the regions and sectors in which it invests. Emerging markets in the Asia Pacific region, in which the portfolio companies operate, are expected to be more volatile than developed markets. Stewart Investors' approach is expected to lead to performance that will deviate from that of comparators, including both market indices and other investment companies investing in the Asia Pacific Region.	To manage these risks the Board has appointed Stewart Investors to manage the portfolio within the remit of the investment objective and policy. Compliance with the investment objective and investment policy limits is monitored daily by Frostrow and Stewart Investors and reported to the Board monthly. The investment policy limits ensure that the portfolio is diversified, reducing the risks associated with individual stocks and markets. Stewart Investors report at each Board meeting on the performance of the Company's portfolio, including the rationale for investment decisions, the make-up of the portfolio, and the investment strategy. As part of its review of the viability of the Company, the Board also considers the sensitivity of the Company to changes in market prices and foreign exchange rates (see note 14), how the portfolio would perform during a market crisis, and the ability of the Company to liquidate its portfolio if the need arose. Further details are included in the Going Concern and Viability Statements. During the year, the Board took further steps to mitigate market risk by introducing a new investment guideline limiting exposure to single jurisdictions (please refer to the Chairman's Statement for further details).
Counterparty Risk
The Company is exposed to credit risk arising from the use of counterparties. If a counterparty were to fail, the Company could be adversely affected through either delay in settlement or loss of assets. The most significant counterparty to which the Company is exposed is J.P. Morgan Chase Bank, the Custodian, which is responsible for the safekeeping of the Company's assets.	Counterparty risk is managed by the Board through: Under the terms of the contract with J.P. Morgan Chase Bank, the Company's investments are required to be segregated from J.P. Morgan Chase Bank's own assets. Further information on other financial risks can be found in note 14.
Strategic Risks
Geopolitical Risk
Geopolitical events may have an adverse impact on the Company's performance by causing exchange rate volatility, changes in tax or regulatory environments, a reduced investment universe and a fall in market prices.	The Board regularly discusses global geopolitical issues and general economic conditions and developments. Political changes in recent years, particularly in the US and Asia Pacific region and more recently in Ukraine and Eastern Europe, have increased uncertainty and volatility in financial markets. The Board discusses such developments and how they may impact decision making with Stewart Investors. As a result of the instability caused by the ongoing war in Ukraine, and increasing tensions between the West and China, the Board considers that geopolitical risk has increased during the year.
Climate Change Risk
The Board is cognisant of risks arising from climate change and the impact climate change events could have on portfolio companies and their operations, as well as on service providers to the Company.	The Board regularly reviews global environmental, geopolitical and economic developments with the Portfolio Manager and the implications of these risks and events on portfolio construction and the Company's operations. Given Stewart Investors' focus on sustainability, the Board considers the portfolio to be relatively well positioned in this regard.
Black Swan Risk
A significant unpredictable event (e.g. a pandemic/war/closure of a major shipping route) could lead to increased market volatility, and in a worst-case scenario, major global trade and supply chain breakdown resulting in significant volatility/ declines in market prices. The Company's service providers and their operational systems may also be affected.	The Board monitors emerging risks and the robustness of Stewart Investors' and other service providers' business continuity plans. Stewart Investors' investment approach includes a focus on sustainability and stewardship, which emphasises quality investments with strong balance sheets, a proven track record in previous crises, and the protection of shareholders' funds, leaving them relatively well positioned to deal with unforeseen events. All of the Company's service providers are required to have business continuity / disaster recovery policies and test them at least annually. Service providers provide updates on contingency plans for coping with major disruption to their operations.
Portfolio Management Key Persons Risk
There is a risk that the team responsible for managing the Company's portfolio may leave their employment or may be prevented from undertaking their duties.	The Board manages this risk by:
Share Price Risk
The Company is exposed to the risk, particularly if the investment strategy and approach are unsuccessful, that the Company underperforms its peer group, fails to achieve its Performance Objective and becomes unattractive to shareholders, resulting in a widening of the share price discount to the NAV per share.	In managing this risk the Board:
Operational Risk
Operational Risk
As an externally-managed investment trust, the Company is reliant on the systems of its service providers for dealing, trade processing, administration, financial and other functions. If such systems were to fail or be disrupted (including, for example, as a result of cyber-crime or a pandemic) this could lead to a failure to comply with applicable laws, regulations and governance requirements and/or to a financial loss.	To manage these risks the Board: As a result of the Board's ongoing assessment of cyber risk, the Board decided during the year that the risk of cybercrime had increased.

Emerging Risks

Emerging risks are discussed in detail as part of the risk review process and also throughout the year to try to ensure that new (as well as known) risks are identified and, so far as practicable, mitigated. Current identified emerging risks are as follows:

1. The risk that 'onshoring' will increase uncertainty over corporate investment plans and damage the growth prospects of companies in the Asia Pacific Region. 'Onshoring' refers to the recent trend for corporations to try to secure their supply chains by relocating their business production and operations within their domestic national borders. The trend has taken hold in response to the disruptions of the Covid-19 pandemic and increased concerns over the impact of geopolitical uncertainty.
2. The risk that persistent inflation will continue to undermine equity markets and cause greater volatility in Asian markets.
3. The risk that increasing water scarcity will affect economic development, potentially leading to mass migration and political conflict in the Asia Pacific Region. This is a particular threat in India, where a high proportion of the Company's assets are invested, and which the UN identifies as one of the most water-stressed countries in the world.

Stakeholder Interests and Board Decision-Making (Section 172 of the Companies Act 2006)

The following disclosure, which is required by the Companies Act 2006 and the AIC Code, describes how the Directors have had regard to the views of the Company's stakeholders in their decision-making.

