REG - Schroder AsiaPacific - Final Results
04/12/2025 07:00
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RNS Number : 1710K Schroder AsiaPacific Fund PLC 04 December 2025
LONDON STOCK EXCHANGE ANNOUNCEMENT
SCHRODER ASIAPACIFIC FUND PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
Information disclosed in accordance with DTR 4.1
The Company's Annual Financial Report for the year ended 30 September 2025 is
being published in hard copy format and an electronic copy will shortly be
available to download from the Company's web
pages:www.schroders.co.uk/asiapacific
(https://www.schroders.com/en-gb/uk/individual/funds-and-strategies/investment-trusts/schroder-asiapacific-fund-plc/)
.
Key highlights
· For the year ended 30 September 2025, the Company's NAV delivered
a total return of 15.7%, with strong performance in absolute terms.
· The Company has a strong long-term record, with an annualised NAV
total return of 11.5% over ten years, compared to the benchmark's 9.8%.
· The Board will introduce a conditional tender offer, allowing
shareholders to tender up to 25% of the Company's NAV at a price equal to NAV
(less costs), if the Company's total return does not outperform the benchmark
over the next five financial years.
· The Articles of Association require the Board to propose a
continuation vote at the 2026 AGM. The Board considers the Manager well
qualified to manage the portfolio and intends to support continuation as an
investment trust.
Investor presentation
Our Portfolio Manager, Abbas Barkhordar will be presenting at an investor
webinar on 15 January 2026 at 9.00 am (which can be signed up to via the
following link: https://www.schroders.events/SDPFY25
(https://www.schroders.events/SDPFY25) ).
James Williams, Chairman of Schroder AsiaPacific Fund plc, commented:
"It is worth noting from a macro perspective that, unlike western nations,
most Asian nations have healthy sovereign balance sheets and sustainable and
responsible fiscal policies. This is a strong and encouraging background
position."
The Company has submitted a copy of its Annual Financial Report to the
National Storage Mechanism and it will shortly be available for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
Enquiries:
Schroder Investment Management Limited
Charlotte Banks/Kirsty Preston (Press) 020 7658 6000
Natalia de Sousa (Company Secretarial) 020 7658 6000
Chairman's Statement
Performance
For the year ended 30 September 2025, the Company's NAV generated a total
return of 15.7%. This was a strong performance in absolute terms. It was,
however, slightly behind the benchmark, which produced a total return of 16.8%
over the same period. The share price produced a total return of 19.8% over
the year.
The Company has a long-term record of outperforming the benchmark. The
Company's annualised NAV total return is 11.5% over ten years, compared with
the annualised return of the benchmark over the same period of 9.8%.
Asian markets experienced a volatile period of performance over the year. This
reflected ongoing geopolitical tensions, tariff uncertainty and differences in
monetary policy across the region. The strongest returns for the year came
from Singapore, China, Taiwan and Korea.
A more detailed comment on performance and investment policy may be found in
the Portfolio Managers' Review.
Benefits of the investment trust structure
The Company invests in a carefully chosen group of Asian companies, making the
most of the distinct benefits offered by the investment trust structure. This
approach ensures a stable pool of capital, enabling long-term investment
decisions without the pressure of unexpected investor redemptions that can
affect open-ended funds. The use of gearing can further enhance returns over
time, adding another layer of flexibility. An additional strength of this
structure is the ability to build up revenue reserves during stronger periods,
providing the capacity to sustain dividends even in more challenging
environments. As a result, investment trusts such as this Company are well
positioned to offer consistent and growing income across various market
cycles. With a strong track record of benchmark outperformance, the Company is
competitively positioned versus open-ended, passive as well as other
investment trust peers.
Revenue and dividend
The Company's principal investment objective is to achieve capital growth, and
the Directors continue to distribute substantially all the revenue received
each year. This year the Company's revenue return increased to 13.21 pence per
share (2024: 12.79p).
The Directors are recommending a final dividend of 13.00 pence per share for
the year ended 30 September 2025. This represents an increase of 4% over the
amount paid in respect of the previous financial year. This dividend will be
paid on 6 February 2026 to shareholders on the register on 30 December 2025,
subject to approval by shareholders at the Annual General Meeting (AGM) on 29
January 2026.
Gearing
During the year, the Company renewed its secured £75 million one-year
multicurrency revolving credit facility with The Bank of Nova Scotia, London
Branch. At 30 September 2025, the Company's net gearing position was 3.0%
taking into account cash balances, compared to 2.6% at 30 September 2025.
Source: Morningstar as at 30 September 2025. Rebased to 100 at 30 September
2015. The Company's benchmark is the MSCI All Countries Asia excluding Japan
Index (with net income reinvested), sterling adjusted. The Company changed its
benchmark with effect from 1 October 2016. Prior to that date the benchmark
was the MSCI All Countries Asia excluding Japan Index (with gross income
reinvested), sterling adjusted.
Discount management
The Company continued to be active in buying back its shares during the year.
A total of 12,605,983 shares were bought back for cancellation at a cost of
£70.5 million (2024: 8,209,500 shares were bought back and cancelled at a
cost of £41.5 million), providing a modest accretion to the NAV. Since the
year end, a further 2,735,714 shares have been bought back for cancellation at
a cost of £18.1 million. The average discount during the year under review
remained stable at 10.8%, whilst market conditions remained volatile.
Over the last five years, the Company has bought back nearly 27% of its issued
share capital in support of its buy back policy. The Board remains focused on
managing discount volatility and helping to provide liquidity in the Company's
shares. The Board continues to follow a flexible strategy towards discount
management and considers that under 10% is a sensible discount target over the
longer term in normal market conditions.
At the Company's last AGM, authority was given to purchase up to 14.99% of the
issued share capital. We propose that the share buy back authority be renewed
at the forthcoming AGM and that any shares so purchased be cancelled or held
in treasury for potential reissue.
Introduction of a performance tender offer
The Board believes that the wider investment trust market is moving towards
the periodic offer of a return of an element of capital close to the net asset
value. This is to address situations where a Company does not perform in line
with expectations. The Board is accordingly introducing a conditional tender
mechanism whereby the Company will offer shareholders the opportunity to
tender up to 25% of the Company's net asset value at a price equal to net
asset value (less costs), should the Company's total return over the next five
financial years fail to outperform the benchmark index. This tender offer will
coincide with the Company's five yearly continuation vote.
Board succession
When I was appointed Chairman in 2021, it was agreed that I would serve
a maximum term of five years in this role. Accordingly, I intend to retire
following the AGM in 2026. The process to identify my successor has been led
by the Chair of the Nomination Committee and the Senior Independent Director.
I am pleased to announce that Nicky Richards will become Chair following the
AGM.
Continuation vote
The Articles of Association contain provisions which require the Board to put
to shareholders a resolution at the AGM in 2026 that the Company continue as
an investment trust for a further five years.
