Pacific Assets Trust plc

(the “Company” or the “Trust”)

Final Results for the Year Ended 31 January 2022

The Company's annual report for the year ended 31 January 2022, 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 for inspection on the National Storage Mechanism (NSM):

The annual report will be posted to shareholders on 17 May 2022. 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 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 2022

Performance Summary

As at As at
31 January 31 January
2022 2021
Shareholders’ funds £450.7m £416.2m
Market capitalisation £411.3m £402.8m


One year to One year to
31 January 31 January
Performance 2022 2021
Share price total return*^ 2.9% 25.8%
Net asset value per share total return*^ 9.1% 22.3%
CPI +6%1 11.5% 6.8%
MSCI All Country Asia ex Japan Index total return, sterling adjusted* (9.2)% 30.7%
Average discount of share price to net asset value per share*^ 7.3% 9.1%
Ongoing charges^ 1.1% 1.1%
Revenue return per share 2.0p 2.6p
Dividend per share 1.9p 2.4p

*Source: Morningstar

See Glossary

^ Alternative Performance Measure (See Glossary)

1 The Company’s Performance Objective (See Glossary)

Performance Assessment

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 and measured over three to five years.

The Board also monitors the Company’s performance against its peer group. The Board reviewed the peer group during the year and the revised peer group is presented for the first time, below. It was agreed to exclude investment trusts with smaller companies or higher income-focused mandates and therefore Invesco Asia, JP Morgan Asia and Fidelity Asian Values have been removed. It was agreed to add Aberdeen New Dawn which has a similar mandate to the Company.

An analysis of performance and the Board’s approach to monitoring it can be found below and in the Chairman’s Statement; further information can be found in the Portfolio Manager’s Review and details of the Key Performance Indicators are contained in the Business Review.

Peer Group Net Asset Value per Share Total Return

1 Year 3 years 5 years
£ Rank £ Rank £ Rank
Pacific Assets Trust 109.1 1 138.2 5 162.8 4
Pacific Horizon 107.1 2 251.0 1 306.2 1
Schroder Asian Total Return 98.9 3 153.4 2 189.9 2
Schroder Asia Pacific 95.4 4 142.6 3 170.0 3
Aberdeen New Dawn 94.7 5 139.6 4 160.6 5
Asia Dragon Ord 91.6 6 135.4 6 157.8 6
iShares MSCI Asia ex Jpn ETF 91.4 7 123.5 7 142.8 7
Peer Group Average 98.3 154.8 184.3
CPI + 6% 111.5 128.8 152.3
MSCI AC Asia ex Japan 90.8 124.6 146.2

Source: Morningstar. Figures show the value of £100 invested at the start of the period as at 31 January 2022.

The Company’s Performance Objective (see Glossary)

Chairman’s Statement

We observe wrenching and dramatic change in the world around us. The decisions on how to protect our capital are hard enough at the best of times. Yet nowhere in the world has been isolated from the economic and social destructiveness of the pandemic, and increasingly assets of all types are under threat from rising producer and consumer prices. Thrown into this situation has been the invasion of Ukraine with the apparent destruction of the post-cold war accord in Europe, bringing with it a ratcheting up of uncertainty over food and energy prices.

My formative investing years were in the 1970s when at one point inflation was halving our spending power every four and a half years. Levels of price rises that are around us today would still halve your purchasing power in 12 years. So, protection against such destructive forces must be a priority for the professional guardians of people’s savings. This is challenging with the quite comfortable certainties of near deflation and negative interest rates, long evaporated. ‘Real assets’ were thought to be the answer to inflation, and these included equities of all types. However even a slight whiff of higher bond yields has caused a dramatic fall in values in what have been determined as ‘long duration growth stocks’.

The Past Year

Pacific Assets Trust produced a positive return both in terms of its net asset value and in terms of its share price. The net asset value per share total return* of 9.1% (2021: 22.3%) compares with the return of the Performance Objective (CPI+6%) of 11.5% (2021: 6.8%) and the average of our peer group of Asian investment trusts which showed a decline in net asset value of 1.7% (2021: +42.8%). During the year, the Board approved changes to the constituents of the peer group. These changes are explained in full above, where the performance data can also be seen in full.

* Alternative Performance Measure (see Glossary)

Over longer periods, the annualised NAV per share total return was 9.9% over three years, 10.2% over five years, and 11.4% since Stewart Investors were appointed as the Portfolio Manager in June 2010. This compares with the Performance Objective return of 6.0% over three years, 8.8% over five years and 8.4% since Stewart Investors were appointed.

We are satisfied that the Trust was able to generate a positive return in absolute terms and at a time when the overall market index for the Asia Pacific region fell by 9.2% during the year. The Trust under Stewart Investors’ management has always sought to characterise itself as being a relative haven in difficult market conditions, and this has proved to be the case in the 12 months to the end of January.

The statistics of returns and the comparative measures that the Board uses to assess the Portfolio Manager’s performance can be found on page 3 of the annual report.

The Portfolio Manager explains the outcomes in detail in their report. We would however point to their sceptical view, held for a long time, of the risks of political interference in companies in China, which has been one of the most harmful features of last year’s investing environment. The Trust’s lack of exposure particularly to large capitalisation Chinese internet stocks has been an important driver of good relative returns in the last 12 months, although over the three and five year period for the Trust against its peer group, the Trust has still lost some ground. Whatever happens from here on, the Portfolio Manager’s concerns over the risks of political interference in the running of some key franchises in China, have been justified. Notwithstanding this, we are still committed to seeking out good companies in China, and the positioning of the portfolio in both China and in Hong Kong supports the opinion that there will be valuable investment opportunities and more to be found.

The backdrop to the year contained two destabilising forces, neither new but of increasing note. First the many years of almost ‘free’ money has led to unprecedented debt accumulation, much of which may be in invisible form, off balance sheet and off market. Secondly the speed of change as technological innovation drives disruption in business is creating both fear and opportunity. This was prior to the destabilising event of Russia’s invasion of Ukraine, which could potentially have far reaching effects upon globalisation. All of these factors are very much in the minds of the Trust’s Portfolio Manager when selecting and holding onto Asian companies. The corporate world contains visionary minds and boundless energies, and our best protection in these times is to engage with the companies and their creativity. However, we must keep in mind that having passed the trough of interest rates, as seems likely, asset markets of all types may have questions asked of them.

Benchmarking against Inflation

We introduced a Performance Objective of CPI plus 6% more than two years ago to measure the achievement of the Trust’s investment objective. The MSCI All Country Asia ex Japan Index (which was previously our primary performance comparator) has always been unrelated to the way in which the Trust’s assets are managed, which is with an absolute return mindset. However, the Board does review the extent to which the portfolio deviates from the Index, enabling us to ask questions of the Portfolio Manager if it appears that there is a move toward greater conformity. I should say that in all my time with the Trust, we have never had to question this. The last year we have provided a positive return against the Index’s negative one which is not a cause of joy in the same way as two previous years’ underperformance was not a cause for disappointment.

CPI plus 6% recognises the home base of our shareholders (predominately UK based) and the inflation bogey they must exceed to protect purchasing power. The 6% is the premium that you should expect from the faster growing, younger economies that provide our investment mandate. We would typically look at this comparison over three years at least, and more likely five years. This is coincident with the Trust’s very long-term investment approach combined with portfolio turnover averaging around 20%, theoretically implying that the portfolio is turned over only over a five year period.

