Contact details
Pacific Assets Trust plc
25 Southampton Buildings
London
WC2A 1AL
www.pacific-assets.co.uk
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Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Pacific Assets Trust plc
Annual Report for the year ended 31 January 2025
Contents
Strategic Report
1 Financial Highlights
2 Key Information
3 Company Performance
6 Chair’s Statement
9 Investment Portfolio
12 Portfolio Manager’s Review
16 Sustainability and ESG
22 Business Review
Governance
34 Board of Directors
36 Corporate Governance
44 Report of the Directors
49 Statement of Directors’ Responsibilities
51 Audit Committee Report
56 Directors’ Remuneration Report
59 Independent Auditor’s Report
Financial Statements
66 Income Statement
67 Statement of Changes in Equity
68 Statement of Financial Position
69 Notes to the Financial Statements
Further Information
80 Glossary of Terms and Alternative Performance
Measures (unaudited)
82 Sustainable Finance Disclosure
Regulation (“SFDR”) Report (unaudited)
99 Shareholder Information
100 How to Invest
101 Notice of the Annual General Meeting
106 Explanatory Notes to the Resolutions
109 Company Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
1
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
1
Source: Frostrow Capital LLP
* Source: Morningstar
† The Company’s Performance Objective (See Glossary beginning on page 80).
^ Alternative Performance Measure (See Glossary beginning on page 80).
Net Asset Value Per Share Total Return for the Five Years to 31 January 2025
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Source: Morningstar
Rebased to 100 as at 31 January 2020
Financial
Highlights
11.5%
Average discount of share price
to net asset value per share
during the year*^
(2024: 6.4%)
3.7%
Share price total return*^
(2024: (1.9)%)
9.7%
Net asset value per share total
return*^
(2024: (1.3)%)
1.1%
Ongoing charges
1
^
(2024: 1.1%)
22.3%
MSCI All Country Asia ex Japan
Index (total return sterling
adjusted)*
(2024: (10.5)%)
8.8%
UK Consumer Price Index
(“CPI”) + 6%†
(2024: 10.4%)
2
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Pacific Assets Trust plc (the “Company”) aims to achieve long-term capital growth
through investment in selected companies in the Asia Pacific region and the Indian
sub-continent, but excluding Japan, Australia and New Zealand (the “Asia Pacific
Region”). Up to a maximum of 20% of the Company’s total assets (at the time of
investment) may be invested in companies incorporated and/or listed outside the
Asia Pacific Region (asdefined above); at least 25% of their economic activities (at
the time of investment) are within the Asia Pacific Region with this proportion being
expected to grow significantly over the long term.
Management
Stewart Investors have been the Company’s Portfolio
Manager since 1 July 2010. They adopt a sustainable
investment strategy when selecting the investments that
make up the Company’s portfolio. They are an autonomous
investment group operating through the regulatory licences of
First Sentier Investors (UK) IM Limited, which is the legal
entity appointed as the Company’s Portfolio Manager. Their
ultimate owner is the Mitsubishi UFJ Trust and Banking
Corporation.
Frostrow Capital LLP is the Company’s Alternative
Investment Fund Manager (“AIFM”).
Investment Aims
Stewart Investors aim to generate strong long-term,
risk-adjusted returns by investing in the shares of high-
quality companies that are particularly well positioned to
contribute to, and benefit from, sustainable development in
the Asia Pacific Region. They define high-quality companies
as those they believe have exceptional management teams
and cultures, enduring franchises with strong market
positions and reputations, and sound financials with low
debt, sustainable margins and free cash flow. Sustainability
is fully integrated into the management of risk and return.
The team seeks to improve sustainable outcomes by
investing in companies contributing to solutions, engaging
and voting for positive change and avoiding businesses
linked to harmful solutions.
Investment Philosophy
The foundations of Stewart Investors’ investment
philosophy and approach remain largely unchanged since
1988 and since their first dedicated sustainability
strategy was launched in 2005.
The Stewart Investors investment philosophy is
summarised below:
> They are stewards. They believe their role is to
allocate society’s capital to productive uses,
inaccordance with their Hippocratic Oath
1
.
> They are long-term investors. Their time horizon is
measured in years, not weeks, and they value
companies accordingly.
> They invest only in companies they believe are
contributing to a more sustainable future. They
engage constructively as owners to help companies
on their sustainability journeys.
> They invest only in high-quality companies.
Theyinvest in companies with exceptional cultures,
strong franchises and resilient financials.
> They believe capital preservation is important for
capital growth. They define risk as the permanent
loss of client capital.
1
https://www.stewartinvestors.com/all/about-us/our-hippocratic-oath.html
Key Information
3
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Performance Summary
As at As at
31 January 31 January
2025 2024
Shareholders’ funds £503.4m £464.8m
Market capitalisation £431.7m £422.1m
One year to One year to
31 January 31 January
Performance 2025 2024
Net asset value per share total return
1
2
9.7% (1.3)%
Share price total return
1 2
3.7% (1.9)%
CPI +6%
3
8.8% 10.4%
MSCI All Country Asia ex Japan Index total return, sterling adjusted
1
22.3% (10.5)%
Average discount of share price to net asset value per share
1 2
11.5% 6.4%
Ongoing charges
2
1.1% 1.1%
Revenue return per share
4
5.4p 4.3p
Dividend per share 4.9p 4.0p
1
Source: Morningstar
2
Alternative Performance Measure (see Glossary beginning on page 80).
3
The Company’s Performance Objective (see Glossary beginning on page 80).
4
See Glossary beginning on page 80.
Total Return since 30 June 2010
(the date of appointment of Stewart Investors as the Portfolio Manager)
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Company
Performance
Source: Morningstar
Rebased to 100 as at 30 June 2010
4
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
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”) plus6%, calculated on
an annual basis and measured over three to five years. The Board also monitors the Company’s performance against its
peer group. An analysis of performance and the Board’s approach to monitoring it can be found below and in the Chair’s
Statement beginning on page 6; further information can be found in the Portfolio Manager’s Review beginning on
page12 and details of the Key Performance Indicators begin on page 24.
Peer Group NAV per Share Total Return
1 Year 3 years 5 years
£ Rank £ Rank £ Rank
Pacific Assets Trust 109.7 6 114.4 1 151.9 3
Schroder Asian Total Return 119.4 3 114.3 2 159.3 2
Schroder Asia Pacific 121.7 1 105.3 3 139.4 4
Pacific Horizon 113.5 5 92.5 5 198.5 1
iShares MSCI Asia ex Jpn ETF 120.8 2 102.2 4 120.9 5
Asia Dragon^ 117.7 4 90.0 6 110.7 6
Peer Group Average 117.1 103.1 146.8
CPI + 6%
†
108.8 140.9 168.3
MSCI AC Asia ex Japan 122.3 107.0 127.0
Source: Morningstar. Figures show the current value of £100 invested at the start of the period.
^Asia Dragon Trust plc entered into members’ voluntary liquidation on 13 February 2025.
† The Company’s Performance Objective (see Glossary beginning on page 80).
Company Performance continued
5
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Five Year Record – Dividend and Costs
Five Year Record - Net Asset Value Per Share, Share Price and Discount
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Source: Morningstar. Data for Pacific Assets Trust plc as at 31 January.
Source: Frostrow Capital LLP. Data for Pacific Assets Trust plc as at 31 January.
6
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Introduction and
Results
I am pleased to present this
Annual Report for the year
ended 31 January 2025. The
Company’s net asset value total
return for the year was 9.7%
(2024: -1.3%), exceeding the performance objective of
UK CPI + 6% which was 8.8% (2024: 10.4%).
While this is a good absolute return, which is the
Company’s primary objective, the Company lagged the
MSCI AC Asia ex Japan Index total return of 22.3%, and
the Company’s bespoke peer group of four other trusts
and an exchange traded fund. The year presented a
number of challenges, in particular a strong market rally
in China driven by stimulus measures and weaker
performance in Indian equities towards the end of the
year. Our portfolio is relatively underweight in China and
overweight in India and so these conditions were not
conducive to performance.
This performance is characteristic of Stewart Investors’
investment strategy, which typically leads the Company
to underperform in sharply rising markets but has
historically preserved capital during times of market
stress; a particularly pertinent quality for investors to
keep in mind today as global markets enter an
increasingly volatile period. Capital preservation remains
the Portfolio Manager’s primary focus and shareholders
may recall that the Company’s performance in a weak
market in 2023 was the best of the peer group, when
overweight positioning in India and underweight
allocation to China contributed to outperformance.
The Board also notes that, over the longer periods
against which we assess investment return, the
Company’s performance is the best within the peer
group over three years and third over five years. We
have not done so well, however, against the long-term
performance objective: over the last five years, our
annualised NAV total return of 8.7% is behind the UK CPI
+ 6% figure of 11.0%, reflecting the period of persistently
high inflation in Western economies during that time.
Despite these headwinds, Stewart Investors remain
optimistic about the prospects for finding high-quality
companies with strong growth prospects in the Asia
Pacific Region. One of the year’s key developments was
our increasing exposure to China and Hong Kong, as our
Portfolio Manager has been able to identify a greater
number of strong businesses, with attractive valuations,
in those jurisdictions.
The downturn in the Indian market, and the increasing
fund flows into China, continued to affect the Company’s
performance after the year end. The Company has also
been impacted by the significant volatility caused by
President Trump’s tariff announcements, along with the
rest of the market. However, SI’s bottom-up approach to
stock picking and long-term view ensures they stay
focused on identifying high-quality, resilient companies,
rather than simply following market trends. As you will
read in their review, beginning on page 12, they continue
to find good opportunities in India, as well as other
markets.
The top two contributors to performance were, once
again, Indian companies: Mahindra & Mahindra and CG
Power and Industrial Solutions continue to be excellent
investments for the Company. We note that Taiwanese
companies also performed well, with four of the top ten
contributors based in Taiwan. By contrast, South Korean
companies performed poorly and the Portfolio Manager
has sold Koh Young Technology, one of the top two
detractors from performance.
Further analysis of the Company’s performance can be
found in the Portfolio Manager’s Review beginning on
page 12.
Share price performance
The Company’s shares traded at an average discount to
the net asset value per share of 11.5% through the
12-month period to the end of January (2024: 6.4%). In
line with the investment trust sector generally, the
Chair’s
Statement
7
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
discount widened during the financial year to close at
14.4% (2024: 9.2%) and this is reflected in the Company’s
share price total return of 3.7%, which fell short of the
net asset value total return.
During the year, the Company repurchased 370,000
shares, at a total cost of £1.4 million, and at an average
discount of 14.0%. The Company has continued to buy
back shares since the year end and, at the time of writing,
had repurchased a further 1,855,000 shares, at a cost of
£6.3 million, at an average discount of 13.0%. The Board
continues to carefully weigh up the circumstances in
which the Company should buy back shares in the
market. We have been conscious that share buybacks
have their drawbacks and are not always effective but
we are prepared to take action when the discount widens
materially.
Buybacks are an immediate way of addressing the share
rating but the Board continues to believe that a
combination of effective marketing and good
performance offers the potential to improve the
Company’s rating on a more sustained basis. Accordingly,
the Sales, Marketing and Communications Committee,
working together with the Portfolio Manager, has
continued to develop and oversee the marketing and
promotional strategy for the Company. During the year,
the Board appointed Kepler Partners LLP to produce
research on and provide PR services to the Company. We
hope that this will be effective in increasing demand for
the Company’s shares.
Investment Policy
Shareholders will be aware that the definition of ‘Asia
Pacific Region’ in the Company’s investment objective
currently excludes Australia, New Zealand and Japan.
The Board reviews the Company’s investment objective
and policy at every Board meeting and reviews the
Company’s strategy annually. This year, following
discussions with our AIFM and our Portfolio Manager, it
was agreed to propose to shareholders that we broaden
the Company’s investable universe by permitting
investment in Australia and New Zealand. We also
considered permitting investment in Japan but
understand that many investors prefer to invest in that
country on a standalone basis.
While there are a number of high-quality companies in
Australia and New Zealand that Stewart Investors
believe to be attractive, these companies are currently
highly valued and consequently the proposed change is
unlikely to result in many immediate new purchases and
will not entail a material rebalancing of the portfolio.
Nevertheless, this is considered to be a material change
to the investment policy and therefore it will be put to
shareholders at the forthcoming annual general meeting
(“AGM”). Further information can be found on pages 101
to 108 of this report.
Dividend
The Company generated a revenue return of 5.3p per
share during the year (2024: 4.3p per share) and, as a
result, the Board recommends to shareholders the
payment of a final dividend to ensure the Company
complies with the investment trust rules regarding
distributable income.
Subject to shareholder approval at the AGM, a final
dividend of 4.9p per share will be paid on 11 July 2025 to
shareholders on the register on 13 June 2025. The
associated ex-dividend date will be 12 June 2025.
The Board
During the year, and as previously announced, we were
very pleased to appoint June Ang as a non-executive
director with effect from 26 September 2024.
Inaddition, Nandita Sahgal became Chair of the Audit
Committee as planned.
Having served on the Board for just over nine years now,
Sian Hansen will retire at the AGM in July. On behalf of
the Board, I would like to express our gratitude to Sian
for her outstanding contribution to the Company during
her tenure as a non-executive director. Sian’s insight,
sound judgement and unwavering commitment have
been invaluable in guiding the Company through key
challenges. We will miss her presence on the Board and
wish her the very best for thefuture.
Following Sian’s retirement, June Ang will take over as
Chair of the Engagement and Remuneration Committee.
Management
David Gait has ably led the Company’s investment
management team since Stewart Investors’ appointment
15 years ago, with Douglas Ledingham as the co-
manager for almost seven years. It has been agreed that,
with effect from 1st July 2025, David will hand over the
lead portfolio manager role to Douglas whilst continuing
to play an integral role as co-portfolio manager (as well
as head of the investment team at Stewart Investors).
This swapping of roles is a natural evolution in the
management of the Company and reflects Stewart
Investors’ focus on team development and long-term
succession planning. There are also practical advantages
of having the lead manager based in the UK, to facilitate
the opportunity for more regular and direct engagement
with the Board and shareholders. This initiative by
Stewart Investors has the full backing of the Board and
we are confident that this will be a seamless transition,
ensuring both the continuity of the investment strategy
and depth of experience.
8
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
The Annual General Meeting
After holding our AGM in Edinburgh last year, this year
the AGM will return to London. The AGM will be held at
12 noon on Tuesday, 1July 2025, 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 performance and its key investments.
The meeting, including the Portfolio Manager’s
presentation, will again be live streamed by Investor
Meet Company for the benefit of those shareholders
who are unable to attend in person. Shareholders joining
the meeting remotely will not be able to speak or vote
but will be able to submit questions via the platform and
vote in advance of the meeting in the usual way. Full
details of how to participate this way are set out on
page99.
I encourage all shareholders to exercise their right to
vote at the AGM. The Board strongly encourages
shareholders to register their votes online in advance
(information on how to vote can be found on page 99).
Registering your vote in advance will not restrict
shareholders from attending and voting at the meeting in
person should they wish to do so. The Board
recommends that shareholders vote in favour of all the
resolutions set out in the Notice of AGM, beginning on
page 101, as the directors intend to do ourselves.
Outlook
The outlook for the Asia Pacific Region, has become
more uncertain following renewed trade tensions, in
particular between the United States and China,
prompted by the recent tariff announcements from the
Trump administration. While the region had been
expected to see modest economic growth supported by
easing inflation and proactive monetary policies, the
re-emergence of a trade war poses fresh challenges to
supply chains, investor sentiment, and export-led
growth.
While long-term opportunities persist—particularly in
areas aligned with sustainable development—our
Portfolio Manager’s investment approach will need to
account for heightened geopolitical risk and potential
market dislocations. Their focus will continue to be on
selecting high-quality companies with strong
fundamentals, resilient balance sheets, and capable
management teams that can navigate volatility and adapt
to a more fragmented global trade environment.
Our Portfolio Manager’s long-term investment horizon,
careful risk management, and commitment to engaging
actively with portfolio companies remain their key
strengths. The Board continues to believe their approach
is well-suited to delivering sustainable value for
shareholders, even in a more complex and fast-evolving
regional landscape.
Andrew Impey
Chair
29 April 2025
Chair’s Statement continued
9
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
%
Value Total
Company Country Sector £’000 Assets
Mahindra & Mahindra India Consumer Discretionary 30,390 6.0%
Oversea-Chinese Banking Corporation Singapore Financials 19,998 3.9%
Voltronic Power Technology Taiwan Industrials 18,120 3.6%
Cholamandalam Financial India Financials 17,380 3.4%
Tube Investments of India India Consumer Discretionary 16,259 3.2%
Midea China Consumer Discretionary 16,217 3.2%
Taiwan Semiconductor Manufacturing Taiwan Information Technology 15,574 3.1%
CG Power & Industrial Solutions India Industrials 15,218 3.0%
Shenzhen Inovance Technology China Industrials 15,164 3.0%
MediaTek Taiwan Information Technology 13,870 2.7%
Top 10 Investments 178,190 35.1%
Hoya Japan Health Care 12,639 2.5%
Samsung Electronics South Korea Information Technology 12,486 2.4%
Ayala Philippines Industrials 12,398 2.4%
Techtronic Industries Hong Kong Industrials 12,116 2.4%
Info Edge India India Communication Services 11,591 2.3%
Triveni Turbine India Industrials 11,391 2.2%
Airtac International Taiwan Industrials 10,568 2.1%
Shanthi Gears India Industrials 10,174 2.0%
Bank OCBC Indonesia Financials 9,867 1.9%
HDFC Bank India Financials 9,400 1.8%
Top 20 Investments 290,820 57.1%
ELGI Equipments India Industrials 9,231 1.8%
Delta Electronics Taiwan Information Technology 8,896 1.7%
Samsung Biologics South Korea Health Care 8,371 1.6%
Marico India Consumer Staples 8,051 1.6%
Philippine Seven Philippines Consumer Staples 7,853 1.5%
Dongguan Yiheda Automation China Industrials 7,796 1.5%
Tata Communications India Communication Services 7,367 1.4%
Sheng Siong Group Singapore Consumer Staples 7,287 1.4%
Advantech Taiwan Information Technology 6,941 1.4%
DFI Retail Hong Kong Consumer Staples 6,508 1.3%
Top 30 Investments 369,121 72.3%
Investment
Portfolio
as at 31 January 2025
10
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
%
Value Total
Company Country Sector £’000 Assets
Selamat Sempurna Indonesia Consumer Discretionary 6,491 1.3%
Naver South Korea Communication Services 6,204 1.2%
Tech Mahindra India Information Technology 6,068 1.2%
Vitasoy International Holdings Hong Kong Consumer Staples 5,811 1.1%
Tata Consumer Products India Consumer Staples 5,747 1.1%
Vitrox Malaysia Information Technology 5,585 1.1%
Unicharm Japan Consumer Staples 5,306 1.0%
Kasikornbank Thailand Financials 5,163 1.0%
Kalbe Farma Indonesia Health Care 4,947 1.0%
Tata Consultancy Services India Information Technology 4,610 0.9%
Top 40 Investments 425,053 83.2%
Humanica Thailand Industrials 4,532 0.9%
Chroma ATE Taiwan Information Technology 4,509 0.9%
Aavas Financiers India Financials 4,493 0.9%
Godrej Consumer Products India Consumer Staples 4,366 0.9%
Dr. Reddy’s Laboratories India Health Care 4,358 0.9%
Cyient India Information Technology 3,957 0.8%
Zhejiang Supor China Consumer Discretionary 3,898 0.8%
Dabur India India Consumer Staples 3,867 0.8%
Dr. Lal PathLabs India Health Care 3,766 0.7%
MANI Japan Health Care 3,563 0.7%
Top 50 Investments 466,362 91.5%
Glodon Company China Information Technology 3,443 0.7%
Blue Dart Express India Industrials 3,317 0.6%
Sundaram Finance India Financials 3,315 0.6%
Industri Jamu dan Farmasi Sido Muncul Indonesia Consumer Staples 3,070 0.6%
Hangzhou Robam China Consumer Discretionary 3,042 0.6%
Tarsons Products India Health Care 3,006 0.6%
Unicharm Indonesia Indonesia Consumer Staples 2,878 0.6%
Marico Bangladesh Bangladesh Consumer Staples 2,693 0.5%
Syngene International India Health Care 2,420 0.5%
ICICI Lombard General Insurance India Financials 2,400 0.5%
Esab India India Industrials 2,276 0.4%
Bajaj Auto India Consumer Discretionary 2,137 0.4%
Centre Testing International Group China Industrials 2,092 0.4%
Yifeng Pharmacy Chain China Consumer Staples 2,053 0.4%
Silergy Taiwan Information Technology 1,971 0.4%
Bajaj Holdings & Investment India Financials 1,939 0.4%
Tokyo Electron Japan Information Technology 1,770 0.3%
Bajaj Housing Finance India Financials 19 0.0%
Total Investments 510,203 100.0%
Investment Portfolio continued
11
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Portfolio Distribution
Geographical Analysis
Geographic Exposure as at 31 January 2025
0
5
10
15
20
25
30
35
40
45
50
India Taiwan China Indonesia South
Korea
Singapore Hong
Kong
Japan Philippines Thailand Malaysia Bangladesh Other Liquidity
31 January 2025 – Pacific Assets Trust 31 January 2025 – MSCI AC Asia ex Japan Index
31 January 2024 – Pacific Assets Trust
%
Source: Frostrow Capital LLP
Sector Analysis
Sector Exposure as at 31 January 2025
Consumer
Discretionary
Information
Technology
Industrials Financials Consumer
Staples
Health
Care
Communication
Services
Materials Energy Real Estate Utilities Liquidity
31 January 2025 – Pacific Assets Trust 31 January 2025 – MSCI AC Asia ex Japan Index
31 January 2024 – Pacific Assets Trust
0
5
10
15
20
25
30
Lorem ipsum
Source: Frostrow Capital LLP
12
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Portfolio
Manager’s
Review
Over the year to 31 January 2025, the net asset value of
the Company returned 9.7%. As a reference, the MSCI
AC Asia ex Japan Index (the ‘Index’) return was 22.3%
over the same period.
The performance was in keeping with the characteristic
outcome of our investment philosophy. Historically, we
trail rapidly rising markets but preserve capital better
than others when markets are weak.
During the period, the Chinese government announced
astimulus package that resulted in a large and swift
appreciation from the market as a whole and lower
quality companies which are financially strained in
particular. We do not invest in lower quality companies.
This, along with some weakness in Indian equities
towards the end of the year, created a challenging
environment for performance.
More specific details on performance are in the
Contributors and Detractors sections.
Investing in China and India
Over the last decade critics of the Company’s
management have, from time to time, focused on a
‘failure to allocate’ capital to China. Typically, this
criticism is greatest after a rapid appreciation in Chinese
equity prices following a change in government policy or
economic stimulus. Generally, the criticism ebbs as the
China rally fades. We have experienced this at least
three times over the years. It should be noted that a
historic ‘failure to allocate’ to China has been beneficial
for shareholders. Moreover, this criticism is
increasinglyunfounded.
Today, the Company is invested in a greater number of
high-quality Chinese businesses than ever before. As little
as five years ago the Company invested in only one
company in China, or 0.6% of shareholder funds. As at the
end of this period the Company is invested in eight
Chinese companies which amount to 10.4% of
shareholder funds. This is a considerable change over a
short period of time. Moreover, this understated the true
position in China. When the Company’s geographic
outcome by revenue is considered, the ‘allocation to China’
is almost double that amount. Companies such as Vitasoy
(Hong Kong: Consumer Staples), AirTAC International
(Taiwan: Industrials), Silergy (Taiwan: Information
Technology) and Unicharm (Japan: Consumer Staples) all
have substantial businesses and revenues from China.
The reason we are finding more investments in China is
due to attractive valuations not a decrease in our quality
standards. High quality people, franchises and financials
exist in China, and at attractive valuations. It is valuation
which explains why we have been trimming some
investments in India and adding to some high-quality
companies in China. Despite the contrasting economic
fortunes, we are finding new exciting investments in both
China and India. This is because we invest in companies
not countries. Dongguan Yiheda Automation (China:
Industrials) and Sundaram Finance (India: Financials) are
two of the latest investments.
Dongguan Yiheda Automation is a one-stop supply chain
solution for factory automation across China. Last year they
shipped 3.3 million items with an average price of USD$3.50.
This is not a robot company, it supplies essential items to
manufacturing companies, that need to automate, in a timely
and cost-effective manner. The ageing population and falling
workforce combined with the low penetration of automation
in China are compelling long-term tailwindshere.
We first met the company in 2021 and noted high-quality
owner/founder/manager stewards who exhibited
intentions to build a strong franchise in the long term
rather than a speedy enrichment programme. The
market capitalisation after the initial public offering
(“IPO”) in 2021 peaked around US$6 billion on a price-
earnings ratio of over 100 times. After studying and
meeting the company we recognised that it was
vulnerable to cyclical end demand. This has impacted the
rating severely, even though the absolute amount of net
income has grown every year since listing. Today, the
company has $179 million of net cash on the balance
sheet and makes cyclically depressed gross margins of
35%
1
. We recently invested in Dongguan Yiheda when
the market capitalisation was two-thirds off peak levels
and the price earnings ratio was in the low twenties.
13
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Dongguan Yiheda may have to continue to endure some
cyclical challenges but the long-term opportunity for
growth is extremelyattractive.
A recent visit to Chennai in the state of Tamil Nadu
reacquainted us with Sundaram Finance, an extremely
high-quality non-banking financial company. Sundaram
Finance is a deposit-taking institution that has been
trusted by over three generations of savers. The
company proudly showcases its charter – the Sundaram
Way
2
- on the wall of each meeting room. The Sundaram
Way consists of nine idioms and each is compelling but it
was the final idiom that resonated most: “to know that we
are not merely the holders of people’s money; but more
importantly the custodians of their trust”.
Trust is key in finance – not only for deposit taking but
also to lend or invest. We met the new managing director
of this family-owned franchise, Rajiv Lochan. His
curriculum vitae of experience was as impressive as his
humility and competence. Rajiv trained at American
Express before becoming a partner at McKinsey for
12years. After a brief stint running a newspaper, he
answered the call of his family friends to step up and run
Sundaram Finance. Under his guidance we are confident
that Rajiv will increase the growth part of the firm’s holy
trinity: ‘quality, profitability and growth’. Such is his
personal commitment to the organisation and the scale
of the under-penetration of financial services that we
were able to enjoy conversations about how the firm may
look in 2040. It is this sort of meeting that makes the
head and tummy ache of travel in India so rewarding, and
the outlook for the Company’s investments so bright.
China requires four rather than
three golden rules
We have four golden rules when investing in China,
compared with our normal three. First, the company
must meet our quality requirements of management,
franchise and financials. A growing number of listed
Chinese companies are meeting these requirements.
Second, they must be well positioned to contribute to
China’s sustainable development. On this, we are
particularly well aligned with the Chinese Government in
almost all aspects of sustainable development.
Sustainability talk is cheap, but very few countries have
walked the walk as purposefully or far as China in terms
of reorientating development toward a genuine
sustainable path. Human rights risk is the clear and
present exception. We try to navigate this challenge
with an approach based on individual companies. Third,
valuations must be attractive. The prolonged sell-off in
Chinese assets has brought many companies back to
attractive levels. We believe despite the recent bounce-
from-the-bottom, valuations are still reasonable,
particularly when factoring in a recovery in earnings.
Our fourth “China-specific” golden rule is the need to
form a view on the Chinese Government’s “allowable
return” for a particular company. This tries to capture the
idea that in China, returns can erode not just with new
capital and competition entering a market, but with a
change of strategic view by the Chinese Government. In
other words, all Chinese companies are actively
regulated by the Chinese Government, whether they sell
1
Stewart Investors, Bloomberg 24 February 2025
2
https://www.sundaramfinance.in/sundaram-way
Contribution by investment for the year ended 31 January 2025
Top 10 contributors to and detractors from absolute performance (%)
-1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
Mahindra & Mahindra
CG Power & Industrial Soluঞons
Taiwan Semiconductor
Manufacturing Company
Chroma ATE
Oversea-Chinese Banking Corporaঞon
Voltronic Power Technology
Triveni Turbine
Midea Group
MediaTek
Philippine Seven Corporaঞon
ELGI Equipments
Cyient
Samsung C&T
Airtac Internaঞonal
Humanica
Unicharm
Ayala
Tube Investments of India
Koh Yo ung Technology
Samsung Electronics
3.9
1.8
1.5
1.4
1.3
1.1
1.0
0.8
0.8
0.7
-0.3
-0.3
-0.3
-0.4
-0.4
-0.5
-0.6
-0.7
-0.8
-1.1
To p 10 Stocks
Boom 10 Stocks
14
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Portfolio Manager’s Review continued
soy sauce, build toll roads or connect small businesses
with consumers via online shopping platforms. Over the
past decade or so, the Chinese Government appears to
have taken a much more proactive approach to allowable
return, built on their goals and ambitions. Great
companies are not just tolerated by Beijing but embraced
and encouraged as part of the development solution, but
excess returns are only acceptable to facilitate national
development. In order to earn extended supernormal
returns in China, not only must companies have sound
business fundamentals, they must also be operating in
the “build-out” phase of industries of national
importance, as decided by the government. The Chinese
Government has been notably transparent in spelling out
just what these industries are, with clear long-term
development plans reaching out to 2035 and beyond.
Investing in a world of “allowable” or “capped” returns
comes with challenges of its own and we are still
learning. Long-term sustainable development alignment
is a critical first step, but looking through a “toll-road”
lens is also helpful. By this we mean, so long as new roads
need to be built, toll-road companies are usually allowed
to generate attractive returns well in excess of their cost
of capital in order to reinvest in new roads. This cycle
usually comes to an abrupt end once the last
roadbuilding project is in sight. We are trying to apply
this lens not just to our Chinese companies but more
broadly. Where China leads, other countries often follow.
Contributors
During the year under review, the Company’s material
ownership of Indian companies, especially those with
exposure to capital spending and industrial growth, was
a key contributor to performance.
Mahindra & Mahindra
(India: Consumer Discretionary)
Contribution: 3.9%
Mahindra & Mahindra have leadership positions in farm
equipment, utility SUVs, information technology and
financial services in India. It is the world’s largest tractor
company by volume. Since Dr Anish Shah was appointed
as group CEO and Managing Director, replacing the
Chairman, Mr Anand Mahindra, the group has enjoyed
superior decisions on capital allocation and improved
operating metrics at key subsidiaries. Dr Shah, previously
of GE Capital, is an excellent example of the powerful
returns that can be derived from the combination of
professional management within family-owned
companies.
CG Power & Industrial Solutions
(India: Industrials)
Contribution: 1.8%
CG Power is the leading manufacturer of motors in India
with a high-quality franchise and fantastic long-term
avenues for growth. Historically the quality of
stewardship was poor at CGPower but this changed
when Tube Investments (India: Consumer Discretionary)
took control of the company, at a low valuation, after a
scandal with creditors. The company invested quickly
after Tube Investments took control and has benefited
from strong investment returns as high-quality
stewardship maximises the opportunities of this high
quality, but previously badly run, franchise.
Taiwan Semiconductor Manufacturing Company
(Taiwan: Information Technology)
Contribution: 1.5%
TSMC is the world’s largest independent semiconductor
foundry. It benefits from economies of scale, engineering
expertise, leading-edge technology, excellent
operational execution and high levels of trust from
clients. It continues to benefit from strong demand and
positive sentiment regarding the long-term benefits of AI
to semiconductor demand. It has delivered strong
results.
Detractors
During the year under review the most significant
detractors were technology companies operating in
South Korea.