STAKEHOLDER GROUP	HOW THE BOARD HAS ENGAGED WITH THE COMPANY'S STAKEHOLDERS
Investors	The Board's key mechanisms of engagement with investors include: The Portfolio Manager and the Company's broker, on behalf of the Board, completed a programme of investor relations throughout the year, reporting to the Board on the feedback received. In addition, the Chairman was (and remains) available to engage with the Company's shareholders.
Portfolio Manager	The Board met regularly with Stewart Investors (the Portfolio Manager) throughout the year, both formally at quarterly Board meetings and informally, as required. The Board engaged with the portfolio management team, discussing the Company's overall performance, as well as developments in individual portfolio companies and wider macroeconomic developments. This year, the Board also visited Seoul in South Korea with the Portfolio Manager, meeting representatives from portfolio companies and potential investee companies. The trip gave the Directors an insight into the Portfolio Manager's investment process and engagement with portfolio companies. The Board, meeting as the Audit Committee, also met with members of the risk management and investment compliance teams to better understand the Portfolio Manager's internal controls.
Service Providers	The Board met regularly with Frostrow (the AIFM), representatives of which attend every quarterly Board meeting to provide updates on risk management, accounting, administration and corporate governance matters. The Board, meeting as the Engagement and Remuneration Committee, reviewed the performance of all the Company's service providers, receiving feedback from Frostrow in their capacity as AIFM and Company Secretary. The AIFM, which is responsible for the day-to-day operational management of the Company, meets and interacts with the other service providers including the Depositary, Custodian and Registrar, on behalf of the Board, on a daily basis. This can be through email, one-to-one meetings and/or regular written reporting. The Audit Committee met with BDO LLP ("BDO") to review the audit plan for the year, agree their remuneration, review the outcome of the annual audit and to assess the quality and effectiveness of the audit process. Please refer to the Audit Committee Report beginning on page 51 of the Annual Report for further information.

As an externally managed investment trust, the Company has no employees, customers, operations or premises. Therefore, the Company's key stakeholders (other than its shareholders) are considered to be its service providers. The need to foster good business relationships with service providers and maintain a reputation for high standards of business conduct are central to the Directors' decision-making as the Board of an externally managed investment trust.

KEY AREAS OF ENGAGEMENT	MAIN DECISIONS AND ACTIONS TAKEN
Ongoing dialogue with shareholders concerning the strategy of the Company, performance and the portfolio. The impact of market volatility caused by certain geopolitical events on the portfolio. Share price performance. The Portfolio Manager's approach to sustainable development and investment.	The Board and the Portfolio Manager provided updates on performance via RNS, the Company's website and the usual financial reports and monthly fact sheets. The Board continued to monitor share price movements closely, both in absolute terms and in relation to the Company's peer group. As the discount remained relatively stable throughout the year, and narrowed in the second half, the Board did not initiate any share buybacks. While recognising that buybacks can generate shareholder value in the short term, the Board decided that buybacks were not in the long-term interests of shareholders, as they would reduce the size of the Company, increase the ongoing charges ratio and reduce the liquidity of the Company's shares. Instead, the Board continued to take steps to improve the visibility of the Company and the Portfolio Manager's sustainability credentials, in particular to retail investors. Further information is provided in the Chairman's Statement.
Portfolio composition, performance, outlook and business updates. The integration of sustainability and ESG factors to the Portfolio Manager's investment process. The promotion and marketing strategy of the Company. The Portfolio Manager's system of internal controls and investment risk management.	The Board agreed that high standards of research and decision-making have been maintained and the Portfolio Manager's strategy has been implemented consistently, leading to good returns over the past year and over longer periods. The Board concluded that it was in the interests of shareholders for Stewart Investors to continue in their role as Portfolio Manager on the same terms and conditions. The Board continued its focus on improving the marketing strategy of the Company, to highlight in particular the Portfolio Manager's sustainability credentials. Further information is provided in the Chairman's Statement. The Board, meeting as the Audit Committee, concluded that the Portfolio Manager's internal controls were satisfactory. See the Audit Committee Report, beginning on page 51 of the Annual Report, for further information.
The quality of service provision and the terms and conditions under which service providers are engaged. The assessment of the effectiveness of the audit and the Auditor's reappointment. The terms and conditions under which the Auditor is engaged.	The Board concluded that it was in the interests of shareholders for Frostrow to continue in their role as AIFM on the same terms and conditions. The Board approved the Audit Committee's recommendation to propose to shareholders that BDO LLP be re-appointed as the Company's auditor for a further year. Please refer to the Audit Committee Report beginning on page 51 of the Annual Report and the Notice of AGM beginning on page 98 of the Annual Report for further information.

Going Concern

The Company's portfolio, investment activity, the Company's cash balances and revenue forecasts, and the trends and factors likely to affect the Company's performance are reviewed and discussed at each Board meeting. The Board has considered a detailed assessment of the Company's ability to meet its liabilities as they fall due, including stress tests which modelled the effects of substantial falls in portfolio valuations and liquidity constraints on the Company's NAV, cash flows and expenses. Based on the information available to the Directors at the date of this report, the conclusions drawn in the Viability Statement (including the results of the stress tests undertaken) below and the Company's cash balances, the Directors are satisfied that the Company has adequate financial resources to continue in operation for at least the next 12 months from the date of signing this report and that, accordingly, it is appropriate to continue to adopt the going concern basis in preparing the financial statements.

Viability Statement

The Directors have carefully assessed the Company's financial position and prospects as well as the principal risks facing the Company and have formed a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next five financial years. The Board has chosen a five year horizon in view of the long-term outlook adopted by the Portfolio Manager when making investment decisions.

