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RNS Number : 1741R  Hansa Investment Company Limited  15 July 2025

Hansa Investment Company Limited

 Annual Report 31 March 2025

 

Chairman's report

Jonathan Davie

Chairman

 

Dear Shareholder

Shareholder returns

Hansa Investment Company Limited (HICL, "the Company") has increased Net Asset
Value from 378.8p at 31 March 2024 to 384.2p per share at 31 March 2025. In
addition, shareholders have also received dividends of 3.2p per share during
the period.

There has been a reduction in the discount from 44.6% to 38.8% for the
Ordinary shares and from 46.1% to 43.5% for the 'A' Ordinary shares as at 31
March 2025.

More details about our results and longer-term performance can be found
further on as well as in our Portfolio Manager's detailed review of markets
and portfolio performance in his report.

Strategy

Alec Letchfield and his team at Hansa Capital Partners (HCP, "the Manager",
"the Portfolio Manager"), supported by the Board, have continued with their
strategy of diversification, both as to geographic spread and investment
styles, with a strong emphasis on retaining investment in top class managers
whilst seeking new opportunities. He continues to keep turnover to a minimum
and has avoided overreacting to the present volatile environment.

Ocean Wilsons Holdings Limited

It has been an exceedingly active period for Ocean Wilsons Holdings Limited
(OWHL, "Ocean Wilsons"). There are a number of important announcements I
should like to update you on.

Sale of Wilson Sons

Ocean Wilsons agreed on 21 October 2024 to sell its 56.47% holding in Wilsons
Sons Holdings Brasil S.A. ("Wilson Sons") to SAS Shipping Agencies Services
("SAS"), a wholly owned subsidiary of MSC Mediterranean Shipping Company for
R$4.4b - the equivalent of R$17.50 per share. The sale was subject to a number
of regulatory approvals, the last of which was received on 20 May 2025, making
the sale unconditional. Ocean Wilsons subsequently received approximately US$
594m net of all costs and relevant Brazilian taxes on 4 June 2025.

Ocean Wilsons tender offer

Following the completion of the sale of Wilson Sons, Ocean Wilsons announced a
tender offer for up to 7,072,608 shares in the company, being the maximum that
can be purchased without becoming a "close company" under the UK Corporation
Tax Act 2010. The tender offer is being run with the strike price set by way
of a reverse Dutch auction, whereby OWHL shareholders are able to elect the
price at which they tender their shares. The tender offer opened on 18 June
2025 and will close on 18 July 2025 with the result expected to be announced
on 21 July 2025. HICL will not participate in the tender offer in light of the
possible combination of HICL and Ocean Wilsons as described in more detail
below.

Possible combination of the Company with Ocean Wilsons

On 17 June 2025, the Company released a joint statement with Ocean Wilsons to
announce we had reached preliminary agreement on the key terms of a possible
all-share combination of HICL and Ocean Wilsons, under which HICL would
acquire Ocean Wilsons ("the Possible Combination").

Following the announcement of the sale of Wilsons Sons, we had been giving
consideration to the options regarding the Company's strategic position in
Ocean Wilsons. The Board concluded that the Possible Combination presents an
attractive proposition for shareholders. It will create an investment company
with total net assets of in excess of £900m under a simplified group
structure, which the Board believes will broaden the appeal of the Company
among investors and enhance the liquidity of the shares. It will also allow
HICL to generate an uplift in the carrying value of Ocean Wilsons by reporting
it at net asset value (rather than share price) and simplify its investment
proposition.

The Company has also agreed a new tiered investment management fee structure
in connection with the Possible Combination. The revised fees will be at a
reduced rate of 0.8% of NAV up to £500m and 0.7% of NAV thereafter, as
compared to the existing management fee of 1.0%. A combination of cost
efficiencies from the increased scale of the Company and the lower blended
management fee rate will result in a lower ongoing charges ratio.

Further, the Board will, following the proposed Combination, introduce a new
capital allocation policy which is expected to enhance returns over time and
is outlined below.

We will make further announcements in relation to the Possible Combination in
due course.

Capital allocation, share buyback and dividend policies

As promised in my half year report, the Board has given active consideration
to its future policies for capital allocation, share buybacks and dividends.
As outlined above, as part of the Possible Combination, the Board proposes a
Capital Allocation policy that:

(i) prioritises annual share buybacks of between 2% and 4% of its shares; and

(ii) pay dividends only to the extent required to ensure that the new combined
company is not treated as a non-mainstream pooled investment. In anticipation
of the above, the Company will not announce any interim dividends ahead of any
shareholder vote regarding the Possible Combination. The Board would assess
the Company's options should the Possible Combination not proceed.

Prospects

Forecasting the future direction of markets has always been perilous; however,
the present situation which includes regional conflict wars, unresolved tariff
discussions, Presidential challenges to Fed policy and government debt
mountains amongst other things, makes it impossible to be confident in
forecasting anything.

We have been fortunate to have Alec Letchfield's steady hand on the investment
tiller during these times of choppy waters.

I am very optimistic about the proposed Possible Combination and both the
immediate and long-term benefits it will bring to all HICL shareholders.

FATCA/CRS

As you will have seen in several of my previous statements, as a
Bermudan-incorporated Investment Company, HICL is required to comply with
Bermuda's specific laws relating to FATCA and CRS annual filings. For the
Company to be compliant with these rules, it must have a record of each direct
certificated shareholder's tax residency verified by the individual
shareholder themselves. In a continuing effort to comply with these
regulations, the Company has started using its powers, within the Amended and
Restated Byelaws of the Company adopted on 2 August 2024, to require
shareholders to supply it with the relevant information, accordingly, several
notices have been served to shareholders who are missing self-certification
data.

Asset reunification

The Company is pleased to report early success with its asset reunification
project being undertaken in conjunction with Georgeson. Following Georgeson's
work, several shareholders have been reunited with their shareholdings and
unclaimed dividends. Georgeson also advised the Board of a number of
shareholders they were unable to trace. The Board considered those untraceable
shareholdings for their eligibility to the Company's share forfeiture process,
which sells the shares of untraceable shareholders in the market returning the
sales proceeds to the Company. This benefits existing shareholders by
returning dormant shares to the freefloat in the market, assisting liquidity,
returns the net sale proceeds to the Company and, importantly, improves
compliance with FATCA/CRS legislation. The Company's Bye-Laws specify how the
process works. For a shareholding to be eligible for forfeiture, there are two
key tests to consider during the period of the past six years. Either, that
the shareholder has not claimed a dividend during the six year period, despite
at least three having become payable. Or, that the shareholder has been
uncontactable for at least two calendar years and being the most recent two
years of the six year period. Therefore, in accordance with Bye-Law 15.3 and
after final notices were sent to their last known contact addresses, their
shares have been sold and the net proceeds of the sale, together with any
unclaimed dividends, have been forfeited to the Company. During the year to 31
March 2025, the Company has received £76,000 through this process following
the sale of 27,525 of shares across both share classes.

Shareholder event

As you may recall, we held a successful shareholder event in London on 25
September 2024. The event was live streamed for those you who could not attend
in person. It is our intention to hold a similar event on 23 September 2025.
Details will be announced nearer the time.

ESG matters

The Board remains responsible for the Company's ESG policies and we continue
to adopt our Investment Manager's Responsible Investing Policy. The Manager
revised its policy most recently in May 2023 to reflect advancements in ESG
principles and to ensure the policy aligns with evolving standards and best
practice within the industry.

The Hanseatic Group, of which our Manager is a part, has continued to be a
signatory to the UN PRI, the UN-supported initiative which aims to promote ESG
factors within investment decision-making. Following a second application
during the summer of 2024, I am pleased to report that the Manager again
received very favourable feedback from the UN PRI on its policies.

I am also pleased to note that the Company has renewed its Partnership with
the Blue Marine Foundation, making another annual donation to support their
marine conversation efforts which focus on securing Marine Protected Areas,
tackling overfishing, and restoring vulnerable and threatened habitats. More
information on their projects and impact can be found on Blue Marine's own
website www.bluemarinefoundation.com .

Key Performance Indicators (KPIs)

The Board has completed its annual review of our KPIs and decided to maintain
our previous investment stance.

Board composition

As mentioned in my half year report, Nadya Wells chose not to stand for
re-election to the HICL Board at the AGM.

Simona Heidempergher, as Chair of our Nominations Committee, worked with an
independent search firm to conduct a thorough search for a replacement for
Nadya. I am delighted to say that Pedro Goncalves agreed to join our Board and
was officially appointed on 6 February 2025. Pedro brings a wealth of
experience in asset management and was also an appointed advisor to the
Portuguese Government during the successful changes made to economic policy
about ten years ago.

Annual General Meeting (AGM)

The Company's AGM will be held on 5 August 2025 in Bermuda. You will find the
Notice of AGM and associated notes further on in  this Annual Report.

I should like to express my gratitude to my fellow Board members, as well as
Alec Letchfield and his team at Hansa Capital Partners, for their dedication
during the past year. As always, we appreciate the support of our shareholders
and look forward to delivering on the Possible Combination.

 

Jonathan Davie

Chairman

15 July 2025

 

Long-term performance

Ten-year company performance statistics

 

 As at 31 March    Shareholders' Funds  Net Asset Value per share -  Annual      Ordinary  'A' Ordinary  Ordinary  'A' Ordinary

Ordinary and

'A' Ordinary                dividends
 2025              £461.1m              384.2p                       3.2p        235.0p    217.0p        38.8%     43.5%
 2024              £454.6m              378.8p                       3.2p        210.0p    204.0p        44.6%     46.1%
 2023              £367.0m              305.8p                       3.2p        174.0p    170.5p        43.1%     44.2%
 2022              £382.9m              319.1p                       3.2p        198.5p    193.0p        37.8%     39.5%
 2021              £367.9m              306.6p                       3.2p        198.0p    198.5p        35.4%     35.3%
 2020              £276.3m              230.2p                       3.2p        130.9p    135.5p        43.1%     41.2%
 2019              £337.3m              281.1p                       3.2p        195.5p    195.0p        30.5%     30.6%
 2018              £323.1m              269.3p                       3.2p        198.5p    195.5p        26.3%     27.4%
 2017              £307.5m              256.3p                       3.2p        173.3p    169.6p        32.4%     33.8%
 2016              £255.6m              213.0p                       3.2p        146.0p    145.1p        31.5%     31.9%

 

The table includes information relating to HICL and historic information
relating to Hansa Trust. The years ended 2020-2025 notes HICL information. The
historic year ends 2016-2019 all relate to Hansa Trust. So that data is
consistent and comparable, the historic data in columns "Net Asset Value per
share", "Annual dividends" and "Share price (mid)" have been restated to
reflect that, as part of the redomicile of the business of Hansa Trust to HICL
in August 2019, HICL issued five times as many shares in each share class of
HICL as there were in Hansa Trust.

The Company's KPIs can be found further on in the Report.

 

 To 31 March 2025                     1 year  3 years  5 years  10 years
 Total Return (%)
  Ordinary shares                     13.5%   24.3%    94.9%    62.8%
  'A' non‑voting Ordinary shares      8.0%    18.2%    74.1%    56.7%
  NAV                                 2.3%    23.9%    75.6%    89.6%

 

 

Portfolio Manager's Review
Portfolio Manager's report
The Donald Trump Show

 

Executive Summary

The big story in the last financial year was the return of Donald Trump as
President of the USA for the second time. However, a significant amount
happened around the world and in markets prior to his second inauguration in
January 2025. In the first part of the year the US equity market continued to
be the only game in town led by the Magnificent 7 (M7) with the rest of the
world trailing (some way) behind. The exception was China which bounced back
after a prolonged COVID and real estate-induced economic slowdown. We did have
concerns, however, that some market participants were getting slightly
complacent and the return of war to Europe and the Middle East had made
geopolitics a consideration once again.

The landslide that brought Trump back to power initially led a wave of
optimism about the prospects of a bonfire of regulation and a surge of M&A
in the US. This quickly subsided when a more vindictive, more
ideologically-driven Trump emerged, announcing plans for tariffs and
immigration clampdowns which were far more aggressive than expected. These,
combined with Trump's unique style of social media diplomacy, unsettled
markets which feared that a slowdown in global economic activity would
catalyse a recession. In the face of this, many of the tariffs have been
paused for negotiation with the next steps highly uncertain.

Against this backdrop, we think it prudent to ask ourselves whether we are
witnessing a sea change from the dominance of the US to other parts of the
world, namely China and Europe? In the short term it is entirely possible that
the US will underperform other regions. Many US companies were priced for
perfection while much of the rest of the world looks cheap by comparison. The
chaos and uncertainty created by Trump is clearly harming the US economy and
once investor sentiment is damaged it is very difficult to repair. On the flip
side, Trump views international relations through the prism of a real estate
deal and has historically gone in with a maximalist approach before settling
somewhere in the middle, seemingly unconcerned about contradicting himself.

However, longer term we still struggle to look past the inherent advantages
that the US has over the rest of the world. The US's entrepreneurial spirit,
stridently capitalist system and the global dominance of the M7 tech companies
will require a massive societal shift that most other regions are highly
unlikely to be able to ever fully make. Europe remains dogged by political
infighting and high debt levels, while China has reminded the world that a
communist system with its central control is not as attractive as capitalism.
And, as we always come back to, you bet against the US at your peril!

Clearly, we are entering a period of higher volatility in markets so how do
investors mitigate this? We are applying the three D's; Diversification, Don't
panic and Don't overtrade. We advocate increased diversification by geography,
sector and style, avoiding panicking after the fact and risking being
whipsawed as the market rebounds and remembering that we are long-term
investors, not short-term volatility traders. While we are aware of the risk
of a global recession and a structural market change, we are yet to see enough
evidence of either to fully pivot from our long-term strategy favouring the US
at this stage.

Alec Letchfield

Portfolio Manager

The calm before the storm

The first half of the financial year was characterised by the broad strength
and stability of global markets despite an ominous geopolitical backdrop. The
US, and by extension the M7, led the way but most other markets also gained.
This backdrop was not however without its risks. Market participants were
getting complacent as the VIX, which measures the expected volatility of the
US stock market and is commonly referred to as the 'fear gauge', had largely
been low for most of the last two years. We also thought credit spreads, the
difference between corporate credit and government bond yields, were looking
very tight by historic standards.

This was on top of our concerns about geopolitics. This was an area investors
had largely been able to ignore for much of the last couple of decades, a
period characterised by the absence of major military conflicts and led by US
hegemony in its role as the global policeman. Free trade was the order of the
day, as countries sought to become increasingly intertwined with the
developing nations becoming more prosperous and developed nations benefiting
from the inflow of cheap goods and services. However, conflicts in Europe and
the Middle East and the rise of more populist parties in the West leading to
increased attacks on free trade and globalisation at least gave us cause for
concern.

Storm clouds building

The second half of the year was all about the US election. With Joe Biden
drifting off the ticket, it became a straight shootout between Kamala Harris
and the resurrected Donald Trump. While we were concerned about the risk of
tariffs, trade wars and tighter migration policies were Trump to win, we
wondered if in reality there would be little difference at the stock market
level between a Harris or a Trump presidency, at least initially. Both were
advocating additional federal spending and showing no willingness to reduce
the US debt overhang. With little desire to tackle this ticking bomb, at least
in the near term, markets were likely to remain underpinned by a wall of
liquidity.

The election itself confounded the pollsters with Trump winning all the
decisive swing states and control of both bodies in Congress. Importantly,
Trump inherited a broadly healthy US economy where a soft landing appeared to
have been achieved, with interest rates on a downward trajectory as inflation
moved back to more acceptable levels. Hence, the US market looked set to
remain the pre-eminent global stock market. With the M7 spearheading this
dominance and Europe and China mired in structural challenges, another period
of the US heading the global stock market leader board looked to be an odds-on
certainty. In fact, the key risk appeared to be one of an excess of animal
spirits that ultimately culminated in a boom and then bust as these excesses
were brought back under control.

Hence, a Trump presidency was meant to be a positive one for the US stock
market, albeit with a high degree of volatility if his first term was anything
to go by. Having campaigned to Make America Great Again, investors were
excited at the prospect of Trump both cutting corporate taxes and instigating
a raft of deregulatory measures. Whilst he also advocated tariffs and
restrictions on immigration, which are both inflationary and damaging to the
economy, investors saw these as being largely rhetoric anticipating that
overly damaging policies would be quickly reversed if they weighed on the US
stock market.

The storm - Trump 2.0

Despite markets initially taking the view that Trump was likely to be positive
for global markets, it quickly became apparent that Trump 2.0 was different to
the first term. When Trump beat Hilary Clinton in the 2016 election, his
victory seemed to be as much of a surprise to him as it was to the rest of the
world. This meant he was largely unprepared for power and, in order to quickly
form an administration, had to rely on a cadre of people who were largely
Republican party stalwarts, who had decades of governance experience but who
were not especially devoted to Trump himself or his agenda. During his four
years out of power he seems to have identified this as the key problem of his
first administration and, with a significantly more organised movement around
him, appears to have arrived at his second inauguration with an agenda he
wants to quickly enact. This time, personal fealty to Trump seems to be
paramount for administration appointees, far ahead of other considerations
like policy alignment, experience, moral integrity or competence, so he can
get his policies enacted with the minimum amount of internal pushback
possible. This has led to a chaotic start to the administration as Trump has
begun pursuing his agenda while many of his cabinet are inexperienced in
navigating the federal bureaucracy that actually has to enact it.

Whilst wrapped in bluster and rhetoric, it has become apparent that Trump
genuinely does think the US has been hard done by globalisation and wants to
reshape the global economic order. By levying tariffs on both friend and foe,
including China, Mexico, Canada and Europe and approaching a crackdown on
immigration with more gusto than initially expected, Trump appears far more
determined to achieve his set objectives this time around.

It's also not just Trump. The Department of Government Efficiency (DOGE) under
Elon Musk has proved more vocal and pernicious than first thought, cutting
government expenditure through laying off large numbers of government
employees. Similarly, Treasury Secretary Scott Bessent has stated that he
wants to bring down the fiscal deficit from 7% of GDP to 3% over the coming
years. Whilst arguably demonstrating commendable and necessary fiscal
prudency, cutting the deficit by 1% per annum will likely weigh heavily on GDP
and lead to growth falling below the 2.5% potential growth rate. However,
despite the noise surrounding DOGE's efforts, it is important to remember that
the cuts they are actually making are a rounding error compared to the overall
federal budget.

Unsurprisingly, this backdrop has led to a shift in the market's focus.
Instead of centring on the positive effects of the anticipated cuts in
taxation and deregulation, markets are now focusing on the potential negative
effects on US and global growth. Not only do we appear to be entering a
renewed global trade war, which will almost inevitably result in global trade
flows shrinking in the coming years, the uncertainty created by Trump's
policies will weigh heavily on US consumption and the corporate sector.

Trump's actions have also led markets to reconsider their positioning outside
of the US. Previously a bias to the US had been something of a "no brainer".
On the one hand you had the ultimate capitalist economy, a government founded
on stability and globalisation and an entrepreneurial spirit that had seen the
rise of the mighty M7 technology companies. Conversely, the two key regions
outside of the US, Europe and China, have been characterised by political
uncertainty, an often anti-business stance by governments and the technology
revolution having almost completely bypassed Europe in recent years.

Now though, such has been the vigour of Trump's actions, not only is it
weighing on sentiment within the US, but also acting as a catalyst for change
elsewhere in the world. Europe, having become increasingly fractured as
political parties became more radical and populist in outlook, has been
brought together by a common cause to counteract the measures introduced by
Trump. Of particular note is the decision to increase spending on defence,
rather than relying on the benevolence of the US to act as the global
policeman, leading to Germany moving away from its strict fiscal controls to
rearm in a way that hasn't been seen since the Second World War. Similarly, in
China, President Xi has toned down many of his anti-business comments and
started to make positive noises on the desire for China to be open for
business again. With more stimulus packages likely to follow earlier ones,
this is creating a far more compelling investment backdrop.

From a market perspective, the swift and radical change in events has resulted
in a significant swing in performance and a clear distinction between the
first nine and final three months of the year. The US gained 13.6% over the
first nine months of the financial year before falling by 7.3% in the final
quarter, taking it to an annual return of 5.4%. In contrast Europe was down
2.5% for the first three quarters but saw a surge in performance in the final
quarter, rising by 7.2%, taking its annual return to 4.5%. At the sector
level, the US was led down by the M7, which fell by 18.5% in the final
quarter, partly due to the geopolitical machinations, but also concerns on
competition from Deepseek, a Chinese Artificial Intelligence (AI) company
which, if reports are to be believed, has produced an AI model which is both
cheaper and provides outcomes at least as good as those produced by the M7
Large Language Models (LLM). However, over the whole year the M7 was still up
17.2%! China saw a notable rebound throughout the year gaining 37.3% following
an improvement in investor sentiment after the government announced a large
stimulus programme and economic growth slightly picked up.

The contrast is also clearly visible in the global bond sector. With the
global economy seeming strong the higher yields on offer in high yield bonds
made them much more attractive but, as we entered the final quarter and
concerns about tariffs and a global slowdown came to the fore, the defensive
characteristics of government bonds became more important. High yield bonds
outperformed treasuries in the first nine months of the year (6.7% vs 0.2%),
but then underperformed in the final quarter (-1.1% vs -0.5%), leaving their
annual returns at 5.6% and -0.3%, respectively.

In the alternatives space, the high geopolitical tensions and concerns over
the stability of the US dollar under the volatile Trump government saw gold
prices hitting new heights, gaining 37.0% over the year. Despite war in the
Middle East, oil prices continued to fall (down 15.9%) as oversupply and weak
demand both contributed downward pressure.

A change in the US hegemony?

This rather chaotic backdrop raises a number of important questions for stock
markets, and, most importantly, the question as to whether we are experiencing
a sustainable transition from the status quo of US and M7 dominance to one
where the US loses its position as the number one economy and stock market as
the rest of the world ("ROW") comes to the fore? Unfortunately, as is
generally the case, the answer is a complex one which is both time and action
dependent.

In the short term it is entirely possible that the current rotation out of the
US and into regions such as Europe, the emerging markets and China will
continue. On the one hand, the US was arguably priced for perfection, trading
well above its long-term average valuation, with a potential bubble in the
dominant tech sector arguably emerging. On the other hand, the ROW has largely
been ignored having been overshadowed by structural growth challenges,
geopolitical unrest and having failed to jump on the technology bandwagon. As
a result, valuations in the ROW are at or below historic averages. As is often
the case however, the outlook is never quite as good as when markets are at
their most bullish nor indeed as bad as when valuations are at their lows.
Hence, if we see a continuation of Trump pressing the self-destruct button for
the US economy, and Europe and China being girded into action to tackle their
structural problems, the shift out of the US and from growth to value
potentially has a long way to go. Following years of investors overweighting
the US and largely able to ignore the ROW and the value sector, the relative
positioning would take a long time to unwind.

Unfortunately, the reality is not quite as clear cut. Trump, being a real
estate man, views everything as a deal. Often, he enters negotiations hard
only to back off again, avoiding the worst-case scenario and, despite his
apparent newfound ideology, it appears he is adopting a similar approach this
time around. It is for this reason we remain nervous of being whipsawed,
chasing trends only to see them reversed as Trump backs down from his more
extreme measures. If his first term in power was anything to go by, this
outcome has a very high probability. We have long said that we believe timing
markets is impossible in the long run and the speed of Trump's social media
diplomacy makes this even more difficult.

Most worrying, however, is that even if Trump ultimately backs down and the
worst-case scenarios are avoided, the process itself results in both four
years of significant volatility and potentially catalyses a recession in the
US and a global slowdown. Already we are seeing tentative signs of this.
Corporates hate uncertainty almost more than anything else. Most of corporate
America was hoping to enjoy a better life under Trump, which they thought
would be a pro-growth government and where M&A was back on the agenda
having been stymied under a Democratic leadership. However, if the operating
backdrop remains so unclear and the volatility so extreme, corporates will
likely remain reluctant to invest and both M&A and IPO markets will remain
in the doldrums due to an absence of animal spirits.

Compounding the problems for the corporate sector, the all-important consumer
sector is also showing signs of weakness due to the uncertainty being created
under Trump. Whilst Trump is focused on reviving the US manufacturing sector
and industrial heartlands through a programme of tariffs and measures to stop
immigration, his policies and ways of doing business are starting to weigh on
consumer sentiment. Rather naively, the Trump government's attempts to return
manufacturing to a mature economy such as the US, where wage levels are
naturally uncompetitive versus emerging markets, is likely to fail and, at the
same time, damage the consumer sector which makes up a far more meaningful two
thirds of the US economy. While tariffs and an immigration crackdown may be
red meat to Trump's voter base, these same US consumers will be the ones who
most feel the impacts of the likely resulting higher inflation.

The longer-term outlook is equally uncertain. Whilst in the short-term a
rotation out of the US and into the ROW is a possibility, given the
deteriorating outlook for the US and improvements elsewhere combined with the
relative valuation gap between the two, ultimately longer-term returns will be
driven by growth and return fundamentals. Here, it is much harder to see the
US's inherent advantages diminishing and the ROW catching up. Ultimately, for
the ROW to catch-up with the US's entrepreneurial spirit, inherently
capitalist system and to replicate and replace the dominance of the M7 tech
companies will require a massive societal shift and likely take a generation.
One could possibly argue that it is the direction of travel that matters, and
Trump is starting this process, but many have made such claims about the
downfall of the US in the past to their ultimate cost. If the direction of
travel is genuinely changing we would rather wait for more definitive evidence
given the risk of being whipsawed in the short term.

Portfolio Positioning

Distilling this rather chaotic backdrop is challenging! One has to accept we
are now in a period that will be characterised by volatility and where a
number of different scenarios are possible. Unlike in the past where markets
were driven by conventional cycles and where governments and central bankers
acted in a fairly predictable fashion, now the outlook will be influenced by
the actions of one highly volatile individual, Trump, and how the world reacts
to these actions.

To position for this new world, we're applying the three D's; Diversification,
Don't panic and Don't overtrade:

1. Diversification

Diversification is key both at the country level and by style. We would
advocate having a blend of funds playing the US, Europe, Asia and the emerging
markets. Similarly, we would seek to own those managers who both focus on
different style factors and those who play to different cycles such as
insurance. By blending such a group, normally the worst periods of stress can
be mitigated. Importantly, with it being hard to predict which countries and
regions will come out on top, targeting those managers who focus on company
fundamentals will become even more important in driving portfolio returns.
Fortunately, this characteristic is the primary driver amongst our active
funds.

2. Don't panic

By not panicking and making significant changes to the portfolio we're
protecting against the dangers of being whipsawed. As markets rotate as events
unfold, it is all too easy to be panicked into chasing the market after the
fact. With Trump typically rolling back from comments that elicit large falls
in the US stock market, there is a real danger of being whipsawed and
compounding the pain as markets normalise after the initial reaction.

3. Don't overtrade

This is a recognition of Hansa's USP which is the longevity of our time
horizon. Ultimately, we are not a trading group and have little skill in
calling short-term market movements. Instead, we focus on the long-term,
recognising that markets typically recover and what look to be near death
experiences in the midst of the storm, end up as mere blips in the chart.
Normally, if one had done nothing a better outcome would be achieved. We have
long held that consistently timing markets is near impossible.

Hence, at the portfolio level, in terms of country positioning we are not
inclined to shift our country allocations at this stage. Having maintained a
long-term bias to keep our US position up to weight and overweight in Asia,
Japan and the emerging markets, we still find the evidence insufficient to
shift our weightings at this stage. Whilst the US has clearly been under
pressure towards the end of the year, a rotation back the other way is still a
distinct possibility. More concerning to us is that the current situation
catalyses a recession in the US which, together with global tariffs, results
in a global downturn. Here there will be very few places to hide in any equity
market. Again, though, it is too early to make this call with much conviction
with a dialling down of the current rhetoric a distinct possibility if history
is anything to go by. It is important to remember that during his first term
Trump used the stock market as a barometer of success and a weak economy is
unlikely to be popular among US voters.