Over the five-year period ended 30 September 2025, the Company's NAV produced
a total return of 6.6% per annum, outperforming the Benchmark's total return
of 5.6% per annum, while our share price produced a total return of 6.9% per
annum.
The Board believes that the Manager remains well qualified and suitable to
manage the portfolio in accordance with the Company's investment objective.
The Board also believes that the Company remains well placed as an investment
vehicle within its peer group, and that its long-term investment objectives
remain appropriate and the structure beneficial to shareholders. The Board
therefore unanimously recommends that the Company continue as an investment
trust, and the Directors intend to vote their shares accordingly.
Results webinar
Please join Portfolio Manager, Abbas Barkhordar, for a webinar in which he
will report on the year ended 30 September 2025 and outline his thoughts on
the future direction of your Company's portfolio. The presentation will be
followed by a live Q&A session. The webinar will take place on Thursday,
15 January 2026 at 09.00am. Register for the event at
https://www.schroders.events/SDPFY25 (https://www.schroders.events/SDPFY25) or
via the QR code below:
AGM
The AGM will be held on Thursday, 29 January 2026 at 12.00 noon at the
offices of Schroders at 1 London Wall Place, London EC2Y 5AU. A presentation
from the Portfolio Manager will be given at the AGM, and attendees will also
be able to ask questions in person and meet the Directors. Details of the
formal business of the meeting are set out in the Notice of Meeting in the
Annual Report and Financial Statements.
All shareholders are recommended to vote by proxy in advance of the AGM and to
appoint the Chairman of the meeting as their proxy. This will ensure that
shareholders' votes will be counted even if they (or any appointed proxy) are
not able to attend.
If shareholders have any questions for the Board, please write, or email using
the details below. The questions and answers will be published on the
Company's web pages before the AGM. To email, please use:
amcompanysecretary@schroders.com or write to us at the Company's registered
office address: Company Secretary, Schroder AsiaPacific Fund plc, 1 London
Wall Place, London, EC2Y 5AU.
Shareholder communication and engagement
The Board understands the importance for our shareholders to have regular
access to information. In addition to our Company web pages, we provide
shareholders with the opportunity to subscribe to Company email updates. These
emails feature updates about the Company, along with news, opinion pieces, and
market insights. Details on how to subscribe can be found on the inside front
cover of this report.
The Board encourages all shareholders to either to attend the AGM or exercise
their voting rights by proxy. The Board acknowledges that certain
execution-only investment platforms are now enabling shareholders to vote
electronically. We encourage shareholders to utilise this feature when it is
available.
The Board is committed to exercising high standards of corporate governance
and accordingly, regularly considers the views of its shareholders, offering
to meet with major shareholders annually. We also seek to engage with all
shareholders where possible and should you wish to contact me, you can do so
via the Company Secretary whose details are set out in the full Annual Report
and Financial Statements.
Outlook
Asian equity markets have shown resilience despite heightened US trade
tensions and increased tariffs. Elevated tariffs, particularly affecting major
exporters like China and India, and sectors such as semiconductors and
pharmaceuticals, could continue to suppress long-term investment and global
growth, although growing trade within Asian and emerging markets could
partially offset US protectionism. In addition, while China's economic
weakness persists, sectors showing strong growth have clearly emerged and
Chinese companies continue to lead global innovation in AI, EVs and Robotics.
More broadly, strong Asian market performance in 2025 has been driven by
multiple re-rating rather than fundamental earnings growth, pushing valuations
above historical averages. However, the region still appears attractively
valued compared to developed markets, and longer-term prospects are supported,
depending on the individual market, by favourable demographics, rising
incomes, and deepening financial markets. Asia remains crucial to the global
economy, providing both the infrastructure for technological revolutions and
the capacity to drive sustainable growth. All these factors should create
enduring opportunities for patient, long-term investors.
It is also worth noting from a macro perspective that, unlike western nations,
most Asian nations have healthy sovereign balance sheets and sustainable and
responsible fiscal policies. This is a strong and encouraging background
position.
We believe our Managers, with their deep resource on the ground in Asia, are
well-positioned to continue to deliver sustainable growth by remaining
focussed on high-quality businesses with strong balance-sheets, structural
growth drivers and attractive valuations.
This will be my last Chairman's statement and I am delighted to steer this
wonderful Company though its 30 years anniversary and, most recently, past its
all-time high share price. I would like to thank shareholders for their
support. We continue to believe that the Company is well-placed to participate
in the exciting prospects for returns produced by Asia and its dynamic
companies over the long term.
James Williams
Chairman
3 December 2025
Portfolio Managers' Report
Market review
The twelve months to the end of September 2025 was a volatile, but ultimately
positive, period for Asian stock markets. Two factors in particular dominated
investor sentiment over the year. First, the policy implications resulting
from the election of Donald Trump to a second term as US president. Second,
the rapid global growth of investment in Artificial Intelligence (AI) data
centres.
The immediate reaction of investors to the election of President Trump was
negative for Asian markets, particularly relative to US markets. The mixture
of trade and fiscal policies expected from the incoming administration
appeared to present significant challenges for most Asian economies. Higher
tariffs on exports to the US were expected to negatively affect Asian
manufacturers' margins (if they absorbed the tariffs), or growth (if they
passed on higher cost to their customers). Compounding this headwind, the
administration's policy direction on fiscal deficits (looser), labour
immigration (tighter) and imports (more restrictive), all suggested
inflationary pressures would build in the US, calling into question the
prevailing expectations of falling US interest rates.
The uncertainty over the impact of US policy on the region dominated the first
half of the period. As a result, Asian markets drifted sideways until the
shock of "Liberation Day" in early April, when President Trump announced
unexpectedly large and wide-ranging tariffs on countries around the world,
making little distinction between different countries. The sharp market
sell-off that followed marked the nadir of policy uncertainty. Perhaps due to
the market reaction, the subsequent weeks and months have seen significant
backtracking from those initial extreme tariff rates, with a steady stream of
deals being agreed. While these deals have left tariffs much higher than they
were at the start of the year, Asian markets have reacted positively to the
lower level of uncertainty, rallying over 30% from the trough levels of early
April.
Much more unambiguously positive for Asian markets has been the extraordinary
boom in capital investment into AI datacentres, which has accelerated this
year. The large US tech companies which are leading this investment include
the traditional hyperscale cloud providers and internet platforms (Microsoft,
Amazon, Google and Meta), as well as well-funded new entrants such as Oracle
and xAI. These companies have repeatedly raised their capex guidance, giving a
boost to the many Asian companies which play a critical role in the global AI
hardware supply chain, such as TSMC and SK Hynix.
Finally, expectations around the timing and size of any US Fed rate cuts - a
frequent and loudly expressed demand of President Trump's - have also shifted
more clearly in a supportive direction over the period. Both near-term
interest rates and the US Dollar weakened as signs of a softening US economy
and labour market grew, while inflation remained relatively benign.
Historically, lower interest rates and a weaker US Dollar have generally been
a positive backdrop for Asian equity market performance, and this year did not
prove an exception.