To make this assessment and in reaching this conclusion, the Audit Committee has considered the Company's financial position and its ability to liquidate its portfolio and meet its liabilities as they fall due and notes the following:

• The portfolio is comprised of investments traded on major international stock exchanges. Based on historic analysis, it is estimated that approximately 55% of the current portfolio could be liquidated within seven trading days. There is no expectation that the nature of the investments held within the portfolio will be materially different in future;
• The Board has considered the viability of the Company under various scenarios, including periods of acute stock market and economic volatility, and concluded that it would expect to be able to ensure the financial stability of the Company through the benefits of having a diversified portfolio of listed and realisable assets. As illustrated in note 14 to the accounts, the Board has considered price sensitivity risk (the sensitivity of the profit after taxation for the year and the value of the shareholders' funds to changes in the fair value of the Company's investments) and foreign currency sensitivity (the sensitivity to changes in key exchange rates to which the portfolio is exposed).
• With an ongoing charges ratio of 1.1%, the expenses of the Company are predictable and modest in comparison with the assets and there are no capital commitments currently foreseen which would alter that position;
• The Board has considered the Company's average cash balance over the past three years and noted that the Company has consistently retained levels of cash that are significantly higher than its annual operating expenses.
• The Company has no employees, only non-executive Directors. Consequently it does not have redundancy or other employment related liabilities or responsibilities; and
• The closed ended nature of the Company means that, unlike open ended funds, it does not need to realise investments when shareholders wish to sell their shares.

The Directors, as well as considering the potential impact of the principal risks and various severe but plausible downside scenarios, have also made the following assumptions in considering the Company's longer-term viability:

• There will continue to be demand for investment trusts;
• The Board and the Portfolio Manager will continue to adopt a long-term view when making investments, and anticipated holding periods will be at least five years;
• The Company invests in the securities of listed companies traded on international stock exchanges to which investors will wish to continue to have exposure;
• Regulation will not increase to a level that makes running the Company uneconomical; and
• The performance of the Company will continue to be satisfactory.

Social, Human Rights and Environmental Matters

As an externally-managed investment trust, the Company does not have any employees or maintain any premises, nor does it undertake any manufacturing or other physical operations itself. All its operational functions are outsourced to third party service providers. Therefore the Company has no material, direct impact on the environment or any particular community and, as a result, the Company itself has no environmental, human rights, social or community policies.

The Portfolio Manager engages with the Company's underlying investee companies in relation to their corporate governance practices and the development of their policies on social, community and environmental matters. The Portfolio Manager (under their parent, legal entity name, First Sentier Investors) is a Tier 1 signatory to the UN Principles of Responsible Investment, an investor signatory of Climate Action 100+ and an investor member of the Institutional Investors Group on Climate Change.

Integrity and Business Ethics

The Company is committed to carrying out business in an honest and fair manner with a zero-tolerance approach to bribery, tax evasion and corruption. As such, policies and procedures are in place to prevent this and can be found on the Company's website. In carrying out its activities, the Company aims to conduct itself responsibly, ethically and fairly, including in relation to social and human rights issues.

Taskforce for Climate-Related Financial Disclosures ("TCFD")

The Company notes the TCFD recommendations on climate-related financial disclosures. The Company is an investment trust with no employees, internal operations or property and, as such, it is exempt from the Listing Rules requirement to report against the TCFD framework.

Stewart Investors is committed to reporting annually on its progress against its climate change objectives which are set out in its climate change statement¹⁰. This reporting is modelled on TCFD recommendations to the degree it is relevant to their activities and to support shareholders with their reporting requirements.

Stewart Investors have signed up to the Net Zero Asset Managers Initiative. They published their first climate report¹¹ in 2022 which provides details about their plan; this will be updated annually. They are engaging with their investee companies to set ambitious targets and have credible action plans to achieve net zero by 2050. They are targeting outcomes that are aligned with their commitment to the Net Zero Asset Managers Initiative and prioritising engagement with companies that have inadequate disclosures and targets, and/or rising emissions.

Climate reporting, at both the Stewart Investors¹² and Pacific Asset Trust¹³ level, is available via the Trust's website.

Performance and Future Developments

A review of the Company's performance over the year and the outlook for the Company can be found in the Chairman's Statement and in the Portfolio Manager's Review.

The Company's overall strategy remains unchanged.

By order of the Board

Frostrow Capital LLP
Company Secretary

9 May 2023

10 https://www.stewartinvestors.com/uk/en/private-investor/insights/climate-change-statement.html

11 https://www.stewartinvestors.com/content/dam/pacific-assets/trust-information/climate-report/Climate- Report-2021.pdf

12 https://www.stewartinvestors.com/content/dam/pacific-assets/trust-information/climate-report/Climate- Report-2021.pdf

13 https://www.stewartinvestors.com/content/dam/pacific-assets/trust-information/climate-report/PASSET- Climate-2021.pdf

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law they are required to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice, including FRS 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.

Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
• prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business; and
• prepare a directors' report, a strategic report and a directors' remuneration report which comply with the requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for ensuring 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.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement which comply with that law and those regulations.

The Directors are responsible for ensuring the Annual Report and the financial statements are made available on the Company's website, which is maintained by the Portfolio Manager. Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Disclosure of Information to the Auditor

The Directors who held office at the date of approval of this report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditor is unaware; and each Director has taken all the steps that he/she might reasonably be expected to have taken as a Director to make himself/ herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Responsibility Statement of the Directors in respect of the Annual Financial Report

We confirm that to the best of our knowledge:

• the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and the return of the Company for the year ended 31 January 2023; and
• the Annual Report includes a fair review of the development and performance of the business and the financial position of the Company, together with a description of the principal risks and uncertainties that they face.

We consider the Annual Report, 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.