Samsung Electronics
(South Korea: Information Technology)
Contribution: -1.1%
Improving governance of the Samsung Chaebol meant
the Company was able to invest in this franchise for
which we have the utmost respect. Samsung has
progressed from bankruptcy in 1997 to a world-
renowned brand capable of spending tens of billions of
US dollars a year on capital expenditure. Samsung
Electronics has suffered over the year as it failed to
compete with Hynix (South Korea: Information
Technology), Micron (US: Information Technology) and
TSMC in the manufacturing of semiconductors which
enable growth in artificial intelligence. It is our
contention that this is a short-term challenge rather than
a fundamental weakness in the manufacturing
capabilities of Samsung Electronics. We have been able
to build the majority of our position at valuations last
seen during previous fiscal crises. History teaches us that
Samsung are formidable competitors with the human
and financial capital to compete successfully.
15
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Koh Young Technology
(South Korea: Information Technology)
Contribution: -0.8%
Koh Young manufactures and develops 3D measurement
and inspection devices which detect accuracy and
reliability in various machines. The Company was
invested in Koh Young for many years but our concerns
about the quality of the franchise were raised when we,
accompanied by the Pacific Assets Trust Board, toured
their plant in Seoul in November 2022. Since then,
operating metrics were patchy, and our concerns grew
on learning about higher-than-normal staff turnover.
Wehave sold the holding.
Tube Investments
(India: Consumer Discretionary)
Contribution: -0.7%
Tube Investments is a manufacturer of precision-
engineered metal-formed products and India’s largest
bicycle maker. The founding Murugappa family are the
largest shareholders. It saw its share price increase
significantly over the last five years but short-term
declines in the share price at the end of the reporting
period have given back some of these gains. It fell
following slower than expected growth in the core
business but it is important that this is seen in the
context of its longer term evolution.
Significant transactions
Over the course of the year, the portfolio turnover of the
Company was 24.7%. This is higher than the previous
year (18.3%) and is an outcome of finding a greater
number of new ideas. Furthermore we have been strict
this year on cutting smaller holdings in the tail of the
portfolio. New ideas were driven by attractive valuations
given how much investor despondency there is within
the region.
New investments
During the year the Company made new investments in
MediaTek (Taiwan: Information Technology), Ayala
(Philippines: Industrials), Techtronic Industries (Hong Kong:
Industrials), Info Edge (India: Communication Services),
Dongguan Yiheda Automation, DFI Retail (Hong Kong:
Consumer Staples), Naver (South Korea: Communication
Services), MANI (Japan: Health Care), Blue Dart Express
(India: Industrials) and Sundaram Finance.
Additions
The comparative weakness in many companies,
particularly in China, allowed us to add to Midea (China:
Consumer Discretionary) and Shenzhen Inovance
Technology (China: Industrials). We also added to
Kasikornbank (Thailand: Financials).
Reductions
As mentioned, most of the reductions were either to
control position size or because of valuation concerns in
India. We reduced Mahindra & Mahindra, CG Power and
Marico (India: Consumer Staples). We also reduced
companies where the valuation appeared to incorporate
excess enthusiasm for the benefit to earnings of artificial
intelligence. In this regard, we trimmed Chroma ATE
(Taiwan: Information Technology) and Tokyo Electron
(Japan: Information Technology).
Disposals
We also identified deteriorating quality and/or found
better investments elsewhere. Accordingly the Company
sold out of Koh Young Technology, Kotak Mahindra Bank
(India: Financials), Advanced Energy Solution, (Taiwan:
Industrials), Amoy Diagnostics (China: Health Care),
RBLBank (India: Financials), Telekom Indonesia
(Indonesia, Communication Services), Unilever Indonesia
(Indonesia: Consumer Staples), IndiaMART (India:
Industrials), WuXi Biologics (China: Health Care),
Samsung C&T (South Korea: Industrials), Pigeon (Japan:
Consumer Staples), Kingmed Diagnostics (China: Health
Care), Pentamaster (Malaysia: Information Technology),
DBH Finance (Bangladesh: Financials) and lastly Vinda
International (China: Consumer Staples) after it was
acquired by a trade buyer.
Looking forward
Given the number of attractively valued companies in
Asia at present it’s hard not to get excited about future
returns. As always, there are plenty of things that could
go wrong at any time. Political risk is rising in almost
every Asian country, with impeachments, International
Criminal Court arrests and attempted coups a growing
feature in the region. If the US economy falters and
global demand falls, Asian economies will all be impacted,
to differing degrees. Asia’s technology hub, built around
Taiwan, South Korea and China, is particularly
vulnerable. Elsewhere, India remains largely isolated
from the global economy, while the Philippines would
receive a significant economic boost from falling oil
prices. Very recently we have seen dramatic share price
moves as Asia markets caught up with US-imposed tariff
announcements and subsequent global share price
movements. Fortunately an outcome of our investment
philosophy means our companies are both financially
strong and comparatively isolated from sales to the USA.
Predicting these events is beyond us though.
Fortunately, most of our Asian companies have very long
memories and the scar tissue from multiple previous
crises from which to learn and adapt. We hope they are
set up not just to sail in fair weather but to navigate
safely through unpredictable political and economic
storms which could appear at any time. Ultimately, the
key attraction lies in the opportunity to invest in such
companies in Asia.
Stewart Investors
Portfolio Manager
29 April 2025
16
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
The Company’s Environmental,
Social & Governance Policy
The Board believes that consideration of environmental,
social and governance issues within the Company’s
operations is of importance to shareholders and other
stakeholders, not least because long-term returns are
much more likely to be generated by companies that
have embedded corporate governance strengths, and
which respect the environment and the society in which
they operate. The Board believes that this investment
approach is readily applicable in the markets in Asia in
which the Company invests.
As the Company delegates the management of the
portfolio to Stewart Investors, the Board has chosen to
adopt and endorse their approach to integrating
sustainability into portfolio construction and investee
company engagement. Accordingly, the Company seeks
to achieve long-term capital appreciation by investing in
companies which both contribute to, and benefit from,
sustainable development, achieving positive social and
environmental sustainable outcomes.
Stewart Investors’ approach is described in detail in the
following section. As part of this focus on sustainability,
the Board expects sustainability and ESG concerns to be
a key topic of engagement with investee companies. The
Company expects to maintain, through its Portfolio
Manager, a continuous constructive dialogue with the
owners and the managers of the companies where it
owns shares. Such a relationship is enhanced by the
long-term nature of the investment inherent in the
Portfolio Manager’s investment approach.
In the same way as the Board expects the Portfolio
Manager to challenge investee companies on their
sustainability and ESG credentials, 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 material
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.
A corporate governance report for the year, beginning on
page 36, forms part of this Annual Report. A description
of how the Directors have taken the interests of key
stakeholders into account in their decision-making is
included on pages30 and 31.
As best practice, regulation and disclosure are constantly
evolving 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.
On behalf of the Board
Andrew Impey
Chair
29 April 2025
Sustainability
and ESG
17
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Stewart Investors’ Approach to
Sustainable Investing
Sustainability is core to Stewart Investors’ investment
philosophy and integrated into our investment process.
We do not have a separate team that looks at
sustainability – every investment team member analyses
the sustainability positioning of a business, and is also
responsible for engaging and voting activities.
Stewart Investors only invest in high-quality companies
that contribute to, and benefit from, sustainable
development. We 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 Oath
1
, pledging to uphold the
principles of stewardship.
Many commentators consider that sustainability and
ESG investing are currently out of fashion. This can only
be the case if sustainability and ESG are being used as an
aid to market funds. It cannot be the case if you have a
consistent investment philosophy which considers
sustainability as an important long-term investment
consideration. We have always approached
sustainability as a means to mitigate risks and as a driver
of investment returns. Integrating sustainability into our
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.
Our consideration of sustainability is holistic; it includes
ESG but is more than ESG. We 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 we ask
ourselves the following questions:
> Products and services – Do the products and
services make a valuable contribution to sustainable
development?
> Context – Can the company benefit from
sustainability tailwinds and navigate headwinds?
> Company ethos – Do the culture and values embody
sustainability and continuous improvement?
> Operational impact – Is the company trying to
reduce impacts from its operations?
In addition, we assess the contribution of the Company’s
investments to positive social and environmental
outcomes by reference to two frameworks described
below.
Positive social outcomes –
Human Development Pillars
Stewart Investors assesses positive social outcomes by
reference to the human development pillars below. We
have developed these human development pillars by
reference to, amongst other things, the UN Human
Development Index.
> Health and well-being – improved access to and
affordability of nutrition, healthcare and hygiene,
water and sanitation
> Physical infrastructure – improved access to and
affordability of energy and housing
> Economic welfare – safe employment offering a
living wage and opportunities for advancement,
access to finance and improved standards of living
> Opportunity and empowerment – improved access
to and affordability of education and information
technology
Further information about how we use the human
development pillars is available on our website
2
.
1
https://www.stewartinvestors.com/uk/en/private-investor/how-we-invest/sustainable-investing/our-hippocratic-oath.html
2
https://www.stewartinvestors.com/uk/en/private-investor/how-we-invest/our-approach/human-development-pillars.html
18
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Positive environmental outcomes
– Project Drawdown climate
solutions
Stewart Investors assesses positive environmental
outcomes by reference to the climate solutions
developed by Project Drawdown
3
, a non-profit
organisation that has mapped, measured and modelled
over 90 different climate solutions that it believes will
contribute to reaching drawdown – i.e. the point in the
future when emissions stop increasing and start to
decline.
Below is a list of climate solution categories together
with corresponding examples we believe lead to positive
environmental outcomes:
> Food system – sustainable farming, food production
and distribution of food-related products and
services
> Energy – adoption of renewable energy and other
clean energy and related technologies
> Circular economy and industries – improved
efficiency, reduced waste, and new business models
for closing resource loops in linear value chains and
production processes
> Human development – advancement of human
rights and education that drive environmental
conservation and sustainable use of resources
> Transport – efficient transport technologies and
growth in fossil fuel-free transportation options
> Buildings – products and services which reduce the
environmental footprint of the built environment,
including energy efficiency, electrification, improved
design, and use of alternative materials
> Water – less energy-intensive methods for treating,
transporting and heating water
> Conservation and restoration – supporting
deforestation-free and environmentally regenerative
supply chains, operations and end-of-life impacts
Further information about how we use the Project
Drawdown climate solutions is available on our website
4
.
Assessment
In assessing whether a company “contributes to and
benefits from” sustainable development, we will consider
whether:
1. there is either a direct
5
or enabling
6
link between the
activities of the company and the achievement of a
positive social or environmental outcome;
2. any contribution to positive social or environmental
outcomes has resulted from revenue or growth
drivers inherent in the company’s business model,
strategic initiatives that are backed by research and
development or capital expenditure, or from the
company’s strong culture and sense of stewardship
e.g. for equity and diversity; and
3. the company recognises potential negative social or
environmental outcomes associated with its product
or services and works towards minimising such
outcomes, e.g. a company that sells affordable
nutritious food products in plastic packaging, but is
investigating alternative packaging options.
We avoid companies that do not contribute to
sustainable development and engage with companies to
improve sustainability outcomes.
We have established a materiality threshold for harmful
or controversial activities at 5% of revenues (0% for
tobacco production and controversial weapons). We
explicitly seek to invest in companies that are making a
positive contribution to society. Full details of the
activities and practices we find inconsistent with our
investment philosophy are available on our website
7
.
Stewart Investors employ the services of an external
ESG research provider, Sustainalytics, to provide a
quarterly check on the Company to ensure investee
companies meet global norms for best practices and
raise no exceptions against our thresholds for harmful
activities. We also receive controversy reporting from
RepRisk.
3
Any reference to Project Drawdown is to describe the publicly available materials utilised by Stewart Investors in formulating its sustainability analysis
framework. It is not intended to be, and should not be, read as constituting or implying that Project Drawdown has reviewed or otherwise endorsed the
Stewart Investors framework. For the list of Project Drawdown climate solutions please go to https://drawdown.org/solutions/table-of-solutions.
4
https://www.stewartinvestors.com/uk/en/private-investor/how-we-invest/our-approach/climate-solutions.html
5
A direct link would arise where the goods an entity produces or the services it provides are the primary means through which the positive social or
environmental outcome can be achieved (e.g. solar panel manufacturers or installers).
6
An enabling link would arise if the goods a company produces or services it provides enable other companies to contribute towards the achievement
of the positive social or environmental outcome (e.g. manufacturers of critical components that are used as inputs in the manufacture of solar panels).
7
https://www.stewartinvestors.com/uk/en/private-investor/insights/our-position-on-harmful-and-controversial-products-and-services.html
Sustainability and ESG continued
19
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Issues such as climate change, biodiversity and water,
human rights and modern slavery, and diversity and
inclusion are integrated into our investment selection
and engagement and voting processes. Our approach to
climate change is explained in detail in our TCFD Climate
Report
8
and the Pacific Assets Trust Annual Review
9
.
Our approach to biodiversity and water is reflected in
our selection of companies that mitigate their impact on
the natural environment or provide services/products
that improve efficiencies. We have engaged on a number
of related issues such as palm oil, deforestation, plastic
waste and the use of harmful chemicals. Human rights
and modern slavery are a risk throughout the supply
chain of our investee companies. Our approach is to
focus on quality companies that treat their employees
well and manage the risks in their supply chain
effectively. Where we identify problems, we engage. Our
recent collaborative engagement on conflict minerals in
the semi- conductor supply chain is a good example of
this. We will provide updates on these issues, amongst
others, in our quarterly shareholder updates.
Transparency
As part of our focus on improved transparency, we have
developed a Portfolio Explorer tool
10
which provides the
contribution that each investee company makes to
climate solutions and human development, as well as the
investment rationale, Sustainable Development Goals,
key risks, and areas for improvement. The company
holdings information is updated on a quarterly basis.
UK Sustainability Disclosure
Requirements
The Company does not have a sustainable investment
label under the UK Sustainability Disclosure
Requirements as it does not have a specific and
measurable non-financial sustainability objective, nor
related key performance indicators which apply to all
companies in the form currently required for such a label.
Stewart Investors believes that companies can
contribute to sustainable development in different ways
and these contributions can be assessed by reference to
measures and methods which are suitable for each
company. Stewart Investors has produced a consumer
facing disclosure which summarises the key
sustainability characteristics of the Company. The
disclosure can be found on the Company’s website
11
.
EU Sustainable Finance Disclosure
Regulation
The Board has been advised that the Company’s existing
disclosures are sufficient for maintaining the Company’s
classification under Article 9 of the EU Sustainable
Finance Disclosure Regulation (“SFDR”). Stewart
Investors’ report on how the Company has met its
sustainable investment objective, in accordance with the
requirements of the SFDR, is appended to this Annual
Report and begins on page 82.
8
https://www.stewartinvestors.com/content/dam/pacific-assets/trust-information/PAC-TCFD-report.pdf
9
https://www.stewartinvestors.com/content/dam/pacific-assets/trust-information/PAC-TCFD-report.pdf
10
https://www.stewartinvestors.com/uk/en/private-investor/our-strategies/pacific-assets-trust.html?tabs-anchor=Pacific%20
Assets%25Trust&active-tab=Portfolio%20Explorer
11
https://www.stewartinvestors.com/content/dam/pacific-assets/trust-information/PAC-sdr-cfd.pdf
20
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Sustainability and ESG continued
Website:
www.voltronicpower.com
Company profile:
Uninterruptable power systems and solar inverters.
Headquartered in Taiwan.
Stewardship:
Entrepreneur. Founder and Chairman, Hsieh Juor-
Ming is a substantial shareholder.
What we like:
> Although Voltronic was founded in 2008, we have
known and backed the steward, Alex Hsieh, in his
previous successful ventures.
> The franchise is predicated on efficient
manufacturing and customer trust.
> There is continued growth from branded owners
outsourcing an increasing portion of the design and
manufacturing process to Voltronic.
> Uninterruptable power systems (UPS) provide a
continuous and stable current to electronic
equipment at times of power outage or abnormal
grid power levels. In a world increasingly dependent
on electric equipment for sustainable development,
UPS help keep industries productive, energy
systems powered, medical equipment responsive
and technology functioning.
Risks:
We believe risks to the company include lower cost
competition from China and economic cyclicality.
Areas to improve:
We would like the company to be more ambitious with
their circular economy practices. We recently
commissioned a research report with the title “Circular
Economy in the Industrial Goods Sector” and have shared
this with Voltronic as a vehicle for further discussion.
How the company is contributing to environmental
outcomes
Voltronic Power is a leading design and manufacturing
service (DMS) for UPS, power converters, automatic
voltage regulators, solar photovoltaic (PV) inverters and
inverters for electric vehicle (EV) chargers. All Voltronic
products have energy efficiency benefits and their PV
inverter has energy efficiency and renewable energy
benefits. Energy efficiencies increase as revenues grow.
Voltronic has calculated that their products reduced
carbon emissions by 1,002,145 tonnes in 2022 and by
879,447 tonnes in 2023. PV inverters are an important
component of solar energy systems and energy storage.
Their InfiniSolar hybrid inverter, for example, improves
storage and energy efficiency for public utilities,
workplaces and homes. The company produced around
6,700 UPS, 539,000 PV inverters, 5,000 energy storage
systems and 2,000 EV chargers in 2022.
How the company is contributing to social outcomes:
UPS help keep industries productive, energy systems
powered, medical equipment responsive and technology
functioning. UPS products are in demand globally and
across industries and are essential for electronic
products and equipment rooms. Voltronic’s UPS
products account for 60-70% of revenues and their
c.500 clients include the IT communication industry,
home appliance industry, medical equipment industry,
individual users, mass transportation equipment and
electrical equipment. c.30-40% of revenues are in power
converters, automatic voltage regulators, solar PV
inverters, energy storage systems and EV chargers.
Relevant Sustainable Development Goals (“SDGs”):
SDG No. 7 – Affordable and Clean Energy
UPS and solar PV inverters are critical for the renewable
energy transition. They have calculated that their
combined products reduced carbon emissions by
1,002,145 tonnes in 2022 and by 879,447 tonnes in 2023.
SDG No. 12 – Responsible consumption and production
All Voltronic products have energy efficiency benefits,
and their PV inverter has energy efficiency and
renewable energy benefits. Energy efficiencies
increase as revenues grow. The Company’s products
have a reuse or recycle ratio of >80% at the end of their
lives. In 2022, they recycled products in aggregation of
1,102,080 kilowatt via consumption power feedback
units and in 2023 this figure was 1,523,325 kilowatts.
Case Study – Voltronic
21
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Stewart Investors
Portfolio Manager
29 April 2025
Stewart Investors are progressing with a collaborative
engagement initiative on conflict minerals (tantalum, tin,
tungsten, gold and cobalt) in the semiconductor supply
chain. These minerals are vital materials for the
semiconductor industry. Poor traceability along complex
supply chains can lead to the inadvertent financing of
armed conflict and the abuse of human rights.
The initiative was supported in November 2021 by 160
signatories representing US$6.59 trillion of assets
under management. In 2022 Stewart Investors wrote to
29 companies encouraging them to develop and invest
in traceability technology, to increase transparency/
reporting from mine to product, to collaborate to
improve industry practices, to impose/ enforce harsher
sanctions on non-compliance and to reduce demand for
new materials by improving recycling.
As part of the engagement, we have engaged with
industry and civil bodies. We attended the Responsible
Minerals Initiative (“RMI”) annual conference in 2022,
and understand we are the first investor known to have
done so. In 2023, we were the first investor to speak at
the Responsible Business Alliance (“RBA”) and RMI’s
Annual Conference in Santa Clara, California on the
positive role of capital and we hosted a closed-door
workshop, endorsed by the RMI, with 16 leading
electronic companies. Stewart Investors commissioned
Kumi Consulting Ltd (Kumi) to deepen our knowledge,
contacts and engagements with companies, trade
bodies and organisations like the OECD, and with their
help developed engagement guidelines for initiative
supporters, and other investors, to improve their
interactions with companies.
Members of the RMI debated, over a number of months,
whether they should allow investors to join their trade
body. There were some initial reservations, however a
number of company representatives and steering
committee members of the RMI and RBA Board Liaison
have been strong supporters.
There is a growing feeling amongst RMI members that
investors could bring a new and constructive perspective
to help influence improvements along mineral supply
chains. Representatives of the companies and other RMI
members believe: “there is a big role for investors, they
have a different point of leverage”.
We are delighted that the RMI has taken the significant
step of allowing investors to become members of their
trade body which was one of our main objectives in
2023. We became the inaugural member of the RMI
Investor Network in 2024.
In May 2024 we attended the OECD Forum on
Responsible Mineral Supply Chains in Paris. We met
with industry bodies, a variety of downstream
companies such as Intel and BMW, and a selection of
NGOs. This has helped deepen our understanding of the
ongoing challenges and opportunities, particularly in
the aftermath of the passing of ramped up European
legislation including The EU Corporate Sustainability
Due Diligence Directive 2024 and Battery Regulation,
and the German Supply Chain Law.
We have strengthened our relationship with another
leading industry association - IRMA - The Initiative for
Responsible Mining Assurance - and in October 2024
became the first investment manager to join their newly
introduced finance sector membership. We published
the following article in 2024 summarising our
engagement work so far: https://www.
stewartinvestors.com/all/insights/conflict-minerals-
power-of-collaborative-engagement.html.
We continued to engage with existing and potential
investee companies on the topic, promoting the RMI
and IRMA to those who are not yet paid members, and
raise awareness of the issue through discussions with
clients and fellow investors.
Thematic Engagement Update – Conflict Minerals
22
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
The Strategic Report, set out on pages 1 to 32, 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
theCompany.
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 admitted to the closed-ended
investment funds category of the FCA’s Official List and to
trading on the main market of the London Stock Exchange.
The purpose of the Company is to achieve long-term
growth in its shareholders’ capital by providing a vehicle
for investors to gain exposure to a portfolio of companies
in the Asia Pacific region and the Indian sub-continent,
but excluding Japan, Australia and New Zealand, through
a single investment.
The Company’s strategy is to create value for
shareholders by addressing its investment objective.
As an externally managed investment trust, all of the
Company’s day-to-day management and administrative
functions are outsourced to service providers. Asa
result, the Company has no executive directors,
employees or internal operations.
The Company is an Alternative Investment Fund (“AIF”)
pursuant to the Alternative Investment Fund Managers
Regulations and the EU AIFM Directive. 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 (see page 45 for further information).
The Board remains responsible for all aspects of the
Company’s affairs, including setting the parameters for
monitoring the investment strategy and the review of
investment performance and policy. It also has
responsibility for all strategic policy issues, including
share issuance and buybacks, share price and discount/
premium monitoring, corporate governance matters,
dividends and gearing.
Further information on the Board’s role and the topics it
discusses with the Portfolio Manager is provided in the
Corporate Governance report beginning on page 36.
Investment Objective and Policy
The Company aims to achieve long-term capital growth
through investment in selected companies in the Asia
Pacific region and the Indian sub-continent, but
excluding Japan, Australia and New Zealand (the “Asia
Pacific Region”). Up to a maximum of 20% of the
Company’s total assets (at the time of investment) may
be invested in companies incorporated and/or listed
outside the Asia Pacific Region (as defined above); at
least 25% of their economic activities (at the time of
investment) are within the Asia Pacific Region with this
proportion being expected to grow significantly over the
long term.
The Company invests in companies which Stewart
Investors believe will be able to generate long-term
growth for shareholders.
The Company invests principally in listed equities
although it is able to invest in other securities, including
preference shares, debt instruments, convertible
securities and warrants. In addition, the Company may
invest in open and closed-ended investment funds and
companies.
The Company is only able to invest in unlisted securities
with the Board’s prior approval. It is the current intention
that such investments are limited to those which are
expected to be listed on a stock exchange or which cease
to be listed and the Company decides to continue to hold
or is required to do so.
Risk is diversified by investing in different countries,
sectors and stocks within the Asia Pacific Region. No
more than 45% of the Company’s total assets (at the time
of investment) may be invested in any single jurisdiction.
Business
Review
23
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
If the proportion of the Company’s total assets invested
in a single jurisdiction exceeds 49% at any time, the AIFM
and the Portfolio Manager will, as soon as reasonably
practicable, seek to re-balance the Company’s portfolio
below this threshold.
No single investment may exceed 7.5% of the Company’s
total assets at the time of investment. This limit is
reviewed from time to time by the Board and may be
revised as appropriate.
No more than 10% of the Company’s total assets may be
invested in other listed closed-ended investment
companies unless such investment companies themselves
have published investment policies to invest no more than
15% of their total assets in other closed-ended investment
companies, in which case the limit is 15%.
When deemed appropriate, the Company may borrow
for investment purposes up to the equivalent of 10% of
the net asset value of the Company at the time of
drawdown of such borrowing.
The use of derivatives is permitted with prior Board
approval and within agreed limits. However, Stewart
Investors are unlikely to use derivatives as they do not
form part of their investment strategy.
Proposed Change to Investment
Policy
As noted in the Chair’s Statement on page 7, the
definition of ‘Asia Pacific Region’ in the Company’s
investment objective currently excludes Australia, New
Zealand and Japan. The Board is proposing to broaden
the Company’s investable universe by removing the
exclusion of Australia and New Zealand from the
definition of ‘Asia Pacific Region’ in the investment
objective.
Accordingly, an ordinary resolution to approve this
amendment to the investment objective is included in
the Notice of AGM, beginning on page 101, and the full
text of the proposed new investment policy can be found
in the explanatory notes on pages 106 and 107. For the
avoidance of doubt, the amendment of the investment
objective is the only proposed change to the Company’s
investment policy. The proposed amendment has been
approved in principle by the Financial Conduct Authority
in accordance with the requirements of the Listing Rules.
Performance Measurement
The Board measures Stewart Investors’ performance
against a performance objective, which is to provide
shareholders with a net asset value total return in excess
of the UK Consumer Price Index (“CPI”) plus 6%
(calculated on an annual basis) measured over three to
five years (the “Performance Objective”). The Board also
monitors the Company’s performance against its peer
group (see page 4 for details). Please refer to the Chair’s
Statement beginning on page 6 and the Glossary on
page80 for further information.
Dividend Policy
It is the Company’s policy to pursue capital growth for
shareholders with income being a secondary
consideration. This reflects that the Portfolio Manager is
frequently drawn to companies whose future growth
profile is more important than the generation of dividend
income for shareholders.
The Company complies with the United Kingdom’s
investment trust rules which require investment trusts
to retain no more than 15% of their distributable income
each year. The Company’s dividend policy is that the
Company will pay a dividend as a minimum to maintain
investment trust status.
The Board
At the date of this report, the Board of the Company
comprises Andrew Impey (Chair), Nandita Sahgal
(Chairof the Audit Committee), Sian Hansen (Chair of
the Engagement and Remuneration Committee),
RobertTalbut, (the Senior Independent Director)
Edward Troughton (the Chair of the Sales, Marketing
and Communications Committee) and June Ang. All of
these Directors are non-executive, independent
Directors. They all served throughout the year except
for June Ang who joined the Board with effect from 26
September 2024.
Further information on the Directors can be found on
pages 34 and 35 and information on the Board’s diversity
can be found in the Corporate Governance Report on
pages 42 and 43.
24
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Key Performance Indicators
(“KPIs”)
The Board of Directors reviews performance against the
following KPIs, which are unchanged from the prior year.
> NAV total return against the Performance
Objective*^
> NAV per share total return against the peer
group*^
> Average discount/premium of share price to NAV
per share over the year^
> Ongoing charges ratio^
* Calculated on an annual basis and measured over three to five years.
^ Alternative Performance Measure (see Glossary beginning on
page80).
NAV per share total return – Performance Objective
The Directors regard the Company’s net asset value total
return as being the overall measure of value generated
by the Portfolio Manager over the long term. Total
return reflects both the net asset value growth of the
Company and the dividends paid to shareholders. The
performance objective of the Company is inflation
(represented by the Consumer Price Index) plus 6%,
measured over three to five years. The 6% represents
what the Board considers to be a reasonable premium on
investors’ capital, which investing in the faster growing
Asian economies ought to provide over time. The
Performance Objective is designed to reflect that the
Portfolio Manager’s approach does not consider index
composition when building and monitoring the portfolio.
During the year under review, the NAV per share total
return was 9.7% outperforming the Performance
Objective by 0.9% (2024: NAV per share total return of
1.3%, underperforming the Performance Objective by
11.7%). Over the past three years, the annualised NAV
per share total return was 4.6%, underperforming the
Performance Objective by 7.5%. Over five years, the
annualised NAV per share total return was 8.7%,
underperforming the Performance Objective by 2.3%
per annum.
A full description of performance during the year under
review is contained in the Portfolio Manager’s Review
beginning on page 12.
NAV total return – peer group
The Board also monitors the Company’s performance
against its peer group of four other investment trusts
with similar investment mandates and one exchange
traded fund.
Over the one, three and five years ended 31 January
2025, the Company ranked 6th, 1st and 3rd,
respectively, in its peer group. TheCompany’s
performance is discussed in the Chair’s Statement
beginning on page6; further information can be found in
the Portfolio Manager’s Review beginning on page 12.
Average discount/premium of share price to NAV
per share
The Board believes that the principal drivers of an
investment trust’s share price discount or premium over
the long term are investment performance and a
proactive marketing strategy. However, there can be
volatility in the discount or premium during the year.
Therefore, the Board takes powers each year to buy back
and issue shares with a view to limiting the volatility of
the share price discount or premium, in normal market
conditions.
During the year under review no new shares were issued
by the Company. The Company’s share price discount to
the NAV per share was wider this year, in comparison
with last year. As a result, the Company repurchased
370,000 shares during the year, at a total cost of
£1.4million, and at an average discount of 14.0%. The
Board keeps the level of the discount under close review.
Please refer to the Chair’s Statement and pages 30 and 31
for further information regarding how the Board
addressed this issue during theyear.
Average discount of share price to NAV per share*^
during the year ended
31 January 2025 31 January 2024
11.5% 6.4%
Peer group average Peer group average
discount 10.8% discount 9.3%
* Source: Morningstar.
^ Alternative Performance Measure (see Glossary beginning on
page80).
Business Review continued
25
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Ongoing charges ratio
Ongoing charges represent the costs that the Company
can reasonably expect to pay from one year to the next,
under normal circumstances. The Board continues to be
conscious of expenses and seeks to maintain a sensible
balance between high quality service and costs.
TheBoard 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 2025 31 January 2024
1.1% 1.1%
Peer group average 0.9% Peer group average 0.9%
^ Alternative Performance Measure (see Glossary beginning on
page80).
The Board believes that the Company’s relatively low
turnover, and the absence of any costs associated with
gearing, will mean that the Company’s overall running
costs – should these costs be factored into the
calculation – are not necessarily as high as some other
investment vehicles. Itshould also be noted that the
Company 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.
Aprocess has been established to identify and assess
risks, their likelihood and the possible severity of their
impact.
These principal risks are set out on the following pages
with a high-level summary of their management through
mitigation and arrows to indicate any change in
assessment during the year. The risks faced by the
Company have been categorised under three headings as
follows:
> Investment and financial risks
> Strategic risks
> Operational risks
26
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
A summary of these risks and their mitigation is set out below:
Principal Risks and Uncertainties Mitigation
Change in risk assessment
over the last financial year
Investment and 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.
To an extent, this risk is accepted as being inherent to the Company’s
activities. However, the Board has set limits in the investment policy which
ensure that the portfolio is diversified, reducing the risks associated with
individual stocks and markets. Compliance with the investment objective
and policy limits is monitored daily by Frostrow and Stewart Investors and
reported to the Board monthly. Stewart Investors report at each Board
meeting on the performance of the Company’s portfolio, including the
impact of wider market trends and events.
As part of its review of the viability of the Company, the Board also
considers the sensitivity of the Company to changes in market prices and
foreign exchange rates (see note 14 beginning on page 75), 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 on page 29.
In light of the material effect that recent geopolitical events have had on
global markets and the volatility of certain markets that the Company
invests in, during the year the Board increased the market risk rating.
Investment Performance
Investment performance may not
achieve the Company’s investment
objective. Stewart Investors’
investment strategy and approach is
expected to lead to performance
that will deviate from that of both
market indices and other investment
companies investing in the Asia
Pacific Region.