If the trend of rising prices is sustained and is not ‘transitory’ (as some central bankers have suggested), we may have to work very hard to exceed this objective. Indeed, in the year to 31 January 2022, this is already the case. However, we would hope that by thinking in an absolutist way about the portfolio, our shareholders can achieve some consistency in protecting their funds from erosion and providing a meaningful real return. However, this must be looked at over longer periods.

Interaction of the Board and the Portfolio Manager

A closed-end investment company such as the Trust is overseen by a board which is independent of the portfolio manager. All five members of the Board are non-executive, but they are accountable for the governance and the wellbeing of the Company. Oversight of the Portfolio Manager and other service providers is an essential part of the role.

Formal Board meetings are held four to five times a year, including an on-site visit to one of the Asian markets in which the Company has investments (although, sadly, that has not been possible since 2019). The Board would expect to have in depth understanding of the structure and the investment process of the Portfolio Manager, and of the key members of the team that are responsible for managing the portfolio of the Trust. The Board monitors both investment risk and financial risk by receiving detailed reports of the controls at the Portfolio Manager and at other principal providers of services, such as the AIFM and the Custodian.

The management of the Trust’s portfolio is delegated fully to the Portfolio Manager, and the Board should not try to second guess investment decisions in any way. The Board will have detailed knowledge of the principal investments, recent purchases and sales, the make- up of the assets by sector and by country, and the key risks within the portfolio. There are also metrics tabled at meetings that show the contributors and detractors of investment return. All of this enables dialogue with the Portfolio Manager as to the direction of investment strategy and enables constructive challenge.

More strategic decisions are taken by the Board in consultation with the Portfolio Manager and the AIFM. For instance, the widening of the mandate to enable up to 20% of the portfolio to be invested in companies outside the regional mandate, where a significant part of their economic activities (at the time of investment) are within the region, was a decision taken three years ago. This has broadened the scope of potential investments and has added value to the portfolio.

In extremis, the Board does have the ultimate authority to takes steps to replace the Portfolio Manager, and there are several examples of UK listed closed end investment companies that have done this in recent times. Such action might have to be considered should there be a deep level of dissatisfaction with the management arrangements, or in the worst case a disintegration of the Portfolio Manager’s investment team. It should be said clearly that this is not the situation now and the Directors retain a high degree of confidence in the abilities of the Portfolio Manager.

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 net asset value per share* of 7.3% through the 12 month period to the end of January. While this is not unusual amongst Asian investment companies, we would rather this was not the case. Better relative performance after two difficult years 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.

* Alternative Performance Measures (see Glossary for further information).

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 paper 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 12 months.

There will be a resolution at the Annual General Meeting (please refer to the notice of the meeting for full details) asking shareholders to approve a new investment policy enabling the Company to gear using up to 10% of its net asset value. This arises because of a change in the AIFMD status of the Company, enabling it to incur borrowing, when previously this was not permissible. This power has always been available under the Company’s Articles of Association but has not been used in the last 12 years. I should state here that the Company has no borrowing facilities in place and has no intention of using gearing in the immediate future. However, the Board will continue to keep the position under review with the AIFM and the Portfolio Manager.


The Company generated a revenue return of 2.0p per share during the year (2021: 2.6p 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 1.9p per share will be paid on 1 July 2022 to shareholders on the register on 10 June 2022. The associated ex-dividend date will be 9 June 2022.

Annual Costs

We are aware that the ongoing charges ratio* of the Trust as measured by conventional means (in line with AIC guidance) is higher than the peer group of comparable funds. The figure stands at 1.1% of net asset value compared with an average of 0.9% of the other Asian trusts.

The comparative figures take no account of the costs associated with investment turnover, where typically the Trust has a low turnover and holds stocks for the long term, or gearing, which is present in many of the peer group companies.

Stewart Investors, as Portfolio Manager, charges the Trust a flat fee of 0.85%, reduced from a higher level two years ago. We recognise the scope of engagement which the Portfolio Manager has, often with smaller companies in areas that are very under researched. The engagement involves a continuous dialogue with company managers on sustainability or environmental, social and governance (“ESG”) adherence. We recognise that this level of research and contact is both time consuming and expensive, but we believe it is in the best interests of shareholders who wish to participate in successful companies that adhere to the highest principles of sustainability and corporate governance.

We also employ Frostrow Capital LLP as AIFM and Company Secretary, which is separate from the Portfolio Manager. This is an arrangement that has worked very well for the last 12 years.

The Board remains focused on achieving value for money for shareholders, and all costs, including management fees, are regularly scrutinised.

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 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.

My own tenure of nine years comes up towards the end of this calendar year, and we have already put in practice a process for replacing me in 2023 both as a board member and as Chairman. 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 aware of. We are very focused on successfully managing the transitions with the right individuals and mix of people.

The Annual General Meeting

This year’s Annual General Meeting will be held at 12 noon on Tuesday, 28 June 2022, 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.

After Covid restrictions have prevented us from welcoming shareholders to this event for the past two years, I very much look forward to seeing as many shareholders as possible on that day. Of course, should circumstances change and restrictions be reintroduced, we will update shareholders on the final arrangements for the meeting through the Company’s website:

I encourage all shareholders to exercise their right to vote at the Company’s annual meeting. The Board strongly encourages shareholders to register their votes online in advance (information on how to vote can be found in the annual report). Registering your vote in advance will not restrict shareholders from attending and voting at the meeting in person should they wish to do so, subject to any Government guidance to the contrary. 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.

The Outlook

The near future appears to hold little promise of reward for investors. After many years of rising asset prices, circumstances point to challenging times as central banks withdraw liquidity. A belief that Russia’s invasion of Ukraine will become a limited ‘distant’ struggle away from the headlines would be naïve. Economic dislocation will be inevitable, in Asia as well. Rising food prices and rising energy prices may beget other unforeseen political problems elsewhere in the world. This is a backdrop that may not be possible to escape in the shorter term.

However as always, we seek out investments that will be resilient in tough times; a strong balance sheet and a risk aware management should be at a premium as we look ahead. Meanwhile the Asian countries that Pacific Assets Trust invests in have populations whose wealth is growing and who have appetite for products and services that in the West are taken for granted. This dynamic will not alter in the face of the adversity that appears to surround us.