On behalf of the Board

James Williams
Chairman

9 May 2023

Income Statement

for the year ended 31 January 2023

		Year ended 31 January 2023			Year ended 31 January 2022
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments	8	-	27,434	27,434	-	43,614	43,614
Exchange differences		-	1,787	1,787	-	(114)	(114)
Income	2	5,541	-	5,541	4,657	-	4,657
Portfolio management
and AIFM fees	3	(1,095)	(3,283)	(4,378)	(1,070)	(3,212)	(4,282)
Other expenses	4	(813)	-	(813)	(692)	-	(692)
Return before taxation		3,633	25,938	29,571	2,895	40,288	43,183
Taxation	5	(621)	(3,656)	(4,277)	(487)	(5,343)	(5,830)
Return after taxation		3,012	22,282	25,294	2,408	34,945	37,353
Return per share (p)	7	2.5	18.4	20.9	2.0	28.9	30.9

The Total column of this statement represents the Company's Income Statement. The Revenue and Capital columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies ("AIC").

All revenue and capital items in the Income Statement derive from continuing operations.

The Company had no recognised gains or losses other than those shown above and therefore no separate Statement of Other Comprehensive Income has been presented.

Statement of Changes in Equity

for the year ended 31 January 2023

		Ordinary		Capital
		Share	Share	Redemption	Special	Capital	Revenue
		Capital	premium	reserve	reserve	reserve	reserve	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 31 January 2021		15,120	8,811	1,648	14,572	369,275	6,790	416,216
Return after taxation		-	-	-	-	34,945	2,408	37,353
Ordinary dividends paid	6	-	-	-	-	-	(2,903)	(2,903)
At 31 January 2022		15,120	8,811	1,648	14,572	404,220	6,295	450,666
Return after taxation		-	-	-	-	22,282	3,012	25,294
Ordinary dividends paid	6	-	-	-	-	-	(2,298)	(2,298)
At 31 January 2023		15,120	8,811	1,648	14,572	426,502	7,009	473,662

The accompanying notes are an integral part of these statements.

Statement of Financial Position

as at 31 January 2023

		2023		2022
	Notes	£'000	£'000	£'000	£'000
Fixed assets
Investments	8		474,399		436,983
Current assets
Debtors	9	333		242
Cash and cash equivalents		10,535		24,192
		10,868		24,434
Creditors (amounts falling due within one year)	10	(1,855)		(2,356)
Net current assets			9,013		22,078
Total assets less current liabilities			483,412		459,061
Non-current liabilities
Provision for liabilities	11		(9,750)		(8,395)
Net assets			473,662		450,666
Capital and reserves
Called up share capital	12		15,120		15,120
Share premium account			8,811		8,811
Capital redemption reserve	15		1,648		1,648
Special reserve	15		14,572		14,572
Capital reserve	15		426,502		404,220
Revenue reserve	15		7,009		6,295
Equity shareholders' funds			473,662		450,666
Net asset value per Ordinary Share (p)	13		391.6p		372.6p

The financial statements were approved and authorised for issue by the Board of Directors on 9 May 2023 and signed on its behalf by:

James Williams
Chairman

The accompanying notes are an integral part of these statements.

Pacific Assets Trust Public Limited Company - Company Registration Number: SC091052 (Registered in Scotland)

Notes to the Financial Statements

1. Accounting Policies

A summary of the principal accounting policies adopted is set out below or as appropriate within the relevant note to the financial statements.

(a) Basis of Accounting

These financial statements have been prepared under UK Company Law, FRS 102 'The Financial Reporting Standard applicable in the UK and Ireland', and in accordance with guidelines set out in the Statement of Recommended Practice ('SORP'), published in July 2022, for Investment Trust Companies and Venture Capital Trusts issued by the Association of Investment Companies ('AIC'), the historical cost convention, as modified by the valuation of investments at fair value through profit or loss.

The Board has considered a detailed assessment of the Company's ability to meets its liabilities as they fall due, including stress and liquidity tests which modelled the effects of substantial falls in markets and significant reductions in market liquidity (including further stressing the current economic conditions caused by the Covid-19 pandemic and certain geopolitical events) on the Company's assets and liabilities. In light of the results of these tests, the Company's cash balances, the liquidity of the Company's investments and the absence of any gearing, the Directors are satisfied that the Company has adequate financial resources to continue in operation for at least the next 12 months from the date of approval of these financial statements and that, accordingly, it is appropriate to adopt the going concern basis in preparing these financial statements.

The Company has taken advantage of the exemption from preparing a Cash Flow Statement under FRS 102, as it is an investment fund whose investments are substantially highly liquid, carried at fair (market) value and provides a statement of changes in net assets.

The Board is of the opinion that the Company is engaged in a single segment of business, namely investing in accordance with the Investment Objective, and consequently no segmental analysis is provided.

Significant Judgement

There is one significant judgement involved in the presentation of the Company's accounts, being the judgement on the functional and presentational currency of the Company.

The Company's investments are made in foreign currencies, however the Board considers the Company's functional and presentational currency to be sterling. In arriving at this conclusion, the Board considered that the shares of the Company are listed on the London Stock Exchange, it is incorporated in the United Kingdom and pays dividends and expenses in sterling. All values are rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

Presentation of the Income Statement

In order to reflect better the activities of an investment trust company and in accordance with the SORP, supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The net revenue return is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 1158 of the Corporation Tax Act 2010.

(b) Foreign Currencies

Transactions denominated in foreign currencies are translated into sterling at the exchange rates on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate ruling at the date of the Statement of Financial Position. Profits or losses on the translation of foreign currency balances, whether realised or unrealised, are taken to the capital or revenue column of the Income Statement, depending on whether the gain or loss is of a capital or revenue nature.

(c) Cash and Cash Equivalents

Cash and cash equivalents are defined as cash and demand deposits readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

2. Income

	2023	2022
	£'000	£'000
Income from investments
Overseas dividends	5,504	4,657
Bank interest	37	-
	5,541	4,657

Dividends receivable are recognised on the ex-dividend date. Where no ex-dividend date is quoted, dividends are recognised when the Company's right to receive payment is established. Foreign dividends are gross of withholding tax.

Special dividends of a revenue nature are recognised through the revenue column of the Income Statement. Special dividends of a capital nature are recognised through the capital column of the Income Statement.