To manage this risk, the Board:
> reviews and challenges reports from Stewart Investors, which cover
portfolio composition, asset allocation, concentration and performance
at each Board meeting;
> reviews investment performance over the long term against the
Company’s performance objective and peer group;
> monitors Stewart Investors’ performance against set KPIs; and
> formally reviews Stewart Investors’ appointment, including their
performance, service levels and contractual arrangements, each year.
Principal Risks and Uncertainties Mitigation
Change in assessment
of risk over the last financial year
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 the Middle East, as well as Ukraine and
EasternEurope, have increased uncertainty and volatility in financial
markets. TheBoard discusses such developments and how they may impact
decision making with StewartInvestors.
The Board’s discussions with the Portfolio Manager often focus on geopolitical
themes or trends that affect social and environmental sustainability, for
example conflict minerals and water scarcity. These are often subjects on which
the Portfolio Manager engages with investee companies.
No change Increased Decreased
Business Review continued
27
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Principal Risks and Uncertainties Mitigation
Change in risk assessment
over the last financial year
Climate Change Risk
The Board is cognisant of risks
arising from climate change and the
impact climate change events could
have on portfolio companies and
their operations, as well as on
service providers to the Company.
The Board regularly reviews global environmental, geopolitical and
economic developments with the Portfolio Manager and the implications of
these risks and events on portfolio construction and the Company’s
operations. Given Stewart Investors’ focus on sustainability as set out on
pages17 to 21, the Board considers the portfolio to be relatively well
positioned in this regard.
Black Swan Risk
A significant unpredictable event (e.g.
a pandemic/war/closure of a major
shipping route) could lead to increased
market volatility, and in a worst-case
scenario, major global trade and
supply chain breakdown resulting in
significant volatility/declines in market
prices. The Company’s service
providers and their operational
systems may also be affected.
The Board monitors emerging risks and the robustness of Stewart Investors’
and other service providers’ business continuity plans.
Stewart Investors’ investment approach includes a focus on sustainability and
stewardship, which emphasises quality investments with strong balance sheets,
a proven track record in previous crises, and the protection of shareholders’
funds, leaving them relatively well positioned to deal with unforeseen events.
All of the Company’s service providers are required to have business continuity /
disaster recovery policies and test them at least annually. Service providers
provide updates on contingency plans for coping with major disruption to their
operations.
Key Persons Risk
There is a risk that the team
responsible for managing the
Company’s portfolio may leave their
employment or may be prevented
from undertaking their duties.
The Board manages this risk by:
> receiving regular reports from the Portfolio Manager, including any
significant changes in the make-up of the portfolio management team;
> meeting the wider team supporting the designated lead manager, atboth
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, fails
to achieve its Performance
Objective and becomes unattractive
to shareholders, resulting in a
widening of the share price discount
to the NAV per share.
In managing this risk the Board:
> reviews the Company’s investment objective and policy, and Stewart
Investors’ investment approach, in relation to investment performance,
market and economic conditions and the performance 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 the NAV per share and considers ways in which share price
performance may beenhanced, 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.
Noting recent developments in the investment trust sector, including
widening share price discounts, and action taken by activist investors and
arbitrageurs, the Board considered that this risk had increased during the
year.
No change Increased Decreased
28
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Principal Risks and Uncertainties Mitigation
Change in risk assessment
over the last financial year
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
andother 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.
Credit risk arising from the use of
counterparties forms part of this
risk. If a counterparty were to fail,
the Company could be adversely
affected through either delay in
settlement or loss of assets.
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 of its service providers,
including disaster recover procedures and business continuity plans;
> maintains a risk matrix with details of the risks to which the Company is
exposed, the approach to managing those risks, the key controls relied
upon 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;
> has considered the increased risk of cyber-attacks and received reports
and assurance from its service providers regarding the information
security controls inplace;
> has reviewed the arrangements (including sub-custodial arrangements)
and services provided by the Custodian to ensure that the security of the
Company’s custodial assets is maintained; and
> reviews 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 credit risk and other financial risks can be found in
note 14 beginning on page 75.
Emerging Risks
Emerging risks are discussed as part of the risk review
process. During the year the Board identified the following
emerging risks:
1. As well as offering investment opportunities, the
development and exploitation of technological
breakthroughs, such as artificial intelligence, may
challenge and damage the addressable market,
revenue and operations of portfolio companies to the
extent that they no longer offer the promise of returns
consistent with the Company’s investment objective.
2. The risk that increasing water scarcity will affect
economic development, potentially leading to mass
migration and political conflict in the Asia Pacific
Region. This is a particular threat in India, where a high
proportion of the Company’s assets are invested, and
which the UN identifies as one of the most water-
stressed countries in the world.
3. The continued rise of misinformation is contributing
to the perceived decay of political and social norms,
and the diminishing role of generally accepted truth
and reason. This trend has encouraged mistrust in
democratic institutions and public discourse and the
success in many countries of more extreme political
parties. Businesses and brands can be drawn into such
debates which may have uncertain direct or indirect
consequences for portfolio companies.
4. Heightened geopolitical tensions and assertive
state behaviour are increasing the risk of state-
backed armed conflicts. Governments may leverage
military capabilities to advance strategic interests,
potentially engaging in proxy wars or direct military
confrontations. This emerging risk could lead to
regional instability, disrupted supply chains and trade
flows, regulatory unpredictability, significant market
volatility and adverse impacts on economic growth.
Business Review continued
29
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
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. Further details of the stress tests and
scenarios considered can be found in the Audit
Committee Report beginning on page 51 and Notes 1
and 14 to the financial statements. Based on the
information available to the Directors at the date of this
report, the conclusions drawn in the Viability Statement
(including the results of the stress tests undertaken)
below and the Company’s cash balances, the Directors
are satisfied that the Company has adequate financial
resources to continue in operation for at least the next
12 months from the date of signing this report and that,
accordingly, it is appropriate to continue to adopt the
going concern basis in preparing the financial statements.
Viability Statement
The Directors have carefully assessed the Company’s
financial position and prospects as well as the principal
risks facing the Company and have formed a reasonable
expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the
next five financial years. The Board has chosen a five
year horizon in view of the long-term outlook adopted by
the Portfolio Manager when making investment
decisions.
To make this assessment and in reaching this conclusion,
the Audit Committee has considered the Company’s
financial position and its ability to liquidate its portfolio
and meet its liabilities as they fall due and notes the
following:
> The portfolio is comprised of investments traded on
major international stock exchanges. Based on historic
analysis, it is estimated that approximately 72% of the
current portfolio could be liquidated within two weeks
(based on current market volumes with 20%
participation);
> The Audit Committee has considered the viability of
the Company under various scenarios, including
periods of acute stock market and economic volatility.
In view of the results of these stress tests, the Board
has concluded that it would expect to be able to
ensure the financial stability of the Company through
the benefits of having a diversified portfolio of listed
and realisable assets. Further details of the stress tests
can be found in Note 1 to the financial statements;
> With an ongoing charges ratio of 1.1%, the expenses
of the Company are predictable and modest in
comparison with the assets and there are no capital
commitments currently foreseen which would alter
that position;
> The Board has considered the Company’s average
cash balance over the past three years and noted that
the Company has consistently retained levels of cash
that are significantly higher than its annual operating
expenses;
> The Company has no employees, only non-executive
Directors. Consequently it does not have redundancy
or other employment related liabilities or
responsibilities; and
> The closed ended nature of the Company means that,
unlike open ended funds, it does not need to realise
investments when shareholders wish to sell their
shares.
The Directors, as well as considering the potential impact
of the principal risks and various severe but plausible
downside scenarios, have also made the following
assumptions in considering the Company’s longer-term
viability:
> There will continue to be demand for investment
trusts;
> The Portfolio Manager will continue to adopt a
long-term view when making investments, and
anticipated holding periods will be at least five years;
> The Company invests in the securities of listed
companies traded on international stock exchanges
to which investors will wish to continue to have
exposure;
> Regulation will not increase to a level that makes
running the Company uneconomical; and
> The performance of the Company will continue to be
satisfactory.
30
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Stakeholder Interests and Board Decision-Making (Section 172 of the
Companies Act 2006)
The following disclosure, which is required by the Companies Act 2006 and the AIC Code of Corporate Governance,
describes how the Directors have had regard to the views of the Company’s stakeholders in their decision-making.
Stakeholder Group How the Board has engaged with the Company’s Stakeholders
Investors The Board’s key mechanisms of engagement with investors include:
> The 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 Chair was (and remains) available
to engage with the Company’s shareholders.
Portfolio Manager The Board met regularly with Stewart Investors (the Portfolio Manager)
throughout the year, both formally at quarterly Board meetings and informally, as
required. The Board engaged with the portfolio management team, discussing the
Company’s overall performance and strategy, as well as developments in individual
portfolio companies and wider macroeconomic developments.
The Board periodically visits different countries and investee companies in the Asia
Pacific Region with the Portfolio Manager, to gain first-hand insight into the
Portfolio Manager’s investment process and engagement with portfolio
companies. The Board considers these visits to be an important part of their
oversight of the Portfolio Manager. This year, the Board accompanied the Portfolio
Manager to meetings with portfolio companies in Mumbai, India, engaging with
representatives from portfolio companies and potential investee companies.
Other Service Providers The Board met regularly with Frostrow (the AIFM), representatives of which attend
every quarterly Board meeting to provide updates on risk management,
accounting, administration, corporate governance and regulatory matters.
The Board, meeting as the Engagement and Remuneration Committee, reviewed
the performance of all the Company’s service providers, receiving feedback from
Frostrow in their capacity as AIFM and Company Secretary. The AIFM, which is
responsible for the day-to-day operational management of the Company, meets
and interacts with the other service providers including the Depositary, the
Custodian and the Registrar, on behalf of the Board, on a daily basis. This can be
through email, one-to-one meetings and/or regular writtenreporting.
The Audit Committee met with BDO LLP to review the audit plan for the year, agree
their remuneration, review the outcome of the annual audit and to assess the quality
and effectiveness of the audit process. Please refer to the Audit Committee Report
beginning on page 51 for further information.
Portfolio Companies The Board supports and endorses the Portfolio Manager’s approach to responsible
and sustainable investing. The Board has delegated authority to Stewart Investors,
as Portfolio Manager, to engage with the companies held in the portfolio and to vote
the shares owned by the Company.
The Board reviews the Portfolio Manager’s voting and engagement reports, and any
exceptions to the Portfolio Manager’s position statement on harmful and
controversial products, services or practices.
As mentioned above, the Board periodically visits different countries and investee
companies in the Asia Pacific Region with the Portfolio Manager and during the year, the
Board engaged directly with representatives from companies based in Mumbai, India.
Business Review continued
31
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
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,
including its Portfolio Manager. The need to foster good business relationships with service providers and maintain
a reputation for high standards of business conduct are central to the Directors’ decision-making as the Board of
an externally managed investment trust.
Key Areas of Engagement Main decisions and actions taken
> Ongoing dialogue with shareholders
concerning the strategy of the
Company, performance and the
portfolio.
> 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 widened during the year,
the Board. initiated a limited buyback programme. As a result, 370,000 shares were
bought back during the year. No shares were issued at a premium to the net asset value
per share during the year.
The Board, meeting as the Sales, Marketing and Communications Committee, also
continued its work to improve the visibility of the Company and the Portfolio
Manager’s sustainability credentials, inparticular to retail investors. Further
information is provided in the Chair’s Statement beginning on page 6.
> Portfolio composition, performance,
outlook and business updates.
> Matters relating to sustainability,
including the sustainability
credentials of the portfolio
companies, and regulatory
developments affecting the Company
itself.
> The promotion and marketing
strategy of the Company.
> The terms and conditions of the
Portfolio Management Agreement.
The Board agreed that high standards of research and decision-making have been
maintained and the Portfolio Manager’s strategy has been implemented consistently,
leading to good returns over the past year and over longer periods. The Board
considered that accompanying the Portfolio Manager to meetings with portfolio
companies in India was a useful part of this assessment. 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. Further information is provided
on page 46.
The Sales, Marketing and Communications Committee continued to work with the
Portfolio Manager on improving the marketing strategy of the Company. Further
information is provided in the Chair’s Statement beginning on page 6.
The Board considered and subsequently approved (subject to shareholder
approval) a proposal from Stewart Investors to widen the investment policy to
include investment in Australia and New Zealand. Further information is provided
in the Chair’s Statement and the Notice of AGM.
The Portfolio Management Agreement was restated and amended to reflect the
Portfolio Manager’s governance framework for complying with the FCA’s Consumer
Duty and to reflect the Portfolio Manager’s responsibility for marketing
theCompany. The amendments were not considered to be material.
> The quality of service provision and
the terms and conditions under which
service providers are engaged.
> The assessment of the effectiveness
of the audit and the Auditor’s
reappointment.
> The terms and conditions under
which the Auditor is engaged.
The Board concluded that it was in the interests of shareholders for Frostrow to
continue in their role as AIFM on the same terms and conditions. See pages 46
and47 for further details.
The Board agreed that the Company’s other service providers continued to
perform satisfactorily and should continue in their roles.
The Board approved the Audit Committee’s recommendation to propose to
shareholders that BDO LLP be re-appointed as the Company’s auditor for a further
year. Please refer to the Audit Committee Report beginning on page 51 and the
Notice of AGM beginning on page 101 for further information.
> Business and investment plans.
> ESG and sustainability matters.
Investment decisions are made at the discretion of the Portfolio Manager, however
the Board values the opportunity to engage directly with representatives from
portfolio companies. Direct engagement enhances the Directors’ understanding of
the relevant companies, as well as their understanding of the Portfolio Manager’s
investment process.
32
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
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. ThePortfolio Manager (under their parent, legal
entity name, First Sentier Investors) is a Tier 1 signatory
to the UNPrinciples of Responsible Investment, an
investor signatory of Climate Action 100+ and an
investor member of the Institutional Investors Group on
Climate Change.
Integrity and Business Ethics
The Board is committed to carrying out the Company’s
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 the Company’s activities, the
Board aims to conduct itself responsibly, ethically and
fairly, including in relation to social and human rights
issues.
Taskforce for Climate-Related
Financial Disclosures (“TCFD”)
The Company notes the TCFD recommendations on
climate-related financial disclosures. The Company is an
investment trust and, as such, it is exempt from the Listing
Rules requirement to report against the TCFD framework.
Stewart Investors is committed to reporting annually on its
progress against its climate change objectives which are
set out in its climate change statement
10
. This reporting is
modelled on TCFD recommendations to the degree it is
relevant to their activities and to support shareholders
with their reporting requirements.
Stewart Investors have signed up to the Net Zero Asset
Managers Initiative. They published their first climate
report
11
in 2022 which provides details about their plan;
this will be updated annually. They are engaging with their
investee companies to set ambitious targets and have
credible action plans to achieve net zero by 2050. They are
targeting outcomes that are aligned with their
commitment to the Net Zero Asset Managers Initiative
and prioritising engagement with companies that have
inadequate disclosures and targets, and/or rising
emissions.
Climate reporting, at both the Stewart Investors
12
and
Pacific Assets Trust
13
level, is available via the Company’s
website.
Performance and Future
Developments
A review of the Company’s performance over the year
and the outlook for the Company can be found in the
Chair’s Statement beginning on page 6 and in the
Portfolio Manager’s Review beginning on page 12.
The Company’s overall strategy remains unchanged.
By order of the Board
Frostrow Capital LLP
Company Secretary
29 April 2025
10
https://www.stewartinvestors.com/uk/en/private-investor/insights/climate-change-statement.html
11
https://www.stewartinvestors.com/content/dam/pacific-assets/trust-information/climate-report/Climate-Report-2021.pdf
12
https://www.stewartinvestors.com/all/insights/annual-report-2023.html
13
https://www.stewartinvestors.com/content/dam/pacific-assets/trust-information/PAC-TCFD-report.pdf
https://www.stewartinvestors.com/content/dam/stewartinvestors/pdf/annual-report-2023/pac/pac-annual-review-2023.pdf
Business Review continued
Strategic Report
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
33
In this section
34 Board of Directors
36 Corporate Governance
44 Report of the Directors
49 Statement of Directors’ Responsibilities
51 Audit Committee Report
56 Directors’ Remuneration Report
59 Independent Auditor’s Report
Governance
34
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Board of Directors
Andrew Impey
Independent Non-Executive Chair
Sian Hansen
Independent Non-Executive Director
Robert Talbut
Independent Non-Executive Director
Joined the Board in 2022
Andrew is Chair of the Nominations
Committee
Shareholding in the Company: 20,000
Joined the Board in 2015
Sian is Chair of the Engagement &
Remuneration Committee
Shareholding in the Company: 15,880
Joined the Board in 2016
Robert is the Senior Independent Director
Shareholding in the Company: 9,611
Skills and Experience
Andrew has over 34 years’ experience in
institutional investment management and
wealth management. He has been lead manager
on a broad range of funds including a sovereign
wealth mandate, unit trusts and several
investment trusts. He was previously a
consultant at Rathbones Investment
Management, a partner of Albion Capital Group,
joint managing director at OLIM Limited and
Chief Investment Officer at Singer &
Friedlander.
Andrew’s wide investment experience allows
him to engage knowledgeably with the Portfolio
Manager. He also brings current knowledge of
the industry and in corporate governance
andstrategy.
He is a charity trustee and on a number of
investment committees including the
HMSVictory Preservation Company.
Skills and Experience
Previously Sian was Chief Operating Officer of
C|T Group, an Executive Director of the
Legatum Institute and before that, Managing
Director of the UK think tank Policy Exchange.
Earlier in her career, Sian was a senior equity
analyst and Co-Director of Sales for Asian
Emerging Markets at Société Générale.
Sian enhances the Board’s knowledge of
sustainability, enabling meaningful debates with
the Portfolio Manager to take place. As a thought
leader in political and other forums, she brings a
valuable perspective on geo-political matters.
Skills and Experience
Robert was formerly a director and Chief
Investment Officer at Royal London Asset
Management Limited.
His ongoing knowledge of the asset
management industry and the strategic
challenges it faces is useful in many board
debates. His understanding of today’s
corporate governance best practice and the
matters that a Board must confront, helps to
ensure that the Company is run in accordance
with best practice.
Given his wide-ranging board and sector
experience Robert is well positioned to bring
alternative perspectives on issues that
mayarise.
Other Appointments
Andrew is a non-executive director of
Blackrock Greater Europe Investment
Trustplc.
Other Appointments
Sian is a non-executive director of Worldwide
Healthcare Trust PLC.
Other Appointments
Robert is a non-executive director of
JPMorgan American Investment Trust plc.
Standing for re-election
Yes
Standing for re-election
No
Standing for re-election
Yes
35
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Edward Troughton
Independent Non-Executive Director
Nandita Sahgal FCA
Independent Non-Executive Director
June Ang
Independent Non-Executive Director
Joined the Board in 2019
Edward is Chair of the Sales, Marketing and
Communications Committee
Shareholding in the Company: 18,357
Joined the Board in 2024
Nandita is Chair of the Audit Committee
Shareholding in the Company: 1,426
Joined the Board in 2024
Shareholding in the Company: 10,000
Skills and Experience
Edward has been in the investment industry for
over 35 years, starting his career with Barings
Asset Management as an Asian equity portfolio
manager. He spent the rest of his career after
that in business development and marketing. He
managed NatWest Investment Management’s
office in Hong Kong for five years. For seven
years, he was with BlackRock where at one
stage, as Managing Director, he ran their Asian
regional office out of Hong Kong. Latterly he was
Managing Director at Alliance Trust Investments
and a Partner at Oldfield Partners where he was
Head of Global Client Relations and Business
Development, and a member of the
Management Committee.
Edward’s experience in the investment sector
and first-hand knowledge of living and working
in Asia enables the Board to engage
authoritatively with the Portfolio Manager on
their investment strategy. His knowledge of
business development and marketing within the
UK wealth sector is also extremely useful as the
Board looks to widen the Company’s overall
appeal and shareholder base.
Skills and Experience
Nandita is the Senior Independent Director and
Chair of the Audit Committee at the UK India
Business Council. Previously, she was a
Managing Director, Infrastructure Asset
Management at ThomasLloyd Group Ltd. She
has over 25 years’ emerging markets experience
working in asset management, equity capital
markets and M&A at ThomasLloyd Group,
Insinger de Beaufort and Seymour Pierce.
Prior to joining ThomasLloyd, Nandita was Chief
Executive Officer at IL&FS Global Financial
Services (UK) Ltd., the UK subsidiary of the
investment banking arm of IL&FS. She holds a
Bachelors in Economics and Business from The
University of Edinburgh, is a Fellow of the
Institute of Chartered Accountants in England
and Wales and a Member of the Chartered
Institute for Securities and Investment.
Skills and Experience
June was the Managing Director, and later a
non-executive director, of PEAL Capital
Partners. Previously she was Head of Investor
Relations at Crake Asset Management LLP.
Ms Ang has over 30 years of experience in
financial markets and has a deep knowledge of
emerging markets, particularly Asia. She spent
two decades in Asian Equities and headed up the
Asian Equity sales desk at HSBC for 12 years.
Asa Managing Director, she was directly
accountable for financial performance, and
responsible for strong risk management,
regulatory and governance oversight and an
in-depth understanding of asset management.
She has held senior roles at Goldman Sachs,
Citigroup and UBS, serving UK, European and
Middle Eastern clients. Ms Ang has also worked
in hedge funds and private equity and so has
insight and expertise that spans public and
private markets.
Other Appointments
None.
Other Appointments
Nandita is a non-executive director of Murray
Income Trust Plc.
Other Appointments
None.
Standing for re-election
Yes
Standing for re-election
Yes
Standing for election
Yes
36
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Corporate
Governance
The Board and Committees
Responsibility for effective governance lies with the Board whose role is to promote the long-term success of the
Company. Thegovernance framework of the Company reflects the fact that as an externally managed investment
company it has no employees and outsources portfolio management to Stewart Investors and risk management,
corporate management, company secretarial and administrative services to Frostrow Capital LLP. The Board
generates value for shareholders through its oversight of the service providers and management of the costs
associated with running the Company.
Copies of the full terms of reference, which clearly define the responsibilities of each Committee, can be obtained
from the Company Secretary and will be available for inspection on the day of the Annual General Meeting. They can
also be found on the Company’s website at www.pacific-assets.co.uk.
Chair – Andrew Impey
Senior Independent Director – Robert Talbut
Four additional non-executive Directors, all considered independent.
Key responsibilities:
> to provide leadership and set the strategy, values and standards of the Company within a framework of effective controls
which enable risk to be assessed and managed;
> to ensure that a robust corporate governance framework is implemented; and
> to challenge constructively and scrutinise the performance of all third-party service providers.
The Board
Chair
Sian Hansen
All Independent Directors
Key responsibilities:
> to review the contracts,
performance and
remuneration of the
Company’s principal
service providers;
> to set the Directors’
remuneration policy;
and
> to review the terms and
conditions of the
Directors’
appointments.
Engagement &
Remuneration
Committee
Chair
Nandita Sahgal FCA
All Independent Directors
Key responsibilities:
> to review the
Company’s financial
reports;
> to oversee the risk and
control environment;
and
> to have primary
responsibility for the
relationship with the
Company’s external
auditor, to review their
independence and
performance, and to
determine their
remuneration.
Audit Committee
Chair
Andrew Impey
All Independent Directors
Key responsibilities:
> to review the Board’s
structure and
composition; and
> to make
recommendations for
any changes or new
appointments.
Nomination Committee
Chair
Edward Troughton
All Independent Directors
Key responsibilities:
> to develop and oversee
a marketing and
promotional strategy
for the Company in
conjunction with the
Portfolio Manager; and
> to review the marketing
activities taken by and
on behalf of the
Company by third
parties.
Sales, Marketing and
Communications
Committee
37
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Board of Directors
Entirely independent and non-executive
Sub-committees:
l Audit Committee
l Engagement & Remuneration Committee
l Nomination Committee
l Sales, Marketing and Communications Committee
Frostrow Capital LLP
(AIFM, Company Secretary, Fund Administrator)
Reporting
l Balance sheet
l Liquidity and gearing
l Income forecasts
l Portfolio valuation
l Portfolio transactions
l Investment limits and restrictions
(monthly)
l Compliance with investment policy and
guidelines (monthly)
l Compliance report (semi-annually)
l Internal Controls Report (annually)
JP Morgan
(Depositary and Custodian)
Reporting
l Depositary’s Report (semi-annually)
l Internal Controls Report (annually)
l Presentations on subjects of interest e.g. cyber security (as required)
Stewart Investors
(Portfolio Management)
Reporting
l Portfolio performance update at each meeting
l Compliance Report (semi-annually)
l Internal Controls Report (annually)
l Presentations on subjects of interest
e.g. Risk Management, Investment Compliance (as required)
Investec Bank PLC
(Corporate Broker)
Equiniti Group
(Registrar)
Reporting
l Internal Controls Report (annually)
l Presentations on subjects of interest e.g. cyber security (as required)
Dickson Minto LLP
(Legal Adviser)
Principal third-party
service providers
The Directors
l receive regular reporting
at meetings;
l review the assurance
report produced by each
organisation;
l receive additional
reporting on the control
environment from each
of the principal third
party service providers;
and
l formally evaluate their
performance on an
annual basis.
Secondary third-
party service
providers
The Directors
l receive regular reporting
on their activities at
meetings; and
l formally evaluate their
performance on an
annual basis.
The Board has a responsibility
for establishing and assessing
internal controls to ensure the
Company operates effectively,
efficiently and within the risk
appetites set by the Board.
As the Company relies on
third-party service providers
for all of its operations, it
obtains regular reports from
these counterparties on the
nature and effectiveness of
controls within these
organisations.
The Company’s principal
service providers are the
Portfolio Manager, Stewart
Investors, the AIFM, Company
Secretary and administrator,
Frostrow Capital, the
custodian and depositary,
JPMorgan and the registrar,
Equiniti Group. The Board
receives regular reporting on
compliance with the control
environment and assesses the
effectiveness of the internal
controls through review of the
assurance reports from each of
these organisations.
In addition, the Company
retains a number of secondary
providers who report regularly
to the Board. These include the
Company’s legal advisers and
the corporate stockbroker.
The Engagement and
Remuneration Committee
formally evaluates the
performance and service
delivery of all third-party
service providers at least
annually and the Audit
Committee evaluates the
performance of the Company’s
external auditor annually,
following the completion of the
annual audit process.
Internal Controls Structure
38
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Corporate Governance Statement
The Board has considered the principles and
recommendations of the AIC Code of Corporate
Governance published in February 2019 (the “AIC
Code”). The AIC Code addresses all the principles set out
in the UK Corporate Governance Code (the “UK Code”),
as well as setting out additional provisions on issues that
are of specific relevance to the Company.
In January 2024 the FRC published a revised UK
Corporate Governance Code which applies to financial
years beginning on or after 1 January 2025. The AIC
published a revised Code of Corporate Governance in
August 2024, which applies with effect from the same
date. The 2018 UK Code and the 2019 AIC Code apply
until this time.
The Board considers that reporting against the principles
and provisions of the AIC Code (which has been
endorsed by the Financial Reporting Council) will provide
better information to shareholders. By reporting against
the AIC Code, the Company meets its obligations under
the UK Code (and associated disclosure requirements
under paragraph 6.6.6 of the UK Listing Rules) and as
such does not need to report further on issues contained
in the UK Code which are irrelevant to the Company as
an externally managed investment company, including
the provisions relating to the role of the chief executive,
executive directors’ remuneration and the internal audit
function.
The AIC Code is available on the AIC’s website
www.theaic.co.uk and the UK Code can be viewed on the
Financial Reporting Council website www.frc.org.uk. The
AIC Code includes an explanation of how the AIC Code
adapts the principles and provisions set out in the UK Code
to make them relevant for investment companies.
The Company has complied with the principles and
provisions of the AIC Code.
This Corporate Governance report on pages36 to 43
forms part of the Report of the Directors on
pages 44 to48.
Board Leadership and Purpose
Purpose and Strategy
The purpose and strategy of the Company are described
in the Strategic Report on page 22.
Strategy issues and all material operational matters are
considered at Board meetings.
Board Culture
The Board aims to capture differences of opinion, unique
vantage points and areas of expertise. TheChair
encourages open debate to foster a supportive and
co-operative approach. Strategic decisions are discussed
openly and constructively. TheBoard aims to be open
and transparent with shareholders and other
stakeholders, and for the Company to conduct itself
responsibly, ethically and fairly in its relationships with
service providers.
Shareholder Relations
Representatives of Stewart Investors and Investec Bank
plc, the Company’s corporate stockbroker, met regularly
with institutional shareholders and private client asset
managers to discuss investment strategy, any issues or
concerns and, if applicable, corporate governance
matters. Reports on investor sentiment and the feedback
from investor meetings were discussed with the
Directors at the following Sales, Marketing and
Communications Committee and Board meetings.
Shareholder Communications
The Directors welcome the views of all shareholders and
place considerable importance on communications with
them. Shareholders wishing to communicate with the
Chair, or any other member of the Board, may do so by
writing to the Company Secretary at the offices of
Frostrow Capital LLP (25 Southampton Buildings,
London WC2A 1AL). Shareholders are encouraged to
attend the AGM, where they are given the opportunity
to question the Chair, the Board and representatives of
Stewart Investors. Inaddition, Stewart Investors make a
presentation to shareholders covering the investment
performance and strategy of the Company at the AGM.
Further details of this year’s AGM are provided in the
Chair’s Statement beginning on page 6 and in the Notice
of AGM beginning on page101.
Significant Holdings and Voting Rights
Details of the shareholders with substantial interests in
the Company’s shares, the Directors’ authorities to issue
and repurchase the Company’s shares, and the voting
rights of the shares are set out in the Report of the
Directors on pages 44 to 48.
Corporate Governance continued
39
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Conflicts of Interest
Company directors have a statutory obligation to avoid a
situation in which they (and connected persons) have,
orcan have, a direct or indirect interest that conflicts, or
may possibly conflict, with the interests of the Company.
In line with the Companies Act 2006, the Board has the
power to authorise any potential conflicts of interest that
may arise and impose such limits or conditions as it
thinks fit. A register of interests and potential conflicts is
maintained and is reviewed at every Board meeting. No
conflicts of interest arose during the year under review.
Division of Responsibilities
Responsibilities of the Chair and the SID
The Chair’s primary role is to provide leadership to the
Board, assuming responsibility for its overall
effectiveness in directing the Company. The Chair is
responsible for:
> taking the chair at general meetings and Board
meetings, conducting meetings effectively and
ensuring all Directors are involved in discussions and
decision-making;
> setting the agenda for Board meetings and ensuring
the Directors receive accurate, timely and clear
information for decision-making;
> taking a leading role in determining the Board’s
composition and structure;
> overseeing the induction of new directors and the
development of the Board as a whole;
> leading the annual board evaluation process and
assessing the contribution of individual Directors;
> supporting and also challenging the Portfolio
Manager (and other suppliers) where necessary;
> ensuring effective communications with shareholders
and, where appropriate, stakeholders; and
> engaging with shareholders to ensure that the Board
has a clear understanding of shareholder views.
The Senior Independent Director (“SID”) serves as a
sounding board for the Chair and acts as an intermediary
for the other Directors and the shareholders. The SID is
responsible for:
> working closely with the Chair and providing support;
> leading the annual assessment of the performance of
the Chair;
> holding meetings with the other non-executive
Directors without the Chair being present, on such
occasions as necessary;
> carrying out succession planning for the Chair’s role;
> working with the Chair, other Directors and
shareholders to resolve major issues; and
> being available to shareholders and other Directors
to address any concerns or issues they feel have not
been adequately dealt with through the usual
channels of communication (i.e. through the Chair or
the Portfolio Manager).
Director Independence
The Board consists of six non-executive Directors, each
of whom is independent of Stewart Investors. Each of the
Directors, including the Chair, was independent on
appointment and all of the Directors seeking election or
re-election at the forthcoming AGM continue to be
independent when assessed against the circumstances
set out in Provision13 of the AIC Code. The Board
carefully considers these guidelines but believes that
independence is evidenced by an individual being
independent of mind, character and judgement. The
Board considers that all of the Directors are independent
and there are no relationships or circumstances which
are likely to impair or could appear to impair their
judgement.