In the diversifying bucket, we remain largely happy with our positioning,
continuing to blend a combination of yield, alternative income streams such as
insurance, and assets which typically move differently from wider equities
markets, including CTA funds and those that trade alternative asset classes
such as credit default swaps. In the bond space we have largely focused on
non-government bonds, albeit we suspect that even government bonds will serve
a function given the higher yields currently on offer, despite ongoing issues
over inflation and overall debt levels.

Summing up

Clearly, we are at an important juncture for global stock markets. Most
optimistically, we may simply be in a period of high volatility with the
worst-case scenarios being avoided as Trump pulls back on his most extreme
measures as he negotiates deals around the world. Here, there may well be
money to be made for short-term investors by more active trading between
different regions and sectors, but ultimately the status quo and US
exceptionalism will remain in place. This remains our core view, albeit with
increasing caution, as we believe having a strong US economy ultimately
benefits Trump and while he does seem more ideologically driven this time
around, he has consistently shown in the past that he will quickly change
direction if it is beneficial for him. It is important to remember that Trump
has only actually been in office for a matter of months and there was always
going to be an adjustment period as he began to enact his election pledges and
set out his policy agenda.

More worryingly, a continuation of Trump's current policies and approach may
impact both the US corporate and consumer, and damage global trade flows
resulting in a global recession. In such an outcome we suspect trading between
countries will be a largely fruitless affair and instead all global stock
markets will come under pressure. Clearly the probability of such a scenario
has increased. At this stage we would argue that such a downturn would be more
muted than the more structural bear markets we have seen in the past, given
the drivers behind it are political. With few signs of the excesses normally
associated with the major bear markets such as during the Global Financial
Crisis, the worst-case outcome should be avoided and longer-term portfolios
such as ours will be able to ride out such a move.

The most worrying outcome, however, is that we are on the doorstep of a
structural change in markets. Here the actions by Trump bring an end to the
period of US exceptionalism and the world enters a period of factionalism and
lower growth as global trade diminishes. Such a world will necessitate some
radical changes in both country selection and the allocation between risk and
lower risk asset classes. These structural changes have historically been very
difficult to predict and market commentators who have little skin in the game
typically call these changes far more frequently than they actually occur.
This is not our central scenario but is no longer a zero percent probability.

Such a world will require careful and prudent portfolio management.
Diversification will be key and a steady and experienced hand needed on the
tiller. We are also fortunate in owning many great managers with experience of
investing in more challenging times with the processes in place not to be
whipsawed and with a strong focus on robust fundamentals.

Portfolio review and activity

The Company's NAV total return for the financial year was 2.3%. The
portfolio's gains over the financial year are in line with the returns a
traditional 60:40 equities and bonds portfolio would have achieved (up 2.4%).
Removing the outsized impact of the M7 on the MSCI ACWI, the equal weighted
60:40 gained 1.5% over the financial year. For the three KPIs, the returns
over the last year were 4.8% for the MSCI ACWI NR Index, 2.6% for UK CPI and
-1.2% for the FTSE UK Gilts All Stocks TR Index. Over five years the NAV total
return has annualised at a strong 11.9%, ahead of CPI (4.7%) and Gilts (-5.8%)
and just a little behind the MSCI ACWI (14.3%). Pleasingly, this return has
been significantly ahead of the 60:40 traditional portfolio, whether using the
market-weighted equity index (5.9%) or the equal-weighted version (2.8%).

The Company's position in Ocean Wilsons Holdings has been a strong contributor
recently and over longer periods. The holding was up 7.0% over the financial
year due to its continued strong financial performance and the news that it
had agreed the sale of its interest in Wilson Sons to a subsidiary of MSC
Mediterranean Shipping Company which now awaits regulatory approval.

The Company's net asset value per share has increased from 378.8p at the end
of March 2024 to 384.2p at the end of March 2025, with 3.2p per share having
been paid out in dividends during that time.

Core and Thematic Funds

The biggest allocation in the portfolio is to the Core Regional silo which
returned 0.5% over the financial year, whilst the Thematic silo was down 2.6%.
Over the last three years, the Core Regional silo gained 15.1% and the
Thematic silo gained 6.0%. Both silos give exposure to global equity markets
through a selection of world class funds, often difficult or impossible for
most investors to access. The Thematic silo allows us to invest in sectors or
areas we believe are exceptionally attractive and offer the possibility of
outsized returns.

Europe was one of the stronger performing areas this year largely due to the
Company's holding in Helikon Long Short Equity Fund performing particularly
well, gaining 45.5%, since purchase in August 2024. The fund takes both long
and short positions, which gave the manager an advantage in the particularly
volatile markets we saw towards the end of the year. The portfolio is
concentrated with a quality and value bias and currently has a large position
in gold miners which has been particularly accretive to performance over the
last year. The manager has liked the gold trade as the increase in
geopolitical uncertainty over the last couple of years has led investors to
seek safety in gold as a store of value. Positions in Endeavour Mining,
Eldorado Gold and Collective Mining were amongst the best performers in the
portfolio. The manager wanted to invest in these companies based on their
fundamentals so also had a short position on a Gold ETF, in order to minimise
exposure to movements in the price of the underlying commodity.

Schroder Global Recovery also performed well over the financial year returning
5.1%. This fund has a strict focus on the value factor meaning that they are
highly sensitive to the valuations companies are held at. This means they
broadly have not held the M7 or many technology companies as their valuations
have been too high. They therefore avoided the biggest falls in the market in
the latter part of the year. The fund's largest exposure currently is to the
healthcare sector where positions in GSK, Sanofi and Bayer have outperformed
this year, having been more modestly valued to begin with as the sector has
struggled with higher inflation and the consequences of the Inflation
Reduction Act in recent years.

The Company's Japanese holdings also performed more robustly with Simplex
Value Up Trust gaining 11.7% over the year. The trust has shifted to invest in
slightly larger cap companies as these firms are now more willing to make
governance improvements once the manager engages with management, whereas
before a much larger ownership stake was required to drive change. The
regulator is encouraging companies to have a price-to-book ratio of at least 1
in order to be listed on the main stock exchange, which has spurred an
increase in shareholder engagement from management teams. We decided to fully
redeem our position in Indus Japan Long Only during the year following a
prolonged period of underperformance and a desire to consolidate our Japanese
holdings.

Our US holdings had a more difficult year with most being underweight
technology and particularly the M7 mainly due to the size of their weighting
within the index, but also due to their higher valuations. While this was
beneficial in the final quarter, it detracted during the first nine months of
the year. The strongest contributor was Armistice Capital which gained 14.0%
over the year. Armistice is a long-short value-oriented hedge fund with
significant exposure to healthcare and consumer sectors. The manager trades
quite actively and looks for mispriced companies in their sectors of interest.
The strategy includes single stock and index shorts, but it is long-biased and
currently has a net exposure to the market of approximately 100%. Its core
healthcare long portfolio is driving recent returns, with the manager very
optimistic about the outlook for the biotech sector. The S&P 500 ETF was
still up 4.9% over the financial year despite a significant decline in the
final quarter.

Within the Thematic silo the Company's investment in Polar Capital Global
Insurance continued to perform well returning 13.1% over the financial year.
The insurance market continues to see strong pricing for underwriters
following a withdrawal of investor capital after several years of losses. This
has meant many companies have been generating significant amounts of revenue
through charging customers higher premiums. The outlook for the sector
continues to look attractive going forward with underwriting margins remaining
stable and share buybacks accelerating as companies look to distribute their
excess cash. The fund had limited exposure to the Los Angeles wildfires with
only two holdings reporting losses which, while meaningful for them, will
still fall well within their annual catastrophe budgets.

The Company's technology and healthcare holdings all struggled this year. The
technology sector was particularly impacted by the unexpected release of the
DeepSeek AI chatbot which appeared to be at least as capable as the OpenAI and
Google equivalents and has supposedly been developed for a fraction of the
cost. Investors speculated that this could signal the emergence of
alternatives to the dominance of the US mega technology companies.

Diversifying Funds

The role of the diversifying holdings is to provide the portfolio with an
alternative source of returns, whilst dampening volatility and displaying low
beta to the equity market. They have continued to deliver on this aim during
the year, with the Diversifying silo gaining a very pleasing 1.5%. Longer-term
performance relative to bonds has compared very favourably given the strongly
negative returns from bonds. Over three years, the Diversifying silo has
returned 7.6%, far ahead of the 17.3% loss of the Gilts index over that
period.

The Company's two multi-strategy credit funds performed well this year. CQS
Credit Multi Asset Fund gained 6.6% while Apollo Total Return gained 7.7%. The
CQS fund was purchased in July 2024 to complement the Apollo fund with its
more European credit focus contrasting to Apollo's US dominated exposure. Both
funds invest more in the high yield and structured credit spaces and so have
been able to take advantage of the higher yields on offer as interest rates
rose. For CQS most of the return came from positioning in financials and
exposure to CLOs and regulatory capital. Apollo's performance was mainly
driven by its European high yield exposure, with Europe largely outperforming
the US given the uncertainty around the US economic landscape. The Vanguard US
Government Bond Index Fund gained 3.9% over the year.

Selwood Liquid Credit Strategy continued to perform well this year gaining
8.8%. Selwood sells credit default swap indexes ("CDXs") to investors seeking
protection from investment grade bonds defaulting. The manager's thesis is
that the real risk of investment grade companies defaulting is much lower than
the market implies. This means the fund can generate an attractive coupon-like
return from selling these CDXs, while attempting to hedge out the risk of
volatility in bond markets by purchasing out-of-the-market payer options. An
increase in volatility and concerns about an economic slowdown normally
increases demand for CDX protection, which can lead to higher returns for the
fund in the future so the current environment is more favourable for the
strategy.

Another strong performer in this silo was Nephila Iron Catastrophe Fund which
gained 9.4%, a very pleasing result given the challenges posed to this
strategy by the US hurricanes, Helene and Milton, in September and October
2024. These events justified the manager's decision earlier in the year to
hedge against large hurricane loss events and to reduce allocations to peak
hurricane risk zones on account of their view that the 2024 hurricane season
was likely to see above average hurricane activity. Although the fund did have
some exposure to these events the losses were relatively muted. As part of
hedging against large hurricane losses, the manager did add some exposure to
wildfire risk. This gave them a very small amount of exposure to the
California wildfires in early 2025 but the performance impact is expected to
be limited. Hudson Bay, a macro trading multi-strategy fund, also performed
well this year gaining 8.7%.

Private Equity

The investment manager's deep experience and track record of investing in
private markets led us to add private equity to the Company's investment
strategy in 2023. It was always anticipated this would be a journey as it
takes multiple years to get capital into the ground and then even longer
before these funds grow in value, realise their investments and start
distributing capital back to investors. We have made good progress to-date
with nine commitments made to seven top quality managers.

Given that we are unable to commit to a manager until they return to the
market to raise a fund, it takes time to flesh out a fully diversified
portfolio. The majority of our commitments so far have been in venture capital
and the technology sector purely because these managers have been the ones
back in the market. GGV and Khosla Ventures are among the very best venture
capital investors in the world, while TrueBridge is a venture capital
fund-of-fund that diversifies our manager level exposure.

We have also made commitments to some mid-market funds in BPEA EQT, a pan-Asia
manager, and Gryphon Partners, a US focused group. Investing in the middle
market is one of our favoured areas as we believe these groups often generate
more attractive returns as they grow quicker than the mega cap companies who
ultimately may end up buying these groups to boost their own growth.

Global Equities

The Global Equities silo of the portfolio is intended to give direct access to
a differentiated group of companies which are selected for the quality of
their underlying businesses with a keen eye on valuation. The silo rose 15.4%
over the financial year, a very pleasing outcome.

At the end of the year it seems prudent to reflect on the silo over the past
five years. It is clear we have navigated a wide range of market environments.
Our compound annual growth rate of 18.7% over this period was strong,
benefiting in part from starting valuations that were unusually low. While
such returns may not be easily repeated, we are encouraged by signs that some
of the headwinds our portfolio has faced could now be turning into tailwinds.

As bottom-up, fundamentally driven investors, we have found the most
compelling opportunities in areas of the market that have been notably out of
favour - small caps, value names, and businesses outside the US. These have
often been described as the least "fashionable" parts of the market and
performance has been hindered by that sentiment. However, we remain confident
and excited about the long-term prospects for our businesses.

The past 12 months have been defined by a surge in M&A activity across our
portfolio - more so than at any point in our history. This has been somewhat
unexpected, particularly as over 75% of our holdings are controlled by either
families or strategic long-term shareholders. Yet, the activity highlights the
value others are beginning to see in these businesses.

Our largest holding, GCO, is being taken private by its controlling family at
€50 per share, an 18% premium to the prevailing price. While we believe this
significantly undervalues the business and we have communicated our thoughts
to the board, we expect the deal to go through. It was a bittersweet moment
for us: a short-term gain at the expense of what we believe could have been
many years of compounded returns.

Subsea 7, another core holding, announced a planned merger with its rival
Saipem to create the global leader in offshore engineering and construction
with over €40bn in backlog and a fleet of 60 construction vessels.
Importantly, the combined entity will be debt-free and chaired by a nominee of
Kristian Siem, Subsea's de facto controlling shareholder and a capital
allocator we hold in high regard.

CK Hutchison agreed to sell its ports business to BlackRock for $19bn - more
than its entire market cap on the day of the announcement, yet ports only
accounted for 8% of group EBITDA. The deal has since become entangled in
broader geopolitical tensions between the US and China and we do not know how
it will end, but it does highlight the huge undervaluation of the group. The
stock now trades at just 0.28x book and at 33% of our estimated intrinsic
value. Meanwhile, rumours of a potential London IPO for its European telecom
business - which could be worth an additional $15bn - add further optionality.

At CTT, two transformational deals were announced in the past six months. The
standout was a merger between its Iberian parcel division and DHL Iberia - a
transaction valued the parcel business at 80% of CTT's market cap, despite
express and parcel services contributing just 35% of last year's EBITDA.
Bergman & Beving also remained active, completing five bolt-on
acquisitions and a rare disposal that has enhanced both its capital efficiency
and margin profile.

Looking ahead, regardless of how markets evolve in the coming years, our
conviction in the underlying businesses remains strong. These are
well-managed, high-quality companies, trading at what we believe is a 40%
discount to intrinsic value. This offers one of the most attractive margins of
safety we have seen in some time and positions the portfolio well for the long
term.

During the year we added to our positions in Glencore, Eurowag, GCO, Arch,
Orion, CK Hutchison and CTT and reduced our positions in Subsea 7, EXOR,
Bergman & Beving and Interactive Brokers. We also bought and sold Coats
during the year. We also initiated a new position in Qualitas, a Mexican auto
insurer.

Ocean Wilsons Holdings

During the financial year, Ocean Wilsons Holdings consisted of two parts,
Wilson Sons, a Brazilian maritime services company, and Ocean Wilsons
(Investments) Ltd (OWIL), a portfolio of fund investments.

It was announced in October 2024 that Ocean Wilsons Holdings had agreed to
sell its entire 56.47% interest in Wilson Sons to a subsidiary of MSC
Mediterranean Shipping Company. The sale is for a cash consideration of
R$4.352bn (equivalent to R$17.50 per share). At the time of the announcement,
the purchase price was equivalent to US$768m. The sale was subject to a number
of regulatory approvals, the last of which was received on 20 May 2025 making
the sale unconditional. Ocean Wilsons subsequently received approximately US$
594m net of all costs and relevant Brazilian taxes on 4 June 2025. Ocean
Wilsons Holdings has confirmed that they intend to make a tender offer for up
to 7,072,608 ordinary shares, representing 20% of the issued capital of the
company. The tender offer is open at the time these financial statements were
released and will close on 18 July 2025. The result is expected to be
announced around 21 July 2025.

The Wilson Sons business performed very strongly during the financial year to
31 March 2025. As the largest integrated provider of port and maritime
logistics in Brazil, Wilson Sons has a strong competitive position. It is the
leading provider of towage services in Brazil with the largest and most modern
fleet, as well as operating major container terminals in the north and south
of the country: Salvador and Rio Grande. The annual results for 2024 released
in March 2025 show that revenues grew 20.5% while earnings were up 28.6% to a
record R$1.3bn, primarily driven by the container terminal and towage
operations businesses. The container terminal performance was due to robust
growth in transshipment and gateway flows, while towage benefited from higher
volumes and increased special operations. The offshore support vessel business
is also performing well, with earnings significantly increased as fleet
utilisation and daily rates grew

The other part of Ocean Wilsons Holdings, OWIL, shares many characteristics
with the fund portfolio held directly within Hansa Investment Company. The
most recent valuation for the investment portfolio was $325.9m in December
2024, slightly down from $327.9m as at the end of September 2024, but up from
$310.9m in December 2023. The main difference between the investment
portfolios of OWIL and HICL is OWIL's mature private equity book. This can be
split into investments made before and after the private equity strategy
changed in 2014. The commitments made since 2014 have been predominantly to a
smaller group of core buyout managers in developed markets, particularly the
US. These include managers like TA Associates, KKR, Silver Lake, PAI Partners
and Apollo. A grouping of more specialist managers has been opportunistically
added over time with financials specialist Reverence Capital Partners and
healthcare specialist OrbiMed good examples, while more recently venture
capital groups like Mayfield, Khosla Ventures and GGV have been committed to.
We continue to believe that the OWIL portfolio strongly complements the
Company's own investments with the private equity investments since 2014
creating a significant point of difference. The annual dividend payment to
shareholders was made on 14 June 2024, when the board of Ocean Wilsons
Holdings increased it from 70 cents to 85 cents per share. As noted in the
Chairman's report, HICL and OWHL are currently in talks regarding a possible
combination of the businesses that would see the OWIL and HICL portfolios
merged, in addition to a deployment of the net sale proceeds of the Wilson
Sons post tender offer, giving a combined NAV of circa £900m. An exciting
development for the next phase of the Company.

 

Alec Letchfield

Chief Investment Officer

June 2025

 

The portfolio

As at 31 March 2025

 

 Investments                                Fair value  % of net

                                            £000        assets
 Core Regional Funds / Thematic Assets
 iShares Core S&P 500 UCITS ETF             48,934      10.6
 Findlay Park American Fund                 20,967      4.5
 Select Equity Offshore Ltd                 17,793      3.9
 BlackRock Strategic Equity Hedge Fund      16,492      3.6
 Pershing Square Holdings Ltd               12,272      2.7
 Schroder ISF Asian Total Return            11,620      2.5
 Polar Capital Fund - Global Technology     9,646       2.1
 Polar Capital Global Insurance Fund        9,441       2..0
 Schroder ISF Global Recovery               9,270       2.0
 BA Beutel Goodman US Value Fund            8,830       1.9
 Helikon Long Short Equity Fund ICAV        8,224       1.8
 iShares Expanded Tech Sector ETF           7,837       1.7
 iShares Core MSCI Europe UCITS ETF         7,644       1.7
 Armistice Capital Offshore Fund Ltd        7,492       1.6
 Simplex Value Up Trust                     6,407       1.4
 Redwheel Next Generation EME Fund          4,919       1.1
 iShares Core EM IMI UCITS ETF              4,606       1.0
 RA Capital International Healthcare Fund   4,207       0.9
 NTAsian Discovery Fund                     4,148       0.9
 BlackRock Frontiers Investment Trust PLC   3,903       0.8
 Arcus Japan Fund                           2,987       0.6
 Worldwide Healthcare Trust PLC             2,899       0.6
 Alma Eikoh Japan Large Cap Equity Fund     2,774       0.6
                                            233,315     50.6

 Strategic
 Ocean Wilsons Holdings Limited(1)          132,342     28.7
 Wilson Sons                                85,187      18.5
 Ocean Wilsons (Investments) Limited        47,155      10.2
                                            132,342     28.7

 Global Equities (direct)
 Grupo Catalana Occidente SA                8,292       1.8
 Interactive Brokers Group Inc              7,081       1.5
 Arch Capital Group                         4,394       1.0
 Bergman & Beving                           4,323       0.9
 CTT Correios de Portugal                   3,985       0.9
 Subsea 7                                   3,704       0.8
 Orion SA                                   2,502       0.5
 CK Hutchison                               2,393       0.5
 Coats Group PLC                            2,102       0.5
 Eurowag                                    2,086       0.5
 Glencore PLC                               1,682       0.4
 EXOR NV                                    839         0.2
 Qualitas Controladora S.A.B de C.V.        403         0.1
                                            43,788      9.5

 Diversifying
 DV4 Ltd(2)                                 7,770       1.7
 Global Event Partners Ltd                  4,807       1.0
 Selwood AM - Liquid Credit Strategy        4,234       0.9
 Nephila Iron Catastrophe Fund Ltd          3,435       0.7
 Apollo Total Return Fund                   3,256       0.7
 CQS Credit Multi Asset Fund                3,071       0.7
 Prana Absolute Return Fund                 2,966       0.6
 BioPharma Credit PLC                       2,797       0.6
 John Street Systematic Fund Limited        2,001       0.4
 Winton Trend Fund UCITS                    1,923       0.4
 Schroder GAIA BlueTrend                    1,887       0.4
 Vanguard US Government Bond Index Fund     1,550       0.3
 Hudson Bay International Fund Ltd          1,432       0.3
 Lazard Convertible Global                  734         0.2
                                            41,865      9.1

 Private Assets(2)
 Khosla Ventures VIII LP                    503         0.1
 TA Associates XV-B LP                      302         0.1
 BPEA EQT Mid-Market Growth Partnership     257         0.1
 TrueBridge Direct Fund III L.P             165         0.0
 GGV Discovery IV-US                        157         0.0
 TrueBridge Capital Partners Fund VIII L.P  46          0.0
 GGV Discovery IV-ASIA L.P                  17          0.0
                                            1,447       0.3

 Total investments                          452,757     98.2
 Net current assets                         8,303       1.8
 Net assets                                 461,060     100

( )

(1) Hansa Investment Company Limited owns 9,352,770 shares in Ocean Wilsons
Holdings Limited (OWHL). OWHL operates through two assets: Wilson Sons S.A.
and Ocean Wilsons Investments Ltd (OWIL). These are shown separately above.
The fair value of Hansa Investment Company Limited's holding in OWHL has been
apportioned across the two assets in the ratio of the latest reported NAV of
OWIL, that being the NAV of OWIL shown per the 31 December 2024 OWHL quarterly
update, to the expected sale proceeds of OWHL's holding in Wilson Sons, net of
withholding tax (estimated on a reasonable worst-case basis), as announced by
OWHL on 21 October 2024.

(2) The holdings within the private assets silo, as well as DV4 Ltd are
unlisted Private Equity holdings. As such, their value is estimated as a Level
3 Asset in note 19. All other valuations are either derived from information
supplied by listed sources, or from pricing information supplied by third
party fund managers.

 

Strategic Review
Investment objective, strategy and performance

Investment objective

The Company objective is to grow the net assets of the Company over the medium
to long-term by investing in a diversified and multi-strategy portfolio.

Investment policy

The Company seeks to achieve its investment objective by investing in
third-party funds, global equities and other international financial
securities. The Company may invest in quoted and unquoted securities, directly
or indirectly, including private assets through commitments to limited
partnerships. The portfolio will usually comprise at least 30 investments.

The Company has no set maximum or minimum exposures to any asset class,
geography or sector and will seek to achieve an appropriate spread of risk by
investing in a diversified global portfolio of securities and other assets.

The Company currently holds a strategic position in the share capital of OWHL.
The Company's current Investment Policy states it will not make further
investments into OWHL. If the Possible Combination were to proceed, the
Company would seek shareholder approval to amend this policy such that it may
acquire further securities in OWHL, including the purchase of the entire
issued share capital of OWHL by way of a public offer or otherwise.

Investment restrictions

The Company spreads investment risk by adhering to the following restrictions,
calculated at the time of investment (excluding the Company's strategic
holding in OWHL and any investments in treasuries, gilts or money market
funds):

no single fund investment (including closed-ended funds and exchange-traded
funds) will represent more than 15% of Gross Assets;

no single direct investment (excluding funds) will represent more than 10% of
Gross Assets; and

            no single direct unquoted investment (excluding funds)
will represent more than 5% of Gross Assets.

The Company may invest cash held for working capital purposes and awaiting
investment in cash deposits, treasuries, gilts and money market funds. The
Company will not hold more than 20% of its Gross Assets in any single money
market fund. The Company will not invest in derivatives but may hold
derivatives for efficient portfolio management and hedging purposes.

No more than 10% of the Company's Gross Assets at the time of investment may
be invested in other listed closed-ended investment funds listed on the
Official List, save that this restriction shall not apply to investments in
listed closed-ended investment funds, which themselves have stated investment
policies to invest no more than 15% of their Gross Assets in other listed
closed-ended investment funds.

Borrowing Policy

The Company may, from time to time, use borrowings including for investment
purposes. Gearing, represented by borrowings, will not exceed 25% of Hansa's
NAV, calculated at the time of draw down.

Any material change to the Company's investment policy will require the
approval of shareholders by way of an ordinary resolution at a general meeting
and the approval of the Financial Conduct Authority.

Investment strategy

The Portfolio Manager, engaged by and acting on behalf of the Company, seeks
to build a multi-strategy portfolio by selecting investments across four key
investment categories, in addition to the strategic investment in OWHL:

            Core/Thematic - investments, typically through
third-party funds, selected by the Portfolio Manager to provide appropriate
regional and thematic exposures.

Diversifying Assets - investments, typically through third‑party funds and
directly, that create asset diversification within the portfolio.

Global Equities (direct) - a diversified portfolio of global equities
identified by the Portfolio Manager as having long-term growth potential.

Private Assets - multi-year investments giving access to investments not
available in public markets.

Although the Company has no set maximum or minimum exposures to any asset
class, geography or sector, the Board establishes set guidelines which the
Portfolio Manager adheres to. These can be adjusted by the Board. While the
proportion of the portfolio represented by each of these categories will vary
over time, the Board establishes parameters for the Portfolio Manager, based
on its view of the global investment environment. The Board has set the
following guidelines for each category as a percentage of the portfolio
(including the strategic investment in OWHL):

Core / Thematic: 0-75%

Diversifying Assets: 0-40%

Global Equities: 0-40%

Private Assets: 0-15%

The Portfolio Manager has a strong focus on identifying investments with
excellent fundamentals, taking a long-term approach to investing, good
alignment and not seeking to replicate a benchmark. These investments range
from those sectors benefiting from structurally higher growth, such as
technology, to assets which the Company believes stand on unwarranted
discounts to their intrinsic value.

The Board has given the Manager a target to develop a long-term, Private Asset
portfolio of initially circa 10% of the Company's Net Asset Value. Given the
long-term nature of Private Asset investments, the guideline acknowledges that
commitments to Private Assets, the timing of their associated cash drawdowns,
their associated performance and valuation profiles as well as the performance
of the other portfolio silos might lead to short to medium-term variance to
this target and, thus, the above guideline seeks to reflect this uncertainty.
It is not the wish of the Board that the Manager divests of Private Assets
prematurely should the guideline limit be reached. However, if a guideline
limit breach occurs, the Board will be informed and can opine on the specific
circumstances. If the Possible Combination were to proceed, it is noted that
OWHL has an established portfolio of Private Assets complimentary to the
portfolio being developed by the Company.

Borrowing limits

The Board considers whether returns may be enhanced if the Company introduces
leverage at appropriate times. The Company has an unsecured lending facility
through its Custodian, Banque Lombard Odier & Cie SA ("Lombard Odier"), in
the amount of £30m, subject to there being sufficient value and diversity
within the portfolio to meet the lender's borrowing requirements. The
Portfolio Manager is able to utilise this facility as required up to the upper
limit available. Gearing, represented by borrowings, will not exceed 25% of
the Company's Net Asset Value, calculated at the time of draw down.

No amounts have been drawn from this facility during the year.

Investment monitoring and key performance indicators

We recognise that measuring the performance of portfolios is essential to both
determining if they are meeting their return targets and the risks taken in
achieving these returns. However, we also passionately believe that the
benchmarks and/or comparators against which portfolios are measured should be
appropriate for achieving the end objectives, with poorly chosen benchmarks
often encouraging short-term actions which more often than not are damaging to
meeting the longer-term aspirations.