James Williams

9 May 2022

Investment Portfolio

as at 31 January 2022

Company Country MSCI Sector Market
% Net
Tube Investments of India India Consumer Discretionary 25,847 5.7%
CG Power &
Industrial Solutions
India Industrials 22,877 5.1%
Mahindra & Mahindra India Consumer Discretionary 21,716 4.8%
Marico India Consumer Staples 13,962 3.1%
Hoya* Japan Health Care 13,720 3.0%
Unicharm Corporation* Japan Consumer Staples 13,284 3.0%
Voltronic Power Technology Taiwan Industrials 11,703 2.6%
Elgi Equipments India Industrials 10,997 2.4%
Taiwan Semiconductor Manufacturing Taiwan Information Technology 10,448 2.3%
Koh Young Technology South Korea Information Technology 10,229 2.3%
Top 10 Investments 154,783 34.3%
Housing Development Finance Corporation India Financials 10,097 2.2%
Tata Consumer Products India Consumer Staples 9,415 2.1%
Techtronic Industries Hong Kong Industrials 9,322 2.1%
Advantech Taiwan Information Technology 9,196 2.0%
Vitasoy International Hong Kong Consumer Staples 9,097 2.0%
Kotak Mahindra Bank India Financials 8,889 2.0%
Vinda International China Consumer Staples 8,597 1.9%
Aavas Financiers India Financials 8,402 1.9%
Tata Consultancy Services India Information Technology 8,335 1.9%
Delta Electronics Taiwan Information Technology 8,293 1.8%
Top 20 Investments 244,426 54.2%
NAVER South Korea Communication Services 8,270 1.8%
Chroma Ate Taiwan Information Technology 8,050 1.8%
Dr Lal Pathlabs India Health Care 7,379 1.6%
Cholamandalam Financial India Financials 7,339 1.6%
Info Edge India Communication Services 7,079 1.6%
Dabur India India Consumer Staples 6,584 1.5%
Dr. Reddy’s Laboratories India Health Care 6,397 1.4%
Unicharm Indonesia Indonesia Consumer Staples 6,213 1.4%
Tokyo Electron* Japan Information Technology 6,089 1.4%
Vitrox Malaysia Information Technology 5,771 1.3%
Top 30 Investments 313,597 69.6%

* 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.

Company Country MSCI Sector Market
% Net
Godrej Consumer Products India Consumer Staples 5,678 1.3%
Philippine Seven Philippines Consumer Staples 5,489 1.2%
Humanica Thailand Information Technology 5,286 1.2%
Tata Communications India Communication Services 5,259 1.2%
PT Industri Jamu dan Farmasi Sido Muncul Indonesia Consumer Staples 5,209 1.1%
Selamat Sempurna Indonesia Consumer Discretionary 5,038 1.1%
Silergy China Information Technology 4,954 1.1%
Infosys India Information Technology 4,954 1.1%
Bank OCBC Indonesia Financials 4,945 1.1%
Syngene International India Health Care 4,879 1.1%
Top 40 Investments 365,288 81.1%
Tech Mahindra India Information Technology 4,816 1.1%
Marico Bangladesh Bangladesh Consumer Staples 4,799 1.1%
Pigeon Corporation* Japan Consumer Staples 4,420 1.0%
Tarsons Products India Health Care 4,372 1.0%
Shenzhen Inovance Technology China Industrials 3,812 0.9%
Hualan Biological China Health Care 3,776 0.8%
Guangzhou Kingmed Diagnostics China Health Care 3,747 0.8%
Mahindra Logistics India Industrials 3,586 0.8%
Indiamart Intermesh India Industrials 3,488 0.8%
Shanthi Gear India Industrials 3,416 0.7%
Top 50 Investments 405,520 90.1%
Centre Testing International Group China Industrials 3,332 0.7%
Kasikornbank Thailand Financials 3,231 0.7%
Airtac International Group Taiwan Industrials 3,141 0.7%
Glodon China Information Technology 3,111 0.7%
Brac Bank Bangladesh Financials 3,052 0.7%
Delta Brac Housing Finance Corporation Bangladesh Financials 2,754 0.6%
Amoy Diagnostics China Health Care 2,606 0.6%
Yifeng Pharmacy Chain China Consumer Staples 2,346 0.5%
Foshan Haitian Flavouring & Food China Consumer Staples 2,140 0.5%
Estun Automation China Industrials 2,108 0.5%
Nippon Paint* Japan Materials 1,504 0.3%
Pentamaster International Malaysia Information Technology 1,498 0.3%
Sundaram Finance India Financials 640 0.1%
Total Investments 436,983 97.0%
Net current assets 13,683 3.0%
Total Shareholders’ Funds 450,666 100.0%

* 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.

Portfolio Manager’s Review

Return for the year

The net asset value per share of Pacific Assets Trust plc returned 9.1% in the 12 months to 31 January 2022. This compares with an increase in the Performance Objective of CPI plus 6% of 11.5%*. However, this comparison only becomes relevant over a longer time period. Over five years, the annualised net asset value total return of the Trust has been 10.2%, against the Performance Objective return of 8.8%* and over 10 years the annualised return of 12.3% compares with 8.2%* for the Performance Objective. For the year there has been a decrease in the MSCI AC Asia ex Japan index (measured on a total return sterling adjusted basis) of 9.2%1.

* Source: Frostrow

1 Source: Morningstar

The divergence in performance between equity markets in China and India was highlighted in the interim report. During the remainder of the year, many equities in China suffered sharper falls while most equities in India recorded strong gains. Country weightings are purely an outcome - a residual - of bottom-up stock selection. Nonetheless, the large differential in performance between China and India complemented strong stock selection and helped to drive positive returns during the year. This report will outline the main drivers of performance and the most significant transactions made by the Trust. It will then illustrate how we examine international peers as a means of assessing possible pathways of development, also known as growth runways, using two of the smaller companies in the Trust as examples.

What contributed to our return?

Since 1988, the typical performance outcome of our investment philosophy has been the preservation of capital when markets are weak and steady, but trailing capital growth during rapidly rising markets. Last year local equity markets within the Asia Pacific region delivered both of these performance outcomes. Equities in Hong Kong, South Korea and China, in particular, fell sharply while equities in Taiwan and India were impressively strong. Within this context, our typical performance outcome was evident at the country level.

Contribution by investment for the year ended 31 January 2022

Top 10 contributors to and detractors from absolute performance (%)

Top 10 Contributors %
Tube Investments of India 3.48
CG Power & Industrial Solutions 2.34
Elgi Equipments 1.29
Dr Lal Pathlabs 1.06
Silergy 0.73
Tech Mahindra 0.71
Aavas Financiers 0.71
Mahindra & Mahindra 0.71
Techtronic Industries 0.55
Marico 0.55
Top 10 Detractors %
Vitasoy International -2.43
Guangzhou Kingmed Diagnostics -0.61
Hualan Biological -0.59
Pigeon Corporation -0.53
Unicharm -0.43
Vinda International -0.32
Bank OCBC -0.31
Philippine Seven -0.28
NAVER -0.26
Amoy Diagnostics -0.26

As always, we held true to our investment philosophy and we did not succumb to despondency in China or euphoria in India. Accordingly, the majority of the Trust’s investments in Hong Kong, South Korea and China fell less than local equity comparisons while the majority of investments in Taiwan and India failed to keep pace with markets that were driven by strong investor enthusiasm. This is evidenced by examination of the top ten contributors to performance.

Eight of the Trust’s top ten contributors were listed in India. India enjoyed a ‘blockbuster year’2 for new equity raisings in 2021. Record numbers, both in terms of the number of listings (63) and the value of capital raised (almost US$13 billion), were matched by bullish adjectives such as ‘wild’, ‘buzzing’ and ‘frenzy’. We tend not to participate in new issues unless we fully understand and can cross-reference the track record of the founders. Moreover, the pressures of being listed, with investors eager for quarterly updates, can have a corrosive influence on a culture, which we prefer to be long-term focused. For IPOs, it is often better to be patient and wait until a track record is established and the culture has settled. In this regard, it is noteworthy that, in accordance with our investment philosophy, the majority of the top contributors had been held in the Trust for over five years.