Directors’ Other Commitments
Directors wishing to accept a new appointment obtain
approval from the Chair before doing so. Following the
annual Board evaluation, the Board considers that all
Directors have sufficient time to discharge their duties.
Board Meetings
The Board met formally four times during the year. The
primary focus at regular Board meetings was the review
of investment performance and associated matters,
including asset allocation, marketing/investor relations,
peer group information and industry issues. The Board
reviewed key investment and financial data, revenue and
expense projections, analyses of asset allocation,
transactions, customised performance metrics and
performance comparisons, share price and net asset
value performance. The Board’s approach to addressing
the Portfolio Manager’s and the Company’s share price
performance during the year is described in the Chair’s
Statement beginning on page 6.
The Board is responsible for setting the Company’s
corporate strategy and reviewed the continued
appropriateness of the Company’s investment objective,
investment strategy and investment restrictions at each
meeting.
40
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Matters Reserved for Decision by the Board
The Board has adopted a schedule of matters reserved
for its decision. This includes, inter alia, the following:
> Decisions relating to the strategic objectives and
overall management of the Company, including the
appointment or removal of the Portfolio Manager
and other service providers, establishing the
investment objectives, strategy and performance
comparators, the permitted types or categories of
investments, the proportion of assets that may be
invested in them, and the markets in which
transactions may be undertaken.
> Requirements under the Companies Act 2006,
including approval of the half yearly and annual
financial statements, recommendation of the final
dividend (if any), declaration of any interim dividends,
the appointment or removal of the Company
Secretary, and determining the policy on share
issuance and buybacks.
> Matters relating to certain Stock Exchange
requirements and announcements, the Company’s
internal controls, and the Company’s corporate
governance structure, policies and procedures.
> Matters relating to the Board and Board committees,
including the terms of reference and membership of
the committees, and the appointment of directors
(including the Chair and the SID).
Day-to-day portfolio management is delegated to
Stewart Investors and operational management is
delegated to Frostrow.
The Board takes responsibility for the content of
communications regarding major corporate issues, even
if Stewart Investors or Frostrow acts as spokesman. The
Board was kept informed of relevant promotional
material that was issued by Stewart Investors.
Board Committees
The Board has established four sub committees, as set
out on page 36.
The Audit Committee Report begins on page 51.
The work of the Engagement and Remuneration
Committee is described in the Directors’ Remuneration
Report beginning on page 56 and in the Report of the
Directors on pages 46 and 47.
The work of the Nomination Committee is described in
the ‘Composition, Succession and Evaluation’ section of
this Corporate Governance report.
The Sales, Marketing and Communications Committee
worked with the Portfolio Manager throughout the year
to develop and enhance the Company’s marketing
strategy. The Committee reviewed Stewart Investors’
marketing activities, including feedback from investor
meetings, and continued working with the Portfolio
Manager to improve the Company’s website, branding,
social media and public relations strategies. On the
recommendation of the Committee, the Board appointed
Kepler Partners LLP to provide paid-for research and PR
services to the Company. Further information is
provided in the Chair’s Statement.
The Committee chairs welcome the views of
shareholders on any of the matters within their
respective remits. Shareholders can contact the
Committee chairs through the Company Secretary
whose details are provided on page 109.
Relationship with the Portfolio Manager
Representatives from Stewart Investors were in
attendance at each Board meeting to provide updates
and address questions on specific matters.
The Engagement and Remuneration Committee
evaluated Stewart Investors’ performance and suitability
as well as reviewing the terms of the Portfolio
Management Agreement. The outcome of this year’s
review is described on pages 46 and 47.
Relationship with Other Service Providers
Representatives from Frostrow were in attendance at each
Board meeting to address questions on the Company’s
operations, administration and governance requirements.
The Engagement and Remuneration Committee monitored
and evaluated all of the Company’s other service providers,
including Frostrow, and also the Depositary, the Custodian,
the Registrar and the Broker. The Committee concluded
that all the service providers were performing well and
should be retained on their existing terms and conditions.
Stewardship and the Exercise of Voting Powers
The Board and the Portfolio Manager support the
UKStewardship Code, which sets out the principles of
effective stewardship by institutional asset owners and
asset managers. Stewart Investors (under their legal
parent entity name, First Sentier Investors) is a Tier1
signatory to the UK Stewardship Code. First Sentier
Investors produce an annual Responsible Investment and
Stewardship Report which is published on their website
www.firstsentierinvestors.com/UK/en/private/
responsible-investment/responsible-investment-
resource-centre.html.
The Board has delegated authority to Stewart Investors (as
Portfolio Manager) to engage with companies held in the
portfolio and to vote the shares owned by the Company.
Stewart Investors have a strong commitment to effective
stewardship and their approach, including their
Corporate Governance continued
41
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
consideration of environmental, social and governance
issues, is set out in the Strategic Report and in their
Stewardship and Corporate Engagement policy which
can be found on their website www.stewartinvestors.
com. During the year, the Board reviewed reports from
Stewart Investors on their voting and engagement and is
supportive of their approach.
Independent Professional Advice
The Board has formalised arrangements under which the
Directors, in the furtherance of their duties, may seek
independent professional advice at the Company’s
expense. No such advice was sought during the year.
Company Secretary
The Directors have access to the advice and services of a
specialist investment trust company secretary, Frostrow
Capital LLP, which is responsible for advising the Board
on all governance matters. The Company Secretary
ensures governance procedures are followed and that
the Company complies with applicable statutory and
regulatory requirements.
Composition, Succession and Evaluation
Board Evaluation
During the year an internal review of the Board, its
committees and individual Directors (including each
Director’s independence) was carried out by the Board,
in the form of electronic performance evaluation
questionnaires. The overall process and individual
performance assessments were led by the Chair. The
review of the Chair’s performance was led by the Senior
Independent Director.
The review concluded that the Board worked in a
collegiate, efficient and effective manner, and there were
no material weaknesses or concerns identified.
The Board’s composition, diversity and succession plans
were reviewed. It was noted that a recruitment process
would be initiated later in the year, ahead of the
anticipated retirement of Robert Talbut in 2026.
All Directors submit themselves for election and annual
re-election thereafter by shareholders (unless they
intend to retire from the Board). The particular
contribution of each individual Director is summarised on
pages 34 and 35. Following the evaluation process, the
Board recommends that shareholders vote in favour of the
Directors’ election/re-election at the forthcoming AGM.
The number of scheduled Board and Committee
meetings held during the year and the number of
meetings attended by each Director is set out below:
Engagement & Sales, Marketing &
Remuneration Nomination Communications
Board Audit Committee Committee Committee Committee
Number of meetings (4) (3) (1) (1) (4)
Andrew Impey 4 3 1 1 4
Charlotta Ginman
1
2 1 0 1 2
Sian Hansen 4 3 1 1 4
Robert Talbut 4 3 1 1 4
Edward Troughton 4 3 1 1 4
Nandita Sahgal 4 3 1 1 4
June Ang
2
2 2 1 0 2
1
Retired from the Board on 9 July 2024.
2
Appointed to the Board on 26 September 2024.
Other ad hoc meetings of the Board and Committees were held in connection with specific events as and when necessary.
42
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Succession Planning
The Nomination Committee considered the structure of
the Board, recognising the need for progressive
refreshment. During the year, the Board appointed
June Ang as a non-executive Director, ahead of the
planned retirement of Sian Hansen at the forthcoming
AGM. Please refer to the Chair’s Statement beginning on
page 6 for further information.
The Board has an approved succession planning policy to
ensure that (i) there is a formal, rigorous and transparent
procedure for the appointment of new directors; and
(ii)the Board is comprised of members who collectively
display the necessary balance of professional skills,
experience, length of service and industry knowledge.
The policy is reviewed annually and at such other times
as circumstances may require.
Policy on the Tenure of the Chair and other
Non-Executive Directors
The tenure of each independent, non-executive director,
including the Chair, is not ordinarily expected to exceed
nine years. It should be noted that, in practice, the date of
departure from the Board may be the date of the AGM
following this anniversary. However, the Board has agreed
that the tenure of the Chair may be extended provided such
an extension is conducive to the Board’s overall orderly
succession. The Board believes that this more flexible
approach to the tenure of the Chair is appropriate in the
context of the regulatory rules that apply to investment
companies, which ensure that the chair remains
independent after appointment, while being consistent
with the need for regular refreshment and diversity.
Appointments to the Board
The Nomination Committee considers annually the skills
possessed by the Directors and identifies any skill
shortages to be filled by new directors. The rules
governing the appointment and replacement of directors
are set out in the Company’s Articles of Association and
the aforementioned succession planning policy. Where
the Board appoints a new director during the year, that
director will stand for election by shareholders at the next
AGM. The minimum number of directors is two and the
maximum is seven. When considering new appointments,
the Board endeavours to ensure that it has the capabilities
required to be effective and oversee the Company’s
strategic priorities. This will include an appropriate range,
balance and diversity of skills, experience and knowledge.
The Company is committed to ensuring that any vacancies
arising are filled by the best qualified candidates.
During the year, June Ang was appointed to the Board.
The Board engaged the services of a specialist executive
search firm, Sapphire Partners, to assist with the search
process. Sapphire Partners sourced and prepared a
diverse long list of potential candidates for consideration
by the Nomination Committee. The Nomination
Committee then selected a short list of candidates to
interview. Following the interviews, a recommendation
was made to the Board that Ms Ang be appointed as a
Director. Sapphire Partners has no other connection
with theCompany.
Board Diversity
The Board supports the principle of boardroom diversity,
of which gender and ethnicity are two important aspects.
The Company’s policy is that the Board and its
committees should be comprised of directors with a
diverse range of skills, knowledge and experience and
that appointments to the Board should be made on
merit, against objective criteria, including diversity in its
broadest sense. The objective of the policy is to ensure
there is a broad range of approaches, backgrounds, skills,
knowledge and experience represented on the Board. To
this end, achieving a diversity of perspectives and
backgrounds on the Board is a key consideration in any
director search process. The Board encourages any
recruitment agencies it engages to find a diverse range of
candidates that meet the criteria agreed for each
appointment and, from the shortlist, aims to ensure that
a diverse range of candidates is brought forward for
interview.
The Directors have noted that the last recruitment
agency engaged by the Board, Sapphire Partners, is a
signatory of The Enhanced Voluntary Code of Conduct
for Executive Search Firms. This code of conduct
recognises the best recruitment practice that has led to
measurable success in increasing gender equality in
boardrooms.
The FCA’s Listing Rules require companies to report
against the following diversity targets:
a) At least 40% of individuals on the board are women;
b) At least one of the senior board positions is held by a
woman; and
c) At least one individual on the board is from a minority
ethnic background.
Corporate Governance continued
43
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
In accordance with the Listing Rules, the Board has provided the following information in relation to its diversity as at
the year end.
Number of
Number of Senior
Board Percentage of Positions on
Members the Board the Board*
Men 3 50% Not applicable *
Women 3 50% – see note
Not specified/prefer not to say^ – –
^ Directors were also given the opportunity to indicate if there was an ‘other category’ they wished to specify.
Number of
Number of Senior
Board Percentage of Positions on
Members the Board the Board*
White British or other White
(including minority-white groups) 4 67%
Mixed/Multiple Ethnic Groups – –
Asian/Asian British 1 17% Not applicable *
Black/African/Caribbean/Black British – – – see note
Other ethnic group 1 17%
Not specified/prefer not to say – –
* The Listing Rules define ‘senior board positions’ as the roles of Chair, SID, CEO and CFO. This column is inapplicable as the Company is externally
managed and does not have executive management functions, specifically it does not have a CEO or CFO. The Chair of the Board and the SID are
currently both men. However, the Company considers that chairing the permanent sub-committees of the Board are senior roles in an investment
company context. Of the four permanent sub-committees of the Board, two are chaired by women: the Audit Committee and the Engagement and
Remuneration Committee.
The information above was obtained by asking the
Directors to complete a multiple choice form with the
options in the tables set out above. The form asked the
Directors to indicate how they should be categorised for
the purposes of these disclosures.
As an externally managed investment company, the
Company does not have the positions of CEO or CFO and
therefore, as permitted by the Listing Rules, it has not
reported against the second target as it is not applicable.
Asshown in the tables, the Company had met both the first
and third targets at the year end.
Audit, Risk and Internal Control
The Statement of Directors’ Responsibilities on pages 49
and 50 describes the Directors’ responsibility for
preparing this report.
The Audit Committee Report, beginning on page 51, explains
the work undertaken to allow the Directors to make this
statement and to apply the going concern basis of accounting.
It also sets out the main roles and responsibilities and the
work of the Audit Committee throughout the year, and
describes the Directors’ review of the Company’s risk
management and internal control systems.
A description of the principal risks facing the Company
and an explanation of how they are being managed is
provided in the Strategic Report on pages 25 to 28.
The Board’s assessment of the Company’s longer-term
viability is set out in the Strategic Report on page 29.
Remuneration
The Directors’ Remuneration Report beginning on
page56 sets out the levels of remuneration for each
Director and explains how Directors’ remuneration is
determined.
Frostrow Capital LLP
Company Secretary
29 April 2025
44
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Report of the
Directors
The Directors present this Annual Report on the affairs
of the Company together with the audited financial
statements and the Independent Auditor’s Report for
the year ended 31 January 2025.
Business and Status of the
Company
The Company is registered as a public limited company in
Scotland (Registered Number SC091052) and is an
investment company within the terms of Section 833 of
the Companies Act 2006 (the “Act”). Its shares are
admitted to the closed-ended investment funds category
of the FCA’s Official List and to trading on the main market
of the London Stock Exchange, which is a regulated
market as defined in Section 1173 of the Act.
The Company has been accepted as an investment trust
under Section 1158 of the Corporation Taxes Act 2010
and Part 2 Chapter 1 of Statutory Instrument
2011/2999. This approval relates to accounting periods
commencing on or after 1 February 2012. The Directors
are of the opinion that the Company has conducted its
affairs so as to be able to retain such approval.
It is the Directors’ intention that the Company should
continue to manage its affairs so as to be a qualifying
investment for inclusion in the stocks and shares
components of an Individual Savings Account (“ISA”) and
Junior ISA.
The Company is a member of the Association of
Investment Companies.
Alternative Performance Measures
The financial statements (on pages 66 to 79) set out the
required statutory reporting measures of the Company’s
financial performance. In addition, the Board assesses the
Company’s performance against a range of criteria which are
viewed as particularly relevant for investment trusts. These
measures are summarised on page 1 and explained in greater
detail in the Strategic Report, under the heading ‘Key
Performance Indicators’ on pages 24 and 25. The Directors
believe that these measures enhance the comparability of
information between reporting periods and aid investors in
understanding the Company’s performance.
The measures used for the year under review have
remained consistent with the prior year.
Definitions of the terms used and the basis of their
calculation are set out in the Glossary beginning on
page80.
Annual General Meeting
THE FOLLOWING INFORMATION TO BE DISCUSSED
AT THE FORTHCOMING ANNUAL GENERAL
MEETING IS IMPORTANT AND REQUIRES YOUR
IMMEDIATE ATTENTION.
If you are in any doubt about the action you should
take, you should seek advice from your stockbroker,
bank manager, solicitor, accountant or other financial
adviser authorised under the Financial Services and
Markets Act 2000 (as amended). If you have sold or
transferred all of your ordinary shares in the Company,
you should pass this document, together with any
other accompanying documents, including the form of
proxy, at once to the purchaser or transferee, or to the
stockbroker, bank or other agent through whom the
sale or transfer was effected, for onward transmission
to the purchaser or transferee.
Resolutions relating to the following items of business
will be proposed at the Annual General Meeting to be
held on 1 July 2025.
Resolution 11 Approval of the proposed, amended
Investment Policy
Resolution 12 Authority to allot shares
Resolution 13 Authority to disapply pre-emption rights
Resolution 14 Authority to buy back shares
Resolution 15 Authority to hold General Meetings (other
than the AGM) on at least 14 clear days’ notice
The full text of the resolutions can be found in the Notice
of Annual General Meeting on pages 101 and 102.
Explanatory notes regarding the resolutions can be
found on pages 106 to 108.
45
44
Governance Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025 Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Report of the
Directors
The Directors present this Annual Report on the affairs
of the Company together with the audited financial
statements and the Independent Auditor’s Report for
the year ended 31 January 2025.
Business and Status of the
Company
The Company is registered as a public limited company in
Scotland (Registered Number SC091052) and is an
investment company within the terms of Section 833 of
the Companies Act 2006 (the “Act”). Its shares are
admitted to the closed-ended investment funds category
of the FCA’s Official List and to trading on the main market
of the London Stock Exchange, which is a regulated
market as defined in Section 1173 of the Act.
The Company has been accepted as an investment trust
under Section 1158 of the Corporation Taxes Act 2010
and Part 2 Chapter 1 of Statutory Instrument
2011/2999. This approval relates to accounting periods
commencing on or after 1 February 2012. The Directors
are of the opinion that the Company has conducted its
affairs so as to be able to retain such approval.
It is the Directors’ intention that the Company should
continue to manage its affairs so as to be a qualifying
investment for inclusion in the stocks and shares
components of an Individual Savings Account (“ISA”) and
Junior ISA.
The Company is a member of the Association of
Investment Companies.
Alternative Performance Measures
The financial statements (on pages 66 to 79) set out the
required statutory reporting measures of the Company’s
financial performance. In addition, the Board assesses the
Company’s performance against a range of criteria which are
viewed as particularly relevant for investment trusts. These
measures are summarised on page 1 and explained in greater
detail in the Strategic Report, under the heading ‘Key
Performance Indicators’ on pages 24 and 25. The Directors
believe that these measures enhance the comparability of
information between reporting periods and aid investors in
understanding the Company’s performance.
The measures used for the year under review have
remained consistent with the prior year.
Definitions of the terms used and the basis of their
calculation are set out in the Glossary beginning on
page80.
Annual General Meeting
THE FOLLOWING INFORMATION TO BE DISCUSSED
AT THE FORTHCOMING ANNUAL GENERAL
MEETING IS IMPORTANT AND REQUIRES YOUR
IMMEDIATE ATTENTION.
If you are in any doubt about the action you should
take, you should seek advice from your stockbroker,
bank manager, solicitor, accountant or other financial
adviser authorised under the Financial Services and
Markets Act 2000 (as amended). If you have sold or
transferred all of your ordinary shares in the Company,
you should pass this document, together with any
other accompanying documents, including the form of
proxy, at once to the purchaser or transferee, or to the
stockbroker, bank or other agent through whom the
sale or transfer was effected, for onward transmission
to the purchaser or transferee.
Resolutions relating to the following items of business
will be proposed at the Annual General Meeting to be
held on 1 July 2025.
Resolution 11 Approval of the proposed, amended
Investment Policy
Resolution 12 Authority to allot shares
Resolution 13 Authority to disapply pre-emption rights
Resolution 14 Authority to buy back shares
Resolution 15 Authority to hold General Meetings (other
than the AGM) on at least 14 clear days’ notice
The full text of the resolutions can be found in the Notice
of Annual General Meeting on pages 101 and 102.
Explanatory notes regarding the resolutions can be
found on pages 106 to 108.
Results and Dividend
The results attributable to shareholders for the year are
shown on page 66. Details of the Company’s dividend
record can be found on page 5 and the dividend policy is
outlined in the Strategic Report on page 23.
A final dividend of 4.9p per ordinary share has been
proposed and, subject to shareholder approval, will be paid
on 11 July 2025 to shareholders on the register on 13 June
2025. The associated ex-dividend date is 12 June 2025.
Capital Structure
As at 31 January 2025, there were 120,588,386 ordinary
shares of 12.5p each (“shares”) in issue (2024:
120,958,386). All shares rank equally for dividends and
distributions. Each shareholder is entitled to one vote on a
show of hands and, on a poll, to one vote for every share
held. Details of the substantial shareholders in the
Company are listed on page 47.
At the start of the year under review, the Directors had
shareholder authority to issue up to 12,095,838 shares on
a non-pre-emptive basis and to buy back up to 18,131,662
shares in the market. At the Company’s annual general
meeting held on Tuesday, 9 July 2024, these authorities
expired and new authorities to allot up to 12,095,838
shares (representing 10% of the Company’s issued share
capital) on a non-pre-emptive basis and to buy back up to
18,131,662 shares (representing 14.99% of the
Company’s issued share capital) were granted.
During the year, no new shares were issued (2024:nil).
370,000shares were repurchased and then cancelled
during the year (2024: nil) and there are no shares held in
Treasury.
The powers to issue or buy back the Company’s shares
require the relevant resolution to be passed by
shareholders. Proposals for the renewal of the Board’s
authorities to issue and buy back shares are detailed in
the Notice of AGM beginning on page 101.
There are no restrictions concerning the transfer of
securities in the Company; no special rights with regard
to control attached to securities; no restrictions on
voting rights; no agreements between holders of
securities regarding their transfer known to the
Company; and no agreements which the Company is
party to that might affect its control following a
successful takeover bid.
Financial Instruments
The Company’s financial instruments comprise its
investment portfolio, cash balances, debtors and
creditors which arise directly from its operations such as
sales and purchases awaiting settlement, and accrued
income. The financial risk management objectives and
policies arising from its financial instruments and the
exposure of the Company to risk are disclosed in note 14
to the financial statements, beginning on page 75.
Principal Service Providers
Portfolio Manager
The Company’s investment portfolio has been managed
by Stewart Investors since 1 July 2010. Stewart
Investors are engaged under the terms of aPortfolio
Management Agreement (the “PMA”) effective from
24March 2025, which replaced two previous
agreements.
Under the terms of the PMA, Stewart Investors provide,
inter alia, the following services:
> seeking out and evaluating investment opportunities;
> recommending the manner by which cash should be
invested, divested, retained or realised;
> advising on how rights conferred by the investments
should be exercised;
> analysing the performance of investments made;
> advising the Company in relation to trends, market
movements and other matters which may affect the
investment objective and policy of the Company; and
> marketing and investor relations services.
The PMA is terminable by six months’ notice. Stewart
Investors complied with the terms of the PMA dated
30April 2021 throughout the year to 31January2025.
Stewart Investors are entitled to a fee, paid quarterly, of
0.85% of the Company’s net assets.
Alternative Investment Fund Manager
Frostrow Capital LLP acts as the AIFM. It is an
independent provider of services to the investment
companies sector.
The Board resolved to appoint Frostrow Capital LLP as
the Company’s AIFM with effect from 30 April 2021 on
the terms and subject to the conditions of the alternative
investment fund management agreement between the
Company and Frostrow (the “AIFM Agreement”). The
AIFM Agreement assigns to Frostrow overall
responsibility to manage the Company, subject to the
supervision, review and control of the Board, and
ensures that the relationship between the Company and
46
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Frostrow is compliant with the requirements of the
AIFMD. Frostrow, under the terms of the AIFM
Agreement provides, inter alia, the following services:
> risk management services;
> administrative and secretarial services;
> advice and guidance in respect of corporate
governance requirements;
> maintenance of the Company’s accounting records;
> preparation and dispatch of the annual and half
yearly reports; and
> ensuring compliance with applicable tax, legal and
regulatory requirements.
Under the AIFM Agreement, Frostrow receives a fixed
fee of £75,000 per annum plus 0.11% per annum of net
assets up to £250 million, plus 0.075% per annum of net
assets in excess of £250 million .
The AIFM Agreement is terminable on six months’ notice
given by either party.
Further details of the fees payable to Stewart Investors
and Frostrow Capital LLP during the year are set out in
note 3 to the financial statements on page 70.
Depositary and Custodian
The Board resolved to appoint J.P. Morgan Europe Limited
(the “Depositary”) as the Company’s depositary in
accordance with the AIFMD on the terms and subject to
the conditions of the depositary agreement between the
Company, Frostrow and the Depositary (the “Depositary
Agreement”), with effect from 30April2021.
The Depositary provides the following services, inter alia,
under its agreement with the Company:
> safekeeping and custody of the Company’s custodial
investments and cash;
> processing of transactions; and
> foreign exchange services.
The Depositary must take reasonable care to ensure that
the Company is managed in accordance with the
Financial Conduct Authority’s Investment Funds
Sourcebook, the AIFMD and the Company’s Articles of
Association.
Under the terms of the Depositary Agreement, the
Depositary is entitled to receive an annual fee of the higher
of £30,000 or 0.015% of the net assets of the Company up
to £150 million, 0.0125% of the net assets in excess of
£150million and up to £300 million, 0.01% of the net assets
in excess of £300 million and up to £500million and
0.005% of the net assets in excess of £500 million.
The Depositary has delegated the custody and
safekeeping of the Company’s assets to JPMorgan Chase
Bank N.A., London branch under a Global Custody
Agreement. Custody fees are charged according to the
jurisdiction in which the holdings are based. Variable
transaction fees are also chargeable.
The notice period on the Depositary Agreement is
90days if terminated by the Company and 120 days if
terminated by the Depositary.
Portfolio Manager and AIFM Evaluation and
Re‑Appointment
The review of the performance of Stewart Investors as
Portfolio Manager and Frostrow Capital LLP as AIFM is a
continuous process carried out by the Board and the
Engagement and Remuneration Committee (the “ERC”),
with a formal evaluation being undertaken each year. As
part of this process the Board monitors the services
provided by Stewart Investors and Frostrow and
receives regular reports and views from them. The Board
also receives comprehensive performance measurement
reports to enable it to determine whether or not the
Performance Objective set by the Board has been met.
The ERC formally reviewed the appointment of Stewart
Investors in January 2025 with a recommendation being
made to the Board to continue their appointment on the
existing terms.
The Board believes the continuing appointment of
Stewart Investors, under the terms described earlier in
this report, is in the interests of shareholders. In coming
to this decision the Board took into consideration the
following reasons:
> the terms of the Portfolio Management Agreement,
in particular the level and method of remuneration
and the notice period, and the comparable
arrangements of a group of the Company’s peers; and
> the quality and depth of experience of the Stewart
Investors team and the level of performance of the
portfolio in absolute terms and also by reference to
the Performance Objective and the Company’s peer
group over the medium to longer term.
Report of the Directors continued
47
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
The ERC also formally reviewed Frostrow’s appointment
in January 2025 with a formal recommendation being
made to the Board. The Board believes the continuing
appointment of Frostrow Capital LLP, under the terms
described earlier in this report, is in the interests of
shareholders. In coming to this decision, the Board took
into consideration the quality and depth of experience of
the management, administrative and company
secretarial team that Frostrow allocates to the Company.
Directors
Directors’ and Officers’ Liability Insurance Cover
Directors’ and officers’ liability insurance cover was
maintained by the Board during the year ended
31January 2025 and to the date of this report. It is
intended that this cover will continue throughout the
year ending 31 January 2026 and subsequent years.
Directors’ Indemnities
As at the date of this report, a deed of indemnity has been
entered into by the Company and each of its Directors
under which the Company has agreed to indemnify each
Director, to the extent permitted by law, in respect of
certain liabilities as a result of carrying out his or her role
as a Director of the Company. EachDirector is
indemnified against the costs of defending any criminal or
civil proceedings or any claim by the Company or a
regulator as they are incurred provided that where the
defence is unsuccessful the Director must repay those
defence costs to the Company. Theindemnities are
qualifying third party indemnity provisions for the
purposes of the Companies Act 2006.
A copy of each deed of indemnity is available for
inspection at Frostrow’s offices during normal business
hours and will be available for inspection at the AGM.
Articles of Association
Amendment of the Company’s Articles of Association
requires a special resolution to be passed by
shareholders.
The Directors have not proposed any changes to the
Articles of Association this year.
Substantial Interests in Share
Capital
As at 31 January 2025 the Company had been notified of
the following substantial interests in the Company’s voting
rights:
Number of
shares %
held held
Evelyn Partners 14,520,035 12.0
Rathbones 12,374,668 10.2
Brewin Dolphin (Ireland) 11,332,765 9.4
Charles Stanley 6,038,409 4.9
These disclosures reflect those shareholders that have
notified the Company of a substantial interest in its shares
when they have crossed certain thresholds and may not
reflect their current holdings. The table does not reflect
the full range of investors in the Company. The
shareholder register is principally comprised of private
wealth managers and retail investors who own their
shares through a variety of online platforms. A profile of
the Company’s ownership is shown on page 99.
After the year end, on 4 February 2025, EQ Investors
notified the Company that they held 4,099,121 shares
(3.4%) in the Company. At the date of this report, there
had been no other substantial interests or changes to
substantial interests notified to the Company.
Beneficial Owners of Shares –
Information Rights
The beneficial owners of shares who have been
nominated by the registered holder of those shares to
receive information rights under Section 146 of the
Companies Act 2006 are required to direct all
communications to the registered holder of their shares
rather than to the Company’s registrar, Equiniti, or to the
Company directly.
Modern Slavery Act 2015
The Company does not provide goods or services in the
normal course of business, and as a financial investment
vehicle, does not have customers. Therefore, the
Directors do not consider that the Company is required to
make a statement under the Modern Slavery Act 2015 in
relation to slavery or human trafficking. TheCompany’s
suppliers are typically professional advisers and the
Company’s supply chains are considered to be low risk in
this regard.
48
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Anti-Bribery and Corruption Policy
The Board has adopted a zero tolerance approach to
instances of bribery and corruption. Accordingly,
itexpressly prohibits any Director or associated persons
when acting on behalf of the Company, from accepting,
soliciting, paying, offering or promising to pay or
authorise any payment, public or private, in the United
Kingdom or abroad to secure any improper benefit for
themselves or for the Company.
The Board applies the same standards to its service
providers in their activities for the Company.
A copy of the Company’s Anti Bribery and Corruption
Policy can be found on its website at
www.pacific-assets.co.uk. The policy is reviewed
annually by the Audit Committee.
Prevention of the Facilitation of
Tax Evasion
In response to the implementation of the Criminal
Finances Act 2017, the Board adopted a zero-tolerance
approach to the criminal facilitation of tax evasion.
Acopy of the Company’s policy on preventing the
facilitation of tax evasion can be found on the Company’s
website www.pacific-assets.co.uk. The policy is reviewed
annually by the Audit Committee.
Global Greenhouse Gas Emissions
The Company is an investment trust, with no employees
or premises, nor has it any financial or operational
control of the assets it owns. It has no greenhouse gas
emissions to report from its operations, nor does it have
responsibility for any other emissions producing sources
under the Companies Act 2006 (Strategic Reports and
Directors’ Reports) Regulations 2013 or the Companies
(Directors’ Report) and Limited Liability Partnerships
(Energy and Carbon Report) Regulations 2018, including
those within the Company’s underlying investment
portfolio. The Company consumed less than
40,000kWh of energy during the year and therefore is
exempt from the disclosures required under the
Streamlined Energy and Carbon Reporting criteria.
Political Donations
The Company has not made and does not intend to make
any political donations.
Corporate Governance
The Corporate Governance report, which includes the
Company’s corporate governance policies and forms
part of the Report of the Directors, is set out on
pages 36 to43.
Common Reporting Standard (“CRS”)
CRS is a global standard for the automatic exchange of
information commissioned by the Organisation for
Economic Cooperation and Development and
incorporated into UK law by the International Tax
Compliance Regulations 2015. CRS requires the
Company to provide certain additional details to HMRC
in relation to certain shareholders. The reporting
obligation began in 2016 and is an annual requirement.
The Registrar, Equiniti, has been engaged to collate such
information and file the reports with HMRC on behalf of
the Company.
UK Sanctions
The Board has made due diligence enquiries of the
service providers that process the Company’s
shareholder data, to ensure the Company’s compliance
with the UK sanctions regime. The relevant service
providers have confirmed that they check the Company’s
shareholder data against the UK sanctions list on a daily
basis. At the date of this report, no sanctioned
individuals had been identified on the Company’s
shareholder register. The Board notes that stockbrokers
and execution-only platforms also carry out their own
due diligence.