Where the Company has elected to receive its dividends in the form of additional shares rather than cash the amount of the stock dividend is recognised in the revenue column.

3. Portfolio Management and AIFM Fees

		2023			2022
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Portfolio management fee
- Stewart Investors	968	2,904	3,872	949	2,850	3,799
AIFM fee - Frostrow	127	379	506	121	362	483
	1,095	3,283	4,378	1,070	3,212	4,282

Frostrow's AIFM fee is for risk management, corporate management, company secretarial and administrative services. Further information regarding Stewart Investors and Frostrow's fees can be found on pages 45 and 46 of the Annual Report.

All expenses and interest are accounted for on an accruals basis. Expenses and interest are charged to the Income Statement as revenue items except where incurred in connection with the maintenance or enhancement of the value of the Company's assets and taking account of the expected long-term returns, when they are split as follows:

• Portfolio Management and AIFM fees payable have been allocated 25% to revenue and 75% to capital.
• Transaction costs incurred on the purchase and sale of investments are taken to the Income Statement as a capital item, within gains on investments held at fair value through profit or loss.

4. Other Expenses

	2023	2022
	£'000	£'000
Directors' fees	183	161
Employers NIC on directors' remuneration	14	13
Auditor's remuneration for annual audit	44	37
Depository fees	56	41
Custody fees	190	217
Registrar fees	25	26
Broker retainer	32	30
Listing fees	36	26
Legal and professional fees	43	43
Other expenses	190	98
Total expenses	813	692

For accounting policy, see note 3.

5. Taxation

(a) Analysis of Charge in the Year

		2023			2022
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Overseas taxation	764	-	764	591	-	591
Indian capital gains tax charge	(143)	3,656	3,513	(104)	5,343	5,239
	621	3,656	4,277	487	5,343	5,830

Overseas tax arose as a result of irrecoverable withholding tax on overseas dividends and Indian capital gains tax ("CGT").

As an investment trust, the Company is generally not subject to UK tax on capital gains. However, Indian capital gains tax arises on capital gains on the sale of Indian securities at a rate of 15% on short-term capital gains (defined as those where the security was held for less than a year) and 10% on long-term capital gains. £1,355,000 (2022: £3,073,000) of the charge arose on unrealised long-term capital gains on securities still held and is included in deferred taxation on unrealised capital gains on Indian securities as set out in note 11. £2,158,000 (2022: £2,202,000) of the charge relates to capital gains tax paid on disposals during the year.

(b) Reconciliation of Tax Charge

The revenue account tax charge for the year is lower than the standard rate of corporation tax in the UK of 19.0% (2021: 19.0%).

The differences are explained below:

			2023			2022
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Total return on ordinary activities
	before tax	3,633	25,938	29,571	2,895	40,288	43,183
Corporation tax charged at 19.0%
	(2022: 19.0%)	690	4,928	5,618	550	7,655	8,205
Effects of:
Gains on investment not subject to UK
	corporation tax	-	(5,212)	(5,212)	-	(8,287)	(8,287)
Non-taxable exchange differences		-	(340)	(340)	-	22	22
Expenses not deductible for
	tax purposes	356	624	980	335	610	945
Income not subject to corporation tax		(1,046)	-	(1,046)	(885)	-	(885)
Indian capital gains tax charge
	(see note 5a)	(143)	3,656	3,513	(104)	5,343	5,239
Overseas taxation		764	-	764	591	-	591
Tax charge for the year		621	3,656	4,277	487	5,343	5,830

As at 31 January 2023 the Company had unutilised management expenses and other reliefs for taxation purposes of £57,846,000 (2022: £52,693,000). It is not anticipated that these will be utilised in the foreseeable future and as such no related deferred tax asset has been recognised.

In October 2022 it was confirmed that the main rate of corporation tax would increase from 19% to 25% from April 2023. This rate has been enacted as at the date of the Statement of Financial Position.

The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue as set out in this note. The standard rate of corporation tax is applied to taxable net revenue. Any adjustment resulting from relief for overseas tax is allocated to the revenue reserve.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the Statement of Financial Position date where transactions or events that result in an obligation to pay more, or right to pay less, tax in future have occurred at the Statement of Financial Position date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the accounts which are capable of reversal in one or more subsequent periods. Deferred tax is measured without discounting and based on enacted tax rates. Due to the Company's status as an investment trust, and the intention to meet the conditions required to obtain approval under Section 1158 of the Corporation Tax Act 2010, the Company has not provided for deferred UK tax on any capital gains and losses arising on the revaluation or disposal of investments.

Deferred tax has been provided for on capital gains arising on Indian securities as noted in 5(a) above.

6. Dividends

Amounts recognised as distributable to shareholders for the year ended 31 January 2023, were as follows:

	2023	2022
	£'000	£'000
Final dividend paid for the year ended 31 January 2022 of 1.9p per share	2,298	-
Final dividend paid for the year ended 31 January 2021 of 2.4p per share	-	2,903

In respect of the year ended 31 January 2023, a final dividend of 2.3p per share has been proposed and will be reflected in the Annual Report for the year ending 31 January 2024. Details of the ex-dividend and payment dates are provided in the Chairman's Statement.

The Board's current policy is to pay dividends only out of revenue reserves. Therefore the amount available for distribution as at 31 January 2023 is £7,009,000 (2022: £6,295,000).

The dividends payable in respect of both the current and the previous financial year, which meet the requirements of Section 1158 CTA 2010, are set out below:

	2023	2022
	£'000	£'000
Revenue available for distribution by way of dividend for the year	3,012	2,408
Final dividend of 2.3p per share (2022: final dividend of 1.9p)	(2,782)	(2,298)
Transfer to revenue reserves	230	110

Dividends paid by the Company on its shares are recognised in the financial statements in the year in which they are paid and are shown in the Statement of Changes in Equity.