2 “2021: A blockbuster year for public offers despite hiccups”, The Economic Times, Sanam Mirchandani. 01/01/22

Examination of the Indian portion of the Trust shows that we held true to our investment philosophy and did not get carried away with over-exuberance. We did not participate in hot IPOs or invest in fashionable areas such as clean energy, fintech, electric vehicles or big data analytics. In stark contrast, the main business of the top contributor (Tube Investments) is the manufacture of bicycles. Tube Investments did not perform because it is fashionable. It performed because this family-controlled conglomerate is undertaking a powerful transformation under the excellent leadership of Vellayan Subbiah, a family member. Part of this restructuring involved the purchase and rejuvenation of another old franchise in India, CG Power and Industrial Solutions Limited, which is owned by the Trust and performed strongly over the period. Other strong contributors were Aavas Financiers, Dr Lal Pathlabs, Elgi Equipments, Tech Mahindra Mahindra & Mahindra and Marico. Each of these businesses boast high quality stewardship, improving franchises and robust financials. These were, at one time, each small businesses accounting for a small portion of the Trust, but they have grown into more significant holdings thanks to the long growth runways available in India and the rest of Asia.

Outside India, Techtronic Industries (Hong Kong), a manufacturer of power tools, Voltronic Power Technology (Taiwan), an original design manufacturer of uninterruptable power supplies and Silergy Corp, a manufacturer of analogue semiconductors in China for Chinese customers, contributed positively to the Trust’s performance.

What detracted from our return?

The most significant detractor of performance was Vitasoy International (Hong Kong) where politically motivated commotions, distinct from the management or the products – plant based beverages – of the company, conspired to disrupt sales in mainland China during the peak summer months. The quality of the stewardship, franchise and financials of Vitasoy is undiminished. In addition, we note that Vitasoy has renewed advertising activities, is placing orders with suppliers and has restarted production, which increases our confidence that the worst of this unfortunate episode is in the past. The rest of the detractors from performance were significantly smaller. Sometimes it is hard to determine any meaningful patterns in contributors or detractors. Last year, however, seven of the top ten detractors were either listed in, or had significant operations in, China. The seven companies are: Guangzhou Kingmed Diagnostics, Hualan Biological, Amoy Diagnostics, Vinda International, Vitasoy International, Pigeon Corporation and Unicharm.

Over the course of the year, the Chinese economy slowed and political headwinds strengthened. In pockets of the economy, notably property, there was economic stress. The second order impact of the weaker property sector was reduced confidence in banks, insurance and retail. The once popular internet and education sectors suffered from penalties as they were deemed to be no longer compatible with the common prosperity of the Chinese population. The combination of these connected but distinct factors reduced equity valuations of these sectors dramatically and almost all listed Chinese companies more generally. The Trust was not invested in any of these specific sectors and the focus on high quality sustainable businesses insulated the shareholders from the worst of the falls in China in 2021.

Covid restrictions and rising input costs were two additional factors impacting certain equities in the financial year. In this regard, lockdowns and reduced economic activity help to explain weak performance at Philippine Seven (Philippines) and Bank OCBC (Indonesia). Rising input costs, alongside weaker domestic demand in China, had a chilling effect on sentiment and operations at manufacturers such as Unicharm (Japan, Diapers), Pigeon Corporation (Japan, Baby accessories) and Vinda International (China, Tissues).


The most significant purchase was CG Power and Industrial Solutions Limited (India) which manufactures equipment for power manufacturing, distribution and transmission. Formerly known as Cromptom Greaves, CG Power is an old and high quality franchise that suffered from weak governance. We are confident this will change as the franchise was recently acquired by the Murugappan family who have an excellent record on governance and franchise optimisation. Such is our confidence in the possibilities for this group that Tube and CG Power are now two of the larger investments in the Trust.

The largest sale was MediaTek (Taiwan) which designs semiconductor chips, particularly but not exclusively, suited for mobile telecommunications in China. Over the course of the year we have become increasingly concerned with cyclicality, valuations and sustainability of companies operating along the semiconductor supply chain. Geopolitical headwinds have also strengthened.

In addition to these larger transactions, we added to five companies in China which were weak over the year and we trimmed five companies in India and in Indonesia where valuations had run ahead of fundamentals.

Growth Runways

The closed end nature of the Trust allows us to explore a number of smaller companies. Liquidity considerations often confine smaller companies to smaller holdings in the Trust. This portion of a portfolio is often described, rather unflatteringly, as ‘the tail’, as if it is an unattractive appendage. In the case of the Trust, this pejorative description could not be less apt. We believe that these smaller companies will contribute meaningfully to future returns as they possess all the requisite qualities but are simply at an earlier stage of development. As such, their small size is an asset, a harbinger of superior growth. Often we reassure ourselves of this growth by studying the history of companies or industries in Europe or the USA. Two examples of this approach are Elgi Equipments (India) and Humanica (Thailand).

Elgi Equipments manufactures and services air compressors, an essential product in almost every manufacturing processes. “From the paint on your wall to the car you drive, from the medicines you take to the leather bag you carry, Elgi’s products have been used either in their production, maintenance or usage”3. Elgi Equipments is a family business and Dr Varadaraj, the current CEO, is second generation. Since becoming CEO in 1994 his words and actions have displayed quality decision making with a preference for long-term prosperity over short-term enrichment. Study of Atlas Copco, the Swedish multinational corporation, provides an interesting development pathway which Dr Varadaraj emulates and improves upon. The result is an extremely competent industrial engineering franchise replete with high quality products and clients, which competes admirably with international peers.

3 Stewart Investors’ Sustainable Funds Group company report.

Elgi now dominates the compressor market in India with 30% market share. The consolidated nature of this industry coupled with the frequent need for reliable servicing of compressors, protects this market share and provides recurrent cash-flows which Dr Varadaraj has reinvested in growth over and above the rate determined by the Indian industrial cycle. Today, Elgi has one of the broadest product ranges in the industry and derives half of its revenue from overseas markets. The beauty of this model is that incremental product sales in India, a market with many decades of growth ahead of it, generate more servicing revenues, therefore greater cash-flow predictability, higher R&D expenditure and the possibility for new geographic expansion. It is a virtuous cycle without the need for debt or equity capital raisings. After identifying the growth pathway, the question turns to how long the cycle can continue and in this regard, the small revenues at Elgi Equipment (only US$300m) are encouraging.

No company is perfect, and there will be many difficulties along the way not least the need to find a successor for Dr Varadaraj, who in his words will require ‘temerity and grit’. Fortunately, the family has instilled a wonderful culture with sustainability at its core and it is for this reason that we are confident that Elgi Equipments will overcome any difficulties and generate strong shareholder returns for many years to come.

This approach was similar at Humanica, the outsourcing specialist. Humanica provides HR software and accounting solutions, mostly in Thailand and potentially overseas, and is the smallest company in the Trust in terms of revenues. The steward here is the founder and CEO Mr Dentham who built a strong track record managing similar businesses at PricewaterhouseCoopers (PwC). On leaving the partnership and forming Humanica, Mr Dentham has created an excellent franchise in a market capable of mid-teen growth for many years to come. Confidence in this growth comes from observing that American and European companies have been outsourcing for decades whereas 98% of Thai corporations retain these functions in-house. Despite a dominant market position and excellent reputation, Humanica recorded only US$24 million of revenues last year. Herein lies the opportunity as this small figure confirms industry nascence and the prospect of strong structural tailwinds. Moreover, outsourcing can offer counter cyclical growth as it enables firms to reduce costs when economic activity is weak. Of course, sales growth is necessary but not sufficient, as it must translate into cash-flow growth to generate shareholder returns. For Humanica, their relatively short record is encouraging with operating cash flow eclipsing net profits since listing in 2015. As a people-based business the opportunity might be great but the risks are also high with a quality reputation taking a long time to establish and only seconds of misjudgement to destroy. In this regard, we are convinced that the talented Mr Dentham has a strong appreciation of the risks as well as keen sense of the opportunity. He is an excellent steward and we anticipate Humanica being a much larger portion of the Trust in the years ahead.