By order of the Board
Frostrow Capital LLP
Company Secretary
29 April 2025
Report of the Directors continued
49
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
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
Act2006. They are also responsible for safeguarding the
assets of the Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities. The Directors are responsible for ensuring
that the Annual Report and financial statements, taken
as a whole, are fair, balanced, and understandable and
provide the information necessary for shareholders to
assess the Company’s performance, business model and
strategy.
Under applicable law and regulations, the Directors are
also responsible for preparing a Strategic Report,
Directors’ Report, Directors’ Remuneration Report and
Corporate Governance Statement which comply with
that law and those regulations.
The Directors are responsible for ensuring the Annual
Report and the financial statements are made available
on the Company’s website, which is maintained by the
Portfolio Manager. Financial statements are published
on the Company’s website in accordance with legislation
in the United Kingdom governing the preparation and
dissemination of financial statements, which may vary
from legislation in other jurisdictions. The maintenance
and integrity of the Company’s website is the
responsibility of the Directors. The Directors’
responsibility also extends to the ongoing integrity of the
financial statements contained therein.
Disclosure of Information to the
Auditor
The Directors who held office at the date of approval of
this report confirm that, so far as they are each aware,
there is no relevant audit information of which the
Company’s auditor is unaware; and each Director has
taken all the steps that he/she might reasonably be
expected to have taken as a Director to make himself/
herself aware of any relevant audit information and to
establish that the Company’s auditor is aware of that
information.
50
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
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 31January2025; 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
Andrew Impey
Chair
29 April 2025
Statement of Directors’ Responsibilities continued
51
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Audit Committee
Report
Composition
The Committee comprises all of the Company’s
independent non-executive Directors. As a result,
theCommittee comprises the whole Board. The
Committee believes it is appropriate for the Chair of the
Board to be a member of the Audit Committee on
account of his relevant sector experience.
The experience of the Committee members can be
assessed from the Directors’ biographies set out on
pages 34 and 35 but we consider that we have recent
and relevant financial experience and that the
Committee as a whole has competence relevant to the
investment trustsector.
Role and Responsibilities
A comprehensive description of the Committee’s role, its
duties and responsibilities, can be found in its terms of
reference, which are available on the Company’s website
www.pacific-assets.co.uk.
Introduction from the Chair
As Chair of the Audit Committee, I am pleased to present my
first Audit Committee Report, for the year ended
31 January 2025, to shareholders.
Significant Matters Considered by the Audit Committee During the Year
Significant Reporting Matter How the matter was addressed
Valuation of Investments The Audit Committee received assurance that the valuation of assets
had been carried out in accordance with the adopted accounting
policies set out in note 8 on page 74.
Existence and Ownership of Investments The Committee received assurance that all investment holdings and
cash/deposit balances had been agreed by Frostrow to an
independent confirmation from the Custodian or relevant bank,
throughout the year. The Committee reviewed the internal controls
reports of Frostrow, Stewart Investors and JP Morgan.
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Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Audit Committee Report continued
Significant Reporting Matter How the matter was addressed
Annual Report and Financial Statements The Board asked the Audit Committee to confirm that, in its opinion,
the Annual Report taken as a whole is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company’s financial position,
performance, business model and strategy. In doing so, the
Committee considered:
> the comprehensive control framework around the production of the
Annual Report, including the process in place to verify the factual
content;
> the detailed levels of review that were undertaken in the
production process, by Frostrow and by the Committee; and
> the internal control environment as operated by Stewart
Investors (the Portfolio Manager), Frostrow (the AIFM),
JPMorgan (the Custodian and Depositary) and other service
providers.
Other Reporting Matters
Audit Regulation
The Committee has not had to consider any new audit
regulations in the past year. It has, however, taken note
of reporting guidance and thematic reviews published by
the FRC and determined how to apply any relevant best
practice to the Company’s reporting. The Committee
also reviews the outcomes of the FRC’s annual Audit
Quality Reviews and discusses the findings with
ourAuditor.
The Committee has reviewed an analysis prepared by
the Company Secretary assessing the Company’s
policies, processes, guidelines and reporting against the
Minimum Standard for Audit Committees published by
the FRC and the revised AIC Corporate Governance
Code. The Minimum Standard applies to the Company
on a comply or explain basis as it is included by reference
in the new AIC Corporate Governance Code. The
Committee seeks to comply with the Standard as far as it
is appropriate for an investment company to do so. As a
result of the review, a number of minor updates were
made to the Company’s audit tender guidelines, the
Committee’s terms of reference, and the annual audit
effectiveness questionnaire completed by the Auditor,
the AIFM and the Committee.
Recognition of Revenue from Investments
Frostrow confirmed to the Committee, as in previous
years, that all dividends received had been accounted for
correctly. It was noted that there was an appropriate
segregation of duties between Frostrow and JPMorgan.
Accounting Policies
The Committee ensured that the accounting policies set
out in the notes to the financial statements were applied
consistently throughout the year. In light of there being
no unusual transactions during the year or other possible
reasons, there were no changes to these policies.
Going Concern
The Audit Committee, at the request of the Board,
considered the ability of the Company to adopt the going
concern basis for the preparation of the financial
statements. Having reviewed the Company’s financial
position, the Committee is satisfied that it is appropriate
for the Board to prepare the financial statements for the
year ended 31 January 2025 on a going concern basis.
The Committee’s review of the Company’s financial
position included consideration of the cash position; the
diversification of the portfolio; and an analysis of
portfolio liquidity, which estimated liquidation c.72% of
the portfolio within two weeks (based on current market
volumes with 20% participation). Stress testing was also
conducted as described below. Further information is
provided on page 69.
Viability Statement
The Committee considered, again on behalf of the Board,
the longer-term viability of the Company in connection
with the Board’s statement in the Strategic Report (see
page 29). The Committee reviewed the Company’s
financial position (including its cash flows and liquidity
position), the principal risks and uncertainties and the
results of stress tests.
53
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
The stress tests modelled the impact of one or more of
the principal risks occurring. The tests assumed
substantial falls in the Company’s NAV and reductions in
the liquidity of the portfolio and then modelled the
effect this would have on the Company’s expenses and
the Company’s ability to meet its liabilities as they fell
due. Further details of the stress tests and the scenarios
considered are provided in note 1 to the financial
statements. Based on the results of these tests the
Committee concluded it was reasonable for the Board to
expect that the Company will be able to continue in
operation and meet its liabilities as they fall due over the
next five financial years.
Internal Controls and Risk Management
The Board is ultimately responsible for the Company’s
risk management and internal control systems and for
reviewing their effectiveness. Operational responsibility
is delegated to the Audit Committee.
A description of the principal risks facing the Company
and an explanation of how they are managed is provided
in the Strategic Report on pages 25 to 28. The Directors
have a robust process for identifying, evaluating and
managing the risks faced by the Company, including
emerging risks, which are recorded in a risk schedule.
The Committee reviewed the risk schedule at each of its
three meetings during the year. One of the Committee
meetings was a dedicated meeting to evaluate the
Company’s risks, identify emerging risks, and discuss the
Board’s approach to monitoring and managing them. The
Audit Committee, on behalf of the Board, assessed the
likelihood of occurrence and the possible impact of each
risk. The Committee then recorded the mitigating
controls in place.
As an externally managed investment trust, the
Company is reliant on the operational systems of its
service providers and this is reflected in the Company’s
internal controls structure, which is summarised on
page37. The Company’s internal controls are designed to
manage and mitigate against financial, investment,
reporting, compliance and governance risks. As such, the
controls aim to ensure that, inter alia:
> The assets of the Company are safeguarded;
> Proper accounting records are kept;
> The Company’s financial information is reliable and
clearly communicated to shareholders;
> There is an effective governance and oversight
system in place;
> The Portfolio Manager complies with the Company’s
investment policy; and
> The Company complies with all legal and regulatory
requirements.
Internal control systems are designed to manage, rather
than eliminate, the risk of failure to achieve the
Company’s strategic objectives and can provide only
reasonable and not absolute assurance against material
misstatement or loss.
The Board and the Committee monitored the Company’s
risk management and internal control framework
throughout the year through the review of reports from
the principal service providers, as set out on page 37. The
principal service providers each provided a letter
confirming that there had been no material changes in
their internal controls between the date of their internal
controls report and the date of this report.
To supplement this annual review, the Committee
periodically carries out due diligence visits to the offices
of the Company’s principal service providers. During the
year, members of the Committee visited the offices of
JPMorgan in Bournemouth, where the agenda covered
network management, risk management, cyber security,
business resilience, trade and tax services. The
Committee also visited the offices of Stewart Investors
in Edinburgh to gain a better understanding of their risk
management, investment compliance and information
security functions. The Committee is planning to visit the
offices of Equiniti, the Company’s registrar, and
Frostrow, the AIFM, in due course.
Following its annual review of the internal controls
environment, the Committee concluded that there were
no significant control weaknesses or other issues that
were required to be brought to the attention of the
Board; there were no changes to the Company’s risk
management processes during the year and no
significant failings or weaknesses in the internal controls
framework were identified.
Accordingly, the Committee is satisfied that appropriate
systems have been in place for the year under review and
up to the date of approval of this report.
Half Year Report
The Committee reviewed the Half Year Report including
the unaudited financial statements, to ensure that the
accounting policies were consistent with those applied in
the annual financial statements and that the report met
the requirements of the FCA’s Disclosure Guidance and
Transparency Rules.
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Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Audit Committee Report continued
Depositary
During the year, the Committee reviewed reports from
the Depositary on their regulatory oversight and due
diligence duties. Nothing material was brought to the
attention of the Committee; no breaches or pricing
errors were reported during the year.
Investment Trust Status
The Committee sought and received confirmation from
Frostrow that the Company continues to comply with
Section 1158 of the Corporation Tax Act 2010, so that its
status as an investment trust is maintained.
Withholding Tax
The Committee monitored the reclamation of
withholding tax, receiving updates from Frostrow on the
process and the appointment of specialist local agents. In
the year under review, Grant Thornton LLP provided
services to the Company as tax agents in Taiwan, Ernst &
Young in India and S.F.Ahmed & Co. in Bangladesh.
Taxation
As an investment trust, the Company is generally not
subject to UK tax on capital gains. However Indian
capital gains tax arises on the sale of Indian securities
(see note 5 to the financial statements on page71 for
further information). The Committee has been
monitoring the provision for Indian capital gains tax
arising on the unrealised gains on Indian securities, which
has increased to £13,645,000 as at 31January 2025
(2024: £11,206,000), receiving regular updates on the
position. A local tax specialist (Ernst & Young LLP) has
been appointed to ensure that tax returns and any tax
due are calculated accurately and in line with the
relevant legislation.
Internal Audit
The Committee considered whether there was a need
for the Company to have an internal audit function.
Asthe Company delegates its day-to-day operations to
third parties and has no employees, the Committee
concluded that there was no such need.
Other Activities During the Year
In addition to carrying out its principal duties, the
Committee also reviewed:
> the Committee’s terms of reference;
> the Company’s policy on the engagement of the
external auditor for non-audit services;
> the Company’s policy on former employees of the
Company’s Auditor, Portfolio Manager or AIFM
joining the Board;
> compliance reports submitted by Frostrow and
Stewart Investors;
> Stewart Investors’ list of approved brokers,
commission rates and the amount of commission paid
by the Company throughout the year;
> the Company’s anti-bribery and corruption policy;
> the Company’s commitment to the prevention of the
criminal facilitation of tax evasion; and
> the Company’s audit tender guidelines.
External Auditor
Appointment and Tenure
BDO LLP (“BDO”) was the Auditor for the financial year
and this was their fifth audit of the Company.
Peter Smith was the audit partner for the financial year
under review and he has been the audit partner since
BDO’s initial engagement. Accordingly, this was
Mr Smith’s final audit of the Company as audit partner
and he will be succeeded by Mr Jamie Smith.
As a public company listed on the London Stock
Exchange, the Company is subject to mandatory auditor
rotation requirements. Based on these requirements,
another tender process will be conducted no later than
2030. The Committee will, however, continue to consider
annually the need to go to tender for audit quality,
remuneration or independence reasons.
The Audit
The Committee reviewed BDO’s audit plan on
26September 2024. The review considered, inter alia,
the scope of the audit, the level of materiality, the audit
risks identified by BDO, the Auditor’s approach to testing
the portfolio, and pertinent regulatory developments.
No modifications were required to the audit approach.
The Committee met with BDO on 26March 2025 to
discuss the progress of the audit andthe draft Annual
Report. The Committee then met BDOon 16 April 2025
to review formally the outcome of theaudit.
The Auditor was provided with an opportunity to meet
with the Committee without the AIFM or the Portfolio
Manager being present. No concerns were raised by the
Auditor or the Audit Committee in relation to the service
provided by the AIFM, the Portfolio Manager, or any other
third-party service provider. There were no material or
significant adverse matters brought to the Audit
Committee’s attention in respect of the 2025audit, which
should be brought to shareholders’ attention.
Remuneration
The Committee approved a fee of £48,000 for the audit
of the year ended 31 January 2025 (2024: £45,800).
Thisrepresents an increase of 4.8% compared with the
previous year’s fee.
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Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Independence and Effectiveness
The Committee evaluated the independence of the
Auditor and the effectiveness of the external audit. In
order to fulfil this responsibility, the Committee
reviewed:
> the senior audit personnel in the audit plan, in order
to ensure that there were sufficient, suitably
experienced staff with knowledge of the investment
trust sector working on the audit;
> the steps the Auditor takes to ensure its
independence and objectivity;
> the statement by the Auditor that they remain
independent within the meaning of the relevant
regulations and their professional standards;
> the audit quality review results published by the FRC
and BDO’s response to the findings;
> the extent of any non-audit services provided by the
Auditor (there were none during the year under
review);
> the Company’s policy on former employees of the
Auditor (and other service providers) joining the
Board;
> the Auditor’s fulfilment of the agreed audit plan,
including their ability to communicate with
management and to resolve any issues promptly and
satisfactorily;
> the presentation of the audit findings including, in
particular, the Auditor’s commentary on the
Company’s system of internal controls and the audit
partner’s response to questions from the Committee;
and
> feedback from BDO and Frostrow as the AIFM and
Company Secretary on their working relationship.
The Committee is satisfied with the Auditor’s
independence and the effectiveness of the audit and the
audit partner has confirmed BDO’s willingness to continue
to act as Auditor for the forthcoming financial year.
Therefore the Committee recommended to the Board,
and the Board subsequently resolved, that it be
recommended to shareholders that BDO be reappointed
as the Company’s external auditor for another year. BDO’s
re-appointment is subject to shareholder approval at the
next AGM to be held in July and details can be found in the
Notice of AGM beginning on page101.
Non-Audit Services
BDO LLP did not carry out any non-audit work during
the year. Pursuant to the Company’s non-audit services
policy, the Committee is required to approve the
engagement of the Auditor for any non-audit work.
Acopy of the Company’s non-audit services policy can
be found on the Company’s website at
www.pacific-assets.co.uk.
Effectiveness of the Committee
The Committee’s performance over the past year was
reviewed as part of the annual Board evaluation. The
evaluation considered the composition of the Committee
and the efficacy of Committee meetings, as well as
assessing the Committee’s role in monitoring and
overseeing the Company’s financial reporting and
accounting, risk management and internal controls,
compliance with corporate governance regulations and
the assessment of the external audit.
Iam pleased to confirm that the evaluation result was
positive and no matters of concern or requirements for
change were highlighted.
Nandita Sahgal FCA
Chair of the Audit Committee
29 April 2025
56
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Directors’
Remuneration
Report
The law requires the Auditor to audit certain disclosures
in this report. Where disclosures have been audited, they
are indicated as such and the audit opinion is included in
the Auditor’s report to shareholders on pages 51 to 55.
The Engagement & Remuneration Committee considers
the framework for the remuneration of the Directors.
Itreviews the ongoing appropriateness of the Company’s
remuneration policy and the individual remuneration of
Directors by reference to the activities of the Company
and in comparison with other companies of a similar
structure and size. This is in line with the AIC Code.
The simple fee structure reflects the non-executive
nature of the Board, which itself reflects the Company’s
business model as an externally managed investment
trust. Accordingly, statutory requirements relating to
executive directors’ and employees’ pay do not apply.
The Engagement & Remuneration Committee met once
during the year and approved a small increase in the level
of fees paid to the Directors, to take effect from 1
February 2025. The fees for the current year and the
annual percentage change in directors’ fee rates over the
past five years are shown in the table below.
Directors’ Fees
The Directors as at the date of this report received the
fees listed in the table on page 57. These exclude
employer’s national insurance contributions,
ifapplicable. No other forms of remuneration were
received by the Directors and so fees represent the total
remuneration of each Director.
No communications have been received from
shareholders regarding Directors’ remuneration and no
remuneration consultants were engaged during the year.
The Company’s Articles of Association provide that
Directors are entitled to be reimbursed for reasonable
expenses incurred by them in connection with the
performance of their duties and attendance at Board and
General Meetings.
Under HMRC guidance, travel expenses and other out of
pocket expenses may be considered as taxable benefits
for the Directors. Where expenses reimbursed to the
Directors are classed as taxable under HMRC guidance,
they are shown in the taxable expenses column of the
Directors’ remuneration table below and include the
associated tax liability settled by the Company.
Statement from the Chair
As Chair of the Engagement and Remuneration Committee,
Iam pleased to present the Directors’ Remuneration Report to
shareholders. The Directors’ Remuneration Report is subject
to an annual advisory vote and therefore an ordinary resolution
for the approval of this report will be put to shareholders at the
Company’s forthcoming Annual General Meeting.
Annual Percentage Change in Directors’ Remuneration
2026 2025 2024 2023 2022
Fee Level Fee Level Fee Level Fee Level Fee Level
(per annum) (per annum) (per annum) (per annum) (per annum)
Board Role (projected)
Chair £48,000 £46,500 £44,000 £42,000 £40,500
+3.2% +5.7% +4.8% +3.7% +6.6%
Audit Chair £41,200 £40,000 £37,000 £35,000 £33,500
+3.0% +8.1% +5.7% +4.5% +8.1%
Senior Independent Director
1
£36,000 £35,000 N/A N/A N/A
+2.9% – – – –
Director £34,500 £33,500 £31,500 £30,000 £29,000
+3.0% +6.3% +5.0% +3.4% +7.4%
1
An additional fee was awarded to the Senior Independent Director with effect from 1 February 2024.
57
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Loss of Office
Directors do not have service contracts with the
Company but are engaged under letters of appointment.
These specifically exclude any entitlement to
compensation upon leaving office for whatever reason.
Relative Cost of Directors’
Remuneration
The bar chart below shows the comparative cost of
Directors’ fees compared with the level of dividend
distribution and Company expenses for the years ended
31 January 2024 and 2025.
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Directors’ Interests in Shares
(audited)
The Directors’ interests in the share capital of the
Company at the year end are shown in the table below:
Number of shares held
31 January 31 January
2025 2024
Andrew Impey Beneficial 17,000 17,000
Sian Hansen Beneficial 15,880 15,880
Robert Talbut Beneficial 9,611 9,611
Edward Troughton Beneficial 18,357 18,357
Nandita Sahgal Beneficial 1,426 –
June Ang – – –
After the year end, Andrew Impey purchased a further
3,000 shares in the Company on 5 February 2025 and
June Ang purchased 10,000 shares in the Company on
19February 2025.
The Directors are not required to own shares in the
Company.
At the year end, members of the Stewart Investors team
held, in aggregate, 575,878 shares in the Company.
Directors’ Remuneration for the Year (audited)
The Directors who served in the year received the following remuneration:
Total Total
Fixed Taxable Remun- Fixed Taxable Remun-
Date of Fees Expenses eration Fees Expenses eration
Appointment 2025 2025 2025 2024 2024 2024
to the Board £ £ £ £ £ £
Andrew Impey
1
1 August 2022 46,500 – 46,500 39,833 – 39,833
June Ang 26 September 2024 11,553 – 11,553 – – –
Sian Hansen 3 August 2015 33,500 – 33 ,500 31,500 – 31,500
Robert Talbut 23 September 2016 35,000 100 35,100 31,500 270 31,770
Edward Troughton 18 December 2019 33,500 – 33,500 31,500 – 31,500
Nandita Sahgal 1 January 2024 37,323 – 37,323 2,625 – 2,625
James Williams
2
1 October 2013 – – – 14,667 239 14,906
Charlotta Ginman
3
9 October 2014 17,742 – 17,742 37,000 – 37,000
215,118 100 215,218 188,625 509 189,134
1
Appointed as Chair of the Board on 1 June 2023.
2
Retired from the Board on 31 May 2023.
3
Retired from the Board on 9 July 2024.
58
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Total Shareholder Return for the
Ten Years to 31 January 2025
MSCI All Country Asia ex Japan (total return, sterling adjusted) (+185.2%)
Share Price To tal Return (+201.0%)
%
80
10
0
12
0
14
0
16
0
18
0
200
22
0
Jan
15
Jan
16
Jan
18
Jan
21
Jan
17
Jan
20
Jan
19
Jan
22
Jan
23
Jan
24
Ja
n
25
Source: Morningstar
Rebased to 100 as at 31 January 2015
In accordance with statutory reporting requirements,
the Directors’ Remuneration Report is required to
compare the Company’s share price total return with
that of a market index. The Board has identified the
MSCI All Country Asia ex Japan Index measured on a
total return, sterling adjusted basis as a suitable
comparator for the Company’s performance.
Approval
A resolution to approve the Directors’ Remuneration
Report for the year ended 31 January 2024 was put to
shareholders at the AGM held on 9 July 2024. Ofthe
proxy votes cast, 99.87% were in favour and 0.13%
wereagainst.
A resolution to approve the Directors’ Remuneration
Policy was last put to shareholders at the AGM held on
3July 2023. Of the proxy votes cast, 99.84% were in
favour and 0.16% were against.
Directors’ Remuneration Policy
The Remuneration Policy provides that fees payable to
the Directors should reflect the time spent by the Board
on the Company’s affairs and the responsibilities borne
by the Directors. Remuneration should be sufficient to
enable candidates of a high calibre to be recruited.
Directors are remunerated in the form of fees payable
monthly in arrears, paid to the Director personally.
Thereare no long-term incentive schemes, bonuses,
share option schemes or pension arrangements and the
fees are not specifically related to the Directors’
performance, either individually or collectively.
TheCompany does not have any employees.
None of the Directors has a service contract. The terms
of their appointment provide that Directors shall be
subject to election at the first AGM after their
appointment and to annual re-election thereafter. The
terms also provide that a Director may be removed
without notice and that compensation will not be due on
leaving office.
The Directors’ Remuneration Policy is subject to a
binding shareholder vote every three years. It was last
approved at the AGM held in 2023 and it is therefore
expected that it will next be recommended to
shareholders at the AGM in 2026. There were no
changes to the Remuneration Policy during the year
andno changes are proposed for the year ending
31January2026. If, however, the Directors propose to
vary the Remuneration Policy, shareholder approval for
the new policy will be sought at a general meeting. The
Committee and the Board review the Remuneration
Policy annually to ensure that it remains appropriate.
Limit on Directors’ Remuneration
The remuneration for the non-executive Directors is
determined within the limits set out in the Company’s
Articles of Association. The present limit is £300,000 in
aggregate per annum.
Sian Hansen
Chair of the Engagement & Remuneration Committee
29 April 2025
Directors’ Remuneration Report continued
59
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Independent
Auditor’s Report
to the Members of Pacific Assets Trust plc
Opinion on the financial
statements
In our opinion the financial statements:
> give a true and fair view of the state of the Company’s
affairs as at 31 January 2025 and of its profit for the
year then ended;
> have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting
Practice; and
> have been prepared in accordance with the
requirements of the Companies Act 2006.
We have audited the financial statements of Pacific
Assets Trust plc (the “Company”) for the year ended
31January 2025 which comprise the Income Statement,
the Statement of Changes in Equity, the Statement of
Financial Position, and notes to the financial statements,
including a summary of principal accounting policies. The
financial reporting framework that has been applied in
their preparation is applicable law and United Kingdom
Accounting Standards, including Financial Reporting
Standard 102 The Financial Reporting Standard
applicable in the UK and Republic of Ireland (United
Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the
audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our
opinion. Our audit opinion is consistent with the
additional report to the Audit Committee.
Independence
Following the recommendation of the Audit Committee,
we were appointed by the Board of Directors on
17November 2020 to audit the financial statements for
the year ended 31 January 2021 and subsequent
financial periods. The period of total uninterrupted
engagement including retenders and reappointments is
five years, covering the years ended 31 January 2021 to
31 January 2025. We remain independent of the
Company in accordance with the ethical requirements
that are relevant to our audit of the financial statements
in the UK, including the FRC’s Ethical Standard as applied
to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements. The non-audit services prohibited by that
standard were not provided to the Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded
that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements
is appropriate. Our evaluation of the Directors’
assessment of the Company’s ability to continue to adopt
the going concern basis of accounting included:
> Evaluating the appropriateness of the Directors’
method of assessing the Company’s ability to
continue as a going concern in light of economic and
market conditions by reviewing the information used
by the Directors in completing their assessment;
> Assessing the projected management fees for the
year to check that it was in line with the net asset
value and the projected market growth forecasts for
the following year;
> Assessing the appropriateness of the Directors’
assumptions and judgements made in both their base
case and stress tested forecasts, including
consideration of the available cash resources relative
to forecast expenditure and commitments;
> Challenging the Directors’ assumptions and
judgements made in their forecasts including
performing an independent analysis of the liquidity
of the portfolio, which underpins the ability of the
Company to meet liabilities as they fall due; and
> Performing a review of the Directors’ stress testing
on the investment portfolio for reasonability.
Based on the work we have performed, we have not
identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast
significant doubt on the Company’s ability to continue as a
going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
60
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Independent Auditor’s Report continued
In relation to the Company’s reporting on how it has
applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to
the Directors’ statement in the financial statements
about whether the Directors considered it appropriate
to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the
Directors with respect to going concern are described in
the relevant sections of this report.
Overview
2025 2024
Key Audit
Matters
Valuation and ownership
of quoted investments
Materiality Company financial statements as a whole
£5.04m (2024: £4.64m) based on 1%
(2024: 1%) of net assets.
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of
the Company and its environment, including the
Company’s system of internal control, and assessing the
risks of material misstatement in the financial
statements. We also addressed the risk of management
override of internal controls, including assessing whether
there was evidence of bias by the Directors that may
have represented a risk of material misstatement.
Key Audit Matters
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in our
audit of the financial statements of the current period
and include the most significant assessed risks of
material misstatement (whether or not due to fraud) that
we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of
resources in the audit, and directing the efforts of the
engagement team. These matters were addressed in the
context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matter How the scope of our audit addressed the Key Audit Matter
Valuation and
ownership of
quoted
investments
(Note 8 to the
financial
statements)
The investment portfolio at the
year-end comprised of quoted
equity investments held at fair
value through profit or loss.
We considered the valuation and
ownership of the quoted
investments to be a significant
audit area as investments
represent the most significant
balance in the financial statements
and underpins the principal
activity of the entity.
There is a risk that the bid price
used as a proxy for fair value of
investments held at the reporting
date is inappropriate.
There is an element of judgement
regarding whether there is an
active market for securities and
therefore the appropriate
classification in the fair value
hierarchy.
We responded to this matter by testing the valuation and
ownership of the whole portfolio of investments. We
performed the following procedures:
> Confirmed that the year-end bid price was used by
agreeing to externally quoted prices;
> Recalculated the valuation of investments held at the
reporting date by multiplying the number of shares held
per the statement obtained from the custodian by the
valuation per share;
> Assessed the appropriateness of the classification in the
fair value hierarchy with reference to trading volume on
relevant exchanges; and
> Assessed whether there were contra indicators, such as
liquidity considerations, to suggest bid price is not the
most appropriate indication of fair value by considering
the realisation period for individual holdings.
61
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Key Audit Matter How the scope of our audit addressed the Key Audit Matter
Valuation and
ownership of
quoted
investments
cont.
Given the significance of
investments on the Statement of
Financial Position, it is necessary
to ensure that the Company has
appropriate title over investments.
For these reasons and given the
materiality of the balance in
relation to the financial
statements, we considered this to
be a Key Audit Matter.
To test for ownership of investments, we obtained direct
confirmation of the units held per investment from the
custodian.
Key observations:
Based on our procedures performed, we did not identify any
matters to suggest that the valuation and ownership of the
quoted equity investments were inappropriate.
Our application of materiality
We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the
magnitude by which misstatements, including omissions,
could influence the economic decisions of reasonable users
that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the
probability that any misstatements exceed materiality, we
use a lower materiality level, performance materiality, to
determine the extent of testing needed. Importantly,
misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the
nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and
performance materiality as follows:
Company financial statements
2025
£m
2024
£m
Materiality 5.04 4.64
Basis for determining
materiality
1% of Net assets
Rationale for the
benchmark applied
As an investment trust, the net asset value is the key measure of
performance for users of the financial statements.
Performance materiality 3.78 3.48
Basis for determining
performance materiality
75% of materiality
Rationale for the percentage
applied for performance
materiality
The level of performance materiality applied was set after having
considered a number of factors including the expected total value of known
and likely misstatements and the level of transactions in the year.
62
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Independent Auditor’s Report continued
Reporting threshold
We agreed with the Audit Committee that we would
report to them all individual audit differences in excess
of £250,000 (2024: £232,000). We also agreed to
report differences below this threshold that, in our view,
warranted reporting on qualitative grounds.
Other information
The Directors are responsible for the other information.
The other information comprises the information
included in the Annual Report other than the financial
statements and our auditor’s report thereon. Our
opinion on the financial statements does not cover the
other information and, except to the extent otherwise
explicitly stated in our report, we do not express any
form of assurance conclusion thereon. Our responsibility
is to read the other information and, in doing so, consider
whether the other information is materially inconsistent
with the financial statements, or our knowledge obtained
in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we
are required to determine whether this gives rise to a
material misstatement in the financial statements
themselves. If, based on the work we have performed,
we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The Listing Rules require us to review the Directors’
statement in relation to going concern, longer-term
viability and that part of the Corporate Governance
Statement relating to the Company’s compliance with the
provisions of the UK Corporate Governance Code
specified for our review.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent
with the financial statements, or our knowledge obtained
during the audit.
Going concern and longer-term viability
> The Directors’ statement with regards to the
appropriateness of adopting the going concern basis
of accounting and any material uncertainties
identified set out on page 29; and
> The Directors’ explanation as to their assessment of
the Company’s prospects, the period this assessment
covers and why the period is appropriate set out on
page 29.
Other Code provisions
> Directors’ statement on fair, balanced and
understandable set out on page 52;
> Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set
out on page 25;
> The section of the annual report that describes the
review of effectiveness of risk management and
internal control systems set out on page 53; and
> The section describing the work of the Audit
Committee set out on pages 51 to 55.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work
performed during the course of the audit, we are required
by the Companies Act 2006 and ISAs (UK) to report on
certain opinions and matters as described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the
course of the audit:
> the information given in the Strategic report and the
Directors’ report for the financial year for which the
financial statements are prepared is consistent with
the financial statements; and
> the Strategic report and the Directors’ report have
been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of the
Company and its environment obtained in the course of
the audit, we have not identified material misstatements
in the strategic report or the Directors’ report.
Directors’ remuneration
In our opinion, the part of the Directors’ remuneration
report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Corporate governance statement
In our opinion, based on the work undertaken in the course
of the audit the information about internal control and risk
management systems in relation to financial reporting
processes and about share capital structures, given in
compliance with rules 7.2.5 and 7.2.6 in the Disclosure
Guidance and Transparency Rules sourcebook made by the
Financial Conduct Authority (the FCA Rules), is consistent
with the financial statements and has been prepared in
accordance with applicable legal requirements.
In the light of the knowledge and understanding of the
Company and its environment obtained in the course of
the audit, we have not identified material misstatements
in this information.