7. Return per Share

The return per share is as follows:

		2023			2022
	Revenue	Capital	Total	Revenue	Capital	Total
	pence	pence	pence	pence	pence	pence
Basic	2.5p	18.4p	20.9p	2.0p	28.9p	30.9p

The total return per share is based on the total return attributable to shareholders of £25,294,000 (2022: £37,353,000).

The revenue return per share is based on the net revenue return attributable to shareholders of £3,012,000 (2022: £2,408,000).

The capital return per share is based on the net capital return attributable to shareholders of £22,282,000 (2022: £34,945,000).

The total return, revenue return and the capital return per share are based on the weighted average number of shares in issue during the year of 120,958,386 (2022: 120,958,386).

The calculations of the returns per Ordinary Share have been carried out in accordance with IAS 33 Earnings per Share.

8. Investments

	2023	2022
	£'000	£'000
Investments
Cost at start of year	290,337	267,140
Investment holding gains at start of year	146,646	137,574
Valuation at start of year	436,983	404,714
Purchases at cost	77,305	82,266
Disposal proceeds	(67,323)	(93,611)
Gains on investments	27,434	43,614
Valuation at end of year	474,399	436,983
Cost at 31 January	320,883	290,337
Investment holding gains at 31 January	153,516	146,646
Valuation at 31 January	474,399	436,983

The Company received £67,323,000 (2022: £93,611,000) from investments sold in the year. The book cost of these investments when they were purchased was £46,759,000 (2022: £59,069,000). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.

During the year the Company incurred transaction costs on purchases of £87,000 (2022: £121,000) and transaction costs on sales of £142,000 (2022: £206,000).

Valuation of Investments

Investments are measured initially and at subsequent reporting dates at fair value. Purchases and sales are recognised on the trade date when a contract exists whose terms require delivery within the time frame established by the market concerned. For quoted securities fair value is either bid price or last traded price, depending on the convention of the exchange on which the investment is listed. Changes in fair value and gains or losses on disposal are included in the Income Statement as a capital item.

In addition, for financial reporting purposes, fair value measurements are categorised into a fair value hierarchy based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 - Quoted prices in active markets.
• Level 2 - Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data), either directly or indirectly.
• Level 3 - Inputs are unobservable (i.e. for which market data is unavailable).

All investments have been classified as Level 1 (2022: All Level 1).

9. Debtors

	2023	2022
	£'000	£'000
Accrued income	323	204
Other debtors	10	38
	333	242

10. Creditors: Amounts Falling Due Within One Year

	2023	2022
	£'000	£'000
Amounts due to brokers	481	1,016
Portfolio management fee - Stewart Investors	1,002	996
AIFM fee - Frostrow	129	125
Other creditors	243	219
	1,855	2,356

11. Provisions for liabilities

	2023	2022
	£'000	£'000
Deferred taxation on unrealised capital gains on Indian securities	9,750	8,395

See note 5 for further details and accounting policy.

12. Share Capital

	2023	2022
	£'000	£'000
Allotted and fully paid:
120,958,386 Ordinary shares of 12.5p each (2022: 120,958,386)	15,120	15,120

During the year, no Ordinary shares were issued (2022: nil).

The capital of the Company is managed in accordance with its investment policy which is detailed in the Strategic Report on pages 22 and 23 of the Annual Report.

The Company does not have any externally imposed capital requirements.

13. Net Asset Value Per Share

The net asset value per share of 391.6p (2022: 372.6p) is calculated on net assets of £473,662,000 (2022: £450,666,000), divided by 120,958,386 (2022: 120,958,386) shares, being the number of shares in issue at the year end.

14. Financial Instruments

The Company's financial instruments comprise its investment portfolio, cash balances, and debtors and creditors that arise directly from its operations. As an investment trust, the Company holds an investment portfolio of financial assets in pursuit of its investment objective.

Fixed asset investments (see note 8) are valued at fair value in accordance with the Company's accounting policies. The fair value of all other financial assets and liabilities is represented by their carrying value in the Statement of Financial Position.

The main risks that the Company faces arising from its financial instruments are:

1. market risk, including:

• other price risk, being the risk that the value of investments will fluctuate as a result of changes in market prices;
• interest rate risk, being the risk that the future cash flows of a financial instrument will fluctuate because of changes in interest rates;
• foreign currency risk, being the risk that the value of financial assets and liabilities will fluctuate because of movements in currency rates;

1. credit risk, being the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company; and
2. liquidity risk, being the risk that the Company will not be able to meet its liabilities when they fall due. This may arise should the Company not be able to liquidate its investments. Under normal market trading volumes, the majority of the investment portfolio could be realised within a week.

Other price risk

The management of other price risk is part of the portfolio management process and is typical of equity investment. The investment portfolio is managed with an awareness of the effects of adverse price movements through detailed and continuing analysis with an objective of maximising overall returns to shareholders. Further information on how the investment portfolio is managed is set out on page 2 of the Annual Report. Although it is the Company's current policy not to use derivatives they may be used from time to time, with prior Board approval, to hedge specific market risk or gain exposure to a specific market.

If the investment portfolio valuation rose or fell by 10% at 31 January, the impact on the net asset value would have been £46.7 million (2022: £41.1 million). The calculations are based on the investment portfolio valuation as at the respective Statement of Financial Position dates and are not necessarily representative of the year as a whole.

Interest rate risk

Floating rate

When the Company retains cash balances the majority of the cash is held in overnight call accounts. The benchmark rate which determines the interest payments received on cash balances is the bank base rate for the relevant currency for each deposit.

Foreign currency risk

The Company invests in overseas securities and holds foreign currency cash balances which give rise to currency risks. Foreign currency risks are managed alongside other market risks as part of the management of the investment portfolio. It is currently not the Company's policy to hedge this risk on a continuing basis but it can do so from time to time.