The only certainty about the outlook is that it is uncertain. As we write this report, newspapers are consumed with the direction of inflation, interest rates, economic growth, heavily indebted national accounts, heightened political uncertainties, a pandemic and the outbreak of war in Europe. This is on top of longer-term structural headwinds such as biodiversity loss, inequality and climate change. Reasons for despondence are many but, as always, we rely on our investment principles as alluded to in our Hippocratic Oath: “We will not succumb to irrational exuberance in good times, nor to unjustified gloom in bad times”. The current context might seem grim but we are confident that the Trust’s capital is invested in the highest quality people, operating the finest franchises with some of the strongest balance sheets in the region. This financial strength gives high quality people such as Dr Varadaraj and Mr Dentham the ability to endure difficulties and take advantage of the plentiful runways of growth that exist in Asia.

Stewart Investors
Portfolio Manager

9 May 2022

Sustainability and ESG

Environmental, Social & Governance Policy

The Board believes that consideration of environmental, social and governance (“ESG”) issues within its 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, through its Portfolio Manager, expects to maintain 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 is 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 analyst in the team analyses the sustainability positioning of a business, and is also responsible for engaging with companies.

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.


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:

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

They avoid companies that have unsustainable business models and engage with companies to improve sustainability outcomes.

The team have 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 website, www.stewartinvestors.com2.

2 Our position on harmful and controversial products and services: our-position-on-harmful-and-controversial-products-and-services.html

The team employ the services of an external ESG research provider to supplement their internal research around sustainability and provide a quarterly check on the portfolio to ensure companies meet global norms for best practices and raise no red flags against their thresholds for harmful activities. They also receive regular updates from an external controversy monitoring service.

Case Study – Mahindra and Mahindra

Mahindra & Mahindra


Company profile: One of India’s most respected and successful industrial groups.

Stewardship: 74% Free Float and now run by the third generation of the family.

What Stewart Investors like:

  • The heart of the group is the country’s dominant tractor franchise. The Portfolio Manager believes there are few companies better placed to contribute to and benefit from India’s sustainable development than this, since rural productivity will hinge on greater farm mechanisation.
  • Stewart Investors believe they are backing a well-regarded steward to allocate capital successfully in nurturing new businesses using existing cash flows. As such, the group is utilising its scale, reputation and capital to cultivate a range of businesses ranging from clean energy to IT-outsourcing and social housing development to inclusive financial services.
  • The Portfolio Manager believes that the group’s palpable sense of purpose and stellar track record provides a lot of comfort on the group’s quality, and they can easily imagine Mahindra evolving into a much more diversified conglomerate in ten years’ time.

Risks: Stewart Investors believe the company faces risks of continued capital allocation to weak businesses such as autos and commercial vehicles and an inability to transition quickly to an electric vehicle world.

Areas for engagement:

  • Better capital allocation and diversification away from businesses with sustainability headwinds.
  • Diversity in senior management.

Relevant Sustainable Development Goals:

1 – No Poverty

Provider of affordable finance and financial products for rural communities.

8 – Decent Work and Economic Growth

Agricultural machinery improves productivity and supports India’s sustainable development.

Engagement and Voting

Stewart Investors believe that no company is perfect and engagement and voting are key responsibilities for them as long-term shareholders. Engagement is a means to mitigate business risks, protect against potential headwinds and improve sustainability outcomes.

Their engagement activity is prioritised from a bottom-up perspective by the investment analysts. The way each company responds to engagement is integrated into the analysts’ conviction level in the company. Engagements are on issues such as:

  • Pollution, natural resource degradation, biodiversity and climate change – packaging, plastic pellets, deforestation, sustainability of supply chains (soy, palm oil and coffee), fossil fuel versus renewables, water, waste and energy efficiency.
  • Aligned remuneration and incentives – living wage, gender pay-gap and complexity of incentives.
  • Diversity, equity and inclusion – diversity, particularly gender, in senior management and on boards.
  • Addictive products – indirect exposure to tobacco and sugar content in food.
  • Governance – corporate strategy and legal structure.

In addition to direct engagement with companies, the team take part in collaborative engagements as both a participant and a leader. Recent examples have included conflict minerals, deforestation, plastic pellets, micro insurance and access to medicine. The team uses the PRI Collaboration Platform to work with other investment firms and asset owners to collectively encourage companies to improve their approaches to ESG issues.

They consider each proxy vote individually and on its own merits in the context of their knowledge about that particular company. This process is not outsourced to an external provider or separate proxy voting / engagement team. The investment analysts use proxy voting as an extension of their engagement activities and are guided by the principle that, where possible, voting should be used to improve sustainability outcomes.

They vote against management to influence companies to improve E, S and G issues, particularly when engagement has been unproductive. A contrary vote is an important part of the engagement process. They aim to explain their rationale for voting against management before voting and will continue to engage following the vote if appropriate. Contrary votes most frequently relate to overly complex management remuneration packages, a curtailment of minority shareholder rights, and director appointments. Given their focus on investing in companies contributing to sustainable development, votes on environmental and social issues are less common than they would be for more index-constrained strategies, but where relevant, they support votes against management to improve social and environmental outcomes. Quarterly voting records for the portfolio are available on the Trust’s website.

Thematic Engagement Example – Reducing Plastic Waste

In July 2018, Stewart Investors hosted an interactive forum with 11 Indian consumer goods companies (four of which remain in the Trust today). The forum was set up to discuss the challenges around plastic waste and to find a way for the companies to work together to improve the situation in India. The forum established that there was demand for a new industry body to work with government and agree on industry wide targets.

Since the forum, Stewart Investors have been working with WRAP, a UK based global sustainability charity, who have experience in rolling out nationwide ‘Plastic Pacts’ in the UK, Europe, US, Canada, South Africa and Chile. India was next on their list and so Stewart Investors provided funding to support the operational set up of the India Plastics Pact, which subsequently launched in September 2021. So far, over 33 organisations have signed up to the pact, including major fast-moving consumer goods (“FMCG”) brands, manufacturers, retailers and recyclers, to create a unified national framework for a circular economy for plastics, with agreed targets and associated reporting by businesses in India.


The Portfolio Manager is transparent about portfolio holdings within the Trust and has developed a Portfolio Explorer tool (available on the Trust’s website: to tell the stories of the companies they invest in on behalf of the Trust. These stories have been written by the investment team so that shareholders and other stakeholders can see why they believe that the companies they invest in are making the world a better place.

Portfolio Explorer 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 80 climate change solutions. 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.

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’s report on the achievement of the Trust’s sustainable investment objective, in accordance with the requirements of the Sustainable Finance Disclosure Regulation (“SFDR”), can be found on page 77 of the Annual Report.

Business Review

The Strategic 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 provide a vehicle for investors to gain exposure to a portfolio of companies in the Asia Pacific Region, 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 buy backs, 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.

Investment Objective

The Company’s investment objective along with Stewart Investors’ investment approach is set out above.