It is for this reason we believe it right to adopt a handful of KPIs rather
than a single benchmark. As long-term multi-asset class investors we are
seeking to both preserve and grow the real spending power of our capital over
time through the dynamic selection of different countries, assets and sectors.
No one benchmark captures this approach and, indeed, the adoption of a single
benchmark may result in the fund deviating from its longer-term goals in the
pursuit of short-term returns.

Instead, the Board believes that considering the portfolio performance against
the following KPIs will provide a more informed understanding of the
performance of the portfolio and if it is meeting its longer-term objectives:

 Objective                                              KPI                                             Indices used
 Safe return                                            UK Government bonds                             FTSE Gilts All Stocks TR Index
 Growing the real spending power of money through time  Achieve returns that are higher than inflation  UK CPI
 Long-term capital growth                               Equity market performance                       MSCI All Country World Index (both market cap weighted and equally weighted to
                                                                                                        remove the distorting effect of the M7)

 

The Board regularly, and at least quarterly, reviews the returns and the
performance of the Company with the Portfolio Manager, including an analysis
using the KPIs.

Additionally, whilst not specifically a KPI, the cost of managing the Company
is monitored against the NAV (the ratio between costs and the NAV is also
known as the 'ongoing charges percentage per annum ratio'); and the
discount/premium the shares sell at in relation to the NAV are likewise
monitored.

The Board of Directors monitors the returns made in absolute and relative
terms against the KPIs established. The comparisons are made over 1, 3, 5 and
10 year time horizons.

i) Shareholders and Company - total returns

 

 To 31 March 2025                1 year  3 years  5 years  10 years
 Share price total return
 Ordinary shares                 13.5%   24.3%    94.9%    62.8%
 'A' non-voting Ordinary shares  8.0%    18.2%    74.1%    56.7%
 Portfolio NAV                   2.3%    23.9%    75.6%    89.6%

 

ii) Discount/premium*

A comparison is made between the (discount)/premium of the Company's two
classes of shares and of the AIC average.

 To 31 March 2025                1 year    3 years   5 years   10 years

average
average
average
average
 (Discount)/Premium
 Ordinary shares                 (40.9%)   (40.8%)   (38.4%)   (33.9%)
 'A' non-voting Ordinary shares  (43.1%)   (42.4%)   (39.2%)   (35.1%)
 AIC                             (4.5%)    (9.1%)    (7.5%)    (5.5%)

 

Whilst there are investment trusts that exhibit one or more similarities to
the Company, the Board does not consider the Company to have any direct peers.

iii) Key performance indicators*

The following are the KPIs the Board uses to assess the returns of elements of
the portfolio and of the Company as a whole.

 To 31 March 2025                   1 year  3 years  5 years  10 years
 NAV Total Return                   2.3%    23.9%    75.6%    89.6%
 NAV Total Return (Ex OWHL)         0.5%    11.5%    48.7%    63.3%
 FTSE UK Gilts All Stocks TR Index  (1.2%)  (17.3%)  (25.9%)  (6.5%)
 UK CPI Inflation                   2.6%    16.6%    25.7%    36.9%
 MSCI ACWI NR (GBP)                 4.8%    24.4%    94.7%    168.2%

 

iv) Expense ratios*

 

 To 31 March 2025            1 year  3 years  5 years  10 years
 Ongoing annual charges (%)  1.1     1.1      1.1      1.1

 

The Company continues to produce a Key Information Document (KID) for each of
its two share classes based on the Packaged Retail and Insurance-based
Investment Products Regulation (PRIIP). However, as this is no longer a
statutory requirement, it is solely for information purposes and no longer
bound by the prescriptive nature of the regulations with regard to how costs
are calculated and presented. As such, the calculation of the costs which are
disclosed in the KIDs is now aligned with the table above.

 

Shareholder profile

Capital structure

The Company has 40,000,000 Ordinary shares of 1p (1/3 of the total capital)
and 80,000,000 'A' non-voting Ordinary shares of 1p (2/3 of the total capital)
each in issue. The Ordinary shareholders are entitled to one vote per Ordinary
share held. The 'A' non-voting Ordinary shares do not entitle the holders to
vote or receive notice of meetings, but in all other respects they have the
same rights as the Company's Ordinary shares. See also Note 13 in the Notes to
the Financial Statements.

Shareholder profile

The Company's shares owned at 31 March 2025 are as follows:

                                    Ordinary shares         'A' non‑voting Ordinary shares
 Institutional and wealth managers   16,217,743   40.54%     72,637,969        90.80%
 Directors                          11,220,745    28.05%    3,817,123          4.77%
 Private individuals                 12,537,139   31.34%    3,484,461          4.36%
 Other                               24,373       0.07%     60,447             0.07%
                                    40,000,000              80,000,000

 

Substantial shareholders

As at 31 March 2025, the Directors were aware of the following interests in
the Ordinary shares of the Company, which exceeded 3% of the voting issued
share capital of that class.

                                No. of voting shares  % of voting shares
 Nomolas Ltd                    10,347,125            25.87%
 Victualia Limited Partnership  10,347,125            25.87%
 Sky Hill Limited               1,730,000             4.33%

 

These holdings are correct as of 31 March 2025 and have not changed as at the
signing date of these Financial Statements.

Hansa Investment Company traces its origins back to 1912 when the Alto Paranà
Development Company was launched to develop forestry in Brazil. Having become
an investment trust company in the late-1940s, the Company became closely
associated with the Salomon Family, initially through Sir Walter Salomon,
whose family trusts became substantial shareholders. The late-1950s also saw
the acquisition of a significant shareholding of Ocean Wilsons Holdings
Limited through the issuance of the 'A' non-voting Ordinary shares by the
Company's predecessor, Hansa Trust. Over the following decades, the Salomon
family helped to build the publicly-owned and independently run investment
company we know today, with its focus on delivering reliable long-term asset
growth for shareholders.

The wider Salomon family remain significant investors in the Company. William
Salomon, Sir Walter's son, a director of HICL and Senior Partner of the
Company's Portfolio Manager, is interested in 10,347,125 of the shares held by
Victualia Limited Partnership, representing 25.9% of the voting share capital.
In addition, William Salomon has further interests in the Company's shares;
the total interest is detailed in the Directors' Interests section. Other
members of the wider Salomon family, who are also descendants of Sir Walter,
are interested in a further 12m shares in the Company.

Restrictions associated within the share classes

The giving of powers to issue or buy back the Company's shares requires an
appropriate resolution to be passed by shareholders. Proposals for the renewal
of the Board's powers to buy back shares are set out in the Notice of the
Annual General Meeting.

There are: no restrictions concerning the transfer of securities in the
Company; no agreements between holders of securities regarding their transfer
known to the Company; and no agreements between the Company and its Directors
concerning compensation for loss of office. Notwithstanding the foregoing, the
Company can require any holder of the Ordinary voting shares to transfer some
or all of its shares (or otherwise refuse to register any transfer of shares)
to avoid the Company, if the Company were a company which was resident for tax
purposes in the UK, being regarded as a "close company" as defined in s.439 of
the UK Corporation Tax Act 2010, to another person whose holding of such
shares, in the sole and conclusive determination of the Board, would not cause
the Company to be a close company. Additionally, the Company's Bye‑Laws
provide for the voting rights of Ordinary shares to be automatically
reallocated to other shareholders to prevent the Company becoming a close
company.

As at 15 July 2025, the date of signing of the Annual Financial Statements,
there have been no disclosures to the Company of changes of interests under
DTR 5.

Board and management shareholdings

Directors' Interests

The interests of Directors and their connected parties in the Company at 31
March 2025 are shown below:

                  Ordinary shares       'A' non‑voting ordinary shares        Nature of

                  of 1p each            of 1p each                            interest
 W Salomon        11,169,345  27.92%    3,587,123          4.48%              Beneficial
 J Davie          45,000      0.11%     230,000            0.29%              Beneficial
 S Heidempergher  6,400       0.02%     -                  -                  Beneficial
 Total            11,220,745  28.05%    3,817,123          4.77%

 

As at 15 July 2025, the date of signing the Annual Financial Statements, there
were no changes to report to the Directors' holdings.

William Salomon is the senior partner of Hansa Capital Partners LLP. Fees
payable to Hansa Capital Partners LLP amounted to £3,346,097 (including
Portfolio Management and Additional Administrative Services Provider (AASP)
functions). During the year, no rights to subscribe for the shares of the
Company were granted to, or exercised by Directors, their spouses or infant
children.

Portfolio Manager's interests

As at 15 July 2025, the date of signing of this Annual Report, the management
and staff of the wider Portfolio Manager's group (Hanseatic Asset Management
LBG, an Investment Manager and AIFM located and regulated in Guernsey),
excluding the holding of William Salomon, shown above, were interested in
circa 10.3m shares in the Company - a mixture of Ordinary and 'A' non-voting
Ordinary shares.

 

 

Stakeholder engagement

As required by the AIC Code, the Board describes below how the Board has
sought to promote the Company for the benefit of its members, how it has taken
into account the likely long-term consequences of decisions and how it fosters
relationships with stakeholders. The Company is an investment company with an
appointed Portfolio Manager. As a result, it has no direct employees or
customers. The Board has identified the Company's shareholders, its Portfolio
Manager (as well as the Additional Administrative Services Provider, and its
other key service providers as its key stakeholders.

 Stakeholder                  Interaction
 Shareholders                 The shareholder base is a mixture of private investors, wealth managers and
                              asset managers across both classes of the Company's shares. The Board monitors
                              changes in the shareholder base at its Board meetings. The Company
                              communicates through the publication of Annual and Half-Year Financial
                              Statements, through detailed quarterly and monthly factsheets, as well as
                              through the Company's website. The Company also holds periodic shareholder
                              presentations incorporating presentations by the Board and key service
                              providers to keep shareholders informed.

                              The Board seeks to understand the opinions of a wide variety of shareholders.
                              The Company maintains a dedicated email address for shareholders to contact
                              the Board (HICLenquiry@hansacap.com) and shareholder correspondence and
                              feedback is a regular item of discussion at Board meetings.

                              The Company continues to meet shareholders and other interested parties
                              facilitated by its broker, as well as through direct contact. The Portfolio
                              Manager also runs an outreach programme in conjunction with an investor
                              relations specialist.

                              Investors are also kept informed through paid-for editorial pieces and
                              discussion with media organisations. The Board uses online shareholder
                              presentations to enable shareholders to meet with the Board and Portfolio
                              Manager. Whilst the Board believes there is still a place for face-to-face
                              shareholder updates, the strong attendance at the online events encourages the
                              Board that these online events will remain a feature of the Company's
                              shareholder outreach. The next shareholder event is planned for 23 September
                              2025 as a hybrid online and physical meeting.
 Portfolio Manager and AASP   The Board's main working relationship is with the staff of HCP as the
                              Portfolio Manager and the AASP. HCP is responsible for the Company's portfolio
                              management (including asset allocation, stock and sector selection in
                              accordance with guidelines established by the Board). It is also responsible
                              for administrative and operational functions including day-to-day oversight of
                              the other key service providers (Administrators, Custodians, Registrar and
                              Company Secretarial). Successful management of shareholders' assets by the
                              Portfolio Manager is crucial to enable the Company to deliver its investment
                              strategy and meet its objective. The AASP also assists with the preparation of
                              the Annual and Half-Year Financial Statements as well as Factsheets and
                              website updates. The Board works closely with the AASP to approve disclosures
                              made via these publications.
 Other key service providers  Key service providers are the Company's Administrator (Apex Fund
                              Administration Services (UK) Ltd to 31 March 2025, Juniper Partners from 1
                              April 2025), Custodian (Lombard Odier) and the Registrar (Computershare
                              Investor Services (Bermuda) Limited). Whilst the Board looks to the Portfolio
                              Manager and the AASP to keep a day-to-day oversight of these providers, they
                              are contracted directly to the Company. As such, the Board retains ultimate
                              responsibility for their roles. The AASP reports regularly on operational
                              matters. The Board seeks to visit each provider at least annually for a
                              face-to-face meeting to discuss service levels, operations and future
                              developments.

 

Main areas of engagement

 Key area                                              Topic                                                                            Engagement and outcomes
 Investment strategy and ESG matters                   The Investment Strategy incorporates appropriate ESG considerations. For         The Board has engaged with the Portfolio Manager and encouraged them to
                                                       clarity, the Company does not purport to be a "Green" fund. However, through     develop a responsible investment policy. The Board notes that the Hanseatic
                                                       its ESG disclosures and reporting the actions of its Portfolio Manager, it       Group, of which the Portfolio Manager is a member, is a signatory to the UN
                                                       seeks to give clarity to the processes around assessing the Environmental,       PRI. The Board wholeheartedly supports this policy. Further information can be
                                                       Social and/or Governance aspects to its investment decisions and ongoing         found later in Report.
                                                       monitoring.
 Discount management and share buybacks                It is a great frustration to the Board that the discount has not tightened       The Board is mindful of, and regularly considers, the share price compared to
                                                       over the past year. It is also noted that there has been general widening of     the NAV and related discount. The Board is of the view that providing
                                                       investment trust spreads due to market volatility and declining retail           transparency and clarity to investors, as well as promoting demand for the
                                                       participation in the markets.                                                    Company's shares, should create a positive impact on the discount for the
                                                                                                                                        medium to longer-term. To this end, the Board continues to develop the
                                                                                                                                        Company's branding and communications strategy with shareholders and potential
                                                                                                                                        shareholders alike. The aim is to enhance and broaden the understanding of the
                                                                                                                                        Company, with the ultimate objective of widening the shareholder base and
                                                                                                                                        deepening the market for shares.

                                                                                                                                        The primary objective of the Company is to generate a good economic return
                                                                                                                                        over the medium to long-term and create a compelling investment proposition
                                                                                                                                        for private investors, enabling them to gain access to investments not readily
                                                                                                                                        available. This in due course should increase demand for the Company's shares.
                                                                                                                                        Each investment company must consider its own particular circumstances and
                                                                                                                                        objectives in assessing what is in the best interests at any particular point
                                                                                                                                        in time for the company and its shareholders. The Board continues to focus on
                                                                                                                                        the construction of a portfolio to create long-term value including an
                                                                                                                                        allocation to Private Equity.

                                                                                                                                        On 17 June 2025, the Company jointly announced a Possible Combination of the
                                                                                                                                        Company with OWHL. This included the intention to introduce a new capital
                                                                                                                                        allocation policy through the implementation of an on-market share buyback of
                                                                                                                                        between 2% and 4% of NAV. If the Possible Combination were to proceed, it
                                                                                                                                        would represent a significant change for the Company. The Board will review
                                                                                                                                        its position with regard to Discount Management, Share Buybacks and Capital
                                                                                                                                        Allocation policies following the decision as to whether to proceed or not
                                                                                                                                        with the transaction.
 Capital structure                                     The Company has two separate share classes, both of which are traded on the      The current position of Ordinary and 'A' Ordinary share classes remains
                                                       LSE. The Ordinary shareholders are entitled to one vote per Ordinary share       unchanged as the majority of Ordinary shareholders have informed the Board
                                                       held. The 'A' non-voting Ordinary shares do not entitle the holders to vote or   they do not wish to alter the present structure at the present time.
                                                       receive notice of meetings, but in all other respects they have the same
                                                       rights as the Company's Ordinary shares. Consideration has been given to
                                                       whether the two share classes could be merged in some way.
 Dividends                                             The Board's stated policy for the year to 31 March 2025, was to maintain the     The portfolio held by the Company is currently constructed for long-term
                                                       dividend at 3.2p until it is fully covered by net income. At that time it        capital appreciation rather than income generation. As a result, the income
                                                       plans to increase it in line with any increase in the net income of the          generated by the portfolio is insufficient to meet this dividend commitment
                                                       Company.                                                                         and the shortfall is made up from the Company's reserves. In principle, your
                                                                                                                                        Board does not believe it to be in the Company's best interests to use capital
                                                                                                                                        as a source from which to pay dividends.

                                                                                                                                        On 17 June 2025, HICL announced a Possible Combination of the Company with
                                                                                                                                        OWHL. It was stated within that announcement that, should the transaction
                                                                                                                                        proceed, the Board would implement a Capital Allocation policy whereby the
                                                                                                                                        Company would implement on-market share buybacks of between 2% and 4% of its
                                                                                                                                        issued share capital (which may include both voting Ordinary shares and
                                                                                                                                        non-voting A Ordinary shares) replacing the Company's existing dividend
                                                                                                                                        policy.

                                                                                                                                        The Board will review its future dividend policy should the Possible
                                                                                                                                        Combination not proceed.
 Maintaining levels of service from service providers  The Company does not have direct employees. Rather, its operations are           The independent members of the Board annually review the performance of the
                                                       conducted by several key service providers. The Company enters into              Portfolio Manager. Additionally, the day-to-day performance of other key
                                                       service-level agreements with each provider. The Board oversees these services   service providers (Administrator, Custodian and Registrar) are monitored by
                                                       to ensure best practice is followed and that the Company is receiving a          the AASP on behalf of the Board. In addition, there is an annual review of
                                                       comprehensive service and value for money.                                       service providers' annual Controls Audit Reports. Members of the Board also
                                                                                                                                        visit each key service provider annually to review performance and understand
                                                                                                                                        any changes in their businesses. As a result of ongoing monitoring, the Board,
                                                                                                                                        in conjunction with feedback from the AASP, has changed the Company's
                                                                                                                                        Administrator to Juniper Partners with effect from 1 April 2025.

 

Notice period for general meetings

The Company's Bye‑Laws permit that the Company's general meetings (other
than AGMs) may be held on 14 days' notice.

Annual General Meeting

The Company's Notice of Annual General Meeting is included in this Report.

Authority to repurchase 'A' non-voting Ordinary shares

A resolution will be proposed at the forthcoming AGM, seeking shareholder
approval for the renewal of the authority for the Company to repurchase its
own 'A' non-voting Ordinary shares. The Board believes the ability of the
Company to repurchase its own 'A' non-voting Ordinary shares in the market
could potentially benefit all equity shareholders of the Company in the
long-term.

The Company's Bye-laws are drafted in such a way that the Company may from
time to time purchase and cancel its own shares. However, the Company requires
that shareholders' approval to repurchase shares be sought. At the AGM the
Company will therefore seek the authority to purchase up to 11,992,000 'A'
non-voting Ordinary shares (representing 14.99% of the Company's issued 'A'
non-voting Ordinary share capital, the maximum permitted under the FCA Listing
Rules), at a price not less than 1p per share (the nominal value of each
share) and not more than 5% above the average of the middle‑market
quotations for the five business days preceding the day of purchase or, where
a series of transactions have taken place the higher of the last independent
trade and current highest independent bid on the trading venue where the
purchase(s) will be carried out. The authority being sought, the full text of
which can be found in the Notice of Meeting, will last until the date of the
next AGM.

The Company is seeking authority to use its realised capital reserve to allow
repurchase of shares in the market. The decision as to whether the Company
repurchases any shares will be at the absolute discretion of the Board. Any
shares purchased will be cancelled.

The Directors consider that all the resolutions to be proposed at the
forthcoming AGM, as set out in the Notice of AGM, are in the best interests of
shareholders as a whole and unanimously recommend all shareholders to vote in
favour. Guidance on how to vote at the AGM can be found in the notes to the
Notice of AGM.

If the Board considers a significant proportion of votes have been cast
against a resolution at the AGM, the Company will explain, when announcing the
results of voting, what action it intends to take to understand the reasons
behind the results of the vote.

 

 

Principal risks

The Company has risk management processes in place which enables the Board to
identify, assess and manage the principal risks faced by the Company.
Consistent with the AIC Code and UK Corporate Governance Code, these risks are
considered to have the potential to threaten the Company's business model,
future performance/returns, solvency, liquidity, reputation, or regulatory
status. An integral part of this process is the maintenance and ongoing
evaluation of the Company's Risk Assessment & Controls (RAC) Matrix, which
identifies both the risks and associated controls operating within the Company
and relevant third-party service providers. To ensure emerging risks are
assessed on an ongoing basis, the Board reviews the RAC Matrix at each Board
meeting, considering HICL's current and future anticipated risk environment.
The Board also receives updates at each meeting from the Portfolio Manager and
the AASP on operational risk matters. Additionally, as part of the risk
management processes, the Company also annually reviews the Custodian,
Administrator and Registrar assurance reports of their internal controls (e.g.
AAF 01/06, AAF 01/20, ISAE 3402). The impact of any exceptions are considered
by the Board.

Consideration of the Company's principal risks and uncertainties, is made in
the context of the Company's stated objective of generating superior, but
sustainable, long‑term growth in shareholder value. The main risk being that
over the long-term (determined as greater than five years), shareholders do
not make a return from investing in the Company. The Company's closed‑ended
fund structure is also considered to be in alignment with its stated
objective, especially within extremely volatile market conditions. This is due
to the portfolio not having to be managed and maintained to manage potential
significant redemptions or short-term liquidity needs as open-ended funds
would. Additionally, the closed-ended structure can take advantage of less
liquid market opportunities as part of its portfolio holdings.

The principal risks and uncertainties identified and associated controls in
place to manage these risks are described below:

 Principal risks - external                                                       Controls to mitigate risks
 Market risk - long-term company share performance                                The Board:

 Market risk includes interest rate, currency, equity, credit, inflation,         has appointed an appropriate Portfolio Manager whose performance for the
 concentration, liquidity and macro geopolitical risks.                           Company is reviewed and challenged on a quarterly basis;

                                                                                  has set investment guidelines and restrictions, which are reported against by
                                                                                  the Portfolio Manager on a monthly basis;

                                                                                  operates an asset allocation model, which is regularly reviewed and discussed
                                                                                  with the Portfolio Manager; and

                                                                                  monitors and discusses portfolio construct and performance quarterly.
 Performance risk, share price, liquidity and discount monitoring                 The Board:

 Low market trading volumes of Company shares and the discount to the NAV         regularly reviews the share price, discount level and portfolio performance;
 becoming inherent in the share price.

                                                                                  maintains periodic oversight on shareholder-base;

                                                                                  actively seeks feedback both directly from shareholders and indirectly through
                                                                                  the Company's Broker or specific outreach programmes involving the Portfolio
                                                                                  Manager;

                                                                                  has the ability to buy-back non-voting shares of the Company; and

                                                                                  initiates strategies to reduce discount over the medium term.
 Tax, accounting, legal and                                                       The Board:

 regulatory risks                                                                 obtains regular updates and advice from relevant professional advisers;

 Adverse outcomes resulting from legislative changes to tax, legal and            maintains oversight and receives regular reporting on the legislative and
 regulatory requirements. Adverse outcomes from not meeting ESG expectations.     regulatory changes, which impact HICL, as monitored by the Portfolio Manager;

                                                                                  maintains the Company's membership with the Association of Investment
                                                                                  Companies;

                                                                                  has adopted the Portfolio Manager's responsible investing policy;

                                                                                  has set explicit expectations on the integration of ESG considerations within
                                                                                  the investment process;

                                                                                  continues to develop ESG disclosures in compliance with reporting regulations;
                                                                                  and

                                                                                  receives documented confirmation of the Portfolio Manager's adherence to
                                                                                  relevant regulatory requirements and emerging sanction risks.
 Reputational risk                                                                The Company:

 Negative behaviours, publications or market sentiment impacting the reputation   requires the annual selection of Board members, all of whom must have a
 of the Company.                                                                  commitment to governance;

                                                                                  has direct oversight of Portfolio Manager;

                                                                                  communicates with investors and the public in a clear and transparent manner;
                                                                                  and

                                                                                  has set pre-approval procedures for accuracy and reliability of such
                                                                                  information.

 

 

 Principal risks - INTERNAL                                                    Controls to mitigate risks
 Operational risk                                                              Pre-approval processes are in place prior to the publication of any financial

                                                                             information.
 Risks associated with process, system and control failures including those

 associated with the Company's third-party service providers.                  Identification and certification of key controls by AASP compliance team.

                                                                               Due diligence is undertaken prior to appointing all service providers. Regular

                                                                             performance reviews of third-party providers are made and, where relevant, the
 Operational areas considered includes Liquidity, Safeguarding of Assets and   Company annually requests independent service provider assurance reports on
 Reliability of Financial Reporting.                                           the operating effectiveness of their internal controls.

                                                                               An overdraft facility provides a contingency for any short-term liquidity
                                                                               shortfall. A pre-approval payment process is in place as part of an overall
                                                                               cash management process.

                                                                                           An independent Custodian is appointed to safeguard the
                                                                               Company's assets. This Custodian is bound by regulatory and legal contractual
                                                                               obligations and liabilities. Regular reconciliations are undertaken to ensure
                                                                               accuracy of records.
 Gearing/balance sheet risk                                                    A maximum limit on the overdraft facility is in place.

 Risk of over-gearing the balance sheet and creating financial stress on the   Any increase in overdraft or credit facility requires Board pre-approval.
 Company.

 

Insurance

The Company through its Bye-laws has indemnified its Directors and Officers to
the fullest extent permissible by law. During the year the Company also
purchased and maintained liability insurance for its Directors and Officers.

Going concern

The Company's business activities, together with the factors likely to affect
its future development, performance and position, including its financial
position, are set out in the Chairman's report and the Portfolio Manager's
report within this Annual Report.

After due consideration of the Balance Sheet, estimated liabilities for the 12
months following the signing of this Report and having made appropriate
enquiries, the Directors have concluded the Company is a going concern and has
adequate resources to continue in operational existence for at least 12
months. Assets of the Company consist of securities, the majority of which are
traded on recognised stock exchanges, or open‑ended funds run by established
managers. The Financial Statements are prepared on a going concern basis.

Longer-term viability statement

In addition to the Statement of Going Concern, the Directors are also required
to make a statement concerning the longer‑term viability of the Company. The
Directors consider 12 months to be a relatively short time frame when
considering performance and look to the longer‑term for both the performance
and risks associated with the Company. The Directors consider a period of five
years to be a more representative period, which aligns with the Portfolio
Manager's longer-term horizon. This period is sufficiently long to manage
short-term market volatility and allow longer-term performance to work
through. The Board continually monitors the Investment Strategy and Investment
Guidelines issued to the Portfolio Manager and directs the Portfolio Manager
to target long-term capital preservation. Further, whilst the Board has
sanctioned the use of gearing, the facility available to the Portfolio Manager
is relatively small compared to the NAV of the Company. Finally, a number of
the more significant costs in each financial year are contracted to be
calculated on the basis of the underlying NAV of the Company. As such, in a
period of negative portfolio performance, the cost base should also fall.

Barring unforeseen circumstances and taking account of the Company's current
position, the principal risks, the longer-term strategy for the portfolio,
including a diversified and liquid asset base and the lack of gearing, the
Directors confirm they have a reasonable expectation that the Company will
continue to operate and meet its liabilities as they fall due for the next
five years.

 

Governance
The Board of Directors

Board members are selected based on their individual and complementary skills
and experience and their ability to commit sufficient time to drive the
Company's success. The Directors who served the Company during the year to 31
March 2025 are:

Jonathan Davie

Chairman

Jonathan became Chairman of Hansa Investment Company in June 2019. He was a
director of Hansa Trust from January 2013 until its liquidation in November
2021. He is also a partner of First Avenue Partners, an alternatives advisory
boutique.

Jonathan qualified as a Chartered Accountant and then joined George M. Hill
and Co. and became an authorised dealer on the London Stock Exchange. The firm
was acquired by Wedd Durlacher Mordaunt and Co. where Jonathan became a
partner in 1975. He was the senior dealing partner of the firm on its
acquisition by Barclays Bank to form BZW in 1986.

Jonathan developed BZW's Fixed Income business prior to becoming chief
executive of the Global Equities Business in 1991. In 1996 he became deputy
chairman of BZW and then vice chairman of Credit Suisse First Boston (CSFB) in
1998 on their acquisition of most of BZW's businesses. He focused on the
development of CSFB's Middle Eastern business. He retired from CSFB in
February 2007.