As a result of the above factors, Asian markets performed very strongly for
the year ended 30 September 2025, with the MSCI AC Asia ex-Japan index up
almost 17% in sterling terms, in-line with the MSCI World index of developed
stock markets, which were up by the same amount. The strongest markets over
the period were Singapore, China, Taiwan and Korea.
Singapore has continued to benefit from strong GDP growth as well as its
increasing importance as a regional hub - particularly in financial services.
Investor sentiment was also helped by regulatory initiatives to enhance the
equity market, coupled with strong individual performance from some of the
market's leading companies (Singtel, Sea, Grab, Singapore Exchange) and the
big three banks.
China has benefitted from two drivers. One, heightened expectations that the
government would enact more aggressive domestic stimulus in the face of higher
US tariffs. Two, an AI boom which echoes that of the US, but also differs in
several significant ways. The release early in the year of DeepSeek, a
seemingly unprecedentedly efficiently-trained Large Language Model from a
Chinese startup drove a strong rally in Chinese companies thought to be
beneficiaries of the emergence of a domestic AI industry. Throughout the year,
many domestic internet companies, such as Alibaba, announced they would be
massively increasing investment into their data centre businesses. This is an
industry which is much more competitive in China than even in the US. It is,
therefore, one which currently makes much lower returns, and where the path to
"monetisation" is harder to navigate. Geopolitics and uncertainty over access
to western chips and chipmaking equipment also complicate the investment case,
but also provide opportunities for domestic Chinese tech hardware companies to
capture more of the AI spend.
Besides the internet and tech names, China has also seen a strong rally in
stocks linked to the "humanoid robot" theme - an area where projections of
demand, revenue potential and profitability are even less certain than AI.
More broadly, Chinese consumer sentiment remains very depressed. There is
little sign of a general recovery in spending beyond goods categories which
have benefitted from government subsidies, but there is growing comfort that
the economy is stabilising, or at the very least is no longer getting worse.
Hong Kong also performed well in the year, benefitting from expectations of
lower interest rates, as well as better investor sentiment towards China and
the consequent recovery in the Chinese stock market. There has also been a
noticeable increase in the number of mainland companies seeking H-share
listings on the Hong Kong stock exchange - a welcome flow given the importance
of the finance sector to the market.
Korea and Taiwan are both tech-heavy, export-dependent economies and as such
have benefitted both from the recovery in sentiment around tariff deals, and
the global spend on AI datacentres. Korea also benefitted from an improvement
in investor sentiment following the change in their president. Expectations
are rising again that the persistent equity market discount would be reduced
if the new president's planned governance and tax reforms are implemented.
Investors there have also enthusiastically embraced a number of thematic
investment trends beyond AI and "Value-Up", such as defence and nuclear power,
which has seen pockets of the market perform exceptionally strongly.
The smaller ASEAN markets (Indonesia, Malaysia, Philippines and Thailand) all
lagged the overall Index. They suffered from a combination of domestic
political turmoil, as well as generally being more open, trade-oriented
economies - which was a clear headwind given the prevailing US policy
environment.
India was the only larger Asian market which underperformed the overall Index
over the period. While reported economic numbers appear satisfactory, results
announcements from companies have frequently disappointed high investor
expectations. This has led to negative earnings revisions, producing a
challenging backdrop for share prices when starting valuations are as elevated
as they were in India. Sentiment was also not helped when, towards the end of
the period, the US announced a very high tariff rate of 50% on India, partly
to force them to abandon purchases of discounted Russian oil. Although it is a
rather more closed economy than East Asia (and therefore less reliant on
exports), high tariff levels are clearly a headwind for investor confidence
and particularly for hopes of India rapidly replacing China as the key
manufacturing hub for exports to the US. A high degree of domestic retail
market participation also added to the volatility.
Of the major sectors, the best Index returns, by far, came from communication
services (a group that includes many internet companies) and information
technology (IT) - perhaps unsurprising given the strength of AI-related
stocks. Laggards included some of the more traditionally defensive sectors
such as consumer staples, healthcare and utilities, as well as more cyclical
sectors such as energy and materials companies, which were affected by low oil
prices and the stalling property market in China, which has reduced demand for
commodities such as steel.
Performance
The net asset value per share of the Company recorded a total return of +15.7%
over the twelve months to end September 2025. This lagged the performance of
the benchmark, the MSCI All Country Asia ex Japan Index, which rose +16.8%
over the same period.
The Company's underweight exposure to China was the key factor behind the
difference between the Company's NAV total return and the Index. Being
underweight Korea and overweight the Philippines and Thailand, as well as the
off-benchmark holdings in Vietnam and Australian resource companies, also
detracted. These headwinds were offset to an extent by the positive
contribution from being underweight India and overweight Singapore. However,
overall regional allocation was a negative contributor to relative returns.
Stock selection across the region was positive in aggregate, with particularly
strong performance in India. Our exposure to the more reasonably-valued large
cap Indian banks HDFC Bank and ICICI Bank was a positive contributor. This
reflected the structural appeal of private sector banks in India, given low
levels of financial penetration, the opportunity to take market share from
inefficient state-owned banks and the high returns on offer in a fast-growing
economy. Limited exposure to the highly valued small and mid-cap segments of
the Indian market also helped us to avoid some of the sharpest share price
falls seen in recent months.
Although the one-year has lagged the Index, the Company's NAV has outperformed
its reference benchmark over longer periods.
Although the one-year performance has lagged the Index, the Company's NAV has
outperformed its reference benchmark over longer periods.
Past performance is not a guide to future performance and may not be repeated.
The value of investments and the income from them may go down as well as up
and investors may not get back the amounts originally invested. Exchange rate
changes may cause the value of any overseas investments to rise or fall. Any
reference to sectors/countries/stocks/securities are for illustrative purposes
only and not a recommendation to buy or sell any financial
instrument/securities or adopt any investment strategy.
Portfolio activity
During the period, we initiated positions in five Chinese stocks, four of
which we detailed in the Company's Half Year Report: internet platform
Meituan, online travel agency Trip.com, domestic sportswear company Anta
Sports and testing services specialist Centre Testing. The additional holding
added since then is Kanzhun, the country's leading online recruitment
platform. The company benefits from strong network effects, as well as being
geared to benefit from any recovery in the domestic economy and labour market.
In India, we added two travel-related stocks: low-cost airline IndiGo (as
detailed in the Half Year Report) and, more recently, online travel agent
MakeMyTrip. Both companies stand to be beneficiaries of the long-term
structural growth in the underpenetrated Indian domestic and outbound travel
market, and face limited domestic competition.
Two other new holdings added in the year were Hong Kong listed luggage maker
Samsonite and Grab, the dominant internet ride-hailing and on-demand delivery
platform across most of southeast Asia. Samsonite had been weak given tariffs
on exports to the US, and soft global travel trends - issues we judge they are
better placed than competitors to weather. We used the share price weakness as
an opportunity to start a position.