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”). Please refer to the Chairman’s Statement and the Glossary for further information.

Investment Policy

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%.

The Company has the power under its Articles of Association to borrow up to two times the adjusted total of capital and reserves. During the year the Company appointed an external AIFM which means that, in principle, the Company is now able to employ gearing with the Board’s approval.

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.

Change to Investment Policy

As noted above and in the Chairman’s Statement, the Company has appointed an external AIFM which means that in principle the Company is now able to employ gearing with the Board’s approval. The Board proposes to shareholders that any gearing be limited to 10% of the Company’s net assets.

An ordinary resolution to approve the new investment policy is included in the Notice of AGM and the full text of the proposed new investment policy can be found in the explanatory notes. The proposed amendment has been approved in principle by the Financial Conduct Authority in accordance with the requirements of the Listing Rules. The Company currently has no gearing facilities in place and there is no intention to employ gearing in the immediate future. However, the Board will keep the position under review, together with the AIFM and the Portfolio Manager.

Dividend Policy

It is the Company’s policy to pursue capital growth for shareholders with income being a secondary consideration. This means 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 and Edward Troughton. All of these Directors are non-executive, independent Directors and served throughout the year.

Key Performance Indicators

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

  • Net asset value total return against the Consumer Price Index +6% (the “Performance Objective”)* ^
  • Net asset value per share total return against the peer group* ^
  • Average discount/premium of share price to net asset value 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)

Net asset value per share total return – Performance Objective

The Directors regard the Company’s net asset value total return as being the overall measure of value delivered to shareholders 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% (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), measured over three to five years. 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 net asset value per share total return was 9.1% underperforming the Performance Objective by 2.4% (2021: net asset value per share total return of 22.3%, outperforming the Performance Objective by 15.5%). Over the past three years, the annualised net asset value per share total return was 9.9%, outperforming the Performance Objective by 3.9% per annum. Over five years, the annualised net asset value per share total return was 10.2%, outperforming the Performance Objective by 1.4% per annum.

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

Net asset value 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”). The Board has agreed changes to the peer group which are explained above.

Over the three years ended 31 January 2022, the Company ranked fifth in its peer group, over five years it was ranked fourth. The Company’s performance and the Board’s approach to monitoring it 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 net asset value 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.

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 net asset value per share was at times wider than the peer group average and the Board kept this under close review. Please see the s172 Companies Act 2006 disclosure, below, for information regarding how the Board addressed this issue during the year.

Average discount of share price to net asset value per share*^ during the year ended

31 January 2022                                31 January 2021

7.3%                                                 9.1%

Peer group average                           Peer group average

discount 5.0%                                    discount 7.0%

* Source: Morningstar

^ Alternative Performance Measure (see Glossary)

Ongoing charges ratio

Ongoing charges represent the costs that shareholders 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 2022                                31 January 2021

1.1%                                                 1.1%

Peer group average* 0.9%                  Peer group average* 0.9%

^ Alternative Performance Measure (see Glossary).

* Peer group average excludes performance fees

Shareholders should be aware 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 are not necessarily as high as some other investment vehicles, should these costs be added into the calculation of ongoing charges. 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 impact.

These principal risks are detailed below 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 risks (including financial risks)
  • Strategic risks
  • Operational risks (including cyber crime, corporate governance, accounting, legal and regulatory)

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

Principal Risks and Uncertainties Mitigation Change in assessment
of risk over the last
financial year
Investment Risks
(including financial 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 investments 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, which encompasses the rationale for investment decisions, the make-up of the portfolio, and the investment strategy.
As part of its review of the going concern and 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 to the financial statements), 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.
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:
·     reviews of the arrangements with, and services provided by, the Custodian to ensure that the security of the Company’s custodial assets is maintained;
·     monitoring of the Custodian, including reviews of internal control reports and sub-custodial arrangements, as appropriate; and
·     reviews of Stewart Investors’ approved list of counterparties, the process for monitoring and adding to the approved counterparty list, and the Company’s use of those counterparties.
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 to the financial statements.
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/or 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 developments and how they may impact decision making processes with Stewart Investors.
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 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 and ESG, the Board considers the portfolio to be relatively well positioned to deal with climate change events as they arise.
Black Swan Risk
A black swan 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 seeks to manage this risk by monitoring emerging risks and the robustness of Stewart Investors’ and other service providers’ processes for taking account of these risks.
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 on protecting shareholders’ funds, leaving them well positioned to deal with unforeseen events.
All 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.
The Board recognises that the emergence and spread of new coronavirus variants represents a continuing risk. The Portfolio Manager has maintained contact with investee companies and the Board has stayed in close contact with the Portfolio Manager, regularly monitoring portfolio and share price developments. The Board has also received assurances from all of the Company’s service providers in respect of:
·  their business continuity plans and the steps taken to guarantee the efficiency of their operations while ensuring the safety and well-being of their employees;
·  their cyber security measures including safe remote working; and
·  any increased risks of fraud as a result of weakness in user access controls.
As global vaccination rates continue to grow, the outlook is cautiously positive, but the Board will continue to monitor developments as they occur.
Portfolio Management Key Person Risk
There is a risk that the individual(s) 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:
·  appointing a Portfolio Manager which operates a team environment such that the loss of any one individual should not impact on service levels;
·  receiving regular reports from the Portfolio Manager, including any significant changes in the make-up of the team supporting the Company;
·  meeting the wider team supporting the designated lead manager, at both Board meetings and at the Portfolio Manager’s offices; and
·  delegating to the Engagement & Remuneration Committee responsibility to perform an annual review of the service received from the Portfolio Manager, including, inter alia, the team supporting the lead manager and their succession planning.
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 and fails to achieve its Performance Objective, resulting in the Company becoming unattractive to investors and a widening of the share price discount to the net asset value per share. In managing this risk the Board:
·  reviews the Company’s investment objective and policy, and Stewart Investors’ investment approach in relation to investment performance, market and economic conditions and the operation of the Company’s peers;
·  regularly discusses the Company’s future development and strategy;
·  undertakes a regular review of the level of the share price discount/premium to net asset value per share and considers ways in which share price performance may be enhanced, including the effectiveness of marketing, share issuance and share buybacks, where appropriate; and
·  reviews an analysis of the shareholder register at each Board meeting and is kept informed of shareholder sentiment.
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:
·     periodically visits all key service providers to gain a better understanding of their control environment, and the processes in place to mitigate any disruptive events;
·     receives a monthly report from Frostrow, which includes, inter alia, confirmation of compliance with applicable laws and regulations;
·     reviews internal control reports and key policies (including disaster recovery procedures and business continuity plans) of its service providers;
·     maintains a risk matrix with details of risks to which the Company is exposed, the approach to managing those risks, key controls relied on and the frequency of the controls operation;
·     receives updates on pending changes to the regulatory and legal environment and progress towards the Company’s compliance with such changes; and
·     has considered the increased risk of cyber-attacks and received reports and assurance from its service providers regarding the information security controls in place.

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 emerging (as well as known) risks are identified and, so far as practicable, mitigated. Current identified emerging risks are as follows:

  1. Corporations are looking to simplify and shorten supply chains in response to the disruptions during the pandemic and increased concerns over the impact of geopolitical uncertainty on their operations. In effect, security of supply is becoming of greater importance than the efficiency of supply. Having been beneficiaries of globalisation, this ‘onshoring’ trend will increase uncertainty over future corporate investment plans and may damage the growth prospects of companies in the Asia Pacific Region.