63
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
In our opinion, based on the work undertaken in the
course of the audit information about the Company’s
corporate governance code and practices and about its
administrative, management and supervisory bodies and
their committees complies with rules 7.2.2, 7.2.3 and
7.2.7 of the FCA Rules.
We have nothing to report arising from our responsibility
to report if a corporate governance statement has not
been prepared by the Company.
Matters on which we are required to report by
exception
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
> adequate accounting records have not been kept, or
returns adequate for our audit have not been
received from branches not visited by us; or
> the financial statements and the part of the
Directors’ remuneration report to be audited are not
in agreement with the accounting records and
returns; or
> certain disclosures of Directors’ remuneration
specified by law are not made; or
> we have not received all the information and
explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors’
Responsibilities, the Directors are responsible for the
preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary
to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud
or error.
In preparing the financial statements, the Directors are
responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going
concern basis of accounting unless the Directors either
intend to liquidate the Company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free
from material misstatement, whether due to fraud or
error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of
assurance but is not a guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users
taken on the basis of these financial statements.
Extent to which the audit was capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities,
including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
> Our understanding of the Company and the industry
in which it operates;
> Discussion with the Alternative Investment Fund
Manager, Administrator and Those Charged With
Governance;
> Review of any legal correspondences; and
> Obtaining and understanding of the Company’s
policies and procedures regarding compliance with
laws and regulations.
We considered the significant laws and regulations to be
Companies Act 2006, the FCA listing and DTR rules, the
principles of the AIC Code of Corporate Governance,
industry practice represented by the AIC SORP, Financial
Reporting Standard 102, and the Company’s qualification
as an Investment Trust under UK tax legislation as any
non-compliance of this would lead to the Company losing
various deductions and exemptions from corporation tax.
Our procedures in respect of the above included:
> Agreement of the financial statement disclosures to
underlying supporting documentation;
> Enquiries of the Alternative Investment Fund
Manager and Those Charged With Governance
relating to the existence of any non-compliance with
laws and regulations;
> Reviewing minutes of meeting of Those Charged
With Governance throughout the period for
evidence of instances of non-compliance with laws
and regulations; and
> Reviewing the calculation in relation to Investment
Trust compliance to check that the Company was
meeting its requirements to retain their Investment
Trust Status. This included a review of other
qualitative factors and ensuring compliance
withthese.
64
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Independent Auditor’s Report continued
Fraud
We assessed the susceptibility of the financial statement
to material misstatement including fraud.
Our risk assessment procedures included:
> Enquiry with the Alternative Investment Fund
Manager and Those Charged With Governance
regarding any known or suspected instances of fraud;
> Review of minutes of meeting of Those Charged With
Governance for any known or suspected instances
offraud;
> Discussion amongst the engagement team as to how
and where fraud might occur in the financial
statements; and
> Obtaining an understanding of the control environment
in monitoring compliance with laws and regulations.
Based on our risk assessment, we considered the areas
most susceptible to be management override of controls.
Our procedures in respect of the above included:
> In addressing the risk of management override of
controls, we:
> Performed a review of estimates and judgements
applied by management in the valuation of
investments, the allocation of dividend income
between revenue and capital and the
appropriateness of the provision for Indian
capital gains tax to assess their appropriateness
and the existence of any systematic bias;
> Considered the opportunity and incentive to
manipulate accounting entries and target tested
relevant adjustments made in the period end
financial reporting process;
> Reviewed for significant transactions outside
normal course of business;
> Incorporated an element of unpredictability in the
nature, timing and extent of audit procedures; and
> Performed a review of unadjusted audit
differences, if any, for indications of bias or
deliberate misstatement.
We also communicated relevant identified laws and
regulations and potential fraud risks to all engagement
team members, who were deemed to have the
appropriate competence and capabilities and remained
alert to any indications of fraud or non-compliance with
laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks
of material misstatement in the financial statements,
recognising that the risk of not detecting a material
misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are
inherent limitations in the audit procedures performed
and the further removed non-compliance with laws and
regulations is from the events and transactions reflected
in the financial statements, the less likely we are to
become aware of it.
A further description of our responsibilities is available
on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Use of our report
This report is made solely to the Company’s members, as
a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company’s
members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company
and the Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
Peter Smith (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
29 April 2025
BDO LLP is a limited liability partnership registered in
England and Wales (with registered number OC305127).
65
Governance
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025 Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
65
Financial Statements
In this section
66 Income Statement
67 Statement of Changes in Equity
68 Statement of Financial Position
69 Notes to the Financial Statements
66
Financial Statements
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Income Statement
for the year ended 31 January 2025
Year ended 31 January 2025 Year ended 31 January 2024
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Gains/(losses) on investments 8 – 49,989 49,989 – (2,018) (2,018)
Exchange differences – (414) (414) – (642) (642)
Income 2 9,687 – 9,687 7,861 – 7, 861
Portfolio management
and AIFM fees 3 (1,211) (3,634) (4,845) (1,123) (3,369) (4,492)
Other expenses 4 (863) – (863) (795) – (795)
Return/(loss) before taxation 7,613 45,941 53,554 5,943 (6,029) (86)
Taxation 5 (1,049) (7,684) (8,733) (772) (5,203) (5,975)
Return/(loss) after taxation 6,564 38,257 44,821 5,171 (11,232) (6,061)
Return/(loss) per share (p) 7 5.4 31.7 37.1 4.3 (9.3) (5.0)
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.
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.
The accompanying notes on pages 69 to 79 are an integral part of these statements.
67
Financial Statements
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
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 2023 15,120 8,811 1,648 14,572 426,502 7,009 473,662
(Loss)/return after taxation – – – – (11,232) 5,171 (6,061)
Ordinary dividends paid 6 – – – – – (2,782) (2,782)
At 31 January 2024 15,120 8,811 1,648 14,572 415,270 9,398 464,819
Return after taxation – – – – 38,257 6,564 44,821
Repurchase of own shares
for cancellation (46) – 46 – (1,361) – (1,361)
Ordinary dividends paid 6 – – – – – (4,838) (4,838)
At 31 January 2025 15,074 8,811 1,694 14,572 452,166 11,124 503,441
The accompanying notes on pages 69 to 79 are an integral part of these statements.
Statement of
Changes in Equity
for the year ended 31 January 2025
68
Financial Statements
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
2025 2024
Notes £’000 £’000 £’000 £’000
Fixed assets
Investments 8 510,203 470,109
Current assets
Debtors 9 1,252 1,032
Cash 8,028 6,191
9,280 7,223
Creditors (amounts falling due within one year) 10 (2,397) (1,307)
Net current assets 6,883 5,916
Total assets less current liabilities 517,0 86 476,025
Creditors (amounts falling due after one year)
Provision for liabilities 11 (13,645) (11,206)
Net assets 503,441 464,819
Capital and reserves
Called up share capital 12 15,074 15,120
Share premium account 8,811 8,811
Capital redemption reserve 15 1,694 1,648
Special reserve 15 14,572 14,572
Capital reserve 15 452,166 415,270
Revenue reserve 15 11,124 9,398
Equity shareholders’ funds 503,441 464,819
Net asset value per Ordinary Share (p) 13 417. 5 p 384.3p
The financial statements on pages 66 to 79 were approved and authorised for issue by the Board of Directors on
29April 2025 and signed on its behalf by:
Andrew Impey
Chair
The accompanying notes on pages 69 to 79 are an integral part of these statements.
Pacific Assets Trust Public Limited Company – Company Registration Number: SC091052 (Registered in Scotland)
Statement of
Financial Position
as at 31 January 2025
69
Financial Statements
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
1. Accounting Policies
A summary of the principal accounting policies adopted is set out below or as appropriate within the relevant note to
the financial statements.
(a) Basis of Accounting
These financial statements have been prepared under UK Company Law, FRS 102 ‘The Financial Reporting Standard
applicable in the UK and Ireland’, and in accordance with guidelines set out in the Statement of Recommended
Practice (“SORP”), published in July 2022, for Investment Trust Companies and Venture Capital Trusts issued by the
Association of Investment Companies, the historical cost convention, as modified by the valuation of investments at
fair value through profit or loss.
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 equity.
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.
Going concern
The Directors are required to make an assessment of the Company’s ability to continue as a going concern and have
concluded that the Company has adequate resources to continue in operational existence for at least 12 months from
the date these financial statements were approved.
In making this assessment, the Directors have considered a wide variety of emerging and current risks to the
Company, as well as the mitigation strategies that are in place. The Board has also reviewed stress-testing and
scenario analyses prepared by the AIFM. The stress tests and scenario analyses considered the effect of various
downturns, based on historic bear markets, on the asset value and expenses of the Company. The tests modelled the
impact of decreases of up to and over 80% on the value of the investment portfolio and decreases in current market
liquidity of up to 80%.
These tests are carried out as an arithmetic exercise, which can apply equally to any set of circumstances in which
asset value and income are significantly impaired. It was concluded that even in an extreme downside scenario, the
Company would be able to continue to meet its liabilities as they fell due. Whilst the economic future is uncertain, the
opinion of the Directors is that there is no foreseeable downside scenario that would threaten the Company’s ability
to continue to meet its liabilities as they fall due.
Based on the information available to the Directors at the time of this report, including the results of the stress tests
and scenario analyses, and having taken account of the liquidity of the investment portfolio, the Company’s cash flow
and borrowing position (the Company is not currently geared), the Directors are satisfied that the Company has
adequate financial resources to continue in operation for at least 12 months from the date of signing these financial
statements and that, accordingly, it is appropriate to adopt the going concern basis.
Significant Judgement
There is one significant judgement involved in the presentation of the Company’s accounts, being the judgement on
the functional currency of the Company.
The Company’s investments are made in foreign currencies, however the Board considers the Company’s functional
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.
Notes to the Financial
Statements
70
Financial Statements
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Notes to the Financial Statements continued
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.
All values are rounded to the nearest thousand pounds (£’000) except where otherwise indicated.
(c) Cash
Cash is defined as cash at bank and money market funds that are readily convertible to known amounts of cash and
subject to insignificant risk of changes in value.
2. Income
2025 2024
£’000 £’000
Overseas dividends 9,469 7,701
Interest income 218 160
9,687 7,861
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. Overseas dividends are gross of withholding
tax.
Where the Company has elected to receive its dividends in the form of additional shares rather than cash the amount
of cash foregone is recognised in the revenue column with any excess above this recognised in the capital column.
3. Portfolio Management and AIFM Fees
2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Portfolio management fee
– Stewart Investors 1,075 3,227 4,302 996 2,989 3,985
AIFM fee – Frostrow 136 407 543 127 380 507
1,211 3,634 4,845 1,123 3,369 4,492
Frostrow’s AIFM fee is for risk management, corporate management, company secretarial and administrative
services. Further information regarding Stewart Investors and Frostrow’s fees can be found on pages 45 and 46.
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.
71
Financial Statements
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
4. Other Expenses
2025 2024
£’000 £’000
Directors’ fees 215 189
Employers NIC on directors’ remuneration 16 15
Auditor’s remuneration for annual audit 48 46
Depository fees 70 57
Custody fees 195 175
Registrar fees 28 25
Broker retainer 45 38
Listing fees 25 24
Legal and professional fees 26 41
Other expenses 195 185
Total expenses 863 795
For accounting policy, see note 3 on the prior page.
5. Taxation
(a) Analysis of Charge in the Year
2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Overseas taxation 1,224 – 1,224 985 - 985
Indian capital gains tax charge (175) 7,684 7,509 (213) 5,203 4,990
1,049 7,684 8,733 772 5,203 5,975
Overseas tax arose as a result of irrecoverable withholding tax on overseas dividends and Indian capital gains tax.
As an investment trust, the Company is generally not subject to UK tax on capital gains. However, Indian capital gains
tax arises on capital gains on the sale of Indian securities at a rate of 20% on short-term capital gains (defined as those
where the security was held for less than a year) and 12.5% on long-term capital gains. £2,439,000 (2024: £1,456,000)
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 on page75. £5,070,000 (2024: £3,534,000) of the
charge relates to capital gains tax paid on disposals during the year.
72
Financial Statements
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Notes to the Financial Statements continued
(b) Reconciliation of Tax Charge
The UK corporation tax rate was 19% until 31 March 2023 and 25% from 1 April 2023, giving an effective rate of
25.0% for the year (2024: 24.0%). The tax assessed for the year is lower than the corporation tax rate. The
differences are explained below.
The differences are explained below:
2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Total return on ordinary activities
before tax 7,613 45,941 53,554 5,943 (6,029) (86)
Corporation tax charged at 25.0%
(2024: 24.0%) 1,903 11,486 13,389 1,428 (1,449) (21)
Effects of:
(Gains)/losses on investment not subject to
UK corporation tax – (12,291) (12,291) - 485 485
Non-taxable exchange differences – (103) (103) - 154 154
Unutilised management expenses 464 908 1,372 422 810 1,232
Income not subject to corporation tax (2,367) – (2,367) (1,850) - (1,850)
Indian capital gains tax charge
(see note 5a) (175) 7,684 7,509 (213) 5,203 4,990
Overseas taxation 1,224 – 1,224 985 - 985
Tax charge for the year 1,049 7,68 4 8,733 772 5,203 5,975
As at 31 January 2025 the Company had unutilised management expenses and other reliefs for taxation purposes of
£68,461,000 (2024: £62,974,000). It is not anticipated that these will be utilised in the foreseeable future and as such
no related deferred tax asset has been recognised.
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.
73
Financial Statements
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
6. Dividends
Amounts recognised as distributable to shareholders for the year ended 31 January 2025, were as follows:
2025 2024
£’000 £’000
Final dividend paid for the year ended 31 January 2024 of 4.0p per share 4,838 –
Final dividend paid for the year ended 31 January 2023 of 2.3p per share – 2,782
In respect of the year ended 31 January 2025, a final dividend of 4.9p per share has been proposed and will be
reflected in the Annual Report for the year ending 31 January 2026. Details of the ex-dividend and payment dates are
provided on page45.
The Board’s current policy is to pay dividends only out of revenue reserves. Therefore the amount available for
distribution as at 31 January 2025 is £11,124,000 (2024: £9,398,000).
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:
2025 2024
£’000 £’000
Revenue available for distribution by way of dividend for the year 6,564 5,171
Final dividend of 4.9p per share (2024: final dividend of 4.0p) (5,818) (4,838)
Transfer to revenue reserves 746 333
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:
2025 2024
Revenue Capital Total Revenue Capital Total
pence pence pence pence pence pence
Basic 5.4 31.7 37.1 4.3p (9.3)p (5.0)p
The total return per share is based on the total return attributable to shareholders of £44,821,000 (2024: loss of
£6,061,000).
The revenue return per share is based on the net revenue return attributable to shareholders of £6,564,000
(2024: £5,171,000).
The capital return per share is based on the net capital return attributable to shareholders of £38,257,000
(2024:lossof £11,232,000).
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 120,899,602 (2024: 120,958,386).
The calculations of the returns per Ordinary Share have been carried out in accordance with IAS 33 Earnings
perShare.
74
Financial Statements
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Notes to the Financial Statements continued
8. Investments
2025 2024
£’000 £’000
Investments
Opening cost 352,944 320,883
Opening investment holding gains 117,165 153,516
Opening Valuation 470,109 474,399
Purchases at cost 123,228 84,889
Disposal proceeds (133,123) (87,161)
Gains/(losses) on investments 49,989 (2,018)
Valuation at end of year 510,203 470,109
Cost at 31 January 372,632 352,944
Investment holding gains at 31 January 137, 571 117,165
Valuation at 31 January 510,203 470,109
The Company received £133,123,000 (2024: £87,161,000) from investments sold in the year. The book cost of these
investments when they were purchased was £103,540,000 (2024: £52,828,000). 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 £155,000 (2024: £110,000) and transaction
costs on sales of £263,000 (2024: £169,000).
Valuation of Investments
Investments are measured initially and at subsequent reporting dates at fair value. Purchases and sales are
recognised on the trade date when a contract exists whose terms require delivery within the time frame established
by the market concerned. For quoted securities fair value is either bid price or last traded price, depending on the
convention of the exchange on which the investment is listed. Changes in fair value and gains or losses on disposal are
included inthe 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 are in equity shares and have been classified as Level 1 (2023: All Level 1).
9. Debtors
2025 2024
£’000 £’000
Amounts due from brokers 1,008 746
Accrued income 179 279
Other debtors 65 7
1,252 1,032
75
Financial Statements
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
10. Creditors: Amounts Falling Due Within One Year
2025 2024
£’000 £’000
Amounts due to brokers 781 –
Portfolio management fee – Stewart Investors 1,081 1,002
AIFM fee – Frostrow 135 128
Other creditors 400 177
2,397 1,307
11. Provisions for Liabilities
2025 2024
£’000 £’000
Deferred taxation on unrealised capital gains on Indian securities 13,645 11,206
See note 5 for further details and accounting policy.
12. Share Capital
2025 2024
£’000 £’000
Allotted and fully paid:
120,588,386 Ordinary shares of 12.5p each (2024: 120,958,386) 15,074 15,120
During the current and prior year, no Ordinary shares were issued. 370,000 (2024: Nil) Ordinary shares were bought
back for cancellation.
The capital of the Company is managed in accordance with its investment policy which is detailed in the Strategic
Report on pages 22 and 23.
The Company does not have any externally imposed capital requirements.
13. Net Asset Value Per Share
The net asset value per share of 417.5 p (2024: 384.3p) is calculated on net assets of £503,441,000 (2024: £464,819,000)
divided by 120,588,386 (2024: 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 on page 74) 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 shown on page 68.
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;
76
Financial Statements
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Notes to the Financial Statements continued
(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
majority of the investment portfolio could be realised within a week.
Other price risk
The management of other price risk is part of the portfolio management process and is typical of equity investment.
The investment portfolio is managed with an awareness of the effects of adverse price movements through detailed
and continuing analysis with an objective of maximising overall returns to shareholders. Further information on how
the investment portfolio is managed is set out on page 2. 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 £51.0 million (2024: £46.3 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:
2025 Creditors/ 2024 Creditors/
Investments Cash Debtors Provisions Investments Cash Debtors Provisions
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Indian rupee 208,458 437 1,061 (13,942) 218,067 2,063 783 (11,206)
New Taiwanese dollar 80,473 – – – 51,623 5 – –
Chinese renminbi 53,787 – – – 43,006 – – –
Singapore dollar 27,286 485 – – 21,562 688 – –
Indonesian rupiah 27,224 – 15 – 36,489 – – –
Korean won 27,060 – 74 – 25,379 – 95 –
Japanese yen 23,279 – 29 – 37,707 – 106 –
Philippine peso 20,251 – – (484) 4,688 – – –
Hong Kong dollar 17,927 – – – 13,173 – – –
Thai baht 9,672 – – – 9,471 – – –
US dollar 6,508 434 – – – 464 – –
Malaysian ringgit 5,585 – – – 4,586 – – –
Bangladesh taka 2,693 – – – 4,358 – – –
Euro – 8 – – – 2 – –
Total 510,203 1,364 1,179 (14,426) 470,109 3,222 984 (11,206)
At 31 January 2025 the Company had £7,096,000 of sterling cash balances (2024: £2,969,000).
During the year sterling weakened 1.1% (2024: strengthened by 7.5%) 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 £46.4 million
77
Financial Statements
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
(2024:negative £43.3 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 £56.7 million (2024: positive
£52.9million). 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:
2025 2024
£’000 £’000
Cash 8,028 6,191
Debtors 1,252 1,032
9,280 7, 223
All the assets of the Company which are traded on a recognised exchange are held by J.P.Morgan Chase Bank,
theCustodian. 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 on pages 25 to 28.
The credit risk on cash is controlled through the use of counterparties or banks with high credit ratings (rated AA or
higher), assigned by international credit rating agencies. Cash is currently held at JP Morgan Chase Bank. Bankruptcy
or insolvency of such financial institutions may cause the Company’s ability to access cash placed on deposit to be
delayed, limited or lost.
Liquidity risk
The Company’s liquidity risk is managed on an ongoing basis by the Portfolio Manager. Substantially all of the
Company’s portfolio would be realisable within two weeks under normal market conditions. There may be
circumstances where market liquidity is lower than normal. Stress tests have been performed to understand how
long the portfolio would take to realise in such situations. The Board is comfortable that in such a situation the
Company would be able to meet its liabilities as they fall due.
Capital management policies and procedures
The Company’s capital management objectives are to ensure that it will be able to continue as a going concern and to
maximise the return to its equity shareholders.
The Company’s policy on gearing and leverage is set out on page 23. 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 on page 68.
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.
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Financial Statements
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
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 5 on page 71. 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 and Transactions with the Managers
The following are considered to be related parties:
> Frostrow Capital LLP (under the Listing Rules only)
> Stewart Investors (under the Listing Rules only)
> The Directors of the Company.
Details of the relationship between the Company and Frostrow Capital LLP, the Company’s AIFM, are disclosed on
pages45 and 46. During the year ended 31 January 2025, Frostrow earned £543,000 (2024: £507,000) in respect of
company management fees, of which £135,000 (2024: £128,000) was outstanding at the year end.
The Company employs Stewart Investors as its Portfolio Manager. Details of this arrangement are disclosed on page45.
During the year ended 31 January 2025, Stewart Investors earned £4,302,000 (2024: £3,985,000) in respect of
portfolio management fees, of which £1,081,000 (2024: £1,002,000) was outstanding at the year end.
All material related party transactions have been disclosed in notes 3 and4 on pages 70 and 71. Details of the
remuneration and the shareholdings of all Directors can be found on page 57.
Notes to the Financial Statements continued
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
79
Further Information
In this section
80 Glossary of Terms and Alternative Performance Measures (unaudited)
82 Sustainable Finance Disclosure Regulation (“SFDR”) Report (unaudited)
99 Shareholder Information
100 How to Invest
101 Notice of the Annual General Meeting
106 Explanatory Notes to the Resolutions
109 Company Information
80
Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Absolute Performance
Absolute performance is the percentage (%) rise or fall in
the share price of the investment over the stated period.
Relative performance, on the other hand, is the
difference between the absolute return and the
performance of the market (or other similar
investments), which is gauged by a benchmark, or index
such as the MSCI AC Asia ex Japan Index.
AIFMD
The Alternative Investment Fund Managers Directive
(the ‘Directive’) is a European Union Directive that
entered into force on 22 July 2013. The Directive, which
was retained in UK law following the withdrawal of the
UK from the European Union, regulates fund managers
that manage alternative investment funds (including
investment trusts).
Where an entity falls within the scope of the Directive,
it must appoint a single Alternative Investment Fund
Manager (‘AIFM’). The core functions of an AIFM are
portfolio and risk management. An AIFM can delegate
one but not both of these functions. The entity must also
appoint an independent depositary whose duties include
the following: safeguarding and verification of the
ownership of assets; monitoring cashflows; and ensuring
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.
2025 2024
pence pence
Average share price for the year 369.1 363.1
Average net asset value for the year 417.3 388.0
Average Discount 11.5% 6.4%
Bottom-Up Approach
An investment approach that focuses on the analysis of
individual stocks rather than the significance of
macroeconomic factors.
Discount or Premium
A description of the difference between the share price
and the net asset value per share. The size of the discount
or premium is calculated by subtracting the share price
from the net asset value per share and is usually
expressed as a percentage (%) of the net asset value per
share. If the share price is higher than the net asset value
per share the result is a premium. If the share price is
lower than the net asset value per share, the shares are
trading at a discount.
Gearing
The term used to describe the process of borrowing
money for investment purposes. The expectation is that
the returns on the investments purchased will exceed the
finance costs associated with those borrowings.
There are several methods of calculating gearing and the
following has been selected:
Total assets less current liabilities (before deducting any
prior charges) minus cash/cash equivalents divided by
shareholders’ funds, expressed as a percentage.
Net Asset Value (“NAV”)
The value of the Company’s assets, principally
investments made in other companies and cash being
held, minus any liabilities. The NAV is also described as
“shareholders’ funds” per share. The NAV is often
expressed in pence per share after being divided by the
number of shares which have been issued. The NAV per
share is unlikely to be the same as the share price which
is the price at which the Company’s shares can be bought
or sold by an investor. The share price is determined by
the relationship between the demand for and supply of
the shares.
NAV Per Share Total Return
The total return on an investment over a specified period
assuming dividends paid to shareholders were reinvested
at net asset value per share at the time the shares were
quoted ex-dividend. This is a way of measuring
investment management performance of investment
trusts which is not affected by movements in discounts
or premiums.
Glossary of Terms and
Alternative Performance
Measures (unaudited)
81
Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
31 January 31 January
2025 2024
NAV Total Return p p
Opening NAV 384.3 391.6
Increase/(decrease) in NAV 37. 2 (5.0)
Dividend paid (4.0) (2.3)
Closing NAV 417.5 384.3
Increase/(decrease) in NAV 9.7% (1.3)%
Impact of reinvested dividends 0.0% 0.0%
NAV Total Return 9.7% (1.3)%
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
2025 2024
£’000 £’000
Operating expenses
1
5,708 5,287
Average net assets
during the year 504,629 469,515
Ongoing charges 1.1% 1.1%
1
See notes 3 and 4 on pages 70 and 71.
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 2025 3.7 9.7 8.8
Three years to
31 January 2025 2.5 4.6 12.1
Five years to
31 January 2025 6.9 8.7 11.0
Portfolio Turnover
Portfolio turnover is a measure of how quickly securities
in a fund are either bought or sold by the fund’s
managers, over a given period of time. The rate of
turnover is important for potential investors to consider,
as funds that have a high rate will also have higher fees to
reflect the turnover costs.
It is calculated as the average of the purchases and
sales for the year divided by the average net assets for
the year.
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 on page 73 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
2025 2024
Share Price Total Return p p
Opening share price 349.0 358.0
Increase/(decrease) in share price 13.0 (6.7)
Dividend paid (4.0) (2.3)
Closing share price 358.0 349.0
Increase/(decrease) in share price 3.7% (1.9)%
Impact of reinvested dividends 0.0% 0.0%
Share Price Total Return 3.7% (1.9)%
Volatility
A measure of the range of possible returns for a given
security or market index.
82
Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Sustainable Finance
Disclosure Regulation
(“SFDR”) Report (unaudited)
Template periodic disclosure for the financial products referred to in
Article 9, paragraphs 1 to 4a, of Regulation (EU) 2019/2088 and Article 5,
first paragraph, of Regulation (EU) 2020/852
Product name: Legal entity identifier:
Pacific Assets Trust plc 2138008U8QPGAESFYA48
Sustainable investment objective
To what extent was the sustainable investment objective of this financial product met?
The Company’s investment objective is to achieve long-term capital growth through
investment in selected companies in the Asia Pacific region and the Indian sub-
continent, but excluding Japan, Australia and New Zealand (the “Asia Pacific
Region”). Because the Portfolio Manager adopts a sustainable investment strategy in
selecting the investments that make up the Company’s portfolio, the Company only
invests in companies which both contribute to, and benefit from, sustainable
The EU Taxonomy is a
classification system laid
down in Regulation (EU)
2020/852 establishing a
list of environmentally
sustainable economic
activities. That Regulation
does not lay down a list of
socially sustainable
economic activities.
Sustainable investments
with an environmental
objective might be aligned
with the Taxonomy or not.
Sustainable investment
means an investment in
an economic activity
that contributes to an
environmental or social
objective, provided that
the investment does not
significantly harm any
environmental or social
objective and that the
investee companies
follow good governance
practices.
Did this financial product have a sustainable investment objective?
l l
✖
Yes l l
No
✖
It made sustainable investments
with an environmental objective:
67%
in economic activities that
qualify as environmentally
sustainable under the EU
Taxonomy
✖
in economic activities that do
not qualify as environmentally
sustainable under the EU
Taxonomy
It promoted Environmental/Social
(E/S) characteristics and while it
did not have as its objective a
sustainable investment, it had a
proportion of ___% of sustainable
investments
with an environmental
objective in economic
activities that qualify as
environmentally sustainable
under the EU Taxonomy
with an environmental
objective in economic
activities that do not qualify as
environmentally sustainable
under the EU Taxonomy
with a social objective
✖
It made sustainable investments
with a social objective: 100%
It promoted E/S characteristics,
but did not make any sustainable
investments
Notes: The percentages are defined and measured on the basis that each sustainable investment must
contribute to a social objective and may also contribute to an environmental objective. The percentages will
therefore not add to 100.
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Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
development, achieving positive social and environmental outcomes. All investee
companies contribute to improving human development, while many also contribute
to positive environmental outcomes. The contribution to sustainable development is
assessed under two frameworks, social and environmental.
Positive social outcomes
The Portfolio Manager assesses positive social outcomes by reference to the below
human development pillars. Stewart Investors has developed these human
development pillars by reference to, amongst other things, the UN Human
Development Index.
> Health and well–being – improved access to and affordability of nutrition, health
care, hygiene, water and sanitation,
> Physical infrastructure – improved access to and affordability of energy and
housing,
> Economic welfare – safe employment offering a living wage and opportunities
for advancement, access to finance and improved standards of living,
> Opportunity and empowerment – improved access to and affordability of
education and information technology.
As at 31 December 2024, the Company held 69 companies. All companies (100%)
were contributing to at least one human development pillar and, in total, were
making 193 contributions to the pillars.
Further information about how the Portfolio Manager uses the human development
pillars is available on the Portfolio Manager’s website –
stewartinvestors.com/all/how-we-invest/our-approach/human-development-pillars
Positive environmental outcomes
The Portfolio Manager assesses positive environmental outcomes by reference to
the climate solutions developed by Project Drawdown, a non-profit organisation that
has mapped, measured and modelled over 90 different solutions that it believes will
contribute to reaching ‘drawdown’, – i.e. the future point in time when levels of
greenhouse gases in the atmosphere stop climbing and start to steadily decline.
Below is a list of the climate solutions captured in eight broader categories together
with corresponding examples that the Portfolio Manager believes lead to positive
environmental outcomes:
> Food system – sustainable farming, food production and the distribution of
products and services,
> Energy – adoption of renewable energy and other clean energy and related
technologies,
> Circular economy and industries – improved efficiency, reduced waste, and new
business models for closing resource loops in linear value chains and production
processes,
> Human development – advancement of human rights and education that drive
environmental conservation and sustainable use of resources,
> Transport – efficient transport technologies and growth in fossil fuel-free
transportation options,
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Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
> Buildings – products and services which reduce the environmental footprint of
the built environment, including energy efficiency, electrification, improved
design, and use of alternative materials,
> Water – less energy-intensive methods for treating, transporting and heating
water
> Conservation and restoration – supporting deforestation-free and
environmentally regenerative supply chains, operations and end-of-life impacts.
As at 31 December 2023, the Company held 69 companies. 46 companies (67%)
were contributing to climate change solutions. These companies were contributing
to 41 different solutions and, in total, were making 148 contributions to the
solutions.
Assessment
In assessing whether a company “contributes to and benefits from” sustainable
development, the Portfolio Manager will consider whether:
1. there is either a direct or enabling link between the activities of the company and
the achievement of a positive social or environmental outcome;
2. the company can benefit from any contribution to positive social or environmental
outcomes through revenue or growth drivers inherent in the company’s business
model, strategic initiatives that are backed by research and development or capital
expenditure, or from the company’s strong culture and sense of stewardship e.g.
for equity and diversity; and
3. the company recognises potential negative social or environmental outcomes
associated with its product or services and works towards minimising such
outcomes, e.g. a company that sells affordable nutritious food products in plastic
packaging but is investigating alternative packaging options.
Notes:
Any reference to Project Drawdown is to describe the publicly available materials
utilised by Stewart Investors in formulating its sustainability analysis. It is not
intended to be, and should not be, read as constituting or implying that Project
Drawdown has reviewed or otherwise endorsed the Stewart Investors
sustainability assessment framework.
A direct link would arise where the goods an entity produces or the services it
provides are the primary means through which the positive social or environmental
outcome can be achieved (e.g. solar panel manufacturers or installers).