Tariff-induced weakness also presented opportunities to add to companies we
believe are well-placed competitively over the long-term, including Korean
automaker Kia, Chinese textile manufacturer Shenzhou and Taiwanese e-paper
producer E Ink. We also added to existing positions in several ASEAN holdings
which had sold off, including Philippine property developer Ayala Land,
Bumrungrad Hospital in Thailand, and Vietnamese retailer Mobile World.
We detailed several stock sales in the Half Year Report, including
semiconductor packaging equipment manufacturer ASMPT, landlord Hang Lung
Properties, bicycle manufacturer Giant, as well as small remaining positions
in SK Hynix, Delhivery and Orica. In addition to these, we exited Indian IT
services provider TCS, on concerns around the impact of generative AI on the
sector; mature node foundry UMC, on the increasing competition from China; as
well as luxury manufacturer Prada, following its acquisition of Versace.
Finally, we also exited small remaining positions in Vietnamese dairy company
Vinamilk and Bank Negara in Indonesia.
Other holdings where we have reduced exposure included: investment trust VEIL,
banks BOC Hong Kong and OCBC (both likely to face earnings headwinds from
a lower rate environment), and Singapore Telecom, which had performed
strongly on the back of its own operations as well as the rising value of its
regional associates, such as Bharti Airtel in India.
The overall level of gearing was increased slightly over the year, but remains
moderate.
Portfolio strategy
We continue to hold an underweight position in China. This primarily reflects
structural concerns around demographics and an economic model heavily reliant
on investment, manufacturing and exports. In addition, there are a
preponderance of stocks which do not meet our standards of governance or
business quality. These stocks include many of state-owned enterprises (SOEs),
particularly banks, where alignment with the interests of minority (and
especially overseas) shareholders is questionable, given their propensity to
be used as policy tools by the government. Of course, the ramifications of
state action are not confined to the SOE sector in China. In recent years,
the government's focus on boosting the economy's supply side has meant that
even in growth areas dominated by private companies, such as renewable energy
equipment and electric vehicles, oversupply and an ultra-competitive
environment have led to poor returns.
In our view, the recent strength of several Index heavyweight stocks has run
well ahead of fundamentals and the market no longer looks particularly cheap,
especially in the context of an unpredictable geopolitical environment. As a
result, we remain cautious about adding materially to Chinese equities. Even
if further domestic stimulus measures are announced as the trade conflict
drags on, these are unlikely, in our view, to resolve the underlying
structural challenges in the economy laid out above.
We remain overweight Hong Kong. In part, this is an offset to our underweight
to the China market. While Hong Kong continues to feel the impacts of a weak
Mainland economy, domestic interest rates have started to come down, easing
liquidity, and valuations are more attractive. Company management teams in
Hong Kong also typically demonstrate greater focus on capital allocation and
shareholder returns than their Mainland peers. The recent influx of listings
on the stock exchange is testament to the city's enduring importance as
conduit for investment flows into and out of China.
We retain an underweight position in Korea. This reflects some scepticism
about the ability of the government to force company management teams there to
truly address their historical poor governance and capital allocation
practices. The high degree of family ownership in many of the leading
corporate groups, in contrast to Japan for example, complicates the task -
with conflicts of interest common between controlling and minority
shareholders. Quite aside from the governance concerns, many industries face
intensifying competition from China. This includes the lithium-ion battery
sector, which has seen the leading Chinese manufacturers overtake the Korea
manufacturers on the global stage. Finally, as an export-heavy economy, trade
restrictions can have an outsize impact on the market.
In the South-East Asian region, we are most exposed to Singapore. This country
has been a strong performer as it has benefitted from its increasing status as
a regional wealth management hub, as well as the growth of its ASEAN
neighbours. We also have direct exposure to some of the smaller ASEAN markets,
such as Indonesia, Vietnam, Thailand and the Philippines. However, while
valuations look attractive in this region, they are some of the most exposed
in Asia to external conditions and capital flows. As mentioned earlier, there
are also some concerns over the political developments in these markets
(except Vietnam), which have hurt sentiment. Our off-benchmark exposure to
Vietnam reflects the long-term positive structural growth we expect for that
market. However, in the short-term it is one of the most at-risk regional
economies from US tariffs, given the significant trade surplus they have.
India remains a relatively expensive market but has started to offer more
value following its recent underperformance. The long-term outlook for India
remains positive, with a relatively young, growing population and rising
incomes supporting stronger domestic consumption. As valuations have come back
to more reasonable levels, we have found more opportunities to add to our
position here. We hope to continue to do so, given there are many
well-governed and high-return companies in the market. Although India has
relatively limited reliance on exports relative to many East Asian economies,
clearly recent tariff and geopolitical developments (including a brief
skirmish with Pakistan) have not helped investor sentiment.
IT remains an overweight sector for the Company, but one which we have
moderated as stocks have rallied hard on the AI theme. In many cases
valuations are now back to historically stretched levels, though earnings
momentum remains strong. Clearly, should there be any disruption to the
narrative of growing AI datacentre capital expenditure, several Asian IT
stocks look vulnerable to a correction. For now, however, there is little sign
of such a slowdown from the US companies leading the investment, despite
limited evidence of enterprise or consumer willingness to spend significant
sums of money on AI services.
The portfolio remains overweight financials - a diverse sector spanning not
only banks, but also insurers and exchange companies. The banks we own are
generally well-capitalised with strong deposit franchises and many of our
holdings are in the more mature markets, such as Singapore, which in general
trade at attractive valuations and decent dividend yields, relative to
faster-growing markets. Our direct exposure to developing economies, where
credit penetration is relatively low, includes ASEAN markets such as
Indonesia, as well as significant exposure to Indian banks. The pace of
interest rate cuts from here will be an important driver of relative
performance for many financials, given the importance of rates for their net
interest income.
Investment Outlook
While it may have been a surprise to see Asian equity markets perform so well
in the face of a US trade war primarily targeted at the region's exporters, we
would caution that the road ahead may not be so smooth. Tariffs on Asian
exports to the US are well above where they started the year, and there is, at
the time of writing, little clarity about where final tariff levels on some
countries (particularly China and India), as well as important sectors such as
semiconductors and pharmaceuticals, will end up. Asian exports remain a key
driver for regional earnings, so the absolute level of tariffs clearly matters
a great deal. But perhaps even more damaging is that the ongoing uncertainty
around tariffs for significant trading partners and industries is likely to
continue to hold companies back from making long-term investment plans,
whether in Asia or the US, depressing global growth.
The anticipation of higher tariffs led to a significant uptick in exports to
the US from the Pacific Rim (with the exception of China) in the early part of
2025. This 'front loading' has started to unwind now that the higher tariffs
are in effect, which could have a negative impact on the sales and profits of
some of the region's exporting companies.