        2.   The increase in passive funds investing in the Asia Pacific Region may make markets more volatile as the prices of companies in the Index are inflated by substantial inflows and deflated by substantial                 outflows. The Company’s relative performance may suffer as a result.

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

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.

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.

Investors The Board’s key mechanisms of engagement with investors include:
·  The Annual General Meeting
·  The Company’s website which hosts reports, articles and insights, and monthly factsheets
·  One-to-one investor meetings
·  Group meetings with professional investors
·  The Annual and Half yearly Reports
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 has been available to engage with the Company’s shareholders where required.
The Board met regularly with the Portfolio Manager throughout the year, both formally at quarterly Board meetings and informally, as required. The Board engaged primarily with key members of the portfolio management team, discussing the Company’s overall performance, as well as developments in individual portfolio companies and wider macroeconomic developments.
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 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 Management Engagement 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 outcome of the annual audit and assess the quality and effectiveness of the audit process. The Audit Committee then recommended that the Board propose to shareholders that BDO be reappointed as the Company’s auditor. The Audit Committee also met with BDO to review the audit plan for the subsequent year and to set their remuneration. Please refer to the Audit Committee Report for further information.


·  Ongoing dialogue with shareholders concerning the strategy of the Company, performance and the portfolio.
·  The impact of market volatility caused by, inter alia, the Covid-19 pandemic and 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, 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.
The Board decided 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 Manager:
·  Portfolio composition, performance, outlook and business updates.
·  The ongoing impact of the Covid-19 pandemic on the Portfolio Manager’s business and the businesses of the portfolio companies.
·  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 concluded that the Portfolio Manager had successfully implemented temporary remote working with no material adverse impact on service delivery. The Board agreed that high standards of research have been maintained and the Portfolio Manager’s strategy has been implemented consistently, leading to good returns over the past year. 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 decided to take steps to improve 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 for further information.
Service Providers:
·  The ongoing impact of the Covid-19 pandemic and restrictions on service providers’ businesses and service provision.
·  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 the Company’s principal service providers had successfully implemented temporary remote working with no material adverse impact on service delivery.
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 to be re-appointed as the Company’s auditor for a further year. Please refer to the Audit Committee Report and the Notice of AGM for further information.

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.

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.

The Portfolio Manager reports annually on progress against their own climate change objectives and these reports can be found on their website. Stewart Investors’ climate change statement, which sets out their climate related commitments to investing, engagement and reporting, as well as their approach to TCFD reporting, can be found at:

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.

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 2022

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.

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) in the Report of the Directors 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.

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 2022; 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


9 May 2022

Income Statement

for the year ended 31 January 2022

Year ended 31 January 2022 Year ended 31 January 2021
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Gains on investments 8 - 43,614 43,614 - 77,226 77,226
Exchange differences - (114) (114) - (123) (123)
Income 2 4,657 - 4,657 5,163 - 5,163
Portfolio management and AIFM fees 3 (1,070) (3,212) (4,282) (851) (2,553) (3,404)
Other expenses 4 (692) - (692) (606) - (606)
Return before taxation 2,895 40,288 43,183 3,706 74,550 78,256
Taxation 5 (487) (5,343) (5,830) (555) (3,574) (4,129)
Return after taxation 2,408 34,945 37,353 3,151 70,976 74,127
Return per share (p) 7 2.0 28.9 30.9 2.6 58.7 61.3

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 2022

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 2020 15,120 8,811 1,648 14,572 298,299 7,267 345,717
Return after taxation - - - - 70,976 3,151 74,127
Ordinary dividends paid 6 - - - - - (3,628) (3,628)
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

The accompanying notes are an integral part of these statements.

Statement of Financial Position

as at 31 January 2022

2022 2021
Notes £’000 £’000 £’000 £’000
Fixed assets
Investments 8 436,983 404,714
Current assets
Debtors 9 242 232
Cash and cash equivalents 24,192 17,823
24,434 18,055
Creditors (amounts falling due within one year) 10 (2,356) (1,231)
Net current assets 22,078 16,824
Total assets less current liabilities 459,061 421,538
Non-current liabilities
Provision for liabilities 11 (8,395) (5,322)
Net assets 450,666 416,216
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 15 404,220 369,275
Revenue reserve 15 6,295 6,790
Equity shareholders’ funds 450,666 416,216
Net asset value per Ordinary Share (p) 13 372.6p 344.1p

The financial statements were approved and authorised for issue by the Board of Directors on 9 May 2022 and signed on its behalf by:

James Williams

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 February 2021, 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

2022 2021
£’000 £’000
Income from investments
Overseas dividends 4,657 5,158
Bank interest - 5
4,657 5,163

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

2022 2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Portfolio management fee
– Stewart Investors 949 2,850 3,799 755 2,265 3,020
AIFM fee – Frostrow 121 362 483 96 288 384
1,070 3,212 4,282 851 2,553 3,404

Further information regarding Stewart Investors and Frostrow’s fees can be found on pages 43 and 44 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

2022 2021
£’000 £’000
Directors’ fees 161 150
Employers NIC on directors’ remuneration 13 13
Auditor’s remuneration for:
– annual audit 37 411
Depository fees 41 -
Custody fees 217 185
Registrar fees 26 25
Broker retainer 30 30
Listing fees 26 28
Legal and professional fees 43 46
Other expenses 98 88
Total expenses 692 606

1 Included £7,000 payable to KPMG (the Company’s external auditor at the time) relating to additional work required during the 2020 audit as a result of the COVID pandemic

For accounting policy, see note 3.

5. Taxation

(a) Analysis of Charge in the Year

2022 2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Overseas taxation 591 - 591 585 3 588
Indian capital gains tax charge (104) 5,343 5,239 - 3,571 3,571
Overseas tax recoverable - - - (30) - (30)
487 5,343 5,830 555 3,574 4,129

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 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. £3,037,000 (2021: £3,571,000) 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. £2,202,000 (2021: nil) 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:

2022 2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Total return on ordinary activities before tax 2,895 40,288 43,183 3,706 74,550 78,256
Corporation tax charged at 19.0%
(2021: 19.0%)
550 7,655 8,205 704 14,165 14,869
Effects of:
Gains on investment not subject to UK corporation tax - (8,287) (8,287) - (14,673) (14,673)
Non-taxable exchange differences - 22 22 - 23 23
Expenses not deductible for tax purposes 335 610 945 276 485 761
Income not subject to corporation tax (885) - (885) (980) - (980)
Indian capital gains tax charge
(see note 5a)
(104) 5,343 5,239 - 3,571 3,571
Overseas taxation 591 - 591 585 3 588
Overseas tax recovered - - - (30) - (30)
Tax charge for the year 487 5,343 5,830 555 3,574 4,129

As at 31 January 2022 the Company had unutilised management expenses and other reliefs for taxation purposes of £52,693,000 (2021: £47,719,000). It is not anticipated that these will be utilised in the foreseeable future and as such no related deferred tax asset has been recognised. A reduction in the UK corporation tax rate from 19% to 17% (effective from 1 April 2021) was substantively enacted on 6 September 2016. In the 11 March 2021 budget, it was announced that the UK tax rate would remain at 19%.