An enabling link would arise if the goods a company produces or services it
provides enable other companies to contribute towards the achievement of the
positive social or environmental outcome (e.g. manufacturers of critical
components that are used as inputs in the manufacture of solar panels).
> How did the sustainability indicators perform?
The Portfolio Manager’s Portfolio Explorer tool provides the contribution that each
company makes to climate solutions, human development and the Sustainable
Development Goals, as well as the investment rationale, key risks and areas for
improvement. Click on the link below to access the tool.
stewartinvestors.com/uk/en/private-investor/our-strategies/pacific-assets-trust.
html?tabs-anchor=Pacific%20Assets%Trust&active-tab=Portfolio%20Explorer
Sustainability indicators
measure how the
sustainable objectives of
this financial product are
attained.
Sustainable Finance Disclosure Regulation (“SFDR”) Report (unaudited) continued
85
Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
The social and environmental outcomes for the Company as of 31 December 2024
are provided in the charts below.
Human development pillars
(number of companies contributing to each pillar)
9
4
20
16
2
3
3
13
17
20
7
6
12
3
11
21
5
6
10
8
Enabling/Supporting Contribution
Direct Contribution
Information
technology
Education
Standard
of living
Finance
Employment
Housing
Energy
Water and
sanitation
Healthcare
and hygiene
Nutrition
Climate change solutions
(number of companies contributing to each solution)
3
15
7
1
4
6
35
8
10
9
35
2
13
Enabling/Supporting Contribution
Direct Contribution
Water
Transport
Human
development
Food system
Energy
Conservation/
restoration
Circular
economy/
industry
Buildings
Notes: Direct Contribution - directly attributable to products, services or practices
provided by that company. Enabling/Supporting Contribution - supported or made
possible by products or technologies provided by that company.
> ...and compared to previous periods?
Changes in the sustainability outcomes for the Company year-on-year are related to
bottom-up changes in the portfolio and/or changes in the sustainability profile of
individual investee companies.
The social and environmental outcomes for the Company for previous periods are
provided in the tables below.
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Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Positive social outcomes
Human development
pillars Contribution
31–Dec–
2023
31–Dec–
2022
31–Dec–
2021
No. of companies (%) – 67 (100%) 63 (100%) 63 (100%)
Total no. of
contributions
– 190 174 173
Nutrition Direct 10 10 7
Enabling/Supporting 4 3 3
Healthcare and
hygiene
Direct 22 19 18
Enabling/Supporting 17 12 12
Water and sanitation Direct – – –
Enabling/Supporting 2 2 2
Energy Direct 4 4 4
Enabling/Supporting 10 6 6
Housing Direct 4 6 5
Enabling/Supporting 7 7 7
Employment Direct 21 23 26
Enabling/Supporting 15 10 12
Finance Direct 10 9 8
Enabling/Supporting 2 3 4
Standard of living Direct 9 8 8
Enabling/Supporting 29 29 28
Education Direct 6 5 5
Enabling/Supporting 5 6 5
Information
technology
Direct 9 9 10
Enabling/Supporting 4 3 3
Sustainable Finance Disclosure Regulation (“SFDR”) Report (unaudited) continued
87
Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Positive environmental outcomes
Climate solutions Contribution
31-Dec-
2023
31–Dec–
2022
31–Dec–
2021
No. of companies (%) – 42 (63%) 38 (60%) 38 (60%)
No. of different
solutions
– 40 33 32
Total no. of solutions – 134 111 105
Buildings Direct 3 3 3
Enabling/Supporting 15 15 12
Indirect n/a n/a 1
Circular economy/
industry
Direct 7 7 3
Enabling/Supporting 12 9 -
Indirect n/a n/a 1
Conservation/
restoration
Direct 1 1 –
Enabling/Supporting 1 2 –
Indirect n/a n/a 2
Energy Direct 6 6 4
Enabling/Supporting 27 19 15
Indirect n/a n/a 5
Food system Direct 9 7 6
Enabling/Supporting 4 4 4
Indirect n/a n/a –
Human development Direct 11 9 7
Enabling/Supporting 1 – –
Indirect n/a n/a –
Transport Direct 8 5 5
Enabling/Supporting 26 21 25
Indirect n/a n/a 10
Water Direct 2 2 2
Enabling/Supporting 1 1 –
Indirect n/a n/a –
During 2022 and following feedback from clients, the Portfolio Manager removed
the Indirect Contribution from their climate solutions measures.
Indirect Contribution – providing generic products or services to companies making
direct or enabling contributions or making operational decisions which have a
material contribution.
In 2022, Project Drawdown added 11 new climate solutions to their framework.
The Portfolio Manager considered these new solutions for their 2022 reporting
measures. More detail on these changes are available on the Portfolio Manager’s
website:
stewartinvestors.com/all/insights/climate-solutions-update
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Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
How did the sustainable investments not cause significant harm to any
sustainable investment objective?
The Company only invests in companies which both contribute to, and benefit from,
sustainable development, achieving positive social and environmental outcomes. All
investee companies contribute to improving human development, and may also
contribute to positive environmental outcomes.
The Company’s exposure to harmful or controversial products, services or practices
is monitored on at least a quarterly basis. For harmful products and services which
are revenue-generating, the Portfolio Manager applies a 5% revenue threshold
(controversial weapons and tobacco production are 0%). In other areas where
harmful or controversial activities are not attributable to revenue (for example,
employee or supply chain issues) the Portfolio Manager uses internal analysis and
research from external providers to monitor and assess companies.
Where any material exposure to these harmful activities is found, the Portfolio
Manager will:
• review the company research and investment case, noting the response where
they believe it is adequate,
• engage with the company where they require further information or wish to
encourage improved practices and an appropriate resolution of the issues,
• exit the Company’s position in the company where engagement has been
unsuccessful, or where part of a pattern of behaviour raises concerns regarding
the quality and integrity of the company’s management. If an investment is held in
a company that has material exposure to harmful products and services, this will
be disclosed on the Stewart Investors website, and the reasons for the exception
and for maintaining the holding explained. Exceptions may occur if a company is
winding down a legacy commercial activity (in which case the company will be
engaged and encouraged to cease the commercial activity concerned), or where
the company is not increasing capital expenditure or if a company is only
indirectly exposed to a harmful industry or activity, for example, a company
making safety products for a wide range of industries may also have customers in
the fossil fuel or defence industries.
The Portfolio Manager’s position on harmful and controversial products and
services and investment exclusions is available on the Stewart Investors website:
stewartinvestors.com/all/insights/our-position-on-harmful-and-controversial-
products-and-services
How were the indicators for adverse impacts on sustainability factors taken
into account?
Adverse impact indicators relevant to each Company investee company are taken
into account through the Portfolio Manager’s bottom-up research, company
engagement, adherence to their position statement on harmful and controversial
products and services, Group-wide exclusion policies and third-party research
providers.
The Portfolio Manager meets and liaises with companies on an on-going basis and is
continuously assessing their sustainability credentials and quality. Where the
Portfolio Manager has identified changes to a company’s quality or sustainability
positioning through either meetings, ongoing monitoring and reviewing their annual
reports, the Portfolio Manager will re-evaluate the investment case.
In addition, the Company portfolio is assessed on an ongoing basis by external
service providers including controversy monitoring, product involvement, carbon
footprints and other impact measures, and breaches of social norms.
Principal adverse
impacts are the most
significant negative
impacts of investment
decisions on
sustainability factors
relating to
environmental, social
and employee matters,
respect for human
rights, anti‐corruption
and anti‐bribery
matters.
Sustainable Finance Disclosure Regulation (“SFDR”) Report (unaudited) continued
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Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
The Principal Adverse Impacts (as prescribed under the SFDR) are incorporated into
the Portfolio Manager’s company analysis, team discussion and engagement
programme. Every investment in the portfolio must do no significant harm, based on
the adverse impact indicator assessment. It is possible that an investor does no
significant harm but still have some adverse sustainability impacts. In those cases,
the Portfolio Manager shall engage with the company either directly or as part of
collaborations with other investment institutions.
Depending on the nature of the issue and the response by the company, the Portfolio
Manager’s actions can range from:
• reviewing the company research and investment case, noting the response where
they believe it is adequate,
• engaging with the company where they require further information or wish to
encourage improved practices and an appropriate resolution of the issues,
• Where engagement has been unsuccessful or where the harmful activities are
part of a pattern of behaviour that raises concerns regarding the quality and
integrity of the company’s management, the Portfolio Manager will not invest or
will exit the Company’s position in the company in an orderly manner, having
regard to the best interests of shareholders.
The Portfolio Manager includes product level data on Principal Adverse Impact (PAI)
indicators in the question below.
Were sustainable investments aligned with the OECD Guidelines for Multinational
Enterprises and the UN Guiding Principles on Business and Human Rights?
The Company’s sustainable investments are aligned with these Guidelines and
Principles.
The Portfolio Manager continually monitors the companies owned to understand
any changes to the strategies. The Company’s portfolio is assessed quarterly by an
external service provider for compliance with the OECD Guidelines for
Multinational Enterprises and the UN Guiding Principles on Business and Human
Rights, UN global norms and exposure to high-risk sectors. The Portfolio Manager
also receives regular updates from a controversy monitoring service. Where issues
are raised by these services, the Portfolio Manager will review and consider as part
of the investment analysis and depending on the detail may engage with the
company in question, and if necessary will divest to ensure the portfolio continues to
meet the principles which sit at the heart of the investment philosophy.
During the reporting period the below holdings of the Company flagged against the
Portfolio Manager’s policy.
ESAB India
Activity exposure >5% revenue: Supporting Oil & Gas
Reason for exception/holding: The company provides welding and cutting equipment
and systems for a variety of industries including shipbuilding and wind energy.
The company’s parent released its inaugural sustainability report in 2023,
coinciding with its first year as an independent corporation, and does not yet
directly report revenue by market segment. The external research provider
estimates that revenues from products and services supporting oil and gas
accounted for 7.5% of ESAB India’s overall revenue in FY2023. The Portfolio
Manager met with the parent company and based on their analysis of the company’s
product portfolio within the wider industry believe the exposure to products and
services supporting oil and gas within the India business will be lower than the
external estimate. They also believe exposure to oil and gas will continue to fall in
the coming years as the economy transitions further away from fossil fuels, and the
company continues to focus on growing sales in renewable energy.
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Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Tata Consultancy Services (TCS)
UN Global Compact Principle 2 (Breach): Businesses should make sure that they
are not complicit in human rights abuses.
Reason for exception/holding: TCS has no direct involvement in nuclear weapons
or energy, however the external research provider considers the company to be
involved because its parent company, Tata Sons, owns greater than 50% of TCS.
Tata Sons involvement is due to its ownership of Tata Advanced Systems which
acquired Tata Power’s Strategic Engineering Division. This division provides control
systems for the Indian Navy’s nuclear missile submarines.
As India has not signed the Treaty on the Non-Proliferation of Nuclear Weapons, the
external data provider considers Tata Sons and by extension TCS to be in support of
the nuclear weapons programme of India. The Portfolio Manager disagrees with this
assessment and does not see anything in the activities or conduct of the company to
question its sustainability positioning or the investment case.
Triveni Turbines
Activity exposure >5% revenue: Supporting Nuclear Power
Reason for exception/holding: The company designs and manufactures steam
turbines, with a focus on renewable, efficient industrial heat and power solutions.
Revenues derived from products and services supporting nuclear power accounted
for an estimated 5% of the company’s overall revenue in FY2023, according to the
external research provider.
Nuclear power exposure for supporting products and services was added by the
external research provider in early 2024 and the Portfolio Manager contacted the
company directly to check the 5% revenue estimate provided. Given their nuclear power
exposure is related to servicing old steam turbines within the industry, the company
estimates around 1% of revenue to be a more accurate reflection of their exposure.
How did this financial product consider principal adverse impacts on
sustainability factors?
In addition to the detail described above, the Portfolio Manager has set a
materiality threshold of 5% of revenue for direct involvement in companies
materially involved in the exploration, production or generation of fossil fuel
energy and a threshold of 0% for controversial weapons. Portfolio companies are
checked against the thresholds each quarter by an external third-party research
platform.
The below table sets out the PAI indicators for the Company.
Indicators Metrics 2024 2023 2022
Exposure (EUR m) 631 576 533
1. GHG Emissions
Scope 1 (tCO2eq) 2,740 3,640 3,302
Scope 2 (tCO2eq) 18,184 13,753 14,848
Scope 3 (tCO2eq) 248,290 289,038 437,46 4
Total Emissions Scope
1+2 (tCO2eq)
20,925 17, 393 18,150
Total Emissions Scope
1+2+3 (tCO2eq)
269,214 306,432 455,614
2. Carbon Footprint
Total Emissions Scope
1+2 (tCO2eq/EURm)
33 30 34
Total Emissions Scope
1+2+3 (tCO2eq/EURm)
427 532 854
Sustainable Finance Disclosure Regulation (“SFDR”) Report (unaudited) continued
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Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Indicators Metrics 2024 2023 2022
3. GHG Intensity of
Investee Companies
Scope 1+2 (tCO2eq/
EURm)
66 72 75
Scope 1+2+3 (tCO2eq/
EURm)
1,759 1,899 2,413
4. Exposure to companies
active in the fossil fuel sector
(% involvement) 1% 0% 0%
5. Share of Non-Renewable
Energy Consumption and
Production
Non-Renewable Energy
Consumption (%)
83% 85% 84%
Non-Renewable Energy
Production (%)
7% 30% 35%
6. Energy consumption
intensity per high impact
sector
Agriculture, Forestry &
Fishing (GWh/EURm)
no data no data no data
Construction (GWh/
EURm)
no data no data no data
Electricity, Gas, Steam
& Air Conditioning
Supply (GWh/EURm)
no data no data no data
Manufacturing (GWh/
EURm)
0.16 0.12 0.12
Mining & Quarrying
(GWh/EURm)
no data no data no data
Real Estate Activities
(GWh/EURm)
no data no data no data
Transportation &
Storage (GWh/EURm)
insufficient
data
no data no data
Water Supply,
Sewerage, Waste
Remediation (GWh/
EURm)
no data no data no data
Trade & Repair of
Automobiles (GWh/
EURm)
insufficient
data
insufficient
data
insufficient
data
7. Activities Negatively
Affecting Biodiversity Areas
(% involvement) 0% 0% 0%
8. Emissions to Water
(t/EURm) no data no data insufficient
data
9. Hazardous waste ratio (t/EURm) 107 63 37
10. Violations of UNGC and
OECD Guidelines for
Multinational Enterprises
Watch (% involvement) 0% 1% 0%
Breach (% involvement) 1% 2% 2%
11. Lack of Processes &
Compliance Mechanisms to
Monitor Compliance with
UNGC and OECD
guidelines
(% involvement) 66% 68% 81%
12. Unadjusted Gender Pay
Gap
% of Male Gross Hourly
Rate
insufficient
data
no data insufficient
data
13. Board Gender Diversity
% of Female Board
Members
21% 21% 19%
14. Exposure to
Controversial Weapons
(% involvement) 0% 0% 0%
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Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Voluntary indicators Metrics 2024 2023 2022
Water Usage and
Recycling
% Water Withdrawal 48% 58% n/a
Recycling & Reuse
(cubic metres)
32,869,497 27,0 03 ,3 46 n/a
Number of Identified
Cases of Severe Human
Rights Issues & Incidents
Weighted number of
incidents
0.1 0.1 n/a
The SFDR PAI methodology for fossil fuel sector exposure considers Oil & Gas
Production, Thermal Coal Extraction and Thermal Coal Supporting Products/
Services. The fossil fuel exposure % shown in the table above is for Samsung C&T
which was held for part of the reporting period. Samsung C&T is a holding company
with direct operating businesses in construction and trade, plus high-value holdings
in health and electronics. The third-party data provider estimates that the company
derives c.1% of revenue from one of its subsidiaries which is involved in oil and gas
exploration, development, and production.
Notes: PAI data is sourced from third-party ESG data providers. Limitations to the
data provided from third parties will stem from their coverage and methodologies
and from limited disclosures by issuer companies. Where data is not available,
third-party providers may use estimation models or proxy indicators. Methodologies
used by data providers may include an element of subjectivity. Whilst data is
collected on an ongoing basis, in this rapidly evolving environment, data can become
outdated within a short time period. Data for certain metrics may be based on
limited data across the portfolio companies.
Sustainable Finance Disclosure Regulation (“SFDR”) Report (unaudited) continued
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Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
What were the top investments of this financial product?
The average* largest 15 holdings over the reporting period were:
Largest investments Sector % assets Country
Mahindra & Mahindra Consumer Discretionary 6.0 India
CG Power Industrials 4.2 India
Tube Investments Consumer Discretionary 4.2 India
OCBC Financials 3.3 Singapore
Voltronic Power Industrials 3.2 Taiwan
Samsung Electronics Information Technology 3.2 South
Korea
Cholamandalam Financial Financials 2.9 India
Midea Consumer Discretionary 2.9 China
Inovance Industrials 2.5 China
TSMC Information Technology 2.5 Taiwan
Hoya Health Care 2.5 Japan
Shanthi Gears Industrials 2.3 India
Elgi Equipments Industrials 2.1 India
HDFC Bank Financials 2.1 India
Marico Consumer Staples 2.0 India
* Average based on month end holdings over the year under review.
What was the proportion of sustainability-related investments?
> What was the asset allocation?
The Company invested at least 90% of its Net Asset Value in companies that are
positioned to contribute to, and benefit from, sustainable development. Sustainable
development is based on the Portfolio Manager’s own philosophy explained in the
Investor Disclosure Document.
Investments
#1 Sustainable
90%
#2 Not sustainable
10%
Environmental
67%
Social
100%
Taxonomy-aligned
0%
Other
67%
#1 Sustainable covers sustainable investments with environmental or social objectives.
#2 Not sustainable includes investments which do not qualify as sustainable investments.
Notes: The percentages are defined and measured on the basis that each sustainable investment must
contribute to a social objective and may also contribute to an environmental objective. The percentages will
therefore not add to 100.
The list includes the
investments
constituting the
greatest proportion of
investments of the
financial product during
the reference period
which is: 1 February
2024 to 31 January
2025.
Asset allocation
describes the share of
investments in specific
assets.
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Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Sustainable Finance Disclosure Regulation (“SFDR”) Report (unaudited) continued
> In which economic sectors were the investments made?
The average* holdings over the reporting period in each Global Industry
Classification Standard (GICs) sector was:
Sector % Assets
Industrials 25.1
Information Technology 18.8
Consumer Discretionary 15.8
Consumer Staples 14.0
Financials 13.3
Health Care 9.0
Communication Services 2.9
Energy –
Materials –
Real Estate –
Utilities
Cash and cash equivalents 1.1
* Average based on month end holdings over the year under review.
The Company has no direct holdings in companies materially involved in the
exploration, production or generation of fossil fuel energy.
The Portfolio Manager checks investee companies (via a third-party research
platform and on a quarterly basis) for any revenues derived from exploration, mining,
extraction, production, processing, storage, refining or distribution, including
transportation, storage and trade, of fossil fuels. They disclose any companies above
their material threshold (5% of revenues) on their website.
To comply, with the EU
Taxonomy, the criteria
for fossil gas include
limitations on emissions
and switching to fully
renewable power or
lower-carbon fuels by
the end of 2035. For
nuclear energy, the
criteria include
comprehensive safety
and waste management
rules.
Enabling activities
directly enable other
activities to make a
substantial contribution
to an environmental
objective
Transitional activities
are economic activities
for which low-carbon
alternatives are not yet
available and that have
greenhouse gas
emission levels
corresponding to the
best performance.
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Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
To what extent were sustainable investments with an environmental
objective aligned with the EU Taxonomy
1
?
> Did the financial product invest in fossil gas and/or nuclear energy related
activities?
Yes
In fossil gas In nuclear energy
5
No
The graphs below show in green the percentage of investments that were aligned
with the EU Taxonomy. As there is no appropriate methodology to determine the
taxonomy-alignment of sovereign bonds*, the first graph shows the Taxonomy
alignment in relation to all the investments of the financial product including
sovereign bonds, while the second graph shows the Taxonomy alignment only in
relation to the investments of the financial product other than sovereign bonds.
0%
50%
100%
OpEx
0.0%
0.0%
0.0%
CapEx
Turnover
1. Taxonomy-alignment of investments
including sovereign bonds*
Taxonomy-aligned investment
Other investments
0%
50%
100%
OpEx
0.0%
0.0%
0.0%
CapEx
Turnover
1. Taxonomy-alignment of investments
including sovereign bonds*
Taxonomy-aligned investment
Other investments
% figures represent taxonomy-aligned investments
*For the purpose of these graphs, ‘sovereign bonds’ consist of all sovereign
exposures
> What was the share of investments made in transitional and enabling
activities?
The reported share of investments made in transitional and enabling activities for
the Company is 0%.
> How did the percentage of investments aligned with the EU Taxonomy
compare with previous reference periods?
The percentage of investments aligned with the EU Taxonomy for the previous
reference period was 0%.
1
Fossil gas and/or nuclear related activities will only comply with the EU Taxonomy where they
contribute to limiting climate change (“climate change mitigation”) and do not significantly harm any
EU Taxonomy objective – see explanatory notes in the left hand margin. The full criteria for fossil
gas and nuclear energy economic activities that comply with the EU Taxonomy are laid down in
Commission Delegated Regulation (EU) 2022/1214.
> Taxonomy-aligned
activities are
expressed as a share
of:
> turnover reflecting the
share of revenue from
green activities of
investee companies.
> capital expenditure
(“CapEx”) showing the
green investments
made by investee
companies, e.g. for a
transition to a green
economy.
> operational
expenditure (“OpEx”)
reflecting green
operational activities
of investee companies.
are sustainable
investments
with an
environmental objective
that do not take into
account the criteria for
environmentally
sustainable economic
activities under the EU
Taxonomy.
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Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Sustainable Finance Disclosure Regulation (“SFDR”) Report (unaudited) continued
What was the share of sustainable investments with an environmental
objective that were not aligned with the EU Taxonomy?
The Company does not actively target EU Taxonomy-aligned assets.
As of 31 December 2024, the Company held 69 companies. Based on reported
turnover data, there was no alignment with the EU taxonomy from any of these
companies.
What was the share of socially sustainable investments?
All companies in the Company were aligned to socially sustainable investments
as defined by the Portfolio Manager’s human development pillars.
What investments were included under “not sustainable”, what was
their purpose and were there any minimum environmental or social
safeguards?
The “#2 Not sustainable” assets are cash and near-cash assets held pending
investment, to meet liquidity requirements, or assets held in order to allow
efficient operational exit of positions. Cash is held by the depositary.
What actions have been taken to attain the sustainable investment objective
during the reference period?
No company is perfect and engagement and voting are key responsibilities for the
Portfolio Manager as long-term shareholders. They believe that engagement is a
means to mitigate business risks, protect against potential headwinds and improve
sustainability outcomes. Engagement is fully integrated into the responsibilities of
the Portfolio Manager as it contributes invaluable insights into their understanding
of each company.
During the calendar year 2024, the Portfolio Manager met with 71% of investee
companies.
All engagement starts with bottom-up analysis, with responsibility shared across the
investment team. Over the period and across their funds, the Portfolio Manager
engaged on topics 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,
> Animal testing/welfare – animal testing exposure,
> Human rights and modern slavery – conflict minerals in the supply chains of
semiconductors, trafficking, forced labour and child labour in the Asia Pacific
region and public health,
> Diversity, equity and inclusion – diversity, particularly gender, in senior
management and on boards,
> Addictive products – indirect exposure to tobacco, chemicals, gaming, adult
entertainment, and sugar content in food,
> Governance – corporate strategy and legal structure.
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Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
In 2024 the Portfolio Manager engaged with 49% of investee companies on the
following topics -
> Environmental issues 30%
> Social issues 25%
> Governance issues 46%
Engagements may relate to one or multiple environmental, social or governance issues.
Proxy voting is an extension of the Portfolio Manager’s engagement activities. It is
not outsourced to an external provider or separate proxy voting/engagement team.
The Portfolio Manager considers each proxy vote individually and on its own merits
in the context of their knowledge about that particular company. A breakdown of
voting activity for the Company is detailed below.
Voting activity: 1 January 2024 to 31 December 2024
Number of companies that held voting meetings 70
Number of meetings to vote at 116
Total proposals to vote on 719
Number of votes against management proposals 18
Number of votes abstained from voting 2
Number of shareholder proposals to vote on 0
Number of shareholder proposals voted against 0
Number of shareholder proposals abstained from voting 0
Voting rationales: 1 January 2024 to 31 December 2024
Company Proposal No. of
proposals
Voting decision
Glodon
Philippine Seven
Shanthi Gears
Sheng Siong
Unilever
Indonesia
Vitasoy
ViTrox
Yifeng Pharmacy
Chain
Zhejiang Supor
Appointment of auditor 9 Against management
recommendation
Rationale
The auditor has been in place for over ten years and the companies
have given no information on intended rotation which the Portfolio
Manager believes is important for ensuring a fresh perspective on
the accounts.
Humanica Public
Kasikornbank
Philippine Seven
Transaction of business 3 Against management
recommendation
Rationale
The company did not provide enough information about the
proposals and the Portfolio Manager wanted to avoid giving them
unrestricted decision-making power without sufficient clarity.
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Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Voting rationales: 1 January 2024 to 31 December 2024
Company Proposal No. of
proposals
Voting decision
Amoy
Diagnostics
Amendments to work
systems for independent
directors
2 Abstained from
voting
Rationale
The company did not provide sufficient information on the
proposed amendments
Midea Adjustment of the guarantee
for controlled subsidiaries
assets pool business
4 Against management
recommendation
Employee stock ownership
plan
Rationale
On the guarantee for controlled subsidiaries assets pool business,
the Portfolio Manager found the guarantee amount to be
excessive. On the proposed employee stock ownership plan, the
Portfolio Manager believed that non-executive director
involvement could lead to a conflict of interest.
Pentamaster Authority to issue shares
without pre-emptive rights
1 Against management
recommendation
Rationale
The company proposed to dis-apply pre-emption rights on the issue
of shares representing up to 20% of the issued share capital. The
Portfolio Manager felt that the proposed authority was excessive.
Samsung
Electronics
Director election 1 Against management
recommendation
Rationale
The Portfolio Manager would have preferred more independent,
non-family associated directors.
How did this financial product perform compared to the reference sustainable
benchmark?
A sustainable benchmark has not been designated to compare the performance for
the Company.
> How did the reference benchmark differ from a broad market index?
Not applicable.
> How did this financial product perform with regard to the sustainability
indicators to determine the alignment of the reference benchmark with the
sustainable investment objective?
Not applicable.
> How did this financial product perform compared with the reference benchmark?
Not applicable.
> How did this financial product perform compared with the broad market index?
Not applicable.
Reference benchmarks
are indexes to measure
whether the financial
product attains the
sustainable objective.
!
Sustainable Finance Disclosure Regulation (“SFDR”) Report (unaudited) continued
99
Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Shareholder Information
Financial Calendar
31 January Financial Year End
April/May Final Results Announced
July Annual General Meeting
July Dividend Payable
31 July Half Year End
September Half Year Results Announced
Annual General Meeting
The Annual General Meeting of Pacific Assets Trust plc
will be held at the offices of Stewart Investors, Finsbury
Circus House, 15 Finsbury Circus, London, EC2M 7EB on
Tuesday, 1 July 2025 at12 noon. Please refer to the
Chair’s Statement beginning on page 6 for details of this
year’s arrangements.
In order to ensure that shareholders are able to follow
the proceedings of the AGM without attending in person,
the Company will provide access online via the Investor
Meet Company platform. Please note that shareholders
will not be able to vote online at the AGM via the
platform and are therefore requested to submit their
votes via proxy, as early as possible. Shareholders are
invited to submit any questions for the Board to consider.
Questions can be submitted ahead of the AGM via the
Investor Meet Company platform up until 9am the day
before the AGM or submitted at any time during the
AGM itself. Shareholders who wish to attend the AGM
remotely should register for the event in advance by
using the following link:
https://www.investormeetcompany.com/pacific-assets-
trust-plc/register-investor
How to Vote
If you hold your shares directly you will have received a
paper proxy form or voting instruction card. For this
year’s Annual General Meeting you should ensure that
this is returned to the Registrar, Equiniti, before 12 noon
on 27 June 2025. Alternatively, you can vote online at
www.shareview.co.uk. Shareholders will require their
Shareholder Reference Number, which can be found on
the personalised proxy form or voting instruction card, to
access this service. Before a proxy can be appointed,
shareholders will be asked to agree to the terms and
conditions for electronic proxy appointment. The use of
the electronic proxy appointment service offered
through Equiniti Limited, the Company’s registrar, is
entirely voluntary.
If you hold your shares via an investment platform or a
nominee, you should contact them to inquire about
arrangements to vote.
Profile of the Company’s Ownership
% of shares held at 31 January 2025
Private Wealth
Managers 68%
Other Institutional
8%
Retail
Shareholders
24%
Source: Richard Davies Investor Relations
Change of Address
Communications with shareholders are mailed to the
address held on the share register. In the event of a
change of address or other amendment this should be
notified to the Registrar, Equiniti Limited, under the
signature of the registered holder.
Daily Net Asset Value
The daily net asset value of the Company’s shares can be
obtained on the Company’s website at
www.pacific-assets.co.uk and is published daily via the
London Stock Exchange.
Dividend
A final dividend is paid annually following approval at the
Annual General Meeting. Shareholders who wish to have
dividends paid directly into a bank account, rather than by
cheque posted to their registered address, can complete a
mandate form for the purpose. Mandates may be obtained
from the Registrar, Equiniti Limited, on request.
Share Prices
The Company’s shares are listed on the London Stock
Exchange under ‘Investment Companies’. The price is
given daily in the Financial Times and other newspapers.
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Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
How to Invest
Retail Investors advised by IFAs
The Company currently conducts its affairs so that its
shares can be recommended by Independent Financial
Advisers (“IFAs”) in the UK to ordinary retail investors in
accordance with the Financial Conduct Authority (“FCA”)
rules in relation to non-mainstream investment products
and intends to continue to do so. The shares are excluded
from the FCA’s restrictions which apply to non-
mainstream investment products because they are
shares in an investment trust.
Equiniti – Share Dealing Service
An internet and telephone dealing service is available
through the Company’s registrar, Equiniti. This provides a
simple way for UK shareholders of Pacific Assets Trust plc
to buy or sell the Company’s shares. For full details and
terms and conditions simply log onto
www.shareview.co.uk/dealing or call 03456 037037
between 8.00am and 4.30pm Monday to Friday. This
service is only available to shareholders of Pacific Assets
Trust plc who hold shares in their own name, with a UK
registered address and who are aged 18 and over.
Shareview Dealing is provided by Equiniti Financial
Services Limited which has issued and approved the
preceding paragraph. Equiniti Financial Services Limited,
Aspect House, Spencer Road, Lancing, West Sussex BN99
6DA is registered in England and Wales with number
6208699. Equiniti Financial Services Limited is authorised
and regulated by the Financial Conduct Authority.
Investment Platforms
The Company’s shares are traded openly on the London
Stock Exchange and can be purchased through a stock
broker or other financial intermediary. The shares are
available through savings plans (including Investment
Dealing Accounts, ISAs, Junior ISAs and SIPPs) which
facilitate both regular monthly investments and lump
sum investments in the Company’s shares. There are a
number of investment platforms that offer these
facilities. The following is a list of some of them, which is
not comprehensive and does not constitute any form of
recommendation:
AJ Bell Youinvest www.youinvest.co.uk/
Barclays Stockbrokers www.smartinvestor.barclays.co.uk/
Bestinvest www.bestinvest.co.uk/
Charles Stanley Direct www.charles-stanley-direct.co.uk/
Halifax Share Dealing www.halifaxsharedealing-online.co.uk
Hargreaves Lansdown www.hl.co.uk/
HSBC www.hsbc.co.uk/investments/
products-and-services/invest-direct/
iDealing www.idealing.com/
Interactive Investor www.ii.co.uk/
IWEB www.iweb-sharedealing.co.uk/
Saxo Capital Markets www.home.saxo
Tillit www.tillitinvest.com/
WealthClub www.wealthclub.co.uk
Risk warnings
Past performance is no guarantee of future performance.