Foreign currency exposure:

	2023				2022
	Investments	Cash	Debtors	Creditors	Investments	Cash	Debtors	Creditors
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Chinese renminbi	39,812	481	-	(481)	26,979	-	-	-
Indian rupee	206,897	15	110	(9,750)	216,401	254	22	(9,355)
New Taiwanese dollar	54,280	-	5	-	55,785	69	10	-
Hong Kong dollar	33,134	-	-	-	28,513	-	-	-
Philippine peso	4,835	-	-	-	5,489	-	-	-
Indonesian rupiah	36,718	-	-	-	21,405	-	-	-
Japanese yen	36,161	-	120	-	39,018	-	100	-
Bangladesh taka	6,106	-	1	-	10,606	35	-	-
Thai baht	12,001	-	-	-	8,517	-	-	-
Malaysian ringgit	10,231	-	-	-	5,771	9	-	-
Singapore dollar	23,085	2,898	-	-	-	6,940	-	-
US dollar	-	3,100	-	-	-	7,147	-	-
Korean won	11,139	-	67	-	18,499	-	68	(56)
Total	474,399	6,494	303	(10,231)	436,983	14,454	200	(9,411)

At 31 January 2023 the Company had £4,041,000 of sterling cash balances (2022: £9,738,000).

During the year sterling weakened by an average of 1.6% (2022: strengthened by 0.4%) against all of the currencies in the investment portfolio (weighted for exposure at 31 January). If the value of sterling had strengthened against each of the currencies in the portfolio by 10%, the impact on the net asset value would have been negative £53.4 million (2022: negative £41.0 million). If the value of sterling had weakened against each of the currencies in the investment portfolio by 10%, the impact on the net asset value would have been positive £43.7 million (2022: positive £50.2 million). The calculations are based on the investment portfolio valuation and cash balances as at the year end and are not necessarily representative of the year as a whole.

Credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The Portfolio Manager has in place a monitoring procedure in respect of counterparty risk which is reviewed on an ongoing basis. The carrying amounts of financial assets best represents the maximum credit risk exposure at the Statement of Financial Position date, and the main exposure to credit risk is via the Custodian which is responsible for the safeguarding of the Company's investments and cash balances.

At the reporting date, the Company's financial assets exposed to credit risk amounted to the following:

	2023	2022
	£'000	£'000
Cash and cash equivalents	10,535	24,192
Debtors	333	242
	10,868	24,434

All the assets of the Company which are traded on a recognised exchange are held by J.P. Morgan Chase Bank, the Custodian. Bankruptcy or insolvency of the Custodian may cause the Company's rights with respect to securities held by the Custodian to be delayed or limited. The Board monitors the Company's risk as described in the Strategic Report.

The credit risk on cash is controlled through the use of counterparties or banks with high credit ratings (rated AA or higher), assigned by international credit rating agencies. Cash is currently held at JP Morgan Chase Bank. Bankruptcy or insolvency of such financial institutions may cause the Company's ability to access cash placed on deposit to be delayed, limited or lost.

Liquidity risk

The Company's liquidity risk is managed on an ongoing basis by the Portfolio Manager. Substantially all of the Company's portfolio would be realisable within one week, under normal market conditions. There may be circumstances where market liquidity is lower than normal. Stress tests have been performed to understand how long the portfolio would take to realise in such situations. The Board is comfortable that in such a situation the Company would be able to meet its liabilities as they fall due.

Capital management policies and procedures

The Company's capital management objectives are to ensure that it will be able to continue as a going concern and to maximise the return to its equity shareholders.

The Company's policy on gearing and leverage is set out on page 23 of the Annual Report. The Company had no gearing or leverage during the current or prior year.

The capital structure of the Company consists of the equity share capital, retained earnings and other reserves as shown in the Statement of Financial Position.

The Board, with the assistance of the AIFM and the Portfolio Manager, monitors and reviews the broad structure of the Company's capital on an ongoing basis. This includes a review of:

• the need to buy back equity shares, either for cancellation or to hold in treasury, in light of any share price discount to net asset value per share in accordance with the Company's share buy-back policy;
• the need for new issues of equity shares, including issues from treasury; and
• the extent to which revenue in excess of that which is required to be distributed should be retained.

The Company's objectives, policies and processes for managing capital are unchanged from the prior year.

15. Reserves

Capital redemption reserve

This reserve arose when ordinary shares were redeemed by the Company and subsequently cancelled, at which point the amount equal to the par value of the ordinary share capital was transferred from the ordinary share capital to the Capital Redemption Reserve.

Special reserve

The Special Reserve arose following court approval in February 1999 to transfer £24.2 million from the share premium account.

Capital reserve

The following are accounted for in this reserve: gains and losses on the disposal of investments; changes in the fair value of investments; and expenses and finance costs, together with the related taxation effect, charged to capital in accordance with note 3. Any gains in the fair value of investments that are not readily convertible to cash are treated as unrealised gains in the capital reserve.

Revenue reserve

The Revenue Reserve reflects all income and expenses that are recognised in the revenue column of the Income Statement.

Distributable reserves

The Revenue, Special and Capital Reserves are distributable. It is the Board's current policy to pay dividends only from the revenue reserve.

16. Related Party Transactions

The following are considered to be related parties:

• Frostrow Capital LLP (under the Listing Rules only)
• Stewart Investors (under the Listing Rules only)
• The Directors of the Company

Details of the relationship between the Company and Frostrow Capital LLP, the Company's AIFM, are disclosed on pages 45 and 46 of the Annual Report. During the year ended 31 January 2023, Frostrow earned £506,000 (2022: £483,000) in respect of company management fees, of which £129,000 (2021: £125,000) was outstanding at the year end.

The Company employs Stewart Investors as its Portfolio Manager. Details of this arrangement are disclosed on page 45 of the Annual Report. During the year ended 31 January 2023, Stewart Investors earned £3,872,000 (2022: £3,799,000) in respect of portfolio management fees, of which £1,002,000 (2022: £996,000) was outstanding at the year end.