Pedro Gonçalves

Pedro became a Director of the Company on 6 February 2025. Pedro brings a
wealth of experience to the Board. He has been managing director of Movendo
Capital BV for the past eight years. Movendo Capital BV is an investment
holding company focusing on growth and private equity investments. Pedro has
worked in a number of roles in the Financial Services for 20 years including
asset management, insurance, banking and investment strategy. During this
period, Pedro was seconded into the Portuguese Government as the Secretary of
State of Innovation, Investment and Competitiveness from 2013 to 2015.

Currently, Pedro is an industrial advisor to EQT Partners SE. He is also
chairman of NovaForum (Nova Business School) and the Honorary Consul of
Singapore in Portugal.

Pedro graduated in Economics from Universidade Católica Portuguesa, holds a
Masters Degree in Economics (MSc) from Glasgow University, and an MBA from
Nova Business School.

Simona Heidempergher

Remuneration Committee Chair

Nomination Committee Chair

Simona became a Director of the Company in June 2019. She is chair of the
Remuneration Committee and, following Nadya Wells' decision to not stand for
re-election in July 2024, also chairs the Nomination Committee.

Simona has extensive experience as an executive and non-executive director
across multiple jurisdictions. For the past 22 years, she has been a director
of Merifin Capital, an established, privately-owned European investment
company. Prior to this she had roles as Vice President Investments at CDB
Webtech, a listed investment vehicle; as research associate at Heidrick &
Struggles, a leading executive-level search and leadership consultancy firm;
and as project coordinator at Ambrosetti Group, an Italian consulting company.

Currently, Simona is the chair of the board of directors of the Stramongate
Group, a Luxembourg public company; director of The European Smaller Companies
Trust, a Janus Henderson Asset Management Investment Trust listed on the
London Stock Exchange; and director of Industrie Saleri Italo S.p.A., a
private Italian company in the automotive supplier sector.

Richard Lightowler

Audit Committee Chairman

Richard became a Director of the Company in June 2019 and chairs the Audit
Committee. He is an experienced non-executive director. Richard was previously
a partner of KPMG in Bermuda for 20 years where he was head of the firm's
Insurance Group in Bermuda for 15 years, a member of the firm's Global
Insurance Leadership Team and Global Lead Partner for a number of large
international insurance groups listed on the New York and London Stock
Exchanges.

Richard has significant regulatory experience, previously advising the Bermuda
Monetary Authority and working with clients regulated by the PRA, FRC and FCA,
as well as other international regulators. He also has extensive experience in
risk and corporate governance and significant transaction experience. Richard
is based in Bermuda. Richard also holds non-executive directorships with Aspen
Insurance Holdings, Geneva Re, Oakley Capital Investments and Phoenix Re
Limited.

William Salomon

William became a Director of the Company in June 2019. He was a Director of
Hansa Trust from 1999 until its liquidation in November 2021. He has a
significant, long standing, investment in the Company.

William's experience in investments and finance is important to the Board in
developing and monitoring investments in special investment themes and in the
Company's strategic investment in Ocean Wilsons Holdings Limited.

William is the senior partner of Hansa Capital Partners LLP, the Portfolio
Manager and Additional Administrative Services Provider, chairman of Hanseatic
Asset Management LBG, the Company's AIFM, and also deputy chairman of Ocean
Wilsons Holdings Limited in which he also has a significant, long standing,
investment. Until its sale to SAS Shipping Agencies, which completed on 4 June
2025, William was also a director of OWHL's Brazilian listed subsidiary Wilson
Sons Holdings Brasil S.A. . William was formerly the vice chairman of Close
Asset Management Limited and chairman of the merchant bank Rea Brothers PLC.

Nadya Wells became a Director of the Company in June 2019, retiring her
position at the Company's AGM on 2 August 2024.

All Directors will retire at each AGM and offer themselves for consideration
for re‑election. The Board recommends the re‑appointment of each of the
five Directors who have put themselves forward, based on their continuing
contribution to the Company and its shareholders. The service contracts
between the Company and each of the Directors do not allow for any
compensation payment in the event of loss of office.

 

Organisation and objectives

This section explains how the Board has organised the Company and seeks to
deliver its objectives.

Board committees and roles

The Directors consider that, in order to fulfil their responsibilities as the
Directors of the Company, they should all be members of every sub-committee
where possible. Where a Director cannot be a member of a committee, they
should attend the meetings unless a conflict exists and it would be
inappropriate for them to be present.

Audit Committee

Richard Lightowler is the Chairman of the Audit Committee. The Audit Committee
consists of all independent Directors of the Board. The Audit Committee exists
to assist the Board in the financial and narrative reporting of information
relating to the Company, the review of the Internal Controls and Risk
Management systems, the oversight of the Company's annual audit and assessment
of the independence, performance and quality of Company's external auditor
PricewaterhouseCoopers LLP. The Committee meets at least twice a year - timed
to review the Annual and Half-Year Financial Statements prior to their
approval and release.

The AIC Code of Corporate Governance ("the AIC Code") indicates that all
independent Directors can be members of the Audit Committee including, if
agreed by the Board, the Chairman of the Board. The Board is of the opinion
that, particularly as the Company has relatively few Directors, shareholders
benefit from the views of all Directors. Therefore, Jonathan Davie, as
Chairman of the Company, is also a member of this Committee. The Board further
acknowledges that the AIC Code states all Committee members should be
independent. Therefore, William Salomon is not a member of the Committee
although attends as a non-member. The Committee reports its recommendations to
the Board for final approval.

The Audit Committee Report can be found further ahead in the Report.
Nomination Committee

Simona Heidempergher is the Chairman of the Nomination Committee. The
Committee was previously chaired by Nadya Wells until 14 June 2024 when the
Board appointed Ms Heidempergher to chair the Committee and to lead the search
for a new independent director following Ms Wells' decision to not stand for
re-election. All independent members of the Board are members of the
Nomination Committee. William Salomon attends the Committee but is not a
member.

The Committee reviews the structure, size and composition (including the
skills, knowledge and experience) of the Board and makes recommendations to
the Board with regard to any changes, as necessary. It also considers
succession planning of directors, taking into account tenure and performance
of board members as well as challenges and opportunities facing the Company,
and what skills and expertise are, therefore, needed on the Board in the
future. If a skills-gap or pending vacancy is identified, the Committee is
responsible for identifying and nominating candidates to fill Board vacancies
as and when they arise.

The Nomination Committee Report can be found further ahead in the Report.
Management Engagement Committee

The Committee is chaired by Jonathan Davie. All independent members of the
Board are members of the Management Engagement Committee. The Committee has
two primary roles. Firstly, to review the functional and operational
performance of the Portfolio Manager with the Company's investment policy.
Secondly, to review annually the performance of any other key service
providers to the Company.

The level of management fees, level of service provided and the performance of
the Portfolio Manager are reviewed on a regular basis to ensure these remain
competitive and in the best interests of shareholders. The Board, after the
annual recommendation of this Committee, considers whether the engagement of
the Portfolio Manager is in the best interests of the shareholders. The
Committee members also carry out periodic visits to the key service providers,
as well as seeking feedback on the performance of other service providers from
the Portfolio Manager in its capacity as Additional Administrative Service
Provider.

The Committee reports its recommendations to the Board for final approval.

Remuneration Committee

The Committee is chaired by Simona Heidempergher. All independent members of
the Board are members of the Remuneration Committee. William Salomon attends
the Committee but is not a member. The Committee is responsible for the broad
policy for the remuneration of the Company's Chairman and non-executive
Directors pursuant to the Company's Bye-laws. The Committee takes into account
all factors which it deems necessary. When setting the remuneration policy for
Directors, the Committee reviews remuneration trends across the wider
industry, including the use of external independent surveys, and considers the
ongoing appropriateness and relevance of the remuneration policy. The level of
directors' fees should be set at a level which attracts and retains high
calibre candidates. Fees are monitored against external benchmarks taking
specific note of each Director's duties, time commitments to properly fulfil
all obligations and duties and also relative to other comparable companies in
comparable jurisdictions. No Director sets their own individual remuneration.

The Committee reports its recommendations to the Board for final approval.

The Directors' Remuneration Report can be found further ahead in the Report.
Long-term impact of decisions - ESG matters

In the natural positive progression of HCP's commitment to further integrating
ESG and climate relevant considerations within its investment process, the
Hanseatic Group, of which HCP is a member, has become a signatory of the
United Nations supported Principles for Responsible Investment (UN PRI).

With ever-growing global concerns and developments surrounding matters such
has climate change, social inequalities and ethical corporate strategy and
governance, the Board believes there is a communal duty for meaningful and
effective action to be taken and are committed to doing so. It is the Board's
belief that responsible investing and a well‑run sustainable business model
aids in generating superior long‑term returns.

The Board is responsible for the Company's ESG policy. In 2020, the Board
adopted the Portfolio Manager's Responsible Investment Policy, which is
applied to all Company investments in funds and companies, in both public and
private markets. In line with the evolving nature of ESG's integration within
financial services, the Manager continues to review and develop their policy
of responsible investing within their investment process. This involves
ensuring environmental, social and governance factors are integrated
throughout the investment management process, including within the due
diligence, decision-making and investment monitoring processes.

As long-term investors, HCP has a natural desire to be a responsible investor
and a good corporate citizen. HCP's approach begins by communicating its
expectations to fund and company investments that they should take ESG issues
seriously, clearly report on them, be responsible owners and to continuously
show positive indicators of aspiring to do the right thing.

HCP does not operate an exclusionary policy, as excluding whole sectors or
countries is not a sustainable, or reasonable approach to its investment
activities. Each fund manager or company is assessed as an individual, taking
into account the sector and country within which they operate and their
direction of travel in ESG enhancements.

HCP seeks to ensure that all investee managers and companies are thinking
longer term and that they are also thinking about their longer-term impacts
across the spectrum of their business. This certainly includes the negatives -
such as understanding how companies are lowering their carbon emissions,
ensuring they are not using forced or child labour in their supply chains,
taking care not to deplete natural resources, or be involved in deforestation.
But it also includes the positive impacts, for example, knowing if a company
is taking advantage of the opportunities it may have from climate change by
developing greener energies, recycling used clothing, or designing
biodegradable fabrics. HCP's involvement with the managers and companies is
ongoing and pushes them to manage the risks and take advantage of the
opportunities in a tailored and considered manner. A manner that reaps
longer-term benefits for the Company, as well as the environment and the
greater society.

The Board is pleased to report that the Manager has received very positive
feedback on their second submission to the UN PRI, made in summer 2024, for
both their policies and approach adopted. At the time of publication of this
Report, the Hanseatic Group is in the process of preparing its 2025 submission
to the UN PRI.

Fund investments

HCP seeks to invest in funds who are responsible owners of their investee
companies, have specific consideration as to how their investee companies
manage their ESG responsibilities and seek to engage with those company
boards, if they are failing in their duties. Where a manager is not living up
to these standards, HCP will first seek to engage the management team and
encourage improvement. If the managers engagement is weak, or if the
communicated concerns are not sufficiently addressed and their positive
commitment to do so is not apparent, HCP's ultimate action would be to reduce
the current investment, exit, or not invest in the first place. Whilst HCP
does not seek to exclude fund managers that invest in sectors such as energy
or countries such as China, it would, however, expect such managers to
properly articulate how they operate in such areas and manage the potential
ESG considerations. HCP's investment philosophy favours those fund managers
who are typically long-term in their approach and seeks to invest in
high-quality, well-managed companies that are often higher-returning. As a
result, although we do not set limits, there is a natural bias away from these
companies and sectors that score less well on ESG metrics.

Company investments

When considering direct equity investments HCP seeks to ensure that company
management teams are responsible custodians of their businesses, report
clearly on ESG metrics and seek to improve on those areas in which they are
lagging.

Taskforce on Climate-Related Financial Disclosures

As a closed-ended investment company, HICL is exempt from the annual reporting
requirement to publish statements in line with the Taskforce on
Climate-Related Financial Disclosures' (TCFD) framework of recommendations and
recommended disclosures. However, considering the Board and the Manager's
approach to responsible investing in conjunction with the Company's core
investment objective to generate superior, but sustainable, medium to
long-term growth in shareholder value, we have elected to provide relevant
information on our approach to the TCFD recommendations.

Governance

Strong corporate governance practices are intrinsic to how the Board operates.
The Board oversees a long-term and sustainable approach to business strategy
of the Company. This in part is done by adopting a Responsible Investment
Policy, which aims to integrate sustainability, climate-related risks and
opportunities, social responsibility and strong governance into the Company's
investment process. This is consistent with HCP's approach to its ESG
assessment of fund managers and company investments.

Risk Management

Climate-related risks within the Company's investments are identified,
assessed and managed by HCP as the Portfolio Manager. As part of the portfolio
risk management and monitoring process, HCP combines long-term and
purpose-driven engagement with underlying fund managers and companies, active
voting and setting a clear escalation framework. This approach aims to
identify and address climate‑related issues and minimise systemic risks that
may impact the assets within the portfolio. Engagement can take several forms,
including regular and ad hoc meetings with management, formal written
correspondence, or the Portfolio Manager participating in relevant shareholder
votes for current investments.

Strategy

The Company's strategic objective is to grow its net assets over the medium to
long-term by investing in a diversified and multi-strategy portfolio. In line
with this objective, the Board are responsible for pursuing the growth of
shareholder value. Responsible investment and the integration of ESG risks and
opportunities within the investment process is aligned with the Company's
values and heritage. HCP becoming a signatory to UN PRI is part of our overall
strategy.

Metrics and targets

In relation to the Portfolio Manager's investment process, a more holistic
approach is taken by assessing an investment by their intent and direction of
travel, rather than purely by specific targeted metrics. The ESG assessment of
a fund manager or company will involve HCP developing a view by utilising
their published ESG reporting, the information received through the due
diligence and engagement processes and other external research. The Company
has no material information to report in relation to metrics and targets.

Ocean Wilsons Holdings Limited

During our financial year, OWHL had two investments - Ocean Wilsons
Investments Limited, an investment portfolio and a holding in Wilson Sons
Holdings Brasil S.A., a Brazilian maritime business.

From an ESG standpoint, our Portfolio Manager is also the investment advisor
to the Ocean Wilsons Investments' portfolio. The Board understands that our
Portfolio Manager is engaging with Ocean Wilsons Investments' board on their
Responsible Investing Policy.

As noted in the Chairman's report, OWHL agreed on 21 October 2024 to sell its
investment in Wilsons Sons to SAS, a wholly owned subsidiary of MSC
Mediterranean Shipping Company. The sale was subject to a number of regulatory
approvals, the final of which was received on 20 May 2025, making the sale
unconditional and it completed on 4 June 2025. Therefore, this is the last
time we will give insight into the ESG practices of Wilson Sons. As a Board we
receive periodic updates from Wilson Sons, an operating business with several
thousand employees, regarding their business including issues relevant to ESG
considerations. Wilsons Sons is listed on the Novo Mercado ("New Market") B3
listed segment and is a member of the Carbon Disclosure Project which, in
partnership with companies and governments, aims to build a truly sustainable
economy, by measuring and understanding the environmental impact. In 2023,
Wilson Sons was awarded a grade B performance in the climate change
questionnaire for the maritime transportation segment. This is a continuation
of the grade achieved in 2022, making Wilson Sons in line with 44% of
companies in the maritime sector that publicly disclose their data to CDP.
Wilson Sons continues to focus on health & safety, staff wellbeing and the
preservation of the environment and communities they operate in. Wilson Sons
maintained its "Great Place to Work" certification from the prior year, which
is a standard of excellence for work environments. As in many heavy
industries, there is a focus on safety and improving working practices to
minimise staff injuries. Their commitment to maintaining an increasingly safe
working environment is reflected by their continuous trend of reduction in
lost-time injuries, which in 2023 was reduced to a frequency rate of 0.20
incidents per one million hours worked. This rate exceeds the world-class
benchmark. Additionally, the company has maintained its commitment to
proactively publish its Greenhouse Gas (GHG) emissions inventory in the public
emissions registry, a platform managed by the Brazilian GHG Protocol
programme. In 2023, Wilson Sons maintained their gold seal by the programme.
In 2023, Wilson Sons total GHG emissions were up 4.7% over the previous year.
This performance reflects a 5.0% increase in direct emissions (scope 1),
offset by a 10.3% reduction in indirect emissions associated with the purchase
of electricity (scope 2). Despite this, the reduction of GHG emissions remains
a focus for Wilson Sons, and they continue to look for new technologies and
processes to achieve this. Further information can be seen in their
Sustainability Report, published on their website www.wilsonsons.com.br/en.

Environmental charitable support

The Board has continued to sponsor the Blue Marine Foundation, an
environmental charity that has direct relevance to Bermuda, our country of
domicile. Given its island status, Bermudians are more aware than most of the
marine environment. Marine life is under threat from climate change,
acidification of the sea, pollution and invasive species. But these threats
are compounded by overfishing, which strips the ocean of life, and so reduces
its capacity to produce oxygen, absorb carbon dioxide and regulate the
climate. It's estimated that almost 94% of commercial fish stocks are fully or
overexploited and 90% of large, predatory fish are gone. Overfishing therefore
represents a major threat for the food security of millions and could have
devastating consequences for Earth's climate if these ecosystems fail. Amongst
many worthy organisations, the Blue Marine Foundation is an environmental
charity dedicated to restoring the ocean to health by addressing overfishing
and supporting marine conservation projects. The ocean is the world's largest
carbon sink: by combating overfishing and the associated impact on the wider
marine environment, the Blue Marine Foundation aims to help life in the ocean
perform its vital function of stabilising the Earth's climate. By partnering
with the Foundation, the Company supports their work around the world
ultimately benefiting us all and, in particular, maritime communities like
Bermuda. The Company has committed to a charitable gift of £15,000 per annum
towards Blue Marine's work.

Streamlined Energy and Carbon Reporting (SECR) and Greenhouse Gas Emissions
(GGE)

The Company has no direct greenhouse gas emissions to report from the
day-to-day operations of its business. However, as noted above, the attendance
of Directors at Board meetings in Bermuda means travel related carbon
emissions which are "Scope 3 Indirect Emissions" for the purposes of the SECR.
The Board has further estimated the emissions associated with the flights to
be in the region of 237 tonnes of CO2 in any 'normal' year.

Social, Community, Human Rights, Employee Responsibilities Policy

The Company does not have any employees. The Company has no direct social,
community or human rights impact. Its principal responsibility to shareholders
is to ensure the investment portfolio is properly invested and managed.

Service providers

Service Provider Policy

The Company has no employees and operates through third party service
providers. The Board has contractually delegated to external organisations the
management of the investment portfolio, the custodial services which include
safeguarding of the assets and the day-to-day accounting and company
secretarial requirements. Each of these contracts is only entered into after
proper consideration of the quality and cost of services, which are regularly
reviewed and monitored.

The key service provider relationship to the Company is Hansa Capital Partners
as the Portfolio Manager and AASP to the Company.

The Board carries out the following activities as part of its oversight of
third party service providers:

Monitors performance, costs and commitment to a successfully implemented
controls environment

The Board, at its regular meetings, reviews reports prepared by both the
Portfolio Manager and the Administrator, which enable it to monitor the
performance and costs of the third-party suppliers to the Company. The AASP
has an ongoing dialogue with each provider to monitor their processes and
systems and, in addition, members of the Board meet with key providers at
least annually to discuss performance.

Monitors Portfolio Manager performance

The Board reviews reports prepared by the Portfolio Manager at its regular
meetings, which enables it to monitor the investment performance, risks and
returns. The Portfolio Manager attends each Board meeting where there is an
active dialogue on performance, process, risks and opportunities and
governance matters.

The Board identifies key controls and regularly monitors them through
compliance reports on control effectiveness.

Determines investment strategy, guidelines and restrictions

The Board determines the investment strategy in conjunction with the Portfolio
Manager. The strategy is monitored regularly with adjustments made as
required.

The Board issues formal investment guidelines and restrictions; compliance
with these is reported by the Portfolio Manager's compliance officer quarterly
and is also monitored independently by the Administrator.

Determines gearing levels and capital preservation through the use of hedging
instruments

The Board, taking account of advice from the Portfolio Manager, determines the
maximum level of borrowings the Company will undertake. The Company will not
invest in derivatives for speculative gain, but may use derivatives for
efficient portfolio management and hedging purposes.

The providers

Portfolio Manager & Additional Administrative Services Provider

Hansa Capital Partners LLP is the Portfolio Manager for the Company. It is
responsible for all assets in the portfolio, other than the Company's
investment in OWHL. The Board is in regular contact with the investment
management team at HCP which is led by Alec Letchfield. Additionally, Alec
Letchfield is invited to quarterly meetings of the Board to formally present
portfolio updates and discuss market trends. The Portfolio Manager's detailed
review of the year can be found earlier on in the Report.

HCP charges a portfolio management fee at an annual rate of 1% of the net
assets of the Company (after any borrowings) and after deducting the value of
the investment in OWHL, on which no fee is payable. The Portfolio Manager has
charged £3,346,000 for the year ended 31 March 2025 (year ended 31 March
2024: £2,950,000). Hanseatic Asset Management LBG, a company connected to
Hansa Capital Partners, which is also the Alternative Investment Fund Manager
(AIFM), separately charges an investment management fee to the investment
subsidiary of OWHL.

The terms of the Portfolio Management Agreement permit either party to
terminate the agreement by giving to the other not less than 12 months'
notice, or such shorter period as is mutually acceptable. There is no
agreement between the Company and the Portfolio Manager concerning
compensation in respect to the termination of the agreement. In its annual
assessment of the Portfolio Manager, the Board concluded that, because of the
skills and experience of the management team it is in the best interest of
shareholders that the Portfolio Manager remains in place under the present
terms. Details of the fees paid to the Portfolio Manager can be found in Note
3 to the Financial Statements.

HCP also acts as the AASP to the Company. This role ensures a number of the
day-to-day processes for the Company are carried out, as well as providing
oversight of, and a liaison between, a number of the Company's service
providers and the Company itself. HCP is paid £115,000 per annum for this
service (year ended 31 March 2024: £115,000).

Auditor

The Company's independent Auditor is PricewaterhouseCoopers LLP ("PwC UK"), a
firm registered in the United Kingdom. PwC UK was appointed as Auditor for the
Company's 2024/2025 Financial Year and replaced PricewaterhouseCoopers Ltd of
Bermuda who previously audited the Company since inception. The change of lead
Audit firm was made to improve efficiency of the audit. Auditor independence
rules restrict the amount and type of non-audit related work that can be
performed by a company's Auditor. Any non-audit related work must be
pre-approved by the Board. PwC UK did not provide any non-audit services in
the year. Further information can be found further on in the Report.

Company Secretary

The Company has engaged Conyers Corporate Services (Bermuda) Limited
("Conyers") as its Company Secretary. During the year to 31 March 2025,
Conyers charged £15,000 (year ended 31 March 2024: £15,000).

Alternative Investment Fund Manager

As a Bermudan resident, the Company is a non-UK Alternative Investment Fund
(AIF) under the UK Alternative Investment Fund Manager's Directive (UK AIFMD).
As such, the Company and the AIFM are subject to a more limited set of UK
AIFMD requirements, which are largely in relation to marketing the Company's
shares into the UK. The Company appointed Hanseatic Asset Management LBG, with
effect from 29 August 2019, to act as its AIFM, with responsibilities for the
Portfolio Management and Risk Management functions. The AIFM has delegated the
provision of Portfolio Management services to Hansa Capital Partners LLP, but
remains responsible for the Risk Management function. The AIFM does not charge
a direct fee for its services, although it does recharge any third-party fees
incurred.

Administrator

The Company engaged Apex Fund Administration Services (UK) Ltd as its
Administrator. The Administrator has charged £165,000 for the year ended 31
March 2025 (year ended 31 March 2024: £154,000). Following a review of
services, the Company has replaced Apex as the Company's Administrator with
Juniper Partners with effect from 1 April 2025.

Custodian

The Company has engaged Banque Lombard Odier & Cie SA as the Company's
Custodian. During the year to 31 March 2025, Lombard Odier charged £205,000
for the custodial service (year ended 31 March 2024: £184,000).

Registrar

The Company has engaged Computershare Investor Services (Bermuda) Limited
("Computershare") as the Company's Registrar. During the year, the total
Registrar charges were £61,000 for the year ended 31 March 2025 (year ended
31 March 2024: £80,000).

 

Corporate Governance Report

Corporate Governance Code

Internal Controls

The UK Corporate Governance Code ("UK Code"), requires the directors of UK
listed companies to review the effectiveness of the company's risk management
and system of internal controls on an annual basis. The Board is committed to
sound corporate governance, robust risk management processes and effective
systems of internal controls. The Board reviews and considers the
effectiveness of internal controls regularly and review exception reporting at
least quarterly. The Directors, through the procedures outlined below, keep
the system of risk management and internal controls under review.

The Board recognises its ultimate responsibility for the Company's system of
risk management and internal controls and for monitoring their effectiveness.
In order to perform this responsibility the Board receives regular reports on
all aspects of risk management and internal control from the Company's service
providers (including financial, operational and compliance controls, risk
management and relationships with other service providers); the Board will
instigate necessary action in response to any significant failings or
weaknesses identified by these reports.

Financial Reporting

The Board has a responsibility to present a fair, balanced and understandable
assessment of annual, half‑year and other price sensitive public reports and
reports to regulators, as well as to provide information required to be
presented by statutory requirements. To ensure this responsibility is
fulfilled, all such reports are reviewed and approved by the Board prior to
their issue.

Other than the Company's announcement on 17 June 2025 of a Possible
Combination with OWHL, the outcome of such discussions not being known at the
time of publishing this Report, the Board confirms there have been no other
specific events since 31 March 2025, of which the Board is aware, which would
have a material impact on the Company.

Compliance with the provisions of the UK Corporate Governance Code

The Board of Hansa Investment Company has considered the Principles and
Provisions of the AIC Code. The AIC Code addresses the Principles and
Provisions set out in the UK Code, as well as setting out additional
Provisions on issues that are of specific relevance to the Company.

The Board considers that reporting against the Principles and Provisions of
the AIC Code, which has been endorsed by the FRC in the UK, provides more
relevant information to shareholders. The Board notes the release of the new
AIC Code in August 2024 for accounting periods beginning on or after 1 January
2025. Therefore, references to the AIC Code in this Annual Report refer to the
previous Code document released by the AIC in February 2019.

The Company has complied with the Principles and Provisions of the AIC Code.

The AIC Code is available on the AIC website (www.theaic.co.uk). It 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.

Association of Investment Companies Code

The AIC Code has 17 principles. The Company sets out below how it has complied
with the Principles and Provisions:

Board Leadership and Purpose

A.         A successful company is led by an effective board, whose
role is to promote the long-term sustainable success of the company,
generating value for shareholders and contributing to wider society.

            The Board is formed of five Directors with a
complementary mix of skills and experience to lead the Company. All have
significant and relevant experience. All Directors are focused on generating
long‑term value for shareholders and there is significant share ownership in
the Company's shares amongst the Directors. The Board engages at least
quarterly with its Portfolio Manager challenging performance, process, risk,
cost and strategy.

B.         The board should establish the company's purpose, values
and strategy, and satisfy itself that these and its culture are aligned. All
directors must act with integrity, lead by example and promote the desired
culture.

            The Board believes that the Company's purpose, values
and strategy are clear: to create long‑term growth of shareholder value. The
Board fosters a culture that is open to new ideas and is able to influence its
service providers through effective challenge and regular robust review of
performance. The Board sets the standard for openness and professionalism that
the Company's key service providers follow. In particular, there is regular
interaction between the Board and the Company's Portfolio Manager and also the
AASP for day-to-day liaison with other service providers.

C.         The board should ensure that the necessary resources are in
place for the company to meet its objectives and measure performance against
them. The board should also establish a framework of prudent and effective
controls, which enable risk to be assessed and managed.