However, while the US tariffs have grabbed the headlines - particularly in
regard to companies that export to the US - the increase in intra-Asian trade
as well as trade with non-Asian emerging countries in recent years could
provide a counterweight to the negative impact of US protectionism, albeit
part of this growth has come from the re-routing of supply chains. Since
China's accession to the World Trade Organisation in 2001, the map of world
trade has been transformed, and most nations of the world now do far more
business with China than with the US. This both decreases the impact of
US tariffs on many exporting countries, and makes it more difficult for the
Trump administration to do deals at China's expense.
A further impact of the new US administration's policies has been a weakening
in the Dollar, in part as a result of debt-funded fiscal stimulus swelling the
government balance sheet, together with concerns around US exceptionalism and
declining interest rate expectations. Dollar weakness has historically been
supportive for Asian equity markets, and this can be observed in the region's
performance in 2025. However, this may not remain the case if the US suffers a
significant fall in demand, which would hurt Asian exporters.
Within the region, the Chinese economy remains weak, as consumer confidence is
still extremely low. Although the government has announced some measures to
support the economy, these remain quite small in scale and are unlikely to
drive up growth significantly in the face of a still-contracting property
market and declining private credit extension. The Chinese and Hong Kong
markets have benefited from investor hopes that the government would soon
start to address some of the structural over-supply/competition concerns
across various industrial sectors. Going by the rather confusing name of
"anti-involution" policy, the idea is that companies will be asked to rein in
excessive price discounting and moderate their capacity expansion in
industries where supply already exceeds natural demand. While in many cases
this would be welcome, it's important to bear in mind two caveats.
Firstly, it is harder (though not impossible) for the government to control
the actions of the private sector than of state-owned enterprises. Secondly,
and perhaps more significantly, the economy in China is likely to face
headwinds as exports slow down. As a result, any supply-side reforms, which
inevitably cause disruption to jobs or incomes, will be harder for the economy
to absorb without threatening the government's overall stated GDP growth
target. We will watch policy announcements closely, but history suggests the
government will favour jobs and growth over supply-side reform, if the choice
is between the two.
More broadly across the region, with much of the strong Asian market
performance this year a result of multiple re-rating, rather than improved
earnings, the resultant aggregate valuations no longer look cheap. The market
now trades above long-term averages on measures such as the price/earnings
(P/E) ratio. However, the region as a whole remains attractively valued
compared to developed markets. As we go forward, we would expect underlying
earnings to start to be a bigger driver of share prices. This may see the
market broaden out from the narrow focus it has had so far this year,
potentially resulting in some of the frothier areas of the market taking a
breather.
Conclusion
Despite the well-known challenges facing China, and the current uncertainty
surrounding US trade policy, there are several reasons to be more optimistic
about the long-term outlook for Asian equities. Many of the positive aspects
of the investment case for Asia are domestically oriented with a number of
Asian economies continuing to benefit from favourable demographics, rising
income levels and deepening financial markets. As wealth increases, so too
does the demand for goods and services that are already widely established in
developed markets - from financial products and healthcare, to travel,
technology and branded consumer goods. And while we must remain cognisant of
the challenges facing a region that has historically been heavily reliant on
global trade, Asia remains indispensable to the rest of the world, whether
through its role in facilitating the AI revolution, or in delivering a greener
global economy.
We believe this environment will continue to deliver a rich seam of
high-quality companies across a diverse range of markets and sectors, offering
attractive long-term growth potential for patient investors.
Abbas Barkhordar and
Richard Sennitt
Portfolio Managers
Schroder Investment
Management Limited
3 December 2025
Risk Report
The Board itself, and, through its delegation to its Audit and Risk Committee,
is responsible for the Company's system of risk management and internal
control and for reviewing its effectiveness. The Board has adopted a detailed
matrix of principal and, where applicable, emerging risks affecting the
Company's business as an investment trust. The Company has established
associated policies and processes designed to manage and, where possible,
mitigate those risks, which are monitored by the Audit and Risk Committee on
an ongoing basis.
This system assists the Board in determining the nature and extent of the
risks it is willing to take in achieving the Company's strategic objectives.
Risk assessment and internal controls review by the Board
Risk assessment includes consideration of the scope and quality of the systems
of internal control operating within key service providers, and ensures
regular communication of the results of monitoring by such providers to the
Audit and Risk Committee, including the incidence of significant control
failings or weaknesses that have been identified at any time and the extent to
which they have resulted in unforeseen outcomes or contingencies that may have
a material impact on the Company's performance or condition.
Although the Board believes that it has a robust framework of internal
controls in place, this can provide only reasonable, and not absolute,
assurance against material financial misstatement or loss and is designed to
manage, not eliminate, risk.
Both the principal and emerging risks and the monitoring system are also
subject to robust review at least annually. The last assessment took place in
November 2025.
During the year, the Board discussed and monitored a number of risks which
could potentially impact the Company's ability to meet its strategic
objectives. The Board receives updates from the Investment Manager, Company
Secretary and other service providers on emerging risks that could affect the
Company.
Geopolitical risk includes the impact of territorial disputes, regional
conflicts, trade tensions and sanctions against companies, all of which have
the potential to disrupt global markets and economic stability. During the
financial year, the Board continued to monitor events in the Middle East,
Ukraine, ongoing pressure in the Asia Pacific region, slowing economic growth
in China and supply chains. Following the election of President Trump, the
Board remains mindful of uncertainty surrounding potential changes to
financial and public policy, particularly concerns related to the
implementation of the Trump administration's tariff regime, which could impact
the Company in future. These factors are not classified as new principal or
emerging risks. However, they may increase or intensify existing risks. As
such, they are addressed in the "Geopolitical" section of the table below.
ESG risk includes climate change risk and how it could affect the Company's
investments, and potentially shareholder returns. ESG considerations,
including climate change, are embedded in the investment process. Greater
transparency continues to be provided in Board reporting and the Annual
Report. The Board will continue to monitor this closely. Further details are
provided in the investment management section.
Following the Company's financial year end, JP Morgan was appointed to provide
depositary and custody services, effective from 3 October 2025. The Board was
mindful of the operational risks associated with the transition and received
quarterly progress updates ahead of the transfer from HSBC to JP Morgan. Since
the transition date, the Board has reviewed the depositary's audited internal
controls reports relating to custodial arrangements. Further details are
provided in the third party services section in the full Annual Report and
Financial Statements.
No significant control failings or weaknesses were identified from the Audit
and Risk Committee's ongoing risk assessment which has been in place
throughout the financial year. The Board is satisfied that it has undertaken a
detailed review of the risks facing the Company. A full analysis of the
financial risks facing the Company is set out in note 20 to the Financial
Statements.
Actions taken by the Board and, where appropriate, its Committees, to manage
and mitigate the Company's principal risks and uncertainties are set out in
the table overleaf.
The "Change" column on the right of the table highlights at a glance the
Board's assessment of any increases or decreases in risk during the financial
year after mitigation and management. The arrows show the risks as increased,
decreased or unchanged.