All material related party transactions have been disclosed in notes 3 and 4. Details of the remuneration and the shareholdings of all Directors can be found on page 57 of the Annual Report.

The figures and financial information for 2022 are extracted from the published Annual Report for the year ended 31 January 2022 and do not constitute the statutory accounts for that year. The Annual Report for the year ended 31 January 2022 has been delivered to the Registrar of Companies and included the Independent Auditor's Report which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

The figures and financial information for 2023 are extracted from the Annual Report and financial statements for the year ended 31 January 2023 and do not constitute the statutory accounts for the year. The Annual Report for the year ended 31 January 2023 includes the Independent Auditor's Report which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and financial statements have not yet been delivered to the Registrar of Companies.

Glossary of Terms and Alternative Performance Measures (unaudited)

AIFMD

The Alternative Investment Fund Managers Directive (the 'Directive') is a European Union Directive that entered into force on 22 July 2013. The Directive, which was retained in UK law following the withdrawal of the UK from the European Union, regulates fund managers that manage alternative investment funds (including investment trusts).

Where an entity falls within the scope of the Directive, it must appoint a single Alternative Investment Fund Manager ('AIFM'). The core functions of an AIFM are portfolio and risk management. An AIFM can delegate one but not both of these functions. The entity must also appoint an independent Depositary whose duties include the following: the safeguarding and verification of ownership of assets; the monitoring of cashflows; and to ensure that appropriate valuations are applied to the entity's assets.

Average Discount

The average share price for the period divided by the average net asset value for the period minus 1.

	2023	2022
	pence	pence
Average share price for the year	335.9	342.3
Average net asset value for the year	373.8	369.3
Average Discount	10.1%	7.3%

Bottom Up Approach

An investment approach that focuses on the analysis of individual stocks rather than the significance of macroeconomic factors.

Discount or Premium

A description of the difference between the share price and the net asset value per share. The size of the discount or premium is calculated by subtracting the share price from the net asset value per share and is usually expressed as a percentage (%) of the net asset value per share. If the share price is higher than the net asset value per share the result is a premium. If the share price is lower than the net asset value per share, the shares are trading at a discount.

Gearing

The term used to describe the process of borrowing money for investment purposes. The expectation is that the returns on the investments purchased will exceed the finance costs associated with those borrowings.

There are several methods of calculating gearing and the following has been selected:

Total assets less current liabilities (before deducting any prior charges) minus cash/cash equivalents divided by shareholders' funds, expressed as a percentage.

MSCI Disclaimer

The MSCI information (relating to the Index) may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an "as is" basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the "MSCI Parties") expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation lost profits) or any other damages. (www.msci.com).

Net Asset Value ("NAV")

The value of the Company's assets, principally investments made in other companies and cash being held, minus any liabilities. The NAV is also described as "shareholders' funds" per share. The NAV is often expressed in pence per share after being divided by the number of shares which have been issued. The NAV per share is unlikely to be the same as the share price which is the price at which the Company's shares can be bought or sold by an investor. The share price is determined by the relationship between the demand for and supply of the shares.

NAV Per Share Total Return

The total return on an investment over a specified period assuming dividends paid to shareholders were reinvested at net asset value per share at the time the shares were quoted ex-dividend. This is a way of measuring investment management performance of investment trusts which is not affected by movements in discounts or premiums.

	31 January	31 January
	2023	2022
NAV Total Return	p	p
Opening NAV	372.6	344.1
Increase in NAV	20.9	30.9
Dividend paid	(1.9)	(2.4)
Closing NAV	391.6	372.6
Increase in NAV	5.6%	9.0%
Impact of reinvested dividends	0.1%	0.1%
NAV Total Return	5.7%	9.1%

Ongoing Charges

Ongoing charges are calculated by taking the Company's annualised operating expenses as a proportion of the average daily net asset value of the Company over the year. The costs of buying and selling investments are excluded, as are interest costs, taxation, cost of buying back or issuing ordinary shares and other non-recurring costs.

	31 January	31 January
	2023	2022
	£'000	£'000
Operating expenses	5,190	4,974
Average net assets during the year	452,081	446,596
Ongoing charges	1.1%	1.1%

Performance Objective

The Company's performance objective, against which the Portfolio Manager's performance is measured, is to provide shareholders with a net asset value total return in excess of the UK Consumer Price Index ("CPI") plus 6% (calculated on an annual basis) measured over three to five years. The Consumer Price Index is published by the UK Office for National Statistics and represents inflation. The additional 6% is a fixed element to represent what the Board considers to be a reasonable premium on investors' capital which investing in the faster-growing Asian economies ought to provide over time. The performance objective is designed to reflect that the Portfolio Manager's approach does not consider index composition when investing.

	Total Return (annualised)
	Share Price	NAV	CPI + 6%
	(%)	(%)	(%)
One year to 31 January 2023	5.9	5.7	17.3
Three years to 31 January 2023	11.1	11.9	11.9
Five years to 31 January 2023	8.0	8.8	10.3

Revenue Return per Share

The revenue return per share is calculated by taking the return on ordinary activities after taxation and dividing it by the weighted average number of shares in issue during the year (see note 7 for further information).

Share Price Total Return

The total return on an investment over a specified period assuming dividends paid to shareholders were reinvested in the Company's shares at the share price at the time the shares were quoted ex-dividend.

	31 January	31 January
	2023	2022
Share Price Total Return	p	p
Opening share price	340.0	333.0
Increase in share price	19.9	9.4
Dividend paid	(1.9)	(2.4)
Closing share price	358.0	340.0
Increase in share price	5.8%	2.8%
Impact of reinvested dividends	0.1%	0.1%
Share Price Total Return	5.9%	2.9%

Volatility

A measure of the range of possible returns for a given security or market index.

ANNOUNCEMENT ENDS

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.