            The Board, through the work of its Committees and
regular Board meetings ensures regular measurement against the Company's
objectives. The adequacy and effectiveness of internal controls is considered
at each Board meeting.

D.         In order for the company to meet its responsibilities to
shareholders and stakeholders, the board should ensure effective engagement
with, and encourage participation from, these parties.

            The Board considers its stakeholders to be its
shareholders and its key service providers. The Board is committed to
transparent reporting in all its communications. It actively engages with
shareholders via an annual general meeting, periodic shareholder
presentations, the next of which will be held on 23 September 2025, quarterly
factsheets, website communication and with feedback also received through
outreach programmes by the Company's broker and Portfolio Manager, as well as
direct one-to-one correspondence. The Board engages with other key service
providers through the operations of its AASP on a day-to-day basis, as well as
via at least one annual meeting with each to ensure accountability and
value-added performance.

Principle E is omitted by the AIC Code.

Division of Responsibilities

F.          The chair leads the board and is responsible for its
overall effectiveness in directing the company. They should demonstrate
objective judgement throughout their tenure and promote a culture of openness
and debate. In addition, the chair facilitates constructive board relations
and the effective contribution of all non-executive directors, and ensures
that directors receive accurate, timely and clear information.

            The Chairman is Jonathan Davie. The Chairman promotes
and encourages active participation from all Directors at Board meetings.
Further, whilst adhering to membership guidelines, sub‑committees also seek
to include as many Directors as possible to ensure a broad range of views. All
Directors receive regular monthly and quarterly information prepared by the
Portfolio Manager and Administrator, as well as portfolio performance
presentations from the Portfolio Manager.

G.         The board should consist of an appropriate combination of
directors (and, in particular, independent non-executive directors) such that
no one individual or small group of individuals dominates the board's decision
making.

            The Board consists of five Directors. All have a
financial background, as set out in their individual biographies, which can be
found earlier on in the Report, but each brings complementary individual
expertise. Four Directors are deemed independent. The fifth, William Salomon,
is the Senior Partner of the Company's Portfolio Manager and, therefore, is
deemed non-independent. All Directors are actively involved in decisions and
committees unless conflicts exist which preclude this. Accordingly, Mr Salomon
does not participate in the evaluation of the performance of the Portfolio
Manager due to his role as senior partner of that firm. Nor does he
participate in decisions regarding the Company's largest asset (by value)
OWHL, due to him being a director of that company. Finally, Mr Salomon is not
a member of the Audit, Nomination or Remuneration Committees due to his
non-independent status, although he does attend meetings of those Committees.
The culture of open and honest communication and forthright discussion means
no individual or small group dominate decision making.

            The Board has decided to not appoint a Senior
Independent Director (SID) from the three independent directors (i.e.
excluding Jonathan Davie given his position as Chairman). The Board consists
of a small number of individual directors with well-structured and clearly
defined Committees. As a result, it was felt that presently the role of the
SID is unnecessary given many of its functions clearly sit with existing
Committee Chairs. However, this decision will be reviewed annually.

H.         Non-executive directors should have sufficient time to meet
their board responsibilities. They should provide constructive challenge,
strategic guidance, offer specialist advice and hold third party service
providers to account.

            The Directors confirm they have sufficient time to meet
their responsibilities. Directors consult with the Company before accepting
other appointments, to confirm capacity to do so and that no conflict exists.
In considering appointments and potential conflicts of interests the Board
considers the available time each Director has to commit to the Company. A
formal calendar exists for the Board meetings and sub-committees. Ad-hoc
meetings may be arranged without advance materials for time-sensitive matters.
The Portfolio Manager and AASP report to scheduled Board meetings, giving the
Directors the opportunity to challenge performance, raise issues and offer
guidance.

I.          The board, supported by the company secretary, should
ensure that it has the policies, processes, information, time and resources it
needs in order to function effectively and efficiently.

            The Company Secretary and AASP support the Board in
identifying and monitoring all governance matters. Additionally, Directors are
able to consult external professional advisors to assist them in the
performance of their duties as and when required. Board reporting and
materials are refined on an ongoing basis.

Composition, succession and evaluation

J.         Appointments to the board should be subject to a formal,
rigorous and transparent procedure, and an effective succession plan should be
maintained. Both appointments and succession plans should be based on merit
and objective criteria and, within this context, should promote diversity of
gender, social and ethnic backgrounds, cognitive and personal strengths.

            The Board has appointed a Nomination Committee chaired
by an independent director, Simona Heidempergher. The Nomination Committee
conducts a formal due diligence process on all appointments and considers
annually the continued suitability and performance of directors. The Company
believes a diverse Board brings many benefits and, as such, there is no
restriction placed on Board membership. Inclusivity, diversity, variety of
experience and personal strengths are all incorporated in the decision making
for director selection and succession planning. The Company will appoint an
external Executive Search agency to assist the Nominations Committee with the
appointment of a director. The Executive Search agency will be briefed on the
Company's policy for board composition before any search.

K.         The board and its committees should have a combination of
skills, experience and knowledge. Consideration should be given to the length
of service of the board as a whole and membership regularly refreshed.

            The Directors have a broad range of backgrounds
including investment management, finance and banking as well as operational
experience. Biographies of all Directors are shown earlier on in the Report.
Each director retires and is subject to re-election at the AGM. The decision
to propose directors for Nomination at the AGM is made by the Nomination
Committee. The Nomination Committee is tasked with maintaining a broad range
of skills and experiences at times of succession.

L.         Annual evaluation of the board should consider its
composition, diversity and how effectively members work together to achieve
objectives. Individual evaluation should demonstrate whether each director
continues to contribute effectively.

            The Nomination Committee is responsible for the ongoing
consideration of Board composition and to identify any skills gap, now or in
the future. The Nomination Committee considers Board effectiveness annually.

Audit, risk and internal control

M.        The board should establish formal and transparent policies
and procedures to ensure the independence and effectiveness of external audit
functions and satisfy itself on the integrity of financial and narrative
statements.

            The Board has specifically delegated the appointment
and monitoring of the Company's external Auditor to its Audit Committee. The
Company's Auditor, PwC UK, was appointed in August 2024. The tender process
was led by the Chairman of the Audit Committee. The Audit Committee considers
the independence and effectiveness of the external Auditor at least annually.
The Company's Auditor does not provide other services to the Company. The
Company rigorously follows policy and procedure to ensure effectiveness of the
external audit and integrity of financial reporting. Refer also to the Audit
Committee Report.

N.         The board should present a fair, balanced and
understandable assessment of the company's position and prospects.

            The Board considers and approves all relevant
shareholder communications. The Annual and Half-Year Reports are reviewed by
the Board to ensure they present a fair and balanced view including commentary
on going concern and long-term viability. The Audit Committee considers the
fairness of the Financial Statements before recommending them to the Board for
approval.

            The Annual and Half-Year Reports provide fair, balanced
and understandable commentary on the Company's performance and prospects.

O.         The board should establish procedures to manage risk,
oversee the internal control framework, and determine the nature and extent of
the principal risks the company is willing to take in order to achieve its
long-term strategic objectives.

            Principal risks are identified by the Board and risk
appetite established against these risks. Day to day risk management is
undertaken by the Portfolio Manager and AASP within the parameters established
by the Board. The Board meets with the Portfolio Manager at each scheduled
Board meeting where there is opportunity to discuss particular aspects of the
portfolio and associated risks. Operational risk and compliance reporting are
also regularly discussed by the Board. Emerging risks are monitored and
incorporated into the risk appetite framework as they arise.

Remuneration

P.         Remuneration policies and practices should be designed to
support strategy and promote long-term sustainable success.

            The remuneration of Directors is overseen by the
Remuneration Committee, chaired by Simona Heidempergher. The Directors each
receive a fixed annual fee and do not receive any additional element based on
performance of the Company. Additionally, Directors offer themselves annually
for re-election at the Company's AGM.

Q.         A formal and transparent procedure for developing policy on
remuneration should be established. No director should be involved in deciding
their own remuneration outcome.

            The Directors' Remuneration Report notes that each
Director is paid a fixed fee representative of their roles and additional
responsibilities on the Board. This fee level is reviewed by the Remuneration
Committee annually considering performance, time commitments and market
conditions. Recommendations are made to the Board for approval. Further detail
is provided in the Remuneration Committee Report.

R.         Directors should exercise independent judgement and
discretion when authorising remuneration outcomes, taking account of company
and individual performance, and wider circumstances.

            Performance, individual contribution and market
conditions are all considered when setting directors' fees.

Compliance with The Financial Conduct Authority Listing Rules

The Directors are responsible for ensuring that:

Adequate accounting records are kept, 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 are consistent with the relevant requirements under the
UK Companies Act 2006.

The assets of the Company are safeguarded; and for taking reasonable steps for
the prevention and detection of fraud and other irregularities.

The Report of the Directors and other information included in the Annual
Report is prepared in accordance with both Company Law in Bermuda and, where
required, the UK. The Directors are also responsible for ensuring the Annual
Report includes information required by the Listing Rules of the FCA.

The Company has effective internal control systems, designed to ensure that
adequate accounting records are maintained; and that financial information on
which the business decisions are made, which is issued for publication, is
reliable. Such a system of internal control can provide only reasonable, but
not absolute, assurance against material misstatement or loss.

            The Company Financial Statements for each financial
year are prepared in accordance with International Financial Reporting
Standards (IFRS). IFRS means standards and interpretations issued (or adopted)
by the International Accounting Standards Board (IASB). The Directors must not
approve the Financial Statements unless they are satisfied they give a true
and fair view of the state of affairs and profit or loss of the Company for
that period.

In preparing these Financial Statements, the Directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and estimates that are reasonable and prudent;

state whether they have been prepared in accordance with International
Financial Reporting Standards; and

            prepare the Financial Statements on the going concern
basis, unless it is inappropriate to presume the Company will continue in
business.

Under the FCA Listing Rules and the UK Code, the Board is responsible for:

disclosing how it has applied the principles and complied with the provisions
of the AIC Code and, thereby, the UK Code, or where not, to explain the
reasons for divergence; and

            reviewing the effectiveness of the Company's systems of
risk management and internal controls.

The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website:
www.HansaICL.com. Visitors to the website need to be aware that legislation
governing the preparation and dissemination of the Financial Statements may
differ from legislation in their own jurisdictions.

Responsibility statement

The Directors confirm that:

The Financial Statements are prepared in accordance with applicable
international accounting standards and present fairly, in all material
respects, the financial position of Hansa Investment Company.

The Strategic Report, including the Chairman's report and the Report of the
Directors includes a fair review of the development and performance of the
business and the position of the Company, together with a description of the
principal risks and uncertainties it faces.

The Directors consider the Annual Report and Financial Statements, taken as a
whole, are fair, balanced and understandable. Further commentary demonstrating
the Company's performance, business model and strategy has been included
within the Annual Report.

 

For and on behalf of the Board

Jonathan Davie

15 July 2025

 

Directors' Remuneration Report

Annual statement

The Company has five non-executive Directors. The Board has appointed a
Remuneration Committee. The Chairman of this Committee is Simona
Heidempergher. All independent members of the Board are members of the
Remuneration Committee. William Salomon attends the Committee but is not a
member.

Other than Pedro Goncalves who was appointed on 6 February 2025, each of the
Directors serving at the year-end was initially appointed during June 2019
following the creation of the Company. Each Director presents themselves for
annual re-election at the Company's AGM.

Policy on Directors' remuneration

The Board's policy is that the remuneration of non-executive Directors should
be a fixed-fee only. This fee should reflect the experience of each director,
time commitment required to fulfil the role, market conditions, financial and
reputational risks undertaken and additional responsibilities. The
remuneration does not include a performance related element and Directors do
not receive bonuses, share options, pensions or long-term incentive schemes.
The aggregate remuneration of the Board will be kept within the limits set out
in the Company's Bye-laws, as amended from time to time.

In assessing current and future levels of director compensation, the
Remuneration Committee seeks external comparative information, such as the use
of independent external surveys. This includes the fees paid by other similar
companies (both industry and jurisdiction), seeking input from recruitment
specialists familiar with the external market, assessing the time commitment
for each of the Directors in their appointed roles and considering the
responsibilities their roles bring. The increasing demands being placed on all
NEDs by shareholders, regulators and markets are also factored.

The fees for the non-executive Directors are within the limits (maximum total
fee of $600,000) as set out in the Company's Bye-laws. The maximum is set as a
USD amount. The equivalent is £465,000 if translated at the applicable rate
on 31 March 2025.

The Remuneration Committee has reviewed the Directors' salaries against
available comparables during the year. As advised in the 2024 Annual Report,
the Directors' annual salaries were to be $415,000 from 1 April 2024. The
Committee concluded that Directors' salaries were to remain unchanged during
the remainder of the financial year to 31 March 2025 and to increase from 1
April 2025. The new total annualised salary from 1 April 2025 is $465,000.

Directors' service contracts

It is the Board's policy that every Director has a service contract. None of
the service contracts is for a fixed term. The terms of appointment provide
that a Director shall retire and be subject to re-election at the first AGM
after appointment. The Board has decided each Director will retire annually at
the AGM and seek re-election as appropriate. The terms also provide that
either party may give three months' notice. In certain circumstances a
Director may be removed without notice and compensation will not be due on
leaving office. There are no agreements between the Company and its Directors
concerning compensation for loss of office.

Policy for notice periods

The current Directors' service contracts stipulate three months' written
notice to be given by either the Director or the Company to terminate the
services of a Director. The Board consider this is sufficient notice to ensure
an orderly hand over between the parties.

Shareholders' views on remuneration policy

The formal views of unconnected shareholders have not been sought in the
preparation of this policy.

Employees

The Company does not have any employees, only non‑executive Directors.

Annual report on remuneration

Directors' Emoluments (Audited)

The Company does not have any employees, only non‑executive Directors who
receive only a basic fee, plus repayment of expenses incurred in the course of
performing their duties. Therefore, the use of the detailed remuneration
table, as prescribed in the legislation, is not appropriate here. A condensed
table showing the information relevant to the Directors' remuneration is shown
in its place.

The Directors who received fees during the year received the following
emoluments in the form of fees. For clarity, these amounts are quoted in the
currency as per their service contract. The Director's remuneration is set in
USD, as is common for most Bermudan companies. The following table notes the
Directors current annual fee as at 31 March 2025. It also notes their fee, in
USD, for the current and prior financial years. The equivalent Sterling fees
are shown as converted at the relevant pay date of each fee:

                            2025   2025    2024   2024

                            fee    fee     fee    fee

                            $000   £000    $000   £000
 Jonathan Davie (Chairman)  110    85      100    79
 Simona Heidempergher       90     71      80     65
 Richard Lightowler         100    77      90     71
 William Salomon(1)         25     19      25     20
 Pedro Goncalves(2)         13     10      -      -
 Nadya Wells(3)             31     24      80     63
                            369    286     375    298

 

(1)           William Salomon is not considered independent due to
his role with the Company's Portfolio Manager and is also excluded from
decisions relating to the Company's Strategic holding in Ocean Wilsons
Holdings Limited. As such, he receives a reduced fee which was not increased
during the year.

(2)           Pedro Goncalves joined the Board on 6 February 2025.

(3)           Nadya Wells retired as a Director at the Company's
2024 AGM on 2 August 2024.

The Company also pays the expenses of the Directors to attend the Board
meetings. Directors' travel costs incurred during the year were £178,000
(2024: £126,000).

Statement of shareholder voting

Votes in respect of the resolution to approve the Directors' Remuneration
Report at the Company's AGM in August 2024 were cast as follows:

                       No. of      % of

                       shares      votes

                       voted       cast

 Votes cast in favour  21,715,112  99.88
 Votes cast against    25,028      0.12
 Total votes cast      21,740,140  100.00
 Votes withheld        0           0.00

 

Directors' interests (audited)

Directors must seek permission from the Chairman before trading in shares,
taking note of any Closed Periods. Other than that, there are no specific
rules on Directors' shareholdings.

The interests of Directors and their connected parties in the Company at 31
March 2025 are shown below:

                       Ordinary shares         'A' non‑voting ordinary shares        Nature of

                       of 1p each              of 1p each                            interest
                       2025        2024        2025               2024
 Jonathan Davie        45,000      45,000      230,000            230,000            Beneficial
 William Salomon       11,169,345  11,169,345  3,587,123          3,587,123          Beneficial
 Simona Heidempergher  6,400       6,400       -                  -                  Beneficial

 

As at 15 July 2025, the date of signing of these Annual Financial Statements,
there were no changes to report to the Directors' holdings.

William Salomon is the senior partner of Hansa Capital Partners LLP. Fees
payable to Hansa Capital Partners LLP amounted to £3,461,000 (including
Portfolio Management and AASP functions). During the year, no rights to
subscribe for the shares of the Company were granted to, or exercised by
Directors, their spouses or infant children.

Directors' attendance

The Directors meet as a Board on a quarterly basis and at other times as
necessary and the table below sets out the main Board, Strategy and Audit
Committee meetings. Additionally, there have been numerous Committee and
operational meetings which have been omitted for brevity.

                       Board(1)  Strategy  Audit

                                 Day       Committee
 Number of Meetings    5         1         2
 Jonathan Davie        5         1         2
 Simona Heidempergher  5         1         2
 Richard Lightowler    5         1         2
 William Salomon(2)    5         1         2
 Nadya Wells(3)        1         -         -
 Pedro Goncalves(4)    1         1         -

 

(1)           "Board" includes full, timetabled, meetings of the
Board, of which there were five held during the year. There have been a number
of 'other' meetings and Board calls to discuss aspects of the Potential
Combination as well as to consider and approve operational requirements for
the Company, such as quarterly dividends. These 'other' meetings are arranged
as and when required and require the meeting to be quorate but not necessarily
attended by all Directors.

(2)           William Salomon is deemed to not be independent.
Therefore, he attends as an observer of the Audit and Remuneration Committees
but is not a committee member. Further, he attends the Management Engagement
Committee when the majority of Service Providers are discussed but exempts
himself when the performance of the Portfolio Manager is discussed due to his
position as its Senior Partner.

(3)           Nadya Wells retired as a director of the Company
effective 4 August 2024

(4)           Pedro Goncalves joined the Company as a director on 6
February 2025.

Management Engagement (1), Nomination (4) and Remuneration (1) Committee
meetings omitted for brevity.

On behalf of the Board, I confirm that the above Report on Directors'
Remuneration summarises, as applicable, for the year ended 31 March 2025:

(a)        the major decisions on Directors' remuneration;

(b)        any substantial changes relating to Directors' remuneration
made during the year; and

(c)        the context in which those changes occurred and decisions
have been taken.

An Ordinary resolution for the approval of this Report will be put to
shareholders at the forthcoming AGM.

For and on behalf of the Board

 

 

Simona Heidempergher

Chairman of the Remuneration Committee

15 July 2025

 

Nomination Committee Report

Simona Heidempergher is the Chairman of the Nomination Committee. The
Committee was previously chaired by Nadya Wells until 14 June 2024 when the
Board appointed Ms Heidempergher to chair the Committee and to lead the search
for a new independent director following Ms Wells' decision to not stand for
re-election. All independent members of the Board are members of the
Nomination Committee. William Salomon attends the Committee but is not a
member.

Role

The Committee reviews the structure, size and composition (including the
skills, knowledge and experience) of the Board and makes recommendations to
the Board with regard to any changes, as necessary. It also considers
succession planning of directors, taking into account tenure and performance
of board members as well as challenges and opportunities facing the Company,
and what skills and expertise are, therefore, needed on the Board in the
future. If a skills-gap or pending vacancy is identified, the Committee is
responsible for identifying and nominating candidates to fill Board vacancies
as and when they arise.

Appointments are made after consideration of the skills and experience needed
by the Board and against objective criteria in accordance with the AIC Code.
The Board considers it is of paramount importance to shareholders that, after
consideration of the skills and experience needed by the Board, candidates are
chosen on the basis of their contribution to the Company's needs and that
there should be no discrimination in the choice of Directors for any reason.
The Nomination Committee pays due regard to the rules published by the
Financial Conduct Authority in April 2022 in respect of diversity and
inclusion on company boards and executive management. The Company believes a
diverse Board brings many benefits and, as such, there is no restriction
placed on Board membership. Selection and appointment will continue to be
based on merit and against a skills matrix to ensure the overall composition
of the Board has an appropriate balance of knowledge and experience, whilst
remaining cognisant of the relevant geographic and diversity considerations.
The Board has determined that all Directors will retire and offer themselves
for re-election each year at the AGM and this policy includes any Directors
appointed during the year. The Committee reports its recommendations to the
Board for final approval.

Activities during the year

The Nomination Committee formally met four times during the year. The
Committee maintained a Skills Matrix to summarise the knowledge, skills,
experience and overall competence of each Director. This included anonymised
feedback from the other Board members as well as feedback from each individual
Director themselves. The Skills Matrix considers a wide range of relevant
factors when assessing individual and collective competence including
knowledge, skills, experience, diversity, geographic considerations, other
time and business commitments, as well as their overall performance and
contribution during the period in relation to their specific role. Following
its review, and in line with the small size, structure and nature of the
Company, the Committee concluded that each Director continued to contribute as
required, and the Board continued to operate effectively.

The Committee's main focus during the financial year was to find and appoint a
new independent director following Nadya Wells' decision to not stand for
re-election at the 2024 AGM due to additional professional commitments. The
Committee, under the leadership of Simona Heidempergher, defined the broad
scope of the knowledge, skills, experience, diversity, geographic
considerations, other time and business commitments desirable in a potential
candidate. The Committee then met with prospective Executive Search agencies,
appointing Schulthess Zimmermann & Jauch (SZ&J), to begin the search.
SZ&J then prepared a long-list of potential candidates for further
consideration and internal discussion with the Committee members. The
long-list was subsequently whittled down to a short-list of four candidates
through the process of online and face-to-face interviews. The remaining four
candidates on the short-list were then interviewed a second time by all of the
Directors. The Committee was supported by the Company Secretary, the AASP,
with technical support of the Company's lawyers to consider any technical or
operational issues associated with particular candidates. Particular attention
was paid to any tax jurisdictional issues raised by any of the candidates.

The Committee then met for a final time to discuss the four remaining
candidates before selecting their preferred candidate, Pedro Goncalves.

The Directors acknowledge that, with the appointment of Mr Goncalves, it would
mean the Company would not continue to meet some elements of the diversity
criteria defined by the UK Listing Rules which it had previously achieved.
However, the Directors felt that Mr Goncalves was the best candidate bringing
additional experience and knowledge to the Board. Further, the Board
composition does demonstrate a diversity of background, a broad base of
experience and critical thinking which the Board considers to be of paramount
importance to the Company and its shareholders.

Pedro Goncalves was officially appointed by the Board on 6 February 2025.

Following the annual review of Board Skills, the Nomination Committee was
supportive of re-appointing the Directors to the Board within the 2025 AGM.

Succession planning and Board recruitment policy

With the exception of Pedro Goncalves, the current Directors were all
originally appointed in June 2019. As part of the Skills Matrix utilised to
evaluate Board composition, the Board notes the number of years each Director
has served and their expected date of retirement. While the Board does not
consider the length of tenure to have a direct negative correlation to the
Directors' performance and contribution, the Nomination Committee remains
cognisant of the AIC recommendations and therefore still considers this
element as part of its overall succession planning. The Company's policy on
Board Composition remains unchanged. Namely that, after consideration of the
skills and experience needed by the Board, candidates are chosen on the basis
of their contribution to the Company's needs and that there should be no
discrimination in the choice of Directors for any reason. Selection and
appointment will continue to be based on merit and against a skills matrix to
ensure the overall composition of the Board has an appropriate balance of
knowledge and experience, whilst remaining cognisant of the relevant
geographic and diversity considerations.

For and on behalf of the Board

 

 

Simona Heidempergher

Chairman of the Nomination Committee

15 July 2025

 

Report of the Directors

The Directors have chosen to report on some items within the body of the
Strategic Review or Governance sections of the Report, while others remain
within the Report of the Directors.

Items included within Strategic Review or Governance sections

The following items are listed within the Strategic Review or Governance
sections:

Statement of the existence of qualifying indemnity provisions for Directors.

            Dividend policy and payments made during the year. In
particular, this is disclosed in the Chairman's report.

            Names of Directors, at any time in the year and the
Directors' details and attendance at Company meetings.

            Streamlined energy and carbon reporting and greenhouse
gas emissions.

            Stakeholder engagement - while the Company has no
employees, suppliers or customers, the Directors give regular consideration to
the need to foster the Company's business relationships with its stakeholders,
in particular with shareholders and service providers. The effect of this
consideration upon the principal decisions taken by the Company during the
financial year is set out in further detail in the Strategic Report.

Items reported within the Directors' Report

Disclosure to the Auditor of Relevant Audit Information

The Directors confirm that, so far as they are aware, having made such
enquiries and having taken such steps as they consider they reasonably ought,
they have provided the Auditor with all the information necessary for it to be
able to prepare its Report. In doing so each Director has made themself aware
of any information relevant to the Audit and established that the Company's
Auditor is aware of that information. The Directors are not aware of any
information relevant to the Audit of which the Company's Auditor is unaware.

Board composition and diversity

The Board recognises and is supportive of the new FCA Listing Rules (LR
9.8.6(9)) which aim to improve transparency on the diversity of company boards
and executive management teams and was implemented for accounting periods
starting on or after 1 April 2022. Accordingly, boards of UK incorporated
companies are required to report annually on whether the specific FCA targets
have been met, and if they have not been met, the reasons why. The targets
applicable to the Company are:

(i)         at least 40% of the individuals on its board of directors
are women; and

(ii)         at least one individual on its board of directors is from
a minority ethnic background.

The tables below set out the gender and ethnic diversity composition of the
Board as at 31 March 2025. As reported in the 2024 Annual Report, Nadya Wells
had decided to not stand for re-election at the Company's 2024 AGM. Following
her departure from the Board, Simona Heidempergher was appointed to chair the
Nomination Committee and, with it, lead the executive search process to find
appoint a suitable candidate to the Board. More detail can be found in the
Nomination Committee Report .

On 6 February 2025, Pedro Goncalves was appointed to the Board.

The Directors acknowledge that, with the appointment of Mr Goncalves, it would
mean that the Company would not continue to meet some elements of the
diversity criteria defined by the UK Listing Rules which it had previously
achieved. However, the Directors felt that Mr Goncalves was the best candidate
bringing additional experience and knowledge to the Board. Further, the Board
composition does demonstrate a diversity of background, a broad base of
experience and critical thinking which the Board considers to be of paramount
importance to the Company and its shareholders.

As required by the Listing Rules, the Board reports that one of the five
Directors is a woman (20%) but no members of the Board are from minority
ethnic backgrounds as defined by the Listing Rules. Whilst LR 9.8.6(9)(a)(ii))
is not applicable to a closed-ended investment company, but it should be noted
that two of the four Committee Chairmanships are held by a woman.

As per LR 9.8.6(10), numerical data is disclosed in the tables below, which
shows the Company's compliance with the above FCA targets.

 Gender Diversity                 Number of  Percentage

                                  Board      of the

                                  members    Board
 Men                              4          80%
 Women                            1          20%
 Other                            -          -
 Not specified/prefer not to say  -          -

 

 Ethnic Diversity                                                Number of  Percentage

                                                                 Board      of the

                                                                 members    Board
 White British or other White (including minority-white groups)  5          100%
 Mixed/Multiple Ethnic Groups                                    -          -
 Asian/Asian British                                             -          -
 Black/African/Caribbean/Black British                           -          -
 Other ethnic group, including Arab                              -          -
 Not specified/prefer not to say                                 -          -

 

Note, the format and information supplied in the above tables are as
prescribed by the FCA's Listing Rules. HICL is a Bermudan incorporated,
externally managed closed-ended investment company with three of its five
Directors being international and not resident in the UK. Further, HICL does
not have any employees or appoint executive board positions.

This data was provided by the individual Directors, at the request of the
Committee, asking them to indicate how the Company should categorise their
ethnic background for the purposes of the FCA requirements of Board diversity.