The March 2021 Budget announced a further increase to the main rate of corporation tax 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 2022, were as follows:

2022 2021
£’000 £’000
Final dividend paid for the year ended 31 January 2021 of 2.4p per share 2,903 -
Final dividend paid for the year ended 31 January 2020 of 3.0p per share - 3,628

In respect of the year ended 31 January 2022, a final dividend of 1.9p per share has been proposed and will be reflected in the Annual Report for the year ending 31 January 2023. Details of the ex-dividend and payment dates are provided on page 42 of the annual report.

The Board’s current policy is to pay dividends only out of revenue reserves. Therefore the amount available for distribution as at 31 January 2022 is £6,295,000 (2021: £6,790,000).

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:

2022 2021
£’000 £’000
Revenue available for distribution by way of dividend for the year 2,408 3,151
Final dividend of 1.9p per share (2021: final dividend of 2.4p) (2,298) (2,903)
Transfer to revenue reserves 110 248

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:

2022 2021
Revenue Capital Total Revenue Capital Total
pence pence pence pence pence pence
Basic 2.0p 28.9p 30.9p 2.6 58.7 61.3

The total return per share is based on the total return attributable to shareholders of £37,353,000 (2021: £74,127,000).

The revenue return per share is based on the net revenue return attributable to shareholders of £2,408,000 (2021: £3,151,000).

The capital return per share is based on the net capital return attributable to shareholders of £34,945,000 (2021: return of £70,976,000).

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 (2021: 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

2022 2021
£’000 £’000
Cost at start of year 267,140 222,736
Investment holding gains at start of year 137,574 86,781
Valuation at start of year 404,714 309,517
Purchases at cost 82,266 110,858
Disposal proceeds (93,611) (92,887)
Gains on investments 43,614 77,226
Valuation at end of year 436,983 404,714
Cost at 31 January 290,337 267,140
Investment holding gains at 31 January 146,646 137,574
Valuation at 31 January 436,983 404,714

The Company received £93,611,000 (2021: £92,887,000) from investments sold in the year. The book cost of these investments when they were purchased was £59,069,000 (2021: £66,454,000). 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 £121,000 (2021: £156,000) and transaction costs on sales of £206,000 (2021: £231,000).

Valuation of Investments

Investments are measured initially and at subsequent reporting dates at fair value. Purchases and sales are recognised on the trade date where 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 (2021: All Level 1).

9. Debtors

2022 2021
£’000 £’000
Accrued income 204 163
Other debtors 38 69
242 232

10. Creditors: Amounts Falling Due Within One Year

2022 2021
£’000 £’000
Amounts due to brokers 1,016 143
Portfolio management fee – Stewart Investors 996 868
AIFM fee – Frostrow 125 106
Other creditors 219 114
2,356 1,231

11. Provisions for liabilities

2022 2021
£’000 £’000
Deferred taxation on unrealised capital gains on Indian securities 8,395 5,322

See note 5 for further details and accounting policy.

12. Share Capital

2022 2021
£’000 £’000
Allotted and fully paid:
120,958,386 Ordinary shares of 12.5p each (2021: 120,958,386) 15,120 15,120

During the year, no Ordinary shares were issued (2021: nil).

The capital of the Company is managed in accordance with its investment policy which is detailed in the Strategic Report.

The Company does not have any externally imposed capital requirements.

13. Net Asset Value Per Share

The net asset value per share of 372.6p (2021: 344.1p) is calculated on net assets of £450,666,000 (2021: £416,216,000), divided by 120,958,386 (2021: 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:

(i)   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;

(ii)  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

(iii)  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 investment portfolio could be substantially 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 £41.1 million (2021: £39.9 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:

2022 2021
Investments Cash Debtors Creditors Investments Cash Debtors Creditors
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Chinese renminbi 26,979 - - - 15,613 - - -
Indian rupee 216,401 254 22 (9,355) 164,672 5,331 - (5,427)
New Taiwanese dollar 55,785 69 10 - 61,342 33 5 -
Hong Kong dollar 28,513 - - - 39,573 - - -
Philippine peso 5,489 - - - 6,677 - - -
Indonesian rupiah 21,405 - - - 21,222 - -
Japanese yen 39,018 - 100 - 41,142 - 69 -
Bangladesh taka 10,606 35 - - 15,857 - 72 -
Thai baht 8,517 - - - 8,623 - - -
Malaysian ringgit 5,771 9 - - 5,903 - - -
Sri Lankan rupee - - - - 2,594 - - -
Singapore dollar - 6,940 - - 2,967 207 - -
US dollar - 7,147 - - - 190 - -
Korean won 18,499 - 68 (56) 18,529 - 8 -
Total 436,983 14,454 200 (9,411) 404,714 5,761 154 (5,427)

At 31 January 2022 the Company had £9,738,000 of sterling cash balances (2021: £12,062,000).

During the year sterling strengthened by an average of 0.4% (2021: strengthened by 1.5%) 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 £41.0 million (2021: negative £36.8 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 £50.2 million (2021: positive £45.0 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:

2022 2021
£’000 £’000
Cash and cash equivalents 24,192 17,823
Debtors 242 232
24,434 18,055

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 and Lloyds Bank plc. 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 Board’s policy on gearing and leverage is set out on page 22 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
  • The Directors of the Company

Details of the relationship between the Company and Frostrow Capital LLP, the Company’s AIFM, are disclosed on pages 43 and 44 of the annual report. During the year ended 31 January 2022, Frostrow earned £483,000 (2021: £384,000) in respect of portfolio management fees, of which £125,000 (2021: £106,000) was outstanding at the year end.

The Company employs Stewart Investors as its Portfolio Manager, details of this arrangement are disclosed on page 43 of the annual report. During the year ended 31 January 2022, Stewart Investors earned £3,799,000 (2021: £3,020,000) in respect of portfolio management fees, of which £996,000 (2021: £868,000) 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 pages 32 and 33 of the annual report.


The figures and financial information for 2021 are extracted from the published Annual Report for the year ended 31 January 2021 and do not constitute the statutory accounts for that year. The Annual Report for the year ended 31 January 2021 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 2022 are extracted from the Annual Report and financial statements for the year ended 31 January 2022 and do not constitute the statutory accounts for the year.  The Annual Report for the year ended 31 January 2022 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)


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.

2022 2021
pence pence
Average share price for the year 342.3 268.1
Average net asset value for the year 369.3 294.9
Average Discount 7.3% 9.1%

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.


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. (

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 and supply of the shares.

Net Asset Value (“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
2022 2021
NAV Total Return p p
Opening NAV 344.1 285.8
Increase in NAV 30.9 61.3
Dividend paid (2.4) (3.0)
Closing NAV 372.6 344.1
Increase in NAV 9.0% 21.4%
Impact of reinvested dividends 0.1% 0.9%
NAV Total Return 9.1% 22.3%

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
2022 2021
£’000 £’000
Operating expenses 4,974 4,010
Average net assets during the year 446,596 356,104
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 2022 2.9 9.1 11.5
Three years to 31 January 2022 9.0 9.9 6.0
Five years to 31 January 2022 9.4 10.2 8.8

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
2022 2021
Share Price Total Return p p
Opening share price 333.0 268.0
Increase in share price 9.4 68.0
Dividend paid (2.4) (3.0)
Closing share price 340.0 333.0
Increase in share price 2.8% 25.4%
Impact of reinvested dividends 0.1% 0.4%
Share Price Total Return 2.9% 25.8%


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


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.

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