Risk Mitigation and management Change
Strategy and competitiveness
The requirements of investors change or develop in such a way as to diverge The appropriateness of the Company's investment remit is periodically reviewed
from the Company's investment objectives, resulting in a wide discount of the and the success of the Company in meeting its stated objectives is monitored.
share price to NAV per share. The share price relative to NAV per share is monitored and the use of buy back
authorities is considered on a regular basis. The marketing and distribution
The Company's cost base could become uncompetitive, including fees, against activity is regularly reviewed. The Company engages proactively with
the peer group and against open-ended alternatives. investors.
The Management Engagement Committee reviews fees paid to the Manager at least
annually.
The ongoing competitiveness of all service provider fees is subject to
periodic benchmarking against their competitors, alongside an annual review of
the Company's ongoing charges figure.
The Board approves significant non-routine expenses.
Investment management
The Manager's investment strategy and levels of resourcing, if inappropriate, The Investment Manager seeks to invest in companies with strong balance sheets
may result in the Company underperforming the market and/or peer group and sustainable business models.
companies, leading to the Company and its objectives becoming unattractive to
investors. Regular review of:
• investment performance;
• NAV and share price performance including discount against the
peer group; and
• whether appropriate strategies are employed to mitigate any
negative impact of substantial changes in markets.
The Manager reports on macro-economic events, including regional policies,
quarterly and more frequently in response to events, if considered necessary.
The Management Engagement Committee reviews annually the ongoing suitability
ESG considerations including climate change risks could impact the Company's of the Manager.
investments and potentially shareholder returns.
Regular meetings with major shareholders are undertaken to seek their views
with respect to Company matters.
The consideration of climate change risk and ESG factors is integrated into
the investment process and reported at regular Board meetings. The Investment
Manager also considers and evaluates the approach investee companies take to
recognise and mitigate climate change risks. The Manager has implemented a
comprehensive ESG policy which is outlined in the full Annual Report and
Financial Statements.
Market
A significant fall in regional equity markets and/or currencies could have an The Board continues to monitor market volatility and will continue to do so on
adverse impact on the market value of the Company's underlying investments. an ongoing basis.
The Board recognises that there continues to be a currency/exchange rate risk
relating to the region and monitored it carefully during the period. The Board
also monitors macroeconomic and market factors, including the impact of
inflation.
Those risks, including market risk, associated with the economic environment
that might impact the Company are also mitigated to some extent by the
Investment Manager. Note 20 to the Financial Statements provides further
details of the steps taken to mitigate those risks associated with the
portfolio.
The Company has no formal policy of hedging currency risk but may use foreign
currency borrowings or forward foreign currency contracts to limit exposure.
The Company does not hedge against sterling.
The risk profile of the portfolio is considered and appropriate strategies to
mitigate any negative impact of substantial changes in markets are discussed
with the Portfolio Managers.
Geopolitical
Political developments globally might materially affect the ability of the The Board continued to monitor key political developments in the Asia Pacific
Company to achieve its investment objective. The region also has its own region, in addition to the Ukraine war and the Middle East.
specific risks which could impact market volatility and sentiment.
It was recognised that there continues to be an elevated geopolitical risk
Risks include regional tensions, trade wars and sanctions against companies in relating to the region.
areas which the Company invests or may invest, that might have consequences
for the Company, including an adverse effect on the value of the Company's
assets.
Gearing and leverage
The Company utilises credit facilities. These arrangements increase the funds Gearing is monitored and strict restrictions on borrowings are imposed:
available for investment through borrowing. While this has the potential to gearing continues to operate within pre-agreed limits so as not to exceed 20%
enhance investment returns in rising markets, in falling markets the impact of the Company's net assets.
could be detrimental to performance.
Accounting, legal and regulatory change
In order to continue to qualify as an investment trust, the Company must The Board intends to continue to operate the Company in full compliance with
comply with the requirements of Section 1158 of the Corporation Tax Act 2010. the requirements of Section 1158 of the Corporation Tax Act 2010, compliance
Breaches of the UK Listing Rules, the Companies Act or other regulations with is confirmed by the external auditor.
which the Company is required to comply, could lead to a number of
detrimental outcomes. The confirmation of compliance with relevant laws and regulations by key
service providers is reviewed.
Shareholder documents and announcements, including the Annual Report, are
subject to stringent review processes. Procedures are established to safeguard
against the disclosure of inside information.
Third party services
The Company has no employees and has delegated certain functions to a number Service providers appointments are subject to due diligence processes and with
of service providers. clearly documented contractual arrangements detailing service expectations.
Failure of controls, including as a result of fraud, cyber-attacks, or poor Regular reports are provided by key service providers and the quality of their
performance of any service provider, could lead to disruption, reputational services is monitored.
damage or loss of shareholders' assets.
The depositary reports on the safe custody of the Company's assets, including
In particular, failure by the depositary in its role as custodian could cash and portfolio holdings which are independently reconciled with the
compromise the safe custody of the Company's assets Manager's records.
Monitoring during the financial year included reporting on internal controls
to the Audit and Risk Committee from Schroders' Group Internal Audit
personnel, as well as the Company's depositary and custodian, HSBC, and
registrar, Equiniti.
Review of annual audited internal controls reports from key service providers,
including confirmation of business continuity arrangements and IT controls.
Operational risks may arise from the transfer of custodian, depositary and The Company's service providers report at least annually on their compliance
administration functions with a range of policies, including those relating to financial crime, modern
slavery and cybersecurity.
A detailed transition plan was in place, closely monitored by the Manager's
experienced transition change management team via a Risks, Assumptions Issues
and Dependencies (RAID) log. The Board received quarterly progress updates,
with the Audit and Risk Committee Chair acting as the primary point of contact
between updating cycles. All migration of financial data from HSBC to JP
Morgan was subject to close oversight by the Company's external auditor.
Statement of Directors' Responsibilities in respect of the Annual Report and
Financial Statements
The Directors are responsible for preparing the Annual Report and the
Financial Statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare Financial Statements for each
financial year. Under that law the Directors have prepared the Financial
Statements in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards and applicable law). Under
company law, the Directors must not approve the Financial Statements unless
they are satisfied that they give a true and fair view of the state of affairs
of the Company and of the return or loss of the Company for that period. In
preparing these Financial Statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are reasonable and
prudent;
• state whether applicable UK Accounting Standards, have been
followed, subject to any material departures disclosed and explained in the
Financial Statements; and
• prepare the Financial Statements on a going concern basis unless
it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the Financial Statements and the Directors'
Remuneration Report comply with the Companies Act 2006.
The Directors are also responsible for safeguarding the assets of the Company
and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Manager is responsible for the maintenance and integrity of the web pages
dedicated to the Company. Legislation in the United Kingdom governing the
preparation and dissemination of Financial Statements may differ from
legislation in other jurisdictions.