The value of your investment and any income from it may
go down as well as up and you may not get back the
amount invested. This is because the share price is
determined by the changing conditions in the relevant
stock markets in which the Company invests and by the
supply and demand for the Company’s shares. As the
shares in an investment trust are traded on a stock
market, the share price will fluctuate in accordance with
the supply and demand and may not reflect the
underlying net asset value of the shares; where the share
price is less than the underlying value of the assets, the
difference is known as the ‘discount’. For these reasons
investors may not get back the original amount invested.
Although the Company’s shares are denominated in
sterling, it may invest in stocks and shares which are
denominated in currencies other than sterling and to the
extent they do so, they may be affected by movements in
exchange rates. As a result the value of your investment
may rise or fall with movements in exchange rates.
Investors should note that tax rates and reliefs may
change at any time in the future. The value of ISA tax
advantages will depend on personal circumstances. The
favourable tax treatments of ISAs may not be
maintained.
The Company’s investor disclosure document can be
found on the website: https://www.stewartinvestors.
com/content/dam/pacific-assets/trust-information/
PAC-Investor-Disclosure-Document.pdf
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Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Notice of the
Annual General Meeting
Notice is hereby given that the Annual General Meeting
of Pacific Assets Trust Public Limited Company (the
“Company”) will be held at the offices of Stewart
Investors, Finsbury Circus House, 15 Finsbury Circus,
London, EC2M 7EB on Tuesday, 1 July 2025 at 12noon
for the following purposes:
Ordinary Resolutions
To consider and, if thought fit, pass the following as
Ordinary Resolutions:
1. That the Report of the Directors and the financial
statements for the year ended 31 January 2025
together with the Report of the Auditor thereon be
received.
2. That the Directors’ Remuneration Report for the
year ended 31January 2025 (other than the part
containing the Directors’ Remuneration Policy) be
received and approved.
3. That a final dividend for the year ended 31 January
2025 of 4.9p per share be declared.
4. That Ms J L Y Ang be elected as a Director.
5. That Mr A M Impey be re-elected as a Director.
6. That Ms N Sahgal be re-elected as a Director.
7. That Mr R E Talbut be re-elected as a Director.
8. That Mr E T A Troughton be re-elected as a Director.
9. That BDO LLP be re-appointed as Auditor to hold
office from the conclusion of the meeting to the
conclusion of the next Annual General Meeting at
which accounts are laid.
10. That the Audit Committee be authorised to
determine BDO LLP’s remuneration.
Investment Policy
11. That the proposed amended investment policy set
out on pages106 and 107 of the Annual Report for
the year ended 31 January 2025, a copy of which has
been produced to the meeting and signed by the
Chair for the purposes of identification, be and is
hereby approved and adopted as the investment
policy of the Company with immediate effect in
substitution for, and to the exclusion of, all previous
investment policies of the Company.
Authority to Allot Shares
12. That, in substitution for all existing authorities (but
without prejudice to the exercise of any such
authority prior to the passing of this resolution), the
Board of Directors of the Company (the “Board”) be
and it is hereby generally and unconditionally
authorised pursuant to and in accordance with
section 551 of the Companies Act2006 (the “Act”) to
exercise all the powers of the Company to allot
shares in the Company and to grant rights to
subscribe for or to convert any security into shares
in the Company up to an aggregate nominal amount
of £1,484,167 (or if changed, the number
representing 10% of the issued share capital of the
Company (excluding any shares held in treasury)
immediately prior to the passing of this resolution)
on such terms as the Board may determine provided
that this authority shall expire at the conclusion of
the Annual General Meeting of the Company to be
held in 2026 or on the date which is 15 months after
the date of passing this resolution, whichever is the
earlier, unless previously revoked, varied or renewed
by the Company in general meeting and provided
that the Company may before such expiry make an
offer or enter into an agreement which would or
might require shares to be allotted, or rights to
subscribe for or to convert securities into shares to
be granted, after such expiry and the Board may
allot shares or grant such rights in pursuance of such
an offer or agreement as if the authority conferred
by this resolution had not expired.
Special Resolutions
To consider and, if thought fit, pass the following as
Special Resolutions.
Disapplication of Pre-emption
Rights
13. That, in substitution for all existing powers (but
without prejudice to the exercise of any such power
prior to the passing of this resolution) and subject to
the passing of resolution 12 proposed at the Annual
General Meeting of the Company convened for 1 July
2025 (“Resolution12”), the Board be and it is hereby
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Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
generally empowered pursuant to sections 570 and
573 of the Companies Act 2006 (the “Act”) to allot, or
make offers or agreements to allot, equity securities
(within the meaning of section 560 of the Act) for
cash pursuant to the authority conferred on them by
such Resolution 12 , and/or by way of a sale of
treasury shares for cash,as if section 561(1) of the Act
did not apply to any such allotment or sale, provided
that this power shall be limitedto: the allotment of
equity securities and the sale of treasury shares up to
an aggregate nominal amount of £1,484,167 (orif
changed, the number representing 10% of the issued
share capital of the Company (excluding any shares
held in treasury) immediately prior to the passing of
this resolution) and shall expire at the conclusion of
the Annual General Meeting of the Company to be
held in 2026 or on the date which is 15 months after
the date of passing this resolution, whichever is the
earlier, unless previously revoked, varied or renewed
by the Company in general meeting and provided that
the Company may before such expiry make an offer
or enter into an agreement which would or might
require equity securities to be allotted or treasury
shares to be sold after such expiry and the Board may
allot equity securities or sell treasury shares in
pursuance of such an offer or agreement as if the
authority conferred hereby had not expired.
Authority to Repurchase Shares
14. That, in substitution for all existing authorities (but
without prejudice to the exercise of any such
authority prior to the passing of this resolution), the
Company be and is hereby generally and
unconditionally authorised for the purposes of
section 701 of the Companies Act 2006 (the “Act”)
to make one or more market purchases (within the
meaning of section 693(4) of the Act) of its ordinary
shares of 12.5 pence each in the capital of the
Company (“Ordinary Shares”) either for cancellation
or for retention as treasury shares for future reissue,
resale, transfer or cancellation on such terms and in
such manner as the board of directors may
determine provided that:
(i) the maximum aggregate number of Ordinary
Shares which may be purchased is 17,798,134
or, if lower, the number representing 14.99% of
the issued share capital of the Company
(excluding Ordinary Shares held in treasury)
immediately prior to the passing of this
resolution;
(ii) the minimum price which may be paid for an
Ordinary Share is 12.5 pence (exclusive of
associated expenses);
(iii) the maximum price which may be paid for an
Ordinary Share (exclusive of associated
expenses) shall not be more than the higher of:
(a) an amount equal to 105% of the average of
the middle market quotations for an Ordinary
Share as derived from the London Stock
Exchange Daily Official List for the five dealing
days immediately preceding the day on which
the Ordinary Share is purchased; and (b) the
higher of the price of the last independent trade
and the highest current independent bid on the
London Stock Exchange for an Ordinary Share at
the time the purchase is carried out; and
(iv) this authority shall expire at the conclusion of
the Annual General Meeting of the Company to
be held in 2026 or on the date which is
15months after the date of passing this
resolution, whichever is the earlier, unless
previously revoked, varied or renewed by the
Company in general meeting and provided that
the Company may, before such expiry, enter
into a contract to purchase Ordinary Shares
under such authority which will or may be
completed or executed wholly or partly after
such expiry and may make a purchase of
Ordinary Shares pursuant to any such contract.
General Meetings
15. That any General Meeting of the Company (other
than the Annual General Meeting of the Company)
may be called by not less than 14 clear days’ notice in
accordance with the provisions of the Articles of
Association of the Company provided that the
authority shall expire on the conclusion of the next
Annual General Meeting of the Company to be held
in 2026.
By order of the Board Registered office
16 Charlotte Square
Edinburgh
EH2 4DF
Frostrow Capital LLP
Company Secretary
29 April 2025
Notice of the Annual General Meeting continued
103
Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Notes
1. If you wish to attend the Annual General Meeting in
person, you should arrive at the venue for the
Annual General Meeting in good time to allow your
attendance to be registered. It is advisable to have
some form of identification with you as you may be
asked to provide evidence of your identity to the
Company’s registrar, Equiniti Limited (the
“Registrar”), prior to being admitted to the Annual
GeneralMeeting.
2. Members are entitled to appoint one or more
proxies to exercise all or any of their rights to attend,
speak and vote at the Annual General Meeting.
Aproxy need not be a member of the Company but
must attend the Annual General Meeting to
represent a member. To be validly appointed a proxy
must be appointed using the procedures set out in
these notes and in the notes to the accompanying
proxyform.
If members wish their proxy to speak on their behalf
at the meeting, members will need to appoint their
own choice of proxy (not the chair of the Annual
General Meeting) and give their instructions directly
to them.
Members can only appoint more than one proxy
where each proxy is appointed to exercise rights
attached to different shares. Members cannot
appoint more than one proxy to exercise the rights
attached to the same share(s). If a member wishes
to appoint more than one proxy, they should
contact the Registrar on +44 (0)371 384 2466.
Lines are open between 8.30 am and 5.30 pm,
Monday to Friday (excluding public holidays in
England and Wales).
A member may instruct their proxy to abstain from
voting on any resolution to be considered at the
meeting by marking the abstain option when
appointing their proxy. It should be noted that an
abstention is not a vote in law and will not be
counted in the calculation of the proportion of votes
“for” or “against” the resolution.
The appointment of a proxy will not prevent a
member from attending the Annual General
Meeting and voting in person if he or she wishes.
A person who is not a member of the Company but
who has been nominated by a member to enjoy
information rights does not have a right to appoint
any proxies under the procedures set out in these
notes and should read note 9 overleaf.
3. A proxy form or voting instruction card for use in
connection with the Annual General Meeting has been
sent to shareholders on the shareholder register at the
date of this notice. To be valid any proxy form or other
instrument appointing a proxy, together with any
power of attorney or other authority under which it is
signed or a certified copy thereof, must be received by
post or (during normal business hours only) by hand by
the Registrar at Equiniti Limited, AspectHouse,
Spencer Road, Lancing, West Sussex BN99 6DA no
later than 48 hours (excluding non-working days)
before the time of the Annual General Meeting or any
adjournment of that meeting.
If you do not have a proxy form and believe that you
should have one, or you require additional proxy
forms, please contact the Registrar on +44 (0)371
3842466. Other service providers’ costs may vary.
Lines are open between 8.30 am and 5.30 pm,
Monday to Friday (excluding public holidays in
England and Wales).
4. CREST members who wish to appoint a proxy or
proxies through the CREST electronic proxy
appointment service may do so by using the
procedures described in the CREST Manual and by
logging on to the following website:
www.euroclear.com. CREST personal members or
other CREST sponsored members, and those
CREST members who have appointed (a) voting
service provider(s), should refer to their CREST
sponsor or voting service provider(s) who will be
able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made
using the CREST service to be valid, the appropriate
CREST message (a “CREST Proxy Instruction”) must be
properly authenticated in accordance with Euroclear
UK & International Limited’s specifications, and must
contain the information required for such instruction, as
described in the CREST Manual. The message,
regardless of whether it constitutes the appointment of
a proxy or is an amendment to the instruction given to a
previously appointed proxy, must in order to be valid, be
transmitted so as to be received by the Registrar
(IDRA19) no later 48 hours (excluding non-working
days) before the time of the Annual General Meeting or
any adjournment of that meeting. For this purpose, the
time of receipt will be taken to be the time (as
determined by the timestamp applied to the message by
the CREST Application Host) from which the Registrar is
able to retrieve the message by enquiry to CREST in the
manner prescribed by CREST. After this time any
change of instructions to proxies appointed through
CREST should be communicated to the appointee
through other means.
104
Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
CREST members and, where applicable, their CREST
sponsors or voting service provider(s) should note
that Euroclear UK & International Limited does not
make available special procedures in CREST for any
particular message. Normal system timings and
limitations will, therefore, apply in relation to the
input of CREST Proxy Instructions. It is the
responsibility of the CREST member concerned to
take (or, if the CREST member is a CREST personal
member, or sponsored member, orhas appointed
(a)voting service provider(s), to procure that his
CREST sponsor or voting service provider(s) take(s))
such action as shall be necessary to ensure that a
message is transmitted by means of the CREST
system by any particular time. In this connection,
CREST members and, where applicable, their CREST
sponsors or voting system providers are referred,
inparticular, to those sections of the CREST Manual
concerning practical limitations of the CREST
system and timings.
The Company may treat as invalid a CREST Proxy
Instruction in the circumstances set out in
Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001.
5. If you are an institutional investor you may be able to
appoint a proxy electronically via the Proxymity
platform, a process which has been agreed by the
Company and approved by the Registrar. For further
information regarding Proxymity, please go to
www.proxymity.io. Your proxy must be lodged by
12.00noon on 27 June 2025 in order to be
considered valid. Before you can appoint a proxy via
this process you will need to have agreed to
Proxymity’s associated terms and conditions. It is
important that you read these carefully as you will
be bound by them and they will govern the
electronic appointment of your proxy.
6. In the case of joint holders, where more than one of
the joint holders purports to appoint one or more
proxies, only the purported appointment submitted
by the most senior holder will be accepted. Seniority
is determined by the order in which the names of the
joint holders appear in the Company’s register of
members in respect of the joint holding (the first
named being the most senior).
7. Any corporation which is a member can appoint one
or more corporate representatives. Members can
only appoint more than one corporate
representative where each corporate representative
is appointed to exercise rights attached to different
shares. Members cannot appoint more than one
corporate representative to exercise the rights
attached to the same share(s).
8. To be entitled to attend and vote at the Annual
General Meeting (and for the purpose of
determining the votes they may cast), members must
be registered in the Company’s register of members
at 6.30 p.m. on 27 June 2025 (or, if the Annual
General Meeting is adjourned, at 6.30 p.m. on the
day two working days prior to the adjourned
meeting). Changes to the register of members after
the relevant deadline will be disregarded in
determining the rights of any person to attend and
vote at the Annual General Meeting.
9. Any person to whom this notice is sent who is a
person nominated under section 146 of the
Companies Act 2006 to enjoy information rights
(a “Nominated Person”) may, under an agreement
between him/her and the member by whom he/she
was nominated, have a right to be appointed (or to
have someone else appointed) as a proxy for the
Annual General Meeting. If a Nominated Person has
no such proxy appointment right or does not wish to
exercise it, he/she may, under any such agreement,
have a right to give instructions to the member as to
the exercise of voting rights.
10. Information regarding the Annual General Meeting,
including information required by section 311A of
the 2006 Act, and a copy of this notice of Annual
General Meeting, is available from
www.pacific-assets.co.uk.
11. Members should note that it is possible that, pursuant
to requests made by members of the Company under,
and meeting the threshold requirements in, section527
of the Act, the Company may be required to publish
on a website a statement setting out any matter
relating to: (a) the audit of the Company’s accounts
(including the auditor’s report and the conduct of the
audit) that are to be laid before the Annual General
Meeting; or (b) any circumstance connected with an
auditor of the Company ceasing to hold office since
the previous meeting at which annual accounts and
reports were laid in accordance with section 437 of
the Act. The Company may not require the members
requesting any such website publication to pay its
expenses in complying with sections 527 or 528 of the
Act. Where the Company is required to place a
statement on a website under section 527 of the Act,
it must forward the statement to the Company’s
auditor not later than the time when it makes the
statement available on the website. The business
which may be dealt with at the Annual General
Meeting includes any statement that the Company
has been required under section 527 of the Act to
publish on a website.
Notice of the Annual General Meeting continued
105
Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
12. As at 28 April 2025 (being the latest practicable date
prior to the publication of this notice) the Company’s
issued share capital consisted of 118,733,386
ordinary shares carrying one vote each (and no
shares were held in Treasury). Accordingly, the total
voting rights in the Company at 28April2025 were
118,733,386 votes.
13. Any person holding 3% or more of the total voting
rights of the Company who appoints a person other
than the chair of the Annual General Meeting as her/
she proxy will need to ensure that both he/she, and
his/her proxy, comply with their respective
disclosure obligations under the UK Disclosure
Guidance and Transparency Rules.
14. Under section 319A of the Act, the Company must
cause to be answered any question relating to the
business being dealt with at the Annual General
Meeting put by a member attending the meeting
unless answering the question would interfere
unduly with the preparation for the meeting or
involve the disclosure of confidential information, or
the answer has already been given on a website in
the form of an answer to a question, or it is
undesirable in the interests of the Company or the
good order of the meeting that the question be
answered.
Members who have any queries about the Annual
General Meeting should contact Frostrow Capital
LLP, the Company Secretary, at 25 Southampton
Buildings, London WC2A 1AL or info@frostrow.com.
Members may not use any electronic address
provided in this notice or in any related documents
(including the accompanying proxy form) to
communicate with the Company for any purpose
other than those expressly stated.
15. The following documents will be available for
inspection at the offices of Frostrow Capital LLP,
25Southampton Buildings, London WC2A 1AL
during normal business hours on any weekday
(Saturdays, Sundays and English public holidays
excepted) from the date of this notice and at the
venue of the Annual General Meeting from 9.45 a.m.
on the day of the Annual General Meeting until the
conclusion of the Annual General Meeting:
15.1 copies of the Directors’ letters of appointment;
and
15.2 copies of the Directors’ deeds of indemnity.
16. Under section 338 and section 338A of the Act,
members meeting the threshold requirements in
those sections have the right to require the
Company (i) to give, to members of the Company
entitled to receive notice of the meeting, notice of a
resolution which may properly be moved and is
intended to be moved at the meeting; and/or (ii) to
include in the business to be dealt with at the
meeting any matter (other than a proposed
resolution) which may be properly included in the
business. A resolution may properly be moved or a
matter may properly be included in the business
unless (a) (in the case of a resolution only) it would, if
passed, be ineffective (whether by reason of
inconsistency with any enactment or the Company’s
constitution or otherwise), (b) it is defamatory of any
person, or (c) it is frivolous or vexatious. Such a
request may be in hard copy form or in electronic
form, must identify the resolution of which notice is
to be given or the matter to be included in the
business, must be authenticated by the person or
persons making it, must be received by the Company
not later than 19 May 2025, being the date six clear
weeks before the meeting, and (inthe case of a
matter to be included on the business only) must be
accompanied by a statement setting out the grounds
for the request.
17. In accordance with the Articles, the Company may
impose restrictions on shareholders wishing to
attend the AGM. Such restrictions may include
limiting the number of shareholders permitted to
attend the AGM in person. Other restrictions may
be imposed as the chair of the meeting may specify
in order to ensure the safety of those attending the
AGM.
18. In order to ensure that shareholders are able to
follow the proceedings of the Annual General
Meeting without attending in person, the Company
will provide access online via the Investor Meet
Company platform. However, please note that
shareholders will not be able to vote online at the
Annual General Meeting via the platform and are
therefore requested to submit their votes via proxy,
as early as possible. Shareholders are invited to
submit any questions for the Board to consider.
Questions can be submitted ahead of the Annual
General Meeting via the Investor Meet Company
Platform up until 9am the day before the Annual
General Meeting or submitted at any time during the
Annual General Meeting itself. Shareholders that
wish to attend the Annual General Meeting remotely
should register for the event in advance by using the
following link:
https://www.investormeetcompany.com/pacific-
assets-trust-plc/register-investor
106
Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Explanatory Notes to
the Resolutions
Resolution 1 – To receive the Report of the Directors
and the Financial Statements
The Report of the Directors and the financial statements
for the year ended 31 January 2025 will be presented to
the AGM. These accounts accompany this Notice of
Meeting and shareholders will be given an opportunity
to ask questions at the meeting.
Resolution 2 – Remuneration Report
It is mandatory for all listed companies to put their report
on Directors’ remuneration to an advisory shareholder vote
every year and their remuneration policy to a binding
shareholder vote every three years. As shareholders
approved the Remuneration Policy in 2023, it is anticipated
that the Remuneration Policy will next be put to
shareholders at the AGM in 2026.
The Directors’ Remuneration Report is set out in full on
pages 56 to 58.
Resolution 3 – Declaration of a Final Dividend for the
year ended 31 January 2025
Resolution 3 seeks shareholder approval for the
declaration of a final dividend of 4.9p per share for the
year ended 31January 2025.
Resolutions 4 to 8 – Election and Re-election of
Directors
Resolutions 4 to 8 deal with the election/re-election of
each Director. Biographies of each of the Directors and
details of their specific contribution to the Board can be
found on pages 34 and 35.
The Board has confirmed, following a performance
review, that the Directors standing for election and
re-election continue to perform effectively.
Resolutions 9 and 10 – Re-appointment of Auditor
and the determination of its remuneration
Resolutions 9 and 10 relate to the re-appointment of
BDO LLP as the Company’s independent Auditor to hold
office until the next AGM and also authorise the Audit
Committee to set their remuneration.
Resolution 11 – Investment Policy
The definition of ‘Asia Pacific Region’ in the Company’s
investment objective currently excludes the countries of
Australia, New Zealand and Japan. The Board is
proposing to broaden the Company’s investable universe
by removing the exclusion of Australia and New Zealand
from the definition of ‘Asia Pacific Region’ in the
Investment objective. The deletion of this exclusion is the
only proposed change to the Company’s investment
policy.
The proposed amendment has been approved in
principle by the Financial Conduct Authority in
accordance with the requirements of the Listing Rules.
Please refer to the Chair’s Statement beginning on page 6
for further information. Any future material changes to
the Company’s investment policy will also require the
prior approval of both the FCA and shareholders. The full
text of the proposed amended Investment Policy is set
out below:
Proposed Investment Policy
The Company aims to achieve long-term capital growth
through investment in selected companies in the Asia
Pacific region and the Indian sub-continent, excluding
Japan (the “Asia Pacific Region”).
Up to a maximum of 20% of the Company’s total assets
(at the time of investment) may be invested in companies
incorporated and/or listed outside the Asia Pacific
Region (as defined above); at least 25% of their economic
activities (at the time of investment) are within the Asia
Pacific Region with this proportion being expected to
grow significantly over the long term.
The Company invests in companies which Stewart
Investors believe will be able to generate long-term
growth for shareholders.
The Company invests principally in listed equities
although it is able to invest in other securities, including
preference shares, debt instruments, convertible
securities and warrants. In addition, the Company may
invest in open and closed-ended investment funds and
companies.
The Company is only able to invest in unlisted securities
with the Board’s prior approval. It is the current intention
that such investments are limited to those which are
expected to be listed on a stock exchange or which cease
to be listed and the Company decides to continue to hold
or is required to do so.
107
Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Risk is diversified by investing in different countries,
sectors and stocks within the Asia Pacific Region.
No more than 45% of the Company’s total assets (at the
time of investment) may be invested in any single
jurisdiction. If the proportion of the Company’s total
assets invested in a single jurisdiction exceeds 49% at
any time, the AIFM and the Portfolio Manager will, as
soon as reasonably practicable, seek to re-balance the
Company’s portfolio below this threshold.
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
is15%.
When deemed appropriate, the Company may borrow
for investment purposes up to the equivalent of 10% of
the net asset value of the Company at the time of
drawdown of such borrowing.
The use of derivatives is permitted with prior Board
approval and within agreed limits. However, Stewart
Investors are unlikely to use derivatives as they do not
form part of their investment strategy.
Resolutions 12 and 13 – Issue of Shares
Resolution 12 in the Notice of Annual General Meeting
will renew the authority to allot share capital up to an
aggregate nominal amount of £1,484,167 (equivalent to
11,873,338 shares or 10% of the Company’s existing
issued share capital on 28 April 2025, being the nearest
practicable date prior to the signing of this Report or, if
changed, the number representing 10% of the issued
share capital of the Company immediately prior to the
passing of this resolution). Such authority will expire on
the date of the next AGM or after a period of 15 months
from the date of the passing of the resolution, whichever
is earlier. This means that the authority will have to be
renewed at the next AGM.
When shares are to be allotted for cash, Section 561 of
the Companies Act 2006 provides that existing
shareholders have pre-emption rights and that the new
shares must be offered first to such shareholders in
proportion to their existing holding of shares. However,
shareholders can, by special resolution, authorise the
Directors to allot shares otherwise than by a pro rata
issue to existing shareholders. Resolution 13 will,
ifpassed, give the Directors power to allot for cash
equity securities up to 10% of the Company’s existing
share capital on 28 April 2025, or, if changed, the number
representing 10% of the issued share capital of the
Company immediately prior to the passing of this
resolution as if Section 551 of the Act does not apply.
This is the same nominal amount of share capital which
the Directors are seeking the authority to allot pursuant
to Resolution12. This authority will also expire on the
date of the next AGM or after a period of 15 months,
whichever is earlier. This authority will not be used in
connection with a rights issue by the Company.
The Directors intend to use the authority given by
Resolutions 12 and 13 to allot shares and disapply
pre-emption rights only in circumstances where this will
be clearly beneficial to shareholders as a whole. The
issue proceeds would be available for investment in line
with the Company’s investment policy. No issue of shares
will be made which would effectively alter the control of
the Company without the prior approval of shareholders
in general meeting.
Shares will only be issued at a premium to the Company’s
cum income net asset value per share at the time of issue.
Resolution 14 – Repurchase of Shares
The Directors wish to renew the authority given by
shareholders at the previous AGM. The principal aim of a
share buy back facility is to enhance shareholder value by
acquiring shares at a discount to net asset value, as and
when the Directors consider this to be appropriate.
Thepurchase of shares, when they are trading at a
discount to the net asset value per share, should result in
an increase in the net asset value per share for the
remaining shareholders. This authority, if conferred, will
only be exercised if to do so would result in an increase in
the net asset value per share for the remaining
shareholders and if it is in the best interests of
shareholders generally. Any purchase of shares will be
made within guidelines established from time to time by
the Board. It is proposed to seek shareholder authority to
renew this facility for another year at the AGM.
Under the current Listing Rules, the maximum price that
may be paid on the exercise of this authority must not
exceed the higher of (i) 105% of the average of the
middle market quotations for the shares over the
fivebusiness days immediately preceding the date of
purchase and (ii) the higher of the last independent trade
and the highest current independent bid on the trading
venue where the purchase is carried out. The minimum
price which may be paid is 12.5p per share. Shares which
are purchased under this authority may be cancelled or
held in treasury.
108
Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Special Resolution 14 in the Notice of AGM will renew
the authority to purchase in the market a maximum of
14.99% of shares in issue on 28 April 2025, being the
nearest practicable date prior to the signing of this
Report (amounting to 17,798,134 shares or, if less, the
number representing 14.99% of the issued share capital
of the Company immediately prior to the passing of this
resolution). Such authority will expire on the date of the
next Annual General Meeting or after a period of
15months from the date of passing of the resolution,
whichever is earlier. This means that the authority will
have to be renewed at the next AGM or earlier if the
authority has been exhausted.
Resolution 15 – General Meetings
Special Resolution 15 seeks shareholder approval for the
Company to hold General Meetings (other than the
AGM) on at least 14 clear days’ notice. The Company will
only use this shorter notice period where it is merited by
the purpose of the meeting.
Recommendation
The Board considers that the resolutions detailed above
are in the best interests of shareholders as a whole.
Accordingly, the Board unanimously recommends to the
shareholders that they vote in favour of the above
resolutions to be proposed at the forthcoming AGM as
the Directors intend to do in respect of their own
beneficial holdings totalling 75,274 shares.
How to Vote
Please submit your votes by proxy using one of the
following methods:
> Electronically using: www.shareview.co.uk;
> Submitting a paper proxy form;
> CREST members may use the CREST electronic
proxy appointment service;
> Institutional investors may also be able to appoint a
proxy electronically via the Proxymity Platform
www.proxymity.io; or
> If you hold your shares through a nominee or
investment platform, please contact them to enquire
about voting arrangements.
Explanatory Notes to the Resolutions continued
109
Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Directors
J L Y Ang
S E Hansen
1
A M Impey (Chair)
2
N Sahgal FCA
3
R E Talbut
4
E T A Troughton
5
1
Chair of the Engagement & Remuneration Committee
2
Chair of the Nominations Committee
3
Chair of the Audit Committee
4
Senior Independent Director
5
Chair of the Sales, Marketing and Communications
Committee
Registered Office
16 Charlotte Square
Edinburgh EH2 4DF
Website: www.pacific-assets.co.uk
Company Registration Number
SC091052 (Registered in Scotland)
The Company was incorporated in Scotland on
21 December 1984.
Portfolio Manager
Stewart Investors
23 St. Andrew Square
Edinburgh EH2 1BB
Telephone: 0131 473 2200
Website: www.stewartinvestors.com
Authorised and regulated by the Financial Conduct
Authority.
Alternative Investment
Fund Manager
Frostrow Capital LLP
25 Southampton Buildings
London WC2A 1AL
Telephone: 0203 008 4910
Email: info@frostrow.com
Website: www.frostrow.com
Authorised and regulated by the
Financial Conduct Authority.
Custodian
J.P. Morgan Chase Bank
25 Bank Street, Canary Wharf
London, E14 5JP
United Kingdom
Depositary
JP Morgan Europe Limited
25 Bank Street
Canary Wharf
London E14 5JP
Independent Auditor
BDO LLP
55 Baker Street
London W1U 7EU
United Kingdom
Company
Information
110
Further Information
Pacific Assets Trust plc Annual Report for the year ended 31 January 2025
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Shareholder Helpline: +44 (0)371 384 2466*
Broker Helpline: 0906 559 6025*
For deaf and speech impaired customers, we welcome
calls via Relay UK. Please see www.relayuk.bt.com for
more information.
* Lines open 8.30 a.m. to 5.30 p.m., Monday to Friday
(excluding public holidays in England and Wales).
Notifications of changes of address and enquiries
regarding share certificates or dividend cheques should
be made in writing to the Registrar quoting your
shareholder reference number. Registered shareholders
can obtain further details of their holdings on the
internet by visiting www.shareview.co.uk
Broker
Investec Bank plc
30 Gresham Street
London EC2V 7QP
Solicitors
Dickson Minto W.S.
16 Charlotte Square
Edinburgh EH2 4DF
Identification Codes
Shares: SEDOL: 0667438
ISIN: GB0006674385
Bloomberg: PAC LN
EPIC: PAC
Global Intermediary Identification
Number (“GIIN”)
MAEPFZ.99999.SL.826
Legal Entity Identifier (“LEI”)
2138008U8QPGAESFYA48
Avoid investment fraud
1 Reject cold calls
If you’ve received unsolicited contact about
an investment opportunity, chances are
it’s a high risk investment or a scam. You
should treat the call with extreme caution.
The safest thing to do is to hang up.
2 Check the FCA Warning List
The FCA Warning List is a list of firms and
individuals we know are operating without
our authorisation.
3 Get impartial advice
Think about getting impartial financial
advice before you hand over any money.
Seek advice from someone unconnected to
the firm that has approached you.
Report a Scam
If you suspect that you have been
approached by fraudsters please tell the
FCA using the reporting form at
www.fca.org.uk/consumers/report-
scam-unauthorised-firm. You can also call
the FCA Consumer Helpline on
0800 111 6768
If you have lost money to investment fraud,
you should report it to Action Fraud on
0300 123 2040 or online at
www.actionfraud.police.uk
Find out more at
www.fca.org.uk/scamsmart
Investment scams are
designed to look like
genuine investments
Spot the warning signs
Have you been:
• contacted out of the blue
• promised tempting returns
and told the investment is safe
• called repeatedly, or
• told the offer is only available
for a limited time?
If so, you might have been
contacted by fraudsters.
Remember: if it sounds too
good to be true, it probably is!
Be ScamSmart
Company Information continued
Contact details
Pacific Assets Trust plc
25 Southampton Buildings
London
WC2A 1AL
www.pacific-assets.co.uk
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Pacific Assets Trust plc Annual Report for the year ended 31 January 2025