The Board has also elected to not formally appoint one of the independent
directors as a Senior Independent Director for the time being.

Capital Structure

The Company's Capital Structure is described in the "Shareholder Profile and
Engagement" section.

Corporate Governance Report

The Corporate Governance Report, including the Financial Risk Management
Review of the Company, is included in this Report.

Approval of the Directors

The Directors consider the Annual Report and Financial Statements, taken as a
whole, is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Company's position and performance,
business model and strategy. Further details demonstrating the Company's
performance, business model and strategy have been included within the
Strategic Report.

For and on behalf of the Board

 

 

Jonathan Davie

Chairman

15 July 2025

 

Audit Committee Report

The Audit Committee comprises solely independent Directors, as required by the
AIC Code and endorsed by the FRC. It is chaired by Richard Lightowler. Given
the size of the Board and the range of experience they bring, all
non-committee Directors are invited to attend the Audit Committee meetings.
However, only the independent member Directors are able to vote.
Recommendations of the Audit Committee are brought before the whole Board for
discussion and ratification.

The Audit Committee ensures fair, balanced and understandable reporting of
Company results.

The principal roles of the Audit Committee are to ensure that:

the integrity of financial reporting within the Annual and Half-Year Reports
taken as a whole are fair, balanced and understandable and provide information
necessary for shareholders to assess the Company's performance, business model
and strategy;

the independence, objectivity and effectiveness of the external Auditor is
maintained and monitored. The Committee also reviews the external Auditor's
performance in terms of quality and value; and

            the financial reporting internal controls system of the
Company are adequate and effective.

Financial Reporting and Internal Controls

In discharging its duties and, in particular, matters relating to the approval
of the Annual Report, Half-Year Report and the review of the Company's
internal controls, the Committee considers reports and presentations made by
the Company's Auditor, Administrator, Company Secretary, AASP (including those
of its Compliance Officer) and legal advisers.

In its review of the Financial Statements, the Committee pays particular
attention to the ownership of assets, the valuations of the portfolio and
recognition of income. In this regard we receive regular reporting from the
Portfolio Manager and AASP, including reports on the effectiveness of internal
controls in these areas. In addition, the Committee discusses with, and
receives reports from, the Auditor on the nature and scope of work performed
on valuation and ownership of assets and on income recognition.

The Company's Custodian confirms title of all assets in its custody. In its
consideration of valuations, the Committee notes that 77% of the Investment
Portfolio by value is held in assets that are either traded or listed on an
exchange or are cash. Further, of the remaining 23% unquoted fund investments,
the majority primarily hold traded securities. Valuations for these funds are
supplied by third party managers. The Audit Committee recognises that 59% of
the total portfolio assets are Level 1 and 39% are Level 2 securities. Given
the significant level of externally valued assets, the Committee is satisfied
with the valuation process. There is very limited management judgement in
determining valuations. The Company holds approximately £9m (2%) in private
assets carried at valuations determined by the investment manager. The Audit
Committee considers the work done by the Portfolio Manager, including
obtaining audited NAVs and the work of the external Auditor in its assessment
of fair values reported. Revenue recognition does not involve significant
judgement or the use of estimates.

The Audit Committee also considers the potential need for an internal audit
function on an annual basis, recognising the FRC guidance on proportionality.
The Audit Committee considers internal compliance testing at the Administrator
and Portfolio Manager to be sufficiently independent and robust to negate the
need for a standalone internal audit function.

No material control weaknesses or incidents of potential fraud were
identified. The Company's service providers implement clear whistleblowing,
anti-bribery and corruption policies. The Company received direct reporting
from service providers on internal controls and audit reports on their
internal controls.

The Committee is authorised by the Board to investigate any activity within
its terms of reference, to seek any information it requires from any officer
or service provider to the Company, to obtain outside legal or other
independent professional advice and to secure the attendance of third parties
with relevant experience and expertise if it considers this necessary.

The Chairman of the Audit Committee formally reports to the Board following
each Audit Committee meeting and on other occasions as requested by the Board.

The Audit Committee confirmed to the Board that 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.

Audit: Independence and quality

The Audit Committee considers the external Auditor's independence,
objectivity, scope of work engagement team experience, compliance with
relevant ethical and professional standards and overall quality of service
through a process of feedback from the Company advisors, including the AASP,
the Portfolio Manager and direct discussion with the Auditor. The Committee
also meets with the Auditor in an executive session at least annually. The
current audit partner is Lauren Cooper of PricewaterhouseCoopers LLP. This is
the first year of Lauren's role as PwC's Lead Partner. As a global firm, PwC
has been the Company's Auditor since its inception in 2019.

Auditors' remuneration and terms of engagement are approved by the Audit
Committee. Any non-audit services must be pre-approved by the Audit Committee
to ensure objectivity and independence of the audit is not compromised. No
non‑audit services are provided by PricewaterhouseCoopers Ltd to the
Company. Further information on fees paid to the Auditor is contained in
"Other Expenses" within Note 4 of the Financial Statements.

Company Auditor

The Company's independent Auditor is PricewaterhouseCoopers LLP ("PwC UK"), a
UK registered firm. As was noted in the 2024 Annual Report,
PricewaterhouseCoopers Ltd ("PwC Bermuda") was formally the Company's Auditor
and had audited the Company since our incorporation in 2019. Their audit had
been supported by PwC UK. To improve the efficiency of the audit, the
Directors recommended the appointment of PwC UK as the Company's Auditor for
the year ended 31 March 2025. PwC Bermuda has continued to provide support to
PwC UK. The Audit Committee and Board remain very satisfied with quality of
work by the external auditors. This change in roles is being made for
efficiency purposes only.

 

For and on behalf of the Audit Committee.

 

 

Richard Lightowler

Audit Committee Chairman

15 July 2025

 

Financial Statements
Independent auditor's report

to the directors of Hansa Investment Company Limited

Report on the audit of the financial statements

 

Opinion

In our opinion, Hansa Investment Company Limited's financial statements:

give a true and fair view of the state of the Company's affairs as at 31 March
2025 and of its profit and cash flows for the year then ended;

have been properly prepared in accordance with International Financial
Reporting Standards (IFRSs) as issued by the International Accounting
Standards Board (IASB); and

have been prepared in accordance with the requirements of the Companies Act
1981 (Bermuda).

We have audited the financial statements, included within the Annual Report,
which comprise: the Balance Sheet as at 31 March 2025; the Income Statement,
the Statement of Changes in Equity and the Cash Flow Statement for the year
then ended; and the notes to the financial statements, comprising material
accounting policy information and other explanatory information.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing
(UK) ("ISAs (UK)") and applicable law. Our responsibilities under ISAs (UK)
are further described in the Auditors' 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.

Independence

We remained independent of the Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the
UK, which includes the FRC's Ethical Standard, as applicable to listed
entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.

 

Our audit approach

Context

Hansa Investment Company Limited (the "Company") is a standalone Investment
Trust Company incorporated in Bermuda that is listed in the United Kingdom and
engages Hansa Capital Partners LLP (the "Manager") to manage its assets.

Overview

Audit scope

We conducted our audit of the financial statements using information from the
Manager, the Apex Group (the "Administrator"), Banque Lombard Odier & Cie
SA (the "Custodian") and Conyers (the "Company Secretary") to whom the Manager
has, with the consent of the Directors, delegated the provision of certain
administrative functions.

We tailored the scope of our audit taking into account the types of
investments within the Company, the involvement of the third parties referred
to above, the accounting processes and controls, and the industry in which the
Company operates.

We obtained an understanding of the control environment in place at both the
Manager and the Administrator, and adopted a fully substantive testing
approach using reports obtained from the Administrator.

Key audit matters

Valuation and Existence of Investments.

Accuracy, Completeness and Occurrence of Income.

Materiality

Overall materiality: £4,610,600 based on 1% of Net Assets.

Performance materiality: £3,457,950.

The scope of our audit

As part of designing our audit, we determined materiality and assessed the
risks of material misstatement in the financial statements.

Key audit matters

Key audit matters are those matters that, in the auditors' professional
judgement, were of most significance in the 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) identified by the
auditors, 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, and any comments we make on the results
of our procedures thereon, 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.

This is not a complete list of all risks identified by our audit.

 Key AUDIT MATTER                                                                 How our audit addressed the key audit matter
 Valuation and existence of investments                                           Our approach to addressing the matter involved the following procedures:

 Refer to the Audit Committee Report, Accounting policies (c) and Notes to the    Listed equity investments:
 Financial Statements (Note 8).

                                                                                Tested the valuation of all quoted equity investments as at 31 March 2025 by
 We focused on the valuation and existence of listed investments and unlisted     agreeing the valuation to independent third-party sources; and
 investments because the investment portfolio represents the principal element

 of the net asset value of the Company as disclosed in the Company's balance      Tested the existence of all of the quoted equity investments as at 31 March
 sheet.                                                                           2025 by agreeing investment holdings to an independent custodian confirmation.

 The valuation of the assets held in the investment portfolio is the key driver   Unquoted investments:
 of the Company's net asset value and total return. Incorrect investment

 valuation could have a significant impact on the return generated by the         Understood and evaluated the design and implementation of the process and
 shareholders.                                                                    controls surrounding the valuation of the unlisted investments including the

                                                                                final approval of the valuation by the Manager and the Board of Directors.
 In particular, the unlisted investment portfolio is susceptible to material

 error due to the investments being unquoted with no market price available and   Recalculated the fair value as at 31 March 2025 and compared to management's
 management relying on third party information.                                   valuation.

                                                                                  Tested the existence of the unquoted investments as at 31 March by agreeing
                                                                                  holdings to independently obtained external confirmations..

                                                                                  We obtained the most recent audited financial statements for a sample of the
                                                                                  unlisted investments. Our sample included the testing of 18 investments,
                                                                                  totalling £97.0m. We performed the following procedures where applicable:

                                                                                  Inspected the Generally Accepted Accounting Principles ("GAAP") applied and
                                                                                  reviewed accounting policies on key areas impacting the NAV and compared these
                                                                                  to the fair value requirements per IFRS Accounting Standards.

                                                                                  Compared the NAV per the audited financial statements to the capital account
                                                                                  statements which are coterminous with the financial statements' year end date
                                                                                  for a sample of investments with balances which are above our performance
                                                                                  materiality.

                                                                                  Determined whether the audit firm signing the financial statements was a
                                                                                  recognised audit firm and checked whether there were any modifications made to
                                                                                  their audit reports.

                                                                                  In addition, for the sample selected we obtained direct confirmation of the
                                                                                  price of the investment from each fund administrator.  Where the price of the
                                                                                  investment used by the manager is not co-terminus with the year-end we have
                                                                                  sought supporting evidence and applied appropriate challenge in assessing
                                                                                  management's conclusion.

                                                                                  No material misstatements were identified from this testing.
 Income from investments                                                          We assessed the accounting policy for income recognition for compliance with

                                                                                accounting standards and the AIC SORP and performed testing to check that
 Refer to the Audit Committee Report, Accounting Policies (e) and Notes to the    income had been accounted for in accordance with the stated accounting policy.
 Financial Statements (Note 2).                                                   We found that the accounting policies implemented were in accordance with

                                                                                accounting standards and the AIC SORP, and that income from investments has
 Gains and losses on investments is a material figure in the Income statement     been accounted for in accordance with the stated accounting policy.
 and comprises realised and unrealised gains and losses on both listed and

 unlisted investments. Gains and losses on investments are calculated based on    We tested the recognition of dividend income by comparing the dividends
 the movement in fair value in the year; whilst the fair value of listed          recorded in the financial statements to external sources. We also considered
 investments is derived from external sources, there is judgment involved in      the classification of all dividend income, including any special dividends
 the valuation of unlisted investments (see separate Key Audit Matter above).     received in the year. We have tested the completeness of dividends by

                                                                                confirming that dividends announced by a sample of listed investments in the
 There is an inherent risk that management may fraudulently manipulate revenue    year were appropriately recognised by the Company.
 through the posting of journals to meet the Company's fixed dividend target.

 Currently the income generated by the portfolio is insufficient to meet the      For unrealised gains and losses, we tested the valuation of the investment
 dividend commitment, with the shortfall being made up by drawing on the          portfolio at the year-end (see above), together with testing the
 Company's reserves as such we focussed on the classification of dividends        reconciliation of opening and closing investments. For realised gains and
 between income and capital.                                                      losses, we tested a sample of disposal proceeds by agreeing the proceeds to
                                                                                  bank statements and we re-performed the calculation of a sample of realised
                                                                                  gains and losses.

                                                                                  No material misstatements were identified from this testing.

 

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to
be able to give an opinion on the financial statements as a whole, taking into
account the structure of the Company, the accounting processes and controls,
and the industry in which it operates.

The Company's accounting is delegated to the Administrator who maintains the
Company's accounting records and who has implemented controls over those
accounting records. We obtained our audit evidence from substantive tests.
However, as part of our risk assessment, we understood and assessed the
internal controls in place at both the Manager and the Administrator to the
extent relevant to our audit. This assessment of the operating and accounting
structure in place at both organisations involved obtaining and analysing the
relevant controls reports issued by the independent service auditor of the
Manager and the Administrator in accordance with generally accepted assurance
standards for such work. Following this assessment, we applied professional
judgement to determine the extent of testing required over each balance in the
financial statements.

The impact of climate risk on our audit

As part of our audit we made enquiries of management to understand the extent
of the potential impact of climate risk on the Company's financial statements,
and we remained alert when performing our audit procedures for any indicators
of the impact of climate risk. Our procedures did not identify any material
impact as a result of climate risk on the Company's financial statements.

Materiality

The scope of our audit was influenced by our application of materiality. We
set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and
the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements
as a whole.

Based on our professional judgement, we determined materiality for the
financial statements as a whole as follows:

 Overall Company materiality      £4,610,600.
 How we                           1% of Net Assets

determined it
 Rationale for benchmark applied  We believe that net assets is the primary measure used by the shareholders in
                                  assessing the performance of the entity, and is a generally accepted auditing
                                  benchmark for investment company audits. This benchmark provides an
                                  appropriate and consistent year on year basis for our audit.

 

We use performance materiality to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements
exceeds overall materiality. Specifically, we use performance materiality in
determining the scope of our audit and the nature and extent of our testing of
account balances, classes of transactions and disclosures, for example in
determining sample sizes. Our performance materiality was 75% of overall
materiality, amounting to £3,4537,950 for the Company financial statements.

In determining the performance materiality, we considered a number of factors
- the history of misstatements, risk assessment and aggregation risk and the
effectiveness of controls - and concluded that an amount at the upper end of
our normal range was appropriate.

We agreed with the Audit Committee that we would report to them misstatements
identified during our audit above £230,530 as well as misstatements below
that amount that, in our view, warranted reporting for qualitative reasons.

Conclusions relating to going concern

Our evaluation of the directors' assessment of the Company's ability to
continue to adopt the going concern basis of accounting included:

evaluating the Directors' risk assessment and considering whether it addressed
relevant threats, including wider macroeconomic uncertainty;

evaluating the Directors' assessment of potential operational impacts,
considering their consistency with other available information and our
understanding of the business and assessed the potential impact on the
financial statements;

reviewing the Directors' assessment of the Company's financial position in the
context of its ability to meet future expected operating expenses, their
assessment of liquidity as well as their review of the operational resilience
of the Company and oversight of key third-party service providers;

assessing the premium/discount the Company's share price trades as compared to
the net asset value per share; and

assessing the implication of significant reductions in NAV as a result of
severe but plausible downside scenarios in the market's performance on the
ongoing ability of the Company to operate.

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.

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.

However, because not all future events or conditions can be predicted, this
conclusion is not a guarantee as to the Company's ability to continue as a
going concern.

From our work on the corporate governance statement described below, 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.

Reporting on other information

The other information comprises all of the information in the Annual Report
other than the financial statements and our auditors' report thereon. The
directors are responsible for the other information. Our opinion on the
financial statements does not cover the other information and, accordingly, we
do not express an audit opinion or, except to the extent otherwise explicitly
stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially
misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there
is a material misstatement of the financial statements or a material
misstatement of the other information. 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
based on these responsibilities.

Corporate governance statement

As explained in the Corporate Governance Report, the directors have chosen to
demonstrate how the Company has met its obligations under the UK Corporate
Governance Code ("the Code") by reporting under the 2019 Association of
Investment Companies' Code of Corporate Governance ("the AIC Code"). As such,
we refer to the AIC Code where we report the matters required under ISAs (UK)
in respect of the directors' statements 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 Code, which
the Listing Rules of the Financial Conduct Authority specify for review by the
auditor. Our additional responsibilities with respect to the corporate
governance statement as other information are described in the Reporting on
other information section of this report.

Based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the corporate governance statement, included
within the "Corporate Governance Report" is materially consistent with the
financial statements and our knowledge obtained during the audit, and we have
nothing material to add or draw attention to in relation to:

The directors' confirmation that they have carried out a robust assessment of
the emerging and principal risks;

The disclosures in the Annual Report that describe those principal risks, what
procedures are in place to identify emerging risks and an explanation of how
these are being managed or mitigated;

The directors' statement in the financial statements about whether they
considered it appropriate to adopt the going concern basis of accounting in
preparing them, and their identification of any material uncertainties to the
Company's ability to continue to do so over a period of at least twelve months
from the date of approval of the financial statements;

The directors' explanation as to their assessment of the Company's prospects,
the period this assessment covers and why the period is appropriate; and

The directors' statement as to whether they have a reasonable expectation that
the Company will be able to continue in operation and meet its liabilities as
they fall due over the period of its assessment, including any related
disclosures drawing attention to any necessary qualifications or assumptions.

Our review of the directors' statement regarding the longer-term viability of
the Company was substantially less in scope than an audit and only consisted
of making inquiries and considering the directors' process supporting their
statement; checking that the statement is in alignment with the relevant
provisions of the Code; and considering whether the statement is consistent
with the financial statements and our knowledge and understanding of the
Company and its environment obtained in the course of the audit.

In addition, 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 and our
knowledge obtained during the audit:

The directors' statement that they consider the Annual Report, taken as a
whole, is fair, balanced and understandable, and provides the information
necessary for the members to assess the Company's position, performance,
business model and strategy;

The section of the Annual Report that describes the review of effectiveness of
risk management and internal control systems; and

The section of the Annual Report describing the work of the Audit Committee.

We have nothing to report in respect of our responsibility to report when the
directors' statement relating to the Company's compliance with the Code does
not properly disclose a departure from a relevant provision of the Code
specified under the Listing Rules for review by the auditors.

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Report of the Directors, the directors are
responsible for the preparation of the financial statements in accordance with
the applicable framework and for being satisfied that they give a true and
fair view. The directors are also responsible for such internal control as
they determine is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.

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.

Auditors' 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 auditors' 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.

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.

Based on our understanding of the Company and industry, we identified that the
principal risks of non-compliance with laws and regulations related to the
listing requirements, and we considered the extent to which non-compliance
might have a material effect on the financial statements. We also considered
those laws and regulations that have a direct impact on the financial
statements such as the requirements of the Bermudan Companies Act of 1981. We
evaluated management's incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override of
controls), and determined that the principal risks were related to posting
inappropriate journal entries to manipulate revenue (investment income and
capital gains) or to increase net asset value. Audit procedures performed by
the engagement team included:

Enquiries with management, including consideration of known or suspected
instances of non-compliance with laws and regulations and fraud;

Understanding the controls implemented by Apex Group (the "Administrator") and
Banque Lombard Odier & Cie SA (the "Custodian") designed to prevent and
detect irregularities;

Identifying and testing journal entries, in particular year end journal
entries posted during the preparation of the financial statements;

Reviewing relevant meeting minutes, including those of the Audit Committee;
and

Designing audit procedures to incorporate unpredictability around the nature,
timing or extent of our testing.

There are inherent limitations in the audit procedures described above. We are
less likely to become aware of instances of non-compliance with laws and
regulations that are not closely related to events and transactions reflected
in the financial statements. Also, 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 or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain
transactions and balances, possibly using data auditing techniques. However,
it typically involves selecting a limited number of items for testing, rather
than testing complete populations. We will often seek to target particular
items for testing based on their size or risk characteristics. In other cases,
we will use audit sampling to enable us to draw a conclusion about the
population from which the sample is selected.

A further description of our responsibilities for the audit of the financial
statements is located on the FRC's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditors' report.

Use of this report

This report, including the opinions, has been prepared for and only for the
Company's directors as a body in accordance with Section 90 of the Companies
Act 1981 (Bermuda) and for no other purpose. We do not, in giving these
opinions, accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.

The engagement partner on the audit resulting in this independent auditor's
report is Lauren Cooper.

 

PricewaterhouseCoopers LLP

Chartered Accountants

London

15 July 2025

 

Income Statement

For the year ended 31 March 2025

 

 

                                                                       Year ended                 Year ended

31 March
31 March

2025
2024
                                                                 Note  Revenue  Capital  Total    Revenue  Capital  Total

                                                                       £000     £000     £000     £000     £000     £000
 Gains on investments held at fair value through profit or loss  8     -        7,686    7,686    -        88,760   88,760
 Foreign Exchange losses                                               -        (146)    (146)    -        (492)    (492)
 Income
 Investment income                                               2     7,989    9        7,998    7,780    -        7,780
                                                                       7,989    7,549    15,538   7,780    88,268   96,048
 Expenses
 Portfolio management fees                                       3     (3,346)  -        (3,346)  (2,950)  -        (2,950)
 Other expenses                                                  4     (1,916)  -        (1,916)  (1,676)  -        (1,676)
                                                                       (5,262)  -        (5,262)  (4,626)  -        (4,626)
 Income before finance costs                                           2,727    7,549    10,276   3,154    88,268   91,422
 Income for the year                                                   2,727    7,549    10,276   3,154    88,268   91,422
 Return per Ordinary and 'A' non-voting Ordinary share           7     2.3p     6.3p     8.6p     2.6p     73.6p    76.2p

 

The Company does not have any income or expense not included in the above
Statement. Accordingly, the "Income for the Year" is also the "Total
Comprehensive Income for the Year", as defined in IAS 1 (revised) and no
separate Statement of Comprehensive Income has been presented.

The total column of this Statement represents the Income Statement, prepared
in accordance with IFRS Accounting Standards ("IFRS").

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

The accompanying notes found further on are an integral part of this
Statement.

 

Balance Sheet

As at 31 March 2025

 

                                                                 Note  31 March  31 March

2025
2024

                                                                       £000      £000
 Non-current assets
 Investments held at fair value through profit or loss           8     452,757   449,153
                                                                       452,757   449,153

 Current assets
 Trade and other receivables                                     10    4,793     1,463
 Cash and cash equivalents                                       11    4,933     4,352
                                                                       9,726     5,815

 Current liabilities
 Trade and other payables                                        12    (1,423)   (421)
 Net current assets                                                    8,303     5,394
 Net assets                                                            461,060   454,547

 Capital and reserves
 Called up share capital                                         13    1,200     1,200
 Contributed surplus                                             14    322,839   322,839
 Retained earnings                                               15    137,021   130,508
 Total shareholders' funds                                             461,060   454,547
 Net asset value per Ordinary and 'A' non-voting Ordinary share  16    384.2p    378.8p

 

The Financial Statements of Hansa Investment Company Limited, registered in
Bermuda under company number 54752, were approved by the Board of Directors on
15 July 2025 and were signed on its behalf by

 

 

 

 

Jonathan Davie

Chairman

 

The accompanying notes found further on are an integral part of this
Statement.

 

Statement of Changes in Equity

 

 For the year ended 31 March 2025                                            Note  Share     Contributed  Retained   Total

                                                                                   capital   surplus      earnings   £000

reserve

                                                                                   £000
            £000
                                                                                             £000
 Equity at 1 April 2024                                                            1,200     322,839      130,508    454,547
 Sales proceeds of unclaimed shareholdings sold in the market                      -         -            61         61
 Return of unclaimed dividends relating to shareholdings sold in the market        -         -            16         16
 Profit for the year                                                               -         -            10,276     10,276
 Dividends                                                                   6     -         -            (3,840)    (3,840)
 Equity at 31 March 2025                                                           1,200     322,839      137,021    461,060

 

 

 For the year ended 31 March 2024  Note  Share     Contributed  Retained   Total

                                         capital   surplus      earnings   £000

reserve

                                         £000
            £000
                                                   £000
 Equity at 1 April 2023                  1,200     323,799      41,966     366,965
 Profit for the year                     -         -            91,422     91,422
 Dividends                         6     -         (960)        (2,880)    (3,840)
 Equity at 31 March 2024                 1,200     322,839      130,508    454,547

 

The accompanying notes found further on  are an integral part of this
Statement.

 

Cash Flow Statement

For the year ended 31 March 2025

 

                                                                             Note  Year ended  Year ended

                                                                                   31 March    31 March

                                                                                   2025        2024

                                                                                   £000        £000
 Cash flows from operating activities
 Income*                                                                           10,276      91,422
 Adjustments for:
 Realised gains on investments                                               8     (16,307)    (6,228)
 Unrealised losses/(gains) on investments                                    8     8,621       (82,532)
 Foreign exchange                                                                  146         492
 Increase in trade and other receivables                                     10    (3,330)     (1,335)
 Increase in trade and other payables                                        12    1,002       9
 Purchase of non-current investments                                               (93,538)    (69,313)
 Sale of non-current investments                                                   97,620      62,182
 Net cash inflow/(outflow) from operating activities                               4,490       (5,303)
 Cash flows from financing activities
 Sales proceeds of unclaimed shareholdings sold in the market                      61          -
 Return of unclaimed dividends relating to shareholdings sold in the market  6     16          -
 Dividends paid                                                                    (3,840)     (3,840)
 Bank overdraft                                                                    (1)         -
 Net cash outflow from financing activities                                        (3,764)     (3,840)
 Increase/(decrease) in cash and cash equivalents                                  727         (9,143)
 Cash and cash equivalents at start of financial year                              4,352       13,987
 Effect of foreign exchange rate changes                                           (146)       (492)
 Cash and cash equivalents at end of year                                    11    4,933       4,352

 

* Includes dividends received of £7,653,000 (2024: £7,602,000) and interest
received of £nil (2024: £nil).

The accompanying notes are an integral part of this Statement.

Notes to the Financial Statements

1          Material accounting policy information and other
explanatory information

            Hansa Investment Company Limited is a company limited
by shares, registered and domiciled in Bermuda with its registered office
shown further on. The principal activity of the Company is an investment
vehicle.

(a)        Basis of preparation

            The Financial Statements of the Company have been
prepared in accordance with IFRS Accounting Standards ("IFRS"). IFRS means
standards and interpretations issued (or adopted) by the International
Accounting Standards Board (they comprise: International Reporting Standards,
International Accounting Standards (IAS) and Interpretations developed by the
IFRS Interpretations Committee or the former Standing Interpretations
Committee (SIC)).

            These Financial Statements are presented in sterling
because that is the currency of the primary economic environment in which the
Company operates. The Financial Statements have been prepared on a going
concern basis under the historic cost convention, modified by financial assets
held at fair value through profit or loss with the assertion of the Board can
be found earlier in the Report. The Financial Statements have also been
prepared in accordance with the AIC Statement of Recommended Practice (SORP)
for investment trusts, issued by the AIC in July 2022, to the extent that the
SORP does not conflict with IFRS. The material accounting policy information
adopted is set out below.

(b)        Presentation of Income Statement

            In order to better reflect the activities of an
investment company and in accordance with guidance issued by the AIC,
supplementary information which analyses the Income Statement between items of
a revenue and capital nature, has been presented alongside the Income
Statement.

(c)        Non-current investments

            As the Company's business is investing in financial
assets, with a view to profiting from their total return in the form of income
received and increases in fair value, investments are classified at fair value
through profit in accordance with IFRS 9. The Company manages and evaluates
the performance of these investments on a fair value basis, in accordance with
its investment strategy and information about the investments is provided on
this basis to the Board of Directors.