Directors' statement
Each of the Directors, whose names and functions are listed in the full Annual
Report and Financial Statements, confirm that to the best of their knowledge:
• the Financial Statements, which have been prepared in accordance
with United Kingdom Generally Accepted Accounting Practice (United Kingdom
Accounting Standards, comprising FRS 102 "The Financial Reporting Standard
applicable in the UK and Republic of Ireland" and applicable law), give a true
and fair view of the assets, liabilities, financial position and net return of
the Company;
• the Annual Report and Financial Statements 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 and emerging risks that
it faces; and
• 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.
On behalf of the Board
James Williams
Chairman
3 December 2025
Statement of Comprehensive Income
for the year ended 30 September 2025
2025 2025 2025 2024 2024 2024
Revenue Capital Total Revenue Capital Total
Note £'000 £'000 £'000 £'000 £'000 £'000
Gains on investments held at fair value through profit or loss 2 - 110,620 110,620 - 117,282 117,282
Net foreign currency gains - 83 83 - 2,917 2,917
Income from investments 3 23,600 302 23,902 24,292 117 24,409
Other interest receivable and similar income 3 145 - 145 264 - 264
Gross return 23,745 111,005 134,750 24,556 120,316 144,872
Investment management fee 4 (1,445) (4,333) (5,778) (1,526) (4,576) (6,102)
Administrative expenses 5 (1,553) - (1,553) (1,471) - (1,471)
Net return before finance costs and taxation 20,747 106,672 127,419 21,559 115,740 137,299
Finance costs 6 (441) (1,323) (1,764) (467) (1,400) (1,867)
Net return before taxation 20,306 105,349 125,655 21,092 114,340 135,432
Taxation 7 (1,850) (2,028) (3,878) (1,777) (5,916) (7,693)
Net return after taxation 18,456 103,321 121,777 19,315 108,424 127,739
Return per share (pence) 8 13.21 73.95 87.16 12.79 71.82 84.61
The "Total" column of this statement is the profit and loss account of the
Company. The "Revenue" and "Capital" columns represent supplementary
information prepared under guidance issued by The Association of Investment
Companies. The Company has no other items of other comprehensive income, and
therefore the net return after taxation is also the total comprehensive income
for the year.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the year.
The notes in the full Annual Report and Financial Statements form an integral
part of these Financial Statements.
Statement of Changes in Equity
for the year ended 30 September 2025
Called-up Capital Warrant
share Share redemption exercise Capital Revenue
capital premium reserve reserve reserves reserve Total
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 30 September 2023 15,480 100,956 4,664 8,704 700,106 21,375 851,285
Repurchase and cancellation of the
Company's own shares (821) - 821 - (41,494) - (41,494)
Net return after taxation - - - - 108,424 19,315 127,739
Dividend paid in the year 9 - - - - - (18,371) (18,371)
At 30 September 2024 14,659 100,956 5,485 8,704 767,036 22,319 919,159
Repurchase and cancellation of the Company's own shares (1,261) - 1,261 - (70,459) - (70,459)
Net return after taxation - - - - 103,321 18,456 121,777
Dividend paid in the year 9 - - - - - (17,827) (17,827)
At 30 September 2025 13,398 100,956 6,746 8,704 799,898 22,948 952,650
The notes in the full Annual Report and Financial Statements form an integral
part of these Financial Statements.
Statement of Financial Position
at 30 September 2025
2025 2024
Note £'000 £'000
Fixed assets
Investments held at fair value through profit or loss 10 993,743 955,057
Current assets
Debtors 11 2,264 2,550
Cash and cash equivalents 11 8,390 5,803
10,654 8,353
Current liabilities
Creditors: amounts falling due within one year 12 (41,513) (34,901)
Net current liabilities (30,859) (26,548)
Total assets less current liabilities 962,884 928,509
Non current liabilities
Deferred taxation 13 (10,234) (9,350)
Net assets 952,650 919,159
Capital and reserves
Called-up share capital 14 13,398 14,659
Share premium 15 100,956 100,956
Capital redemption reserve 15 6,746 5,485
Warrant exercise reserve 15 8,704 8,704
Capital reserves 15 799,898 767,036
Revenue reserve 15 22,948 22,319
Total equity shareholders' funds 952,650 919,159
Net asset value per share (pence) 16 711.01 627.02
These Financial Statements were approved and authorised for issue by the board
of Directors on 3 December 2025 and signed on its behalf by:
James Williams
Chairman
The notes in the full Annual Report and Financial Statements form an integral
part of these Financial Statements.
Registered in England and Wales as a public company limited by shares
Company registration number: 03104981
Notes to the Financial Statements
for the year ended 30 September 2025
1. Accounting policies
(a) Basis of accounting
Schroder AsiaPacific Fund plc ("the Company") is registered in England and
Wales as a public company limited by shares. The Company's registered office
is 1 London Wall Place, London EC2Y 5AU.
The Financial Statements are prepared in accordance with the Companies Act
2006, United Kingdom Generally Accepted Accounting Practice ("UK GAAP"), in
particular in accordance with Financial Reporting Standard (FRS) 102 "The
Financial Reporting Standard applicable in the UK and Republic of Ireland",
and with the Statement of Recommended Practice "Financial Statements of
Investment Trust Companies and Venture Capital Trusts" (the "SORP") issued by
the Association of Investment Companies in July 2022. All of the Company's
operations are of a continuing nature.
The Financial Statements have been prepared on a going concern basis under the
historical cost convention, as modified by the revaluation of investments held
at fair value through profit or loss. The Directors believe that the Company
has adequate resources to continue operating to 31 December 2026, which is at
least 12 months from the date of approval of these Financial Statements.
In forming this opinion, the Directors have taken into consideration: the
controls and monitoring processes in place; the Company's low level of debt
and other payables; the low level of operating expenses, comprising largely
variable costs which would reduce pro rata in the event of a market downturn;
and that the Company's assets comprise cash and readily realisable securities
quoted in active markets. In forming this opinion, the Directors have also
considered any potential impact of climate change on the viability of the
Company. Further details of Directors' considerations regarding this are given
in the Chairman's Statement, Portfolio Managers' Review, Going Concern
Statement, Viability Statement and under the Risk report heading in the full
Annual Report and Financial Statements.
In accordance with the Company's Articles of Association, a continuation
resolution will be proposed at the 2026 AGM. The Company has delivered
positive NAV total returns for the past three years and increased its dividend
for ten consecutive years. Based on this performance, shareholder engagement,
and the absence of material uncertainties, the Directors consider the Company
a going concern and have prepared the financial statements on that basis.
In preparing these Financial Statements the Directors have considered the
impact of climate change on the value of the Company's investments. The Board
has concluded that, as the investments are all valued using quoted bid prices
in active markets, the fair value reflects market participants' views of
climate change risk.
The Company has not presented a statement of cash flows, as it is not required
for an investment trust which meets certain conditions; in particular that
substantially all of the Company's investments are highly liquid and held at
fair value.
The Financial Statements are presented in sterling and amounts have been
rounded to the nearest thousand.