            Investments are recognised and de-recognised on the
trade date. For listed investments, fair value is deemed to be bid market
prices, or closing prices for SETS stocks sourced from the London Stock
Exchange. SETS is the London Stock Exchange's electronic trading service,
covering most of the market including all FTSE 100 constituents and most
liquid FTSE 250 constituents, along with some other securities.

            Fund investments are stated at fair value through
profit or loss as determined by using the most recent available valuation
which is considered to be fair value at the Balance Sheet date. In some cases,
this will be by reference to the most recent valuation statement supplied by
the fund's manager. In other cases, values may be available through the fund
being listed on an exchange or via pricing sources such as Bloomberg.

            Private equity investments are stated at fair value
through profit or loss in accordance with the International Private Equity and
Venture Capital Valuation Guidelines. Private equity investments are carried
at the fair value as reported by the Private Equity Fund Manager (PEFM). In
the absence of a valuation by the PEFM at the balance sheet date, additional
procedures to determine the reasonableness of the fair value estimate for
inclusion in the Financial Statements are performed. These may include direct
enquiries of the PEFM of the investment to understand, amongst others,
valuation process and techniques used, external experts used in the valuation
process and updated details of the underlying portfolio. In addition, the
Company can obtain external independent valuation data and benchmarks to
validate fair value estimates. Further, recent arms-length market transactions
between knowledgeable and willing parties where available might also be
considered. Subsequent to the balance sheet date, the Administrator will
review subsequent valuations released by the Private Equity fund to look for
consistency with the estimations made as described above.

            Unrealised gains and losses, arising from changes in
fair value, are included in net profit or loss for the period as a capital
item in the Income Statement and are ultimately recognised in the Capital
Reserves.

(d)        Cash and cash equivalents

            Cash and cash equivalents comprise cash at bank,
short-term deposits and cash funds with an original maturity of three months
or less and are subject to an insignificant risk of changes in capital value.

(e)        Investment Income and return of capital

            Dividends receivable on equity shares 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.
Dividends and Real Estate Investment Trusts' (REIT) income are all stated net
of withholding tax. In many cases, Bermudan companies cannot recover foreign
incurred taxes withheld on dividends and capital transactions. As a result,
any such taxes incurred will be charged as an expense and included here.

            When an investee company returns capital to the
Company, the amount received is treated as a reduction in the book cost of
that investment and is classified as sale proceeds.

(f)         Expenses

            All expenses are accounted for on an accruals basis.
Expenses are charged through the revenue column of the Income Statement except
expenses which are incidental to the acquisition or disposal of an investment
which are charged to the capital column of the Income Statement.

(g)        Taxation

            Under Bermuda law, to the extent the Company remains
out of scope of the Corporate Income Tax Act 2023 (the "CIT Act"), the Company
is not required to pay taxes in Bermuda on either income or capital gains.

            Bermuda enacted the CIT Act on 27 December 2023 with an
effective date of 1 January 2025. Entities subject to tax under the CIT Act
are the Bermuda constituent entities of multi-national groups. A
multi-national group is defined under the CIT Act as a group with entities in
more than one jurisdiction with consolidated revenues of at least EUR750m for
two out of the four previous fiscal years. If Bermuda constituent entities of
a multi-national group are subject to tax under the CIT Act, such tax is
charged at a rate of 15% of the net taxable income of such constituent
entities as determined in accordance with and subject to the adjustments set
out in the CIT Act (including in respect of foreign tax credits applicable to
the Bermuda constituent entities).

            Consolidated revenues of the Company's group are less
than EUR750m in each previous fiscal year. On this basis, the Company is not,
and neither is it expected to be, in scope of the CIT Act regime.

(h)        Foreign Currencies

            Transactions denominated in foreign currencies are
recorded in the local currency, at the actual exchange rates as at the date of
the transaction. Assets and liabilities denominated in foreign currencies at
the balance sheet date are reported at the rate of exchange prevailing at the
balance sheet date. Any gains or losses arising from a change in exchange
rates, subsequent to the date of the transaction, are included as exchange
gains or losses in the capital or revenue column of the Income Statement,
depending on whether the gains or losses are of a capital or revenue nature
respectively.

(i)         Retained Earnings

            Contributed Surplus

            The following are credited or charged to this reserve
via the capital column of the Income Statement:

gains and losses on the disposal of investments;

exchange differences of a capital nature;

expenses charged to the capital column of the Income Statement in accordance
with the above accounting policies; and

increases and decreases in the valuation of investments held at the balance
sheet date.

            Revenue Reserves

            The following are credited or charged to this reserve
via the revenue column of the Income Statement:

net revenue recognised in the revenue column of the Income Statement.

            Under Bermuda Company Law, Retained Earnings and
Contributed Surplus Reserve are both distributable.

(j)         Significant Judgements and Estimates

            The key significant estimate to report, concerns the
Company's valuation of its holding in DV4 Ltd. DV4 is valued using the most
recent estimated NAV as advised to the Company by DV4, adjusted for any
further drawdowns, distributions or redemptions between the valuation date and
31 March 2025. The most recent valuation statement was received on 23 August
2024 stating the value of the Company's holding as at 31 March 2024. In the
absence of a valuation for 31 March 2025 from DV4, the Company performed
additional procedures to determine the reasonableness of the fair value
estimate for inclusion in the Financial Statements. Direct enquiries of the
manager of DV4 were made in July 2020 to understand, amongst others, valuation
process and techniques used, external experts used in the valuation process
and updated details of underlying property portfolio. It has been confirmed
with DV4's manager that the valuation procedures discussed in July 2020 are
still the same used now. In addition, the Company has compared the historic
valuation movements of DV4 to the FTSE350 Real Estate Index. Based on the
information obtained and additional analysis performed the Company is
satisfied that DV4 is carried in these Financial Statements at an amount that
represents its best estimate of fair value at 31 March 2025. It is believed
the value of DV4 as at 31 March 2025 will not be materially different, but
this valuation is based on historic valuations by DV4, does not have a readily
available third party comparator and, as such, is an estimate. There are no
significant judgements.

(k)        Adoption of new and revised standards

            At the date of authorisation of these Financial
Statements there were no standards and amendments to standards, which have not
been applied in these Financial Statements.

            In the current financial period the Company has applied
the following amendments to standards:

Amendments to IAS 1 - Classification of liabilities as current or non-current
(effective 1 January 2024). The IASB has amended IAS 1 Presentation of
Financial Statements to clarify its requirement for the presentation of
liabilities depending on the rights that exist at the end of the reporting
period. The amendment requires liabilities to be classified as non-current if
the entity has a substantive right to defer settlement for at least 12 months
at the end of the reporting period. The amendment no longer refers to
unconditional rights.

Amendments to IAS 1 - Non-current liabilities with covenants (effective 1
January 2024). The IASB has amended IAS 1 Presentation of Financial Statements
to introduce additional disclosures for liabilities with covenants within 12
months of the reporting period. The additional disclosures include the nature
of covenants, when the entity is required to comply with covenants, the
carrying amount of related liabilities and circumstances that may indicate
that the entity will have difficulty complying with the covenants.

Amendments to IAS 8 'Definition of Accounting Estimates' (effective for
accounting periods on or after 1 January 2024).

Amendments to IAS 1 and IFRS Practice Statement 2 'Disclosure of Accounting
Policies' (effective for accounting periods on or         after 1
January 2024).

Amendments to IAS 12 'Deferred Tax related to Assets and Liabilities arising
from a Single Transaction' (effective for accounting periods on or after 1
January 2024).

            There is no material impact on the Financial Statements
or the amounts reported from the adoption of these amendments to the
standards.

            Relevant International Accounting Standards that have
yet to be adopted:

            Amendments to IAS 21 'Lack of Exchangeability'
(effective for accounting periods on or after 1 January 2025). Under IAS 21
The Effects of Changes in Foreign Exchange Rates, a company uses a spot
exchange rate when translating a foreign currency transaction.

            Amendments to the Classification and Measurement of
Financial Instruments - Amendments to IFRS 9 and IFRS 7 (effective for annual
periods beginning on or after 1 January 2026). The IASB issued targeted
amendments to IFRS 9 and IFRS 7 to respond to recent questions arising in
practice, and to include new requirements not only for financial institutions
but also for corporate entities. Among other amendments, the IASB clarified
the date of recognition and derecognition of some financial assets and
liabilities, with a new exception for some financial liabilities settled
through an electronic cash transfer system. IFRS 18 Presentation and
Disclosure in Financial Statements (effective for annual periods beginning on
or after 1 January 2027). The IASB issued the new standard on presentation and
disclosure in financial statements, which replaces IAS 1, with a focus on
updates to the statement of profit or loss. The key new concepts introduced in
IFRS 18 relate to:

the structure of the statement of profit or loss with defined subtotals;

the requirement to determine the most useful structured summary for presenting
expenses in the statement of profit or loss;

required disclosures in a single note within the financial statements for
certain profit or loss performance measures

that are reported outside an entity's financial statements (that is,
management-defined performance measures); and

enhanced principles on aggregation and disaggregation which apply to the
primary financial statements and notes

in general.

(l)         Operating Segments

            The Company considers it has one operating segment for
the purposes of IFRS 8.

2          Investment income

                                 Revenue      Revenue

Year ended
Year ended

                                 31 March     31 March

                                 2025         2024

                                 £000         £000
 Income from quoted investments
 Dividends                       7,998        7,780
 Total income                    7,998        7,780

 

Note: Of the dividend income received during the financial year, £6.3m was
received from the Company's Strategic Holding in OWHL by way of a dividend
received on 14 June 2024. The remainder was received from holdings within the
Global Equity (direct) & Core Regional silos.

3          Portfolio management fee

                           Revenue      Revenue

Year ended
Year ended

                           31 March     31 March

                           2025         2024

                           £000         £000
 Portfolio management fee   3,346        2,950
 Total management fee       3,346        2,950

 

As disclosed earlier in the Report, the portfolio management fee is charged at
an annual rate of 1% of the net assets of the Company (after any borrowings),
after deducting the value of the investment in OWHL, on which no fee is
payable.

4          Other expenses

                                                                                Revenue      Revenue

Year ended
Year ended

                                                                                31 March     31 March

                                                                                2025         2024

                                                                                £000         £000
 Administration fees                                                            165          154
 Directors' remuneration                                                        286          298
 Auditor's remuneration for audit of the Company's Annual Financial Statements  75           92
 Printing fees                                                                  32           57
 Directors' liability insurance                                                 62           67
 Marketing                                                                      74           75
 Registrar's fees                                                               61           80
 Banking charges                                                                75           19
 Secretarial services                                                           129          159
 Travel expenses                                                                290          126
 Broker fees                                                                    33           32
 Stock Exchange listing fees                                                    63           42
 Safe custody fees                                                              205          184
 Management fee rebate from GAM                                                 (18)         (13)
 Other                                                                          384          304
 Total Other Expenses                                                           1,916        1,676

 

5          Finance costs

                      Revenue      Revenue

Year ended
Year ended

                      31 March     31 March

                      2025         2024

                      £000         £000
 Interest payable     -            -
 Total finance costs  -            -

 

As disclosed earlier in the Report, the Company has an unsecured lending
facility through its Custodian, Banque Lombard Odier & Cie SA ("Lombard
Odier"), in the amount of £30m, subject to there being sufficient value and
diversity within the portfolio to meet the lender's borrowing requirements.
The facility is used periodically for short-term transactional funding
requirements. As a result, the cost incurred in finance fees is not
necessarily consistent between financial years.

6          Dividends paid

                                                                                Year ended  Year ended

                                                                                31 March    31 March

                                                                                2025        2024

                                                                                £000        £000
 Amounts recognised as distributed to shareholders in the year are as follows:
 Fourth interim dividend for 2024 (paid 31 May 2024): 0.8p (2023: 0.8p)         960         960
 First interim dividend for 2025 (paid 30 August 2024): 0.8p (2024: 0.8p)       960         960
 Second interim dividend for 2025 (paid 31 November 2024): 0.8p (2024: 0.8p)    960         960
 Third interim dividend for 2025 (paid 25 February 2025): 0.8p (2024: 0.8p)     960         960
 Total dividends paid                                                           3,840       3,840

 

Set out below are the total dividends paid and proposed in respect of the
current financial year. Where there has been no revenue available for
distribution by way of dividend for the year, dividends have been paid from
capital reserves, specifically contributed surplus which is permitted by
Bermudan company law.

 

                                                                              Year ended  Year ended

                                                                              31 March    31 March

                                                                              2025        2024

                                                                              £000        £000
 First interim dividend for 2025 (paid 30 August 2024): 0.8p (2024: 0.8p)     960         960
 Second interim dividend for 2025 (paid 31 November 2024): 0.8p (2024: 0.8p)  960         960
 Third interim dividend for 2025 (paid 25 February 2025): 0.8p (2024: 0.8p)   960         960
 Fourth interim dividend for 2025 (payable 30 May 2025): 0.8p (2024: 0.8p)    960         960
 Total dividends paid & proposed                                              3,840       3,840

 

The Board has announced four interim dividends, each of 0.8p per Ordinary and
'A' non-voting Ordinary share, relating to the year ended 31 March 2025. No
final dividend is proposed for the year ended 31 March 2025.

7          Return on ordinary shares (equity)

                                                        Revenue      Capital      Total        Revenue      Capital      Total

                                                        year ended   year ended   year ended   year ended   year ended   year ended

                                                        31 March     31 March     31 March     31 March     31 March     31 March

                                                        2025         2025         2025         2024         2024         2024
 Return per Ordinary and 'A' non-voting Ordinary share  2.3p         6.3p         8.6p         2.6p         73.6p        76.2p

 

Returns

Revenue return per share is based on the revenue attributable to equity
shareholders of £2,727,000 (2024: £3,154,000).

Capital return per share is based on the capital profit attributable to equity
shareholders of £7,626,393 (2024: profit of £88,268,000).

Total return per share is based on a combination of revenue and capital
returns attributable to equity shareholders, amounting to net profit of
£10,353,393 (2024: profit of £91,422,000).

Both revenue and capital return are based on 40,000,000 Ordinary shares and
80,000,000 'A' non-voting Ordinary shares, in issue throughout the year.

8          Investments held at fair value through profit or loss

                                                                 Listed    Unquoted  2025        2024

Total
                                                                 £000      £000      Total

           £000
                                                                                     £000
 Cost at 1 April                                                 230,152   101,905   332,057     318,698
 Investment holding gains at 1 April                             94,584    22,512    117,096     34,564
 Valuation as at 1 April                                         324,736   124,417   449,153     353,262
 Movements in the year:
 Purchases at cost                                               76,656    16,882    93,538      69,313
 Sales - proceeds                                                (69,213)  (28,406)  (97,620)    (62,182)
 Movement in investment holding gains/(losses)                   15,606    (7,920)   7,686       88,760
 Valuation as at 31 March                                        347,786   104,972   452,757     449,153
 Cost as at 31 March                                             253,902   90,380    344,282     332,057
 Investment holding gains                                        93,884    14,592    108,475     117,096
 Valuation as at 31 March                                        347,786   104,972   452,757     449,153

                                                                                     Year ended  Year ended

                                                                                     31 March    31 March

                                                                                     2025        2024

                                                                                     £000        £000
 Gains on sales                                                                      16,307      6,228
 Movement in investment holding (losses)/gains                                       (8,621)     82,532
 Gains on investments held at fair value through profit or loss                      7,686       88,760

 

Transaction costs

During the year expenses were incurred in acquiring and disposing of
investments classified as fair value through profit or loss.

These have been expensed through capital and are included within gains on
investments in the Income Statement. The total costs were as follows:

                    2025    2024

                    £000    £000
 Purchases          40      13
 Sales              9       11
                    49      24

 

9          Significant holdings

 

The Company's holdings of 10% or more of any class of shares in investment
companies and 20% or more of any class of shares in non-investment companies
as at 31 March 2025 are detailed below:

                                                                                           Exc. Minority Interest
                                 Country of incorporation or  Class of Capital  %          Latest               Total                  Profit after tax for the period

registration
of class
available accounts
capital and reserves
$000

held

                                                                                                                $000
 Ocean Wilsons Holdings Limited  Bermuda                      Ordinary          26.5       31.12.2024           627,869                119,120

 

Ocean Wilsons Holdings Limited is included as part of the investment portfolio
in accordance with IAS 28 - Investment in Associates. The holding is not
recognised as an Associate because HICL does not exert significant influence
over the operations of OWHL. Conflicts between the boards of the two companies
are noted - specifically Mr Salomon who is a director of both entities. Mr
Salomon does not represent HICL on the board of OWHL and is specifically
excluded from decisions of the HICL board in relation to OWHL.

10         Trade and other receivables

 

The Company applies the IFRS 9 simplified approach to measuring expected
credit losses, which uses a lifetime expected loss allowance for all trade
receivables and contract assets.

                                           2025    2024

                                           £000    £000
 Amounts receivable from unsettled trades  101     1,353
 Prepayments and accrued income            4,692   110
                                           4,793   1,463

 

11         Cash and cash equivalents

               2025    2024

               £000    £000
 Cash at bank  390     348
 Cash funds    4,543   4,004
               4,933   4,352

 

12         Trade and other payables

                                       2025    2024

                                       £000    £000
 Amounts payable for unsettled trades  1,069   -
 Other creditors and accruals          353     421
                                       1,422   421

 

13         Called up share capital

                                                                     2025     2024

                                                                     £000     £000
 40,000,000 Ordinary shares of 1p (2024: 40,000,000)                 400      400
 80,000,000 'A' non-voting Ordinary shares of 1p (2024: 80,000,000)  800      800
                                                                      1,200    1,200

 

The 'A' non-voting Ordinary shares do not entitle the holders to receive
notices or to vote, either in person or by proxy, at any general meeting of
the Company, but in all other respects rank pari passu with the Ordinary
shares of the Company.

14         Contributed surplus

                              2025     2024

                              £000     £000
 Opening balance at 1 April   322,839  323,799
 Dividend paid                -        (960)
 Closing balance at 31 March  322,839  322,839

 

15         Retained earnings

                              Revenue  Capital - other  Capital - investment holding  Reserves            Revenue  Capital - other  Capital - investment holding  Reserves

                              2025     2025             profit                                            2024     2024             profit

                              £000     £000             2025                                              £000     £000             2024

                                                        £000                          Total                                         £000                          Total

                                                                                      retained earnings                                                           retained earnings

                                                                                      2025                                                                        2024

                                                                                      £000                                                                        £000
 Opening balance at 1 April   (2,090)  15,502           117,096                       130,508             (2,364)  9,766            34,564                        41,966
 Profit for the year          2,726    16,248           (8,621)                       10,353              3,154    5,736            82,532                        91,422
 Dividend paid                (3,840)  -                -                             (3,840)             (2,880)  -                -                             (2,880)
 Closing balance at 31 March  (3,204)  31,750           108,475                       137,021             (2,090)  15,502           117,096                       130,508

 

16         Net asset value

                                                                 2025    2024

                                                                 £000    £000
 Net Asset Value per Ordinary and 'A' non-voting Ordinary share  384.2p  378.8p

 

The NAV per Ordinary and 'A' non-voting Ordinary share is based on the net
assets attributable to equity shareholders of £461,060,000 (2024:
£454,547,000) and on 40,000,000 Ordinary shares (2024: 40,000,000) and
80,000,000 'A' non-voting Ordinary shares (2024: 80,000,000) in issue at 31
March 2025..

17         Commitments and contingencies

The Company has the following outstanding commitments as at 31 March 2025
(2024: £8.3m):

                                             As at 31 March 2025                                    As at 31 March 2024
                                             Outstanding commitment in local currency  GBP          Outstanding commitment in local currency  GBP
 BPEA EQT Mid-Market Growth Partnership       1,567,082                                 1,214,039   1,774,644                                 1,404,879
 GGV Discovery IV-ASIA, L.P                   576,000                                   446,235     600,000                                   474,984
 GGV Discovery IV-US                          390,000                                   302,138     600,000                                   474,984
 Gryphon VI Top-Up Co-Investment Fund         1,300,000                                 1,007,127   -                                         -
 Khosla Ventures VIII, LP                     612,000                                   474,125     1,020,000                                 807,473
 TA Associates XV-B, LP                       3,168,000                                 2,454,292   3,600,000                                 2,849,905
 Triton 6 SCSP                                1,740,000                                 1,456,189   1,740,000                                 1,487,561
 TrueBridge Capital Partners Fund VIII, L.P   823,500                                   637,976     183,000                                   144,870
 TrueBridge Direct Fund III, L.P              75,000                                    58,104      864,000                                   683,977
                                              10,251,582                                8,050,225   10,381,644                                8,328,633

 

 

18         Financial instruments and associated risks

The Company's financial instruments comprise securities, cash balances,
debtors and creditors. These assets are classified in the following
measurement categories:

those to be measured subsequently at fair value through profit or loss; and

those to be measured at amortised cost.

The financial assets held at amortised cost include trade and other
receivables, cash and cash equivalents.

Risk Objectives and Policies

The objective of the Company is to achieve growth of shareholder value
commensurate with the risks taken, bearing in mind that the protection of
long-term shareholder value is paramount. The policy of the Board is to
provide a framework within which the Portfolio Manager can operate and deliver
the objectives of the Company. In pursuing its investment objective, the
Company is exposed to a variety of risks that could result in either a
reduction in the Company's net assets and/or a reduction of the profits
available for dividends.

These risks include those identified by the accounting standard IFRS 7, being
market risk (comprising currency risk, interest rate risk and other price
risk), liquidity risk and credit risk. The Directors' approach to the
management of these is set out below. The Board, in conjunction with the
Portfolio Manager and Company Secretary, oversees the Company's risk
management.

Foreign currency risk

Foreign currency risks arise in two distinct areas which affect the valuation
of the investment portfolio. 1) the direct exposure where an investment is
denominated and paid for in a currency other than Sterling; and 2) the
indirect exposure where an investment has substantial non-Sterling underlying
investment and/or cash flows. The Company does not normally hedge against
foreign currency movements affecting the value of the investment portfolio,
but takes account of this risk when making investment decisions. Some of the
fund investments into which the Company invests will, in part or in whole,
hedge some of their underlying currency risk, but this will be known at the
time of investment and will form part of the investment decision. In those
cases, the hedging will not remove the exposure to the underlying country or
market sector. The Portfolio Manager monitors the effect of foreign currency
fluctuations through the pricing of the investments by the various markets.

                                          Direct          No direct       Total    Direct          No direct       Total

                                          foreign         foreign         2025     foreign         foreign         2024

                                          currency risk   currency risk   £000     currency risk   currency risk   £000

                                          2025            2025                     2024            2024

                                          £000            £000                     £000            £000
 Investments                              165,878         286,879         452,757  135,145         314,008         449,153
 Other receivables including prepayments  9               92              101      34              1,319           1,353
 Cash at bank                             -               4,933           4,933    -               4,352           4,352
 Current liabilities                      -               (1,423)         (1,423)  (15)            (406)           (421)
                                          165,887         290,481         456,368  135,164         319,273         454,437

 

Note: Direct foreign currency risk includes direct exposure to USD and Euro
currencies.

Foreign currency sensitivity

The following table illustrates the sensitivity of the profit/loss for the
year and the shareholders' funds in regard to the Company's financial assets
and financial liabilities. It assumes a 10% depreciation of Sterling against
foreign currencies at 31 March 2025 and 31 March 2024. These percentages have
been determined based on the average market volatility in exchange rates in
the previous 12 months. The sensitivity analysis is based on the Company's
monetary foreign currency financial instruments held at each balance sheet
date.

 If sterling had weakened by 10% against the currencies shown, this would have  US$     Euro    Other   US$     Euro    Other
 had the following effect on the Company:

                                                                                2025    2025    2025    2024    2024    2024

                                                                                £000    £000    £000    £000    £000    £000
 Income statement - profit                                                      687     20      14      687     20      22
 Equity shareholders funds                                                      13,372  2,135   1,082   10,670  955     1,891
                                                                                14,059  2,155   1,096   11,357  975     1,913

 

Note: Other includes exposure to foreign currencies excluding US dollar and
Euro.

A 10% strengthening of Sterling against the above currencies would result in
an equal and opposite effect on the above amounts.

Interest rate risk

Interest rate movements may affect the level of income receivable on cash
deposits and the interest payable on the Company's variable rate borrowings.

The Company has a credit facility with Bank Lombard Odier & Co Ltd, Geneva
("the Bank"), which is available for the Portfolio Manager to utilise for
purchasing investments; the interest rate for which is variable, and set by
the Bank. As at 31 March 2025, the maximum the Company can borrow from the
Bank is the equivalent of CHF3m, but the Company can request that this limit
is raised at any time. The Board however has set a £30m borrowing limit for
the Portfolio Manager to utilise at their discretion. The Company does not
normally hedge against interest rate movements affecting the value of the
investment portfolio, but takes account of this risk when an investment is
made utilising the facility. The level of banking facilities used is monitored
by both the Board and the Portfolio Manager on a regular basis. The impact on
the returns and net assets of the Company for every 1% change in interest
rates, based on the amount drawn down at the Year-End under the facility,
would be £nil (2024: £nil). The level of banking facilities utilised at 31
March 2025 was £nil (2024: £nil).

Interest rate changes usually impact equity prices. The level and direction of
change in equity prices is subject to prevailing local and world economic
conditions as well as market sentiment, all of which are very difficult to
predict with any certainty.

                                          Cash flow   No          Total    Cash flow   No          Total

                                          interest    interest    2025     interest    interest    2024

                                          rate risk   rate risk   £000     rate risk   rate risk   £000

                                          2025        2025                 2024        2024

                                          £000        £000                 £000        £000
 Investments                              -           452,757     452,757  -           449,153     449,153
 Other receivables including prepayments  -           4,793       4,793    -           1,463       1,463
 Cash at bank                             4,933       -           4,933    4,352       -           4,352
 Current liabilities                      (1,069)     (353)       (1,422)  -           (421)       (421)
                                          3,864       457,197     461,061  4,352       450,195     454,547

 

Other price risk

By the nature of its activities, the Company's investments are exposed to
market price fluctuations. NAV is calculated and reported daily to the London
Stock Exchange. The Portfolio Manager and the Board monitor the portfolio
valuation on a regular basis and consideration is given to hedging the
portfolio against large market movements.

The Company's investment in Ocean Wilsons is large both in absolute terms,
£132.3m as valued at 31 March 2025 (2024: £130.0m) and as a proportion of
the NAV, 28.7% (2024: 28.6%). Shareholders should be aware that if anything of
a severe and untoward nature were to happen to this company, it could result
in a significant impact on the NAV and share price. However, it should also be
noted that as at 31 March 2025 the exposure of Hansa Investment Company
Limited to the currency, country and market based risk exposure of Ocean
Wilsons was, to an extent, mitigated by the diverse nature of the two
investments within Ocean Wilsons. Wilson Sons, has a direct exposure to the
Brazilian economy, whereas Ocean Wilsons Investments Limited (OWIL) has a
diverse investment portfolio. Ocean Wilsons had agreed the sale of its entire
holding of Wilson Sons derisking it somewhat from the Brazilian economy.
However, at 31 March 2025, the completion of the sale was still subject to
various regulatory approvals. At 31 March 2025 Wilson Sons represented 64.7%
of Ocean Wilsons' NAV (based on the expected net proceeds of the sale) and
OWIL represented the remaining 35.3% (based on the latest published NAV of the
portfolio). The sale of Wilson Sons was subsequently completed in June 2025.
It is an investment the Board pays close attention to and it should be pointed
out that the risks associated with it are very different from those of the
other companies represented in the portfolio. The Board itself regularly
undertakes a thorough review of its business and prospects and has determined
that its future holds a lot of promise. As a consequence the Board believes
the risk involved in the investment is worthwhile. The performance of the
portfolio as a whole is not designed to correlate with that of any market
index. Should the portfolio of the Company, as detailed earlier in the Report,
rise or fall in value by 10% from the year end valuation, the effect on the
Company's profit and equity would be an equal rise or fall of £45.3m (2024:
£44.9m).

Credit risk

The Company only transacts with regulated institutions on normal market terms,
which are trade date plus one to three days in the case of equities. Fund
investment settlement periods will vary from fund to fund and are defined by
the individual managers. The levels of amounts outstanding from brokers and
fund managers are regularly reviewed by the Portfolio Manager. The duration of
credit risk associated with the investment transactions is the period between
the date the transaction took place, the trade date, the date the stock and
cash were transferred and the settlement date. The level of risk during the
period is the difference between the value of the original transaction and its
replacement with a new transaction. The amounts due to/(from) brokers at 31
March 2025 are shown in Note 10 and Note 12.

The Company's maximum exposure to credit risk on cash is £0.4m (2024: £0.3m)
and on cash funds is £4.5m (2024: £4.0m). Surplus cash is on deposit with
the Depositary/Custodian.

Liquidity risk

The liquidity risk to the Company is that it is unable to meet its obligations
as they fall due, as a result of a lack of available cash and an inability to
dispose of investments in a timely manner. A substantial proportion of the
Company's portfolio is held in liquid quoted investments; however, there is a
large, Strategic, holding in Ocean Wilsons of 28.7% (2024: 21.2%), unquoted
equity investments of 2.0% (2024: 1.8%) and investments into open-ended
investment funds with varying liquidity terms of 58.0% (2024: 59.6%).

The Portfolio Manager takes into consideration the liquidity of each
investment when purchasing and selling, in order to maximise the returns to
shareholders, by placing suitable transaction levels into the market. Special
consideration is given to investments representing more than 5% of the
investee company. A detailed list of the investments, split by silo, held at
31 March 2025 is shown earlier on in the Report. This can be used broadly to
ascertain the levels of liquidity within the portfolio, although liquidity
will vary with each investment - particularly the funds.

Capital management

The Company considers its capital to be its issued share capital and reserves
and whilst the Company has access to loan facilities it is not considered or
used as core capital, but primarily to meet the cash timing requirements of
opportunistic investment strategies and thereby enhance shareholder returns.
The Board regularly monitors its share discount policy and the level of
discounts and whilst it has the option to repurchase shares, it considers the
best means of attaining a good rating for the shares is to concentrate on good
shareholder returns.

However, the Board believes the ability of the Company to repurchase its own
'A' non-voting Ordinary shares in the market may potentially enable it to
benefit all equity shareholders of the Company. The repurchase of 'A'
non-voting Ordinary shares, at a discount to the underlying NAV, would enhance
the NAV per share of the remaining equity shares and might also enable the
Company to address more effectively any imbalance between supply and demand
for the Company's 'A' non-voting Ordinary shares.

19         Fair value hierarchy and financial liabilities

IFRS 13 'Fair Value Measurement' requires an entity to classify fair value
measurements, using a fair value hierarchy that reflects the significance of
the inputs used in making the measurements. The fair value hierarchy has the
following levels:

Level 1: quoted prices (unadjusted) in active markets for identical assets or
liabilities;

Level 2: inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices); and

Level 3: inputs for the asset or liability not based on observable market data
(unobservable inputs).

The financial assets and liabilities, measured at fair value, in the Statement
of Financial Position, grouped into the fair value hierarchy and valued in
accordance with the accounting policies in Note 1, are detailed below:

 As at 31 March 2025                                    Level 1  Level 2  Level 3  Total

                                                        £000     £000     £000     £000
 Financial assets at fair value through profit or loss
 Quoted equities                                        198,000  -        -        198,000
 Unquoted equities                                      -        -        9,217    9,217
 Fund investments                                       69,022   176,518  -        245,539
 Fair Value                                             267,022  176,518  9,217    452,757

 

 As at 31 March 2024                                    Level 1  Level 2  Level 3  Total

                                                        £000     £000     £000     £000
 Financial assets at fair value through profit or loss
 Quoted equities                                        192,221  -        -        192,221
 Unquoted equities                                      -        -        8,040    8,040
 Fund investments                                       42,692   206,200  -        248,892
 Fair Value                                             234,913  206,200  8,040    449,153

 

The Company's policy is to recognise transfers into and out of the different
fair value hierarchy levels at the date of the event or change in
circumstances that caused the transfer to occur.

A reconciliation of fair value measurements in Level 3 is set out in the
following table:

                                                                       2025          2024

                                                                       equity        equity

                                                                       investments   investments

                                                                       £000          £000
 Opening Balance                                                       8,040         9,132
 Transferred from Level 1                                              -             -
 Purchases                                                             1,132         367
 Sales (Capital Distribution)                                          -             (402)
 Total gains or losses included in gains on investments in the Income
 Statement:
 on assets sold                                                        -             -
 on assets held at year end                                            45            (1,057)
 Closing Balance                                                       9,217         8,040

 

As at 31 March 2025, the investment in DV4 has been classified as Level 3.
This is because the investment has been valued using the most recent estimated
NAV as advised to the Company by DV4, adjusted for any further drawdowns,
distributions or redemptions between the valuation date and 31 March 2025. The
most recent valuation statement was received on 12 March 2025 and relates to
the DV4 portfolio at 31 December 2024. Additionally, the underlying assets of
DV4 are all Real Estate in nature and, as such, there is not a readily
comparable market of identical assets for valuation purposes. In the absence
of a valuation for 31 March 2025 from DV4, the Company performed additional
procedures to determine the reasonableness of the fair value estimate for
inclusion in the Financial Statements. Direct enquiries of the manager of DV4
were made in July 2020 to understand, amongst others, valuation process and
techniques used, external experts used in the valuation process and updated
details of underlying property portfolio. In addition, the Company has
obtained external independent valuation data and compared the historic
valuation movements of DV4 to that data. It has been confirmed with DV4's
manager that the valuation procedures discussed in July 2020 are still the
same used now. In addition, the Company has compared the historic valuation
movements of DV4 to the CBRE Monthly Property Index. Based on the information
obtained and additional analysis performed the Company is satisfied that DV4
is carried in these Financial Statements at an amount that represents its best
estimate of fair value at 31 March 2025. It is believed the value of DV4 as at
31 March 2025 will not be materially different, but this valuation is based on
historic valuations by DV4, does not have a readily available third party
comparator and, as such, is an estimate. If the value of the investment was to
increase or decrease by 10%, while all other variables remained constant, the
return and net assets attributable to shareholders for the year ended and as
at 31 March 2024 would have increased or decreased by £777,000 (2024:
£770,000). The Board considers 10% to be a potential movement between
valuation periods borne out by historic valuation trends. However, this does
not preclude the valuation moving a greater amount than 10% in the future.

20         Related parties and transactions with the portfolio manager

William Salomon is a Director of the Company and Senior Partner of the
Company's Portfolio Manager. Details of the relationship between the Company
and Hansa Capital Partners LLP, including amounts paid during the year and
owing at 31 March 2025, are disclosed in the Governance Section - Service
Providers,and in Note. Details of the relationship between the Company and the
Directors, including amounts paid during the period to 31 March 2025, are
disclosed in the Governance Section - The Board, and also in the Directors'
Remuneration Report.

21         Controlling parties

At 31 March 2025 Victualia Limited Partnership and Nomolas Ltd each held 25.9%
of the issued Ordinary shares. Additional information is disclosed in the
Strategic Review - Substantial Shareholders.

22         Post balance sheet events

There are no significant events that have occurred after the end of the
reporting year to the date of this Report which require disclosure.

 

Additional Information
Notice of the Annual General Meeting

NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Members of the
Company will be held at the Hamilton Princess Hotel, 76 Pitts Bay Rd, Pembroke
HM 08, Bermuda on Tuesday 5 August 2025 at 9:00 a.m. (Bermuda time) for the
following purposes:

Agenda

To appoint a chairperson of the meeting.

To confirm notice.

Resolutions

1.         To receive and consider the audited Financial Statements
and the Reports of the Directors and Auditor for the year ended 31 March 2025.

2.         To re-elect Jonathan Davie (a biography and Board
endorsement can be found earlier on in the Report) as a Director of the
Company.

3.         To re-elect Richard Lightowler (a biography and Board
endorsement can be found earlier on in the Report) as a Director of the
Company.

4.         To re-elect William Salomon (a biography and Board
endorsement can be found earlier on in the Report) as a Director of the
Company.

5.         To re-elect Simona Heidempergher (a biography and Board
endorsement can be found earlier on in the Report) as a Director of the
Company.

6.         To re-elect Pedro Gonçalves (a biography and Board
endorsement can be found earlier on in the Report) as a Director of the
Company.

7.         To approve the Directors' Remuneration Report.

8.         To approve the Directors' Remuneration Policy and authorise
the Board to determine the remuneration of the Directors.

9.         To approve the Company's Dividend Policy as can be found
earlier on in the Annual Report.

10.        To reappoint PricewaterhouseCoopers LLP as Auditor of the
Company and to authorise the Directors to determine the remuneration of the
Auditor.

11.        Approval to repurchase up to 14.99% of the 'A' non‑voting
Ordinary shares of 1p each in the issued shares capital of the Company (the
"Shares").

THAT the Company be and hereby is unconditionally authorised to make market
purchases up to an aggregate of 11,992,000 shares at a price (exclusive of
expenses) which is:

            not less than 1p per share; and

not more than the higher of: i) 5% above the average of the middle-market
quotations (as derived from and calculated by reference to the Daily Official
List of the London Stock Exchange) for 'A' non-voting Ordinary shares of 1p
each in the five business days immediately preceding the day on which the
share is purchased; and ii) the higher of the last independent trade and the
then current highest independent bid.

AND

THAT the approval conferred by this resolution shall expire on the date of the
next AGM (except in relation to the purchase of shares, the contract for which
was concluded before such date and which might be executed wholly or partly
after such date) unless the authority is renewed or revoked at any other
general meeting prior to such time.

For and on behalf of Conyers Corporate Services (Bermuda) Limited

Vida Kam

Secretary

15 July 2025

Notes for Shareholders

1          Pursuant to Regulation 41 of the Uncertificated Securities
Regulations 2001 (as amended), only those members registered in the register
of members of the Company 48 hours before the Annual General Meeting (i.e. by
close of business UK time on 1 August 2025) (or if the Meeting is adjourned,
in the register of members of the Company 48 hours before the date and time of
the adjourned meeting) (the "Meeting") shall be entitled to attend or vote at
the Meeting in respect of the number of shares registered in their respective
names at that time. Changes to entries on the register of members after that
time will be disregarded in determining the rights of any person to attend or
vote at the Meeting.

2          Registered members of the Company may vote at the Meeting
(whether by show of hands or poll) in person or by proxy or corporate
representative. A member may appoint one or more persons as his proxy to
attend and vote at the Meeting on his behalf. A proxy need not be a member.
Where more than one proxy is appointed the instrument of proxy must specify
the number of shares each proxy is entitled to vote.

3          The appointment of a proxy will not affect the right of a
member to attend and vote in person at the Meeting or adjourned meeting. A
member that is a corporation may appoint a representative to attend and vote
on its behalf at the Meeting by delivering evidence of such appointment to the
Company's registrar no later than 48 hours before the time fixed for the
Meeting (i.e. by 1:00pm UK time on 1 August 2025) or any adjourned meeting.

4          In order to be valid, the proxy appointment (together with
any power of attorney or other authority (if any) under which it is signed, or
a notarised certified copy of that authority) must be returned by one of the
following methods, in each case so as to arrive no later than 1:00pm UK time
on 1 August 2025 or, in the case of an adjourned meeting, not less than 48
hours before the time appointed for holding such adjourned meeting (ignoring
for these purposes non-working days) or (in the case of a poll taken otherwise
than at or on the same day as the Meeting or adjourned meeting) for the taking
of the poll at which it is to be used: via www.investorcentre.co.uk/eproxy by
using the details on your Form of Proxy; or in hard copy form by post, by
courier or by hand to the Company's Registrars, Computershare Investor
Services (Bermuda) Limited, c/o The Pavilions, Bridgwater Road, Bristol BS99
6ZY.

            If you need help with voting online or need to request
a proxy form, please contact our Registrars, Computershare Investor Services
(Bermuda) Limited on +44 (0) 370 702 0000. Calls are charged at the standard
geographic rate and will vary by provider. Calls outside the UK will be
charged at the applicable international rate. They are open between 9.00am -
5.30pm UK time, Monday to Friday excluding public holidays in England and
Wales. Alternatively, Computershare at WebCorres@computershare.co.uk.

 

Notes for Depositary Interest Holders

1          You will not receive a form of direction for the Annual
General Meeting in the post. Depositary interests may be voted through the
CREST Proxy Voting Service in accordance with the procedures set out in the
CREST manual.

            In order for a proxy appointment or instruction made
using the CREST service to be valid, the appropriate CREST message (a "CREST
Proxy Instruction") must be properly authenticated in accordance with
Euroclear UK & Ireland Limited's specifications and must contain the
information required for such instruction, as described in the CREST Manual
(available via www.euroclear.com/CREST). The message, regardless of whether it
constitutes the appointment of a proxy or is an amendment to the instruction
given to a previously appointed proxy must, in order to be valid, be
transmitted so as to be received by the issuer's agent ID 3RA50 by 1:00pm UK
time on 31 July 2025. For this purpose, the time of receipt will be taken to
be the time (as determined by the time stamp applied to the message by the
CREST Application Host) from which the issuer's agent is able to retrieve the
message by enquiry to CREST, in the manner prescribed by CREST. After this
time any change of instructions to proxies appointed through CREST should be
communicated to the appointee through other means. CREST members and, where
applicable, their CREST sponsors, or voting service providers should note that
Euroclear UK & Ireland Limited does not make available special procedures
in CREST for any particular message. Normal system timings and limitations
will, therefore, apply in relation to the input of CREST Proxy Instructions.
It is the responsibility of the CREST member concerned to take (or, if the
CREST member is a CREST personal member, or sponsored member, or has appointed
a voting service provider, to procure that his CREST sponsor or voting service
provider(s) take(s)) such action as shall be necessary to ensure that a
message is transmitted by means of the CREST system by any particular time. In
this connection, CREST members and, where applicable, their CREST sponsors or
voting system providers are referred, in particular, to those sections of the
CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the
circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001.

2          In the case of Depositary Interest Holders, a form of
direction may be requested and completed in order to instruct Computershare
Company Nominees Limited, the Depositary, to vote on the holder's behalf at
the Meeting by proxy or, if the Meeting is adjourned, at the adjourned
meeting. Requests for a hard copy should be sent to Computershare Investor
Services (Bermuda) Limited, c/o The Pavilions, Bridgwater Road, Bristol BS99.

3          To be effective, a valid form of direction (and any power
of attorney or other authority under which it is signed) must be received
electronically or delivered to Computershare Investor Services (Bermuda)
Limited, c/o The Pavilions, Bridgwater Road, Bristol BS99 by no later by
1:00pm UK time on 31 July 2025 or 72 hours before any adjourned Meeting.

4          The Depositary will appoint the Chairman of the meeting as
its proxy to cast your votes. The Chairman may also vote or abstain from
voting as he or she thinks fit on any other business (including amendments to
resolutions) which may properly come before the meeting.

5          The 'Vote Withheld' option is provided to enable you to
abstain from voting on the resolutions. However, it should be noted that a
'Vote Withheld' is not a vote in law and will not be counted in the
calculation of the proportion of the votes 'For' and 'Against' a resolution.

6          Depositary Interest holders wishing to attend the meeting
should contact the Depositary at Computershare Investor Services (Bermuda)
Limited, c/o The Pavilions, Bridgwater Road, Bristol BS99 or by emailing
UKALLDITeam2@computershare.co.uk by no later than by 1:00pm UK time on 31 July
2025.

 

All holders

1          The quorum for the Annual General Meeting shall be two or
more shareholders present in person or by proxy. If within two hours from the
time appointed for the meeting a quorum is not present, the meeting shall be
adjourned to the next business day at the same time and place or to such other
time and place as the Directors may determine, and if a quorum is not present
at any such adjourned meeting, the meeting shall be dissolved.

2          As of 15 July 2025 the Company's total number of shares in
issue is 40,000,000 Ordinary shares of 1p each and 80,000,000 'A' non-voting
Ordinary shares of 1p each in issue. The Ordinary shareholders are entitled to
one vote per Ordinary share held. The 'A' non-voting Ordinary shares do not
entitle the holders to vote or receive notice of meetings, but in all other
respects they have the same rights as the Company's Ordinary shares.

3          A copy of this notice and other information can be found
at
https://www.hansaicl.com/shareholder-information/financial-and-investment-reporting/year-2025.aspx#2025

 

 

Investor information

 

Further information about Hansa Investment Company Limited, including monthly
fact sheets, Stock Exchange announcements and shareholder presentations, can
be found on the Company's website: www.hansaicl.com

Please contact the Portfolio Manager, as below, if you have any queries
concerning the Company's investments or performance.

 

Portfolio Manager and additional administrative services provider

Hansa Capital Partners LLP

6th Floor North

20 Balderton Street

London

W1K 6TL

United Kingdom

Telephone: +44 (0) 207 647 5750

Email: hiclenquiry@hansacap.com

Website: www.hansagrp.com (http://www.hansagrp.com)

Please contact the Registrars, as below, if you have a query about a
certificated holding in the Company's shares.

 

Registrar

Computershare Investor Services (Bermuda) Limited

c/o 13 Castle Street

St Helier

Jersey

JE1 1ES

Telephone: +44 (0) 370 707 4040

Email: info@computershare.co.je

Website: www.computershare.com/je

 

If you have a query, you can call our Shareholder helpline on +44 (0) 370 707
4040. Calls are charged at the standard geographic rate and will vary by
provider. Calls outside the United Kingdom will be charged at the applicable
international rate. Lines are open between 08:30 - 17:30, Monday to Friday
excluding public holidays in England and Wales.

Company information

The Company currently manages its affairs so as to be a qualifying investment
company for ISA purposes, for both the Ordinary and 'A' non-voting Ordinary
shares. It is the present intention that the Company will conduct its affairs
so as to continue to qualify for ISA products. In addition, The Company is
classified as a Readily Realisable Security under FCA rules and can be
recommended by independent financial advisors to ordinary retail investors.
Finally, Hansa Investment Company Limited is registered as a Reporting
Financial Institution with the US IRS for FATCA purposes.

Capital structure

The Company has 40,000,000 Ordinary shares of 1p each and 80,000,000 'A'
non-voting Ordinary shares of 1p each in issue. The Ordinary shareholders are
entitled to one vote per Ordinary share held. The 'A' non-voting Ordinary
shares do not entitle the holders to vote or receive notice of meetings, but
in all other respects they have the same rights as the Company's Ordinary
shares.

Secretary and registered office

Conyers Corporate Services (Bermuda) Limited

Clarendon House

2 Church Street PO Box HM666

Hamilton HM CX Bermuda

 

Investor disclosure

AIFMD

Hansa Investment Company Limited's AIFMD Investor Disclosure document can be
found on its website. The document is a regulatory requirement and summarises
key features of the Company for investors.

Packaged Retail and Insurance‑based Investment Products (PRIIPs)

Under the PRIIPs Regulation (Regulation (EU) 1286/2014), the manufacturer of
any investment company was required to make available a Key Investor Documents
(KID). This was formally enforced by new legislation in November 2024 (The
Packaged Retails and Insurance Based Investment Products (Retail
Disclosure)(Amendment) Regulations 2024). There is no replacement for the KID,
and whilst the FCA finalises details in relation to any replacement
requirements, KIDs for both the Ordinary and 'A' non-voting Ordinary shares of
the Company will continue to be available for all prospective investors. Links
to these documents can be found on the Company's website: www.hansaicl.com.

Service providers

Independent Auditor

PricewaterhouseCoopers LLP

Solicitors - Bermuda

Conyers Dill & Pearman Limited

Solicitors - UK

Dentons UK and Middle East LLP

Custodian

Banque Lombard Odier & Cie SA

Stockbroker

Winterflood Investment Trusts

Administrator

Apex Fund Administration Services (UK) Ltd to 31 March 2025.

Juniper Partners as of 1 April 2025.

Alternative Investment Fund Manager

Hanseatic Asset Management LBG

 

Financial calendar

Company year end

31 March

Annual Report released to shareholders

July

Annual General Meeting

August

Announcement of half-year results

November

Half-year Report released to shareholders

December

Interim dividend payments

Historically, August, November, February and May. In anticipation of the
Possible Combination of the Company with OWHL. it was stated within the
announcement that, should the transaction proceed, the Board would introduce a
Capital Allocation policy whereby the Company would implement on-market share
buybacks of between 2% and 4% of its issued share capital (which may include
both voting Ordinary shares and 'A' non-voting Ordinary shares) replacing the
Company's existing dividend policy.

Share price listings

The price of your shares can be found on our website. In addition, share price
information for Ordinary shares / 'A' non-voting Ordinary shares can be found
via the following codes:

ISIN

BMG428941162 / BMG428941089

SEDOL

BKLFC18 / BKLFC07

Reuters

HAN.L / HANA.L

Bloomberg

HAN LN / HANA LN

TIDM

HAN / HANA

Legal Entity Identifier

213800RS2PWJXS2QDF66

 

Glossary of terms

Association of Investment Companies (AIC)

The Association of Investment Companies is the UK trade association for
closed-ended investment companies (www.theaic.co.uk). Despite the Company not
being UK domiciled, the Company is UK listed and operates in most ways in a
similar manner to a UK Investment Trust. Therefore, the Company follows the
AIC Code of Corporate Governance and the Board considers that the AIC's
guidance on issues facing the industry remains very relevant to the operations
of the Company.

Alternative Investment Fund Managers Directive

(AIFMD)

The AIFMD is a regulatory framework for alternative investment fund managers
(AIFMs), including managers of hedge funds, private equity firms and
investment trusts. Its scope is broad and, with a few exceptions, covers the
management, administration and marketing of alternative investment funds
(AIFs). Its focus is on regulating the AIFM rather than the AIFs.

Annual dividend / dividend

The amount paid by the Company to shareholders in dividends (cash or
otherwise) relating to a specific financial year of the Company. The Company's
dividend policy for the year to 31 March 2025 was to announce its expected
level of dividend payment at the start of the financial year. Barring
unforeseen circumstances, the Company then made four interim dividend payments
each year - at the end of August, November and February during that financial
year and at the end of May following the end of the financial year. As part of
the potential Combination, the Board proposes a capital allocation policy
that: (i) prioritises annual share buybacks of between 2% and 4% of its
shares; and (ii) pay dividends only to the extent required to ensure that the
new combined company is not treated as a non-mainstream pooled investment. In
anticipation of the above, the Company will not announce any interim dividends
ahead of any shareholder vote regarding the Possible Combination. The Board
would assess the Company's options should the Possible Combination not
proceed.

Bid price

The price at which you can sell shares determined by supply

and demand.

Capital structure

The stocks and shares that make up a company's capital, i.e. the amount of
ordinary and preference shares, debentures and unsecured loan stock etc. which
are in issue.

Closed‑ended

A company with a fixed number of shares in issue.

Depositary/custodian

A financial institution acting as a holder of securities for safekeeping.

Discount

When the share price is lower than the NAV, it is referred to as trading at a
discount. The discount is expressed as a percentage of the NAV.

Expense ratio

An expense ratio is determined through an annual calculation, where the
operating expenses are divided by the average NAV. Note there is also a
description of an additional PRIIPs KID ongoing charges ratio explained in
this Annual Report.

FCA

The Financial Conduct Authority (FCA) is a financial regulatory body in the
United Kingdom.

Five-year rolling NAV return (per annum)

The rate at which, compounded for five years, will equal the five year NAV
total return to end March, assuming dividends are always reinvested at pay
date.

Five-year NAV and share price total return

Rebased from 0% at the start of the five year period, this is the rate at
which the Company's NAV and share prices would have returned at any period
from that starting point, assuming dividends are always reinvested at pay
date. The Company will continue to quote results from its predecessor, Hansa
Trust Ltd, as part of that reporting so shareholders can see the longer-term
performance of the portfolio.

FRC

The Financial Reporting Council (FRC) is an independent regulator in the UK
and Ireland, responsible for regulating auditors, accountants, actuaries, and
setting the UK's Corporate Governance and Stewardship Codes.

Gearing

Gearing refers to the level of borrowing related to equity capital.

Hedging

Strategy used to reduce risk of loss from movements in interest rates, equity
markets, share prices or currency rates.

Issued share capital

Issued share capital is the total number of shares subscribed to by the
shareholders.

Key Information Document (KID)

This is a document of a form previously stipulated under the UK PRIIPs
Regulations. It provides basic, pre-contractual, information about the Company
and its share classes in a simple and accessible manner. It is not marketing
material. At the time of this Annual Report, the UK regulatory authorities
have temporarily suspended the requirement for Investment Companies to publish
a KID following feedback that the documents were unclear to users -
particularly regarding fee disclosures. Whilst this review is ongoing, the
Company has continued to publish a KID for each share class in substantially
the same form as previously required, but with additional disclosure where it
is felt appropriate. The Company awaits further clarification from the UK
regulatory authorities.

Key Performance Indicators (KPIs)

A set of quantifiable measures a company uses to gauge its performance over
time. These metrics are used to determine a company's progress in achieving
its strategic and operational goals and also to compare a company's finances
and performance against other businesses within its industry. In the case of
historic information, the KPIs will be compared against data of both the
Company and, prior to the Company's formation, from Hansa Trust Ltd.

Market capitalisation

The market value of a company's shares in issue. This figure is found by
taking the stock price and multiplying it by the total number of shares
outstanding.

Mid price

The average of the bid and offer prices of a particular

traded share.

Net Asset Value (NAV)

The value of the total assets minus liabilities of a company.

Net Asset Value total return

See Total return.

Offer price

The price at which you can buy shares determined by supply

and demand.

Ordinary shares

Shares representing equity ownership in a company allowing investors to
receive dividends. Ordinary shareholders have the pro-rata right to a
company's residual profits. In other words, they are entitled to receive
dividends if any are available after payments to financial lenders and
dividends on any preferred shares are paid. They are also entitled to their
share of the residual economic value of the company should the business
unwind.

Hansa Investment Company Limited has two classes of Ordinary shares - the
Ordinary shares (40,000,000 shares) and the 'A' non-voting Ordinary shares
(80,000,000 shares). Both have the same financial interest in the underlying
assets of the Company and receive the same dividend per share, but differ only
in that only the former shares have voting rights, whereas the latter do not.
They trade separately on the London Stock Exchange, nominally giving rise to
different share prices at any given time.

Premium

When the share price is higher than the NAV it is referred to as trading at a
premium. The premium is expressed as a percentage of the NAV.

Packaged Retail and Insurance‑based Investment Product (PRIIP)

Packaged retail investment and insurance-based products (PRIIPs) make up a
broad category of financial assets that are regularly provided to consumers in
the European Union. The term PRIIPs, created by the European Commission to
regulate the underlying market, is defined as any product manufactured by the
financial services industry, to provide investment opportunities to retail
investors, where the amount repayable is subject to fluctuation because of
exposure to reference values, or the performance of underlying assets not
directly purchased by the retail investor. See also Key Information Document
(KID).

PRA

The Prudential Regulation Authority (PRA) is a United Kingdom financial
services regulatory body responsible for the prudential regulation and
supervision of banks, building societies, credit unions, insurers, and major
investment firms.

Shareholders' funds/equity shareholders' funds

This value equates to the NAV of the Company. See NAV.

Spread

The difference between the bid and ask price.

Tradable Instrument Display Mnemonics (TIDM)

A short, unique code used to identify UK-listed shares. The TIDM code is
unique to each class of share and to each company. It allows the user to
ensure they are referring to the right share. Previously known as EPIC.

Total return

When measuring performance, the actual rate of return of an investment or a
pool of investments over a given evaluation period. Total return includes
interest, capital gains, dividends and distributions realised over a given
period of time.

Total return - shareholder

The total return to a shareholder is a measure of the performance of the
Company's share price over time. It combines share price
appreciation/depreciation and dividends paid to show the total return to the
shareholder expressed as an annualised percentage. In the case of historic
information, the total return will include data against data of both the
Company and, prior to the Company's formation, from Hansa Trust Ltd.

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