The accounting policies applied to these Financial Statements are consistent
with those applied in the Financial Statements for the year ended
30 September 2024.
No significant judgements, estimates or assumptions have been required in the
preparation of the Financial Statements for the current or preceding financial
year.
(b) Valuation of investments
The Company's business is investing in financial assets with a view to
profiting from their total return in the form of income and capital growth.
This portfolio of financial assets is managed and its performance evaluated on
a fair value basis, in accordance with a documented investment objective and
information is provided internally on that basis to the Company's Board of
Directors. Accordingly, upon initial recognition the investments are
classified by the Company as "held at fair value through profit or loss".
Investments are included initially at fair value which is taken to be their
cost, excluding expenses incidental to purchase which are written off to
capital at the time of acquisition. Subsequently the investments are valued at
fair value, which are quoted bid prices for investments traded in active
markets.
All purchases and sales are accounted for on a trade date basis.
(c) Accounting for reserves
Gains and losses on sales of investments are included in the Statement of
Comprehensive Income and in capital reserves within "Gains and losses on sales
of investments". Increases and decreases in the valuation of investments held
at the year end are included in the Statement of Comprehensive Income and in
capital reserves within "Holding gains and losses on investments".
Foreign exchange gains and losses on cash and deposit balances and unrealised
exchange gains and losses on foreign currency loans are included in the
Statement of Comprehensive Income and in capital reserves.
The cost of repurchasing shares, including the related stamp duty and
transactions costs, is charged to realised capital reserves.
(d) Income
Dividends receivable are included in revenue on an ex-dividend basis except
where, in the opinion of the Board, the dividend is capital in nature, in
which case it is included in capital.
Overseas dividends are included gross of any withholding tax.
Where the Company has elected to receive scrip dividends in the form of
additional shares rather than in cash, the amount of the cash dividend
foregone is recognised in revenue. Any excess in the value of the shares
received over the amount of the cash dividend is recognised in capital.
Deposit interest outstanding at the year end is calculated and accrued on a
time apportionment basis using market rates of interest.
(e) Expenses
All expenses are accounted for on an accruals basis. Expenses are allocated
wholly to the revenue column of the Statement of Comprehensive Income with the
following exceptions:
• The management fee is allocated 25% to revenue and 75% to capital
in line with the Board's expected long-term split of revenue and capital
return from the Company's investment portfolio.
• Expenses incidental to the purchase or sale of an investment are
charged to capital. These expenses are commonly referred to as transaction
costs and mainly comprise brokerage commission. Details of transaction costs
are given in note 10.
(f) Finance costs
Finance costs, including any premiums payable on settlement or redemption and
direct issue costs, are accounted for on an accruals basis using the effective
interest method and in accordance with the provisions of FRS 102.
Finance costs are allocated 25% to revenue and 75% to capital in line with the
board's expected long-term split of revenue and capital return from the
Company's investment portfolio.
(g) Financial instruments
Cash and cash equivalents comprise cash and demand deposits and may include
short-term, highly liquid investments which are readily convertible to known
amounts of cash and which are subject to insignificant risk of changes in
value.
Other debtors and creditors do not carry any interest, are short-term in
nature and are accordingly stated at nominal value, with debtors reduced by
appropriate allowances for estimated irrecoverable amounts.
Bank loans are classified as financial liabilities at amortised cost. They are
initially measured at the proceeds received, net of direct issue costs, and
subsequently measured at amortised cost using the effective interest method.
(h) Taxation
The tax charge for the year is based on amounts expected to be received or
paid.
Deferred tax is provided on all timing differences that have originated but
not reversed by the accounting date.
Deferred tax liabilities are recognised for all taxable timing differences but
deferred tax assets are only recognised to the extent that it is probable that
taxable profits will be available against which those timing differences can
be utilised.
Deferred tax is measured at the tax rate which is expected to apply in the
periods in which the timing differences are expected to reverse, based on tax
rates that have been enacted or substantively enacted at the balance sheet
date and is measured on an undiscounted basis.
(i) Value added tax ("VAT")
Expenses are disclosed inclusive of any related irrecoverable VAT.
(j) Foreign currency
In accordance with FRS 102, the Company is required to determine a functional
currency, being the currency in which the Company predominantly operates. The
Board, having regard to the currency of the Company's share capital and the
predominant currency in which its shareholders operate, has determined that
sterling is the functional currency and the currency in which the Financial
Statements are presented.
Transactions denominated in foreign currencies are converted at actual
exchange rates as at the date of the transaction. Monetary assets, liabilities
and equity investments held at fair value, denominated in foreign currencies
at the year end are translated at the rates of exchange prevailing at the
year-end date.
(k) Dividends payable
In accordance with FRS 102, the final dividend is included in the Financial
Statements in the year in which it is approved by shareholders.
(l) Repurchases of shares for cancellation
The cost of repurchasing the Company's own shares including the related stamp
duty and transactions costs is charged to "Capital reserves". Share repurchase
transactions are accounted for on a trade date basis. The nominal value of
share capital repurchased and cancelled is transferred out of "Called-up share
capital" and into "Capital redemption reserve".
2. Gains on investments held at fair value through profit or loss
2025 2024
£'000 £'000
Gains/(losses) on sales of investments based on historic cost 14,392 (6,055)
Amounts recognised in investment holding gains and losses in the previous year
in respect of
investments sold in the year (26,418) (4,436)
(Losses) on sales of investments based on the carrying value at the previous (12,026) (10,491)
balance sheet date
Unrealised gains recognised in respect of investments continuing to be held 122,646 127,773
Gains on investments held at fair value through profit or loss 110,620 117,282
3. Income
2025 2024
£'000 £'000
Income from investments
Overseas dividends 22,854 23,399
UK dividends 746 893
23,600 24,292
Other interest receivable and similar income
Deposit interest 144 191
Other income 1 73
145 264
Capital
Special dividend allocated to capital 302 117
Total income 24,047 24,673
4. Investment management fee
2025 2025 2025 2024 2024 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Management fee 1,445 4,333 5,778 1,526 4,576 6,102
Until 1 April 2025, under the terms of the AIFM agreement, the Manager was
entitled to a fee of 0.75% per annum on the first £600 million of the cum
income net assets, and 0.60% per annum on the cum income net assets in excess
of £600 million. Under the revised terms of the AIFM agreement, effective
from 1 April 2025, the Manager is entitled to a fee of 0.65% per annum of the
first £600 million of the cum income net assets and 0.60% per annum on the
cum income net assets in excess of £600 million.
5. Administrative expenses
2025 2025 2025 2024 2024 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Administration expenses 1,112 - 1,112 1,052 - 1,052
Directors' fees(1) 236 - 236 216 - 216
Company secretarial and administration fee 150 - 150 150 - 150
Auditor's remuneration for audit services 55 - 55 53 - 53
1,553 - 1,553 1,471 - 1,471
(1) Full details are given in the remuneration report in the full
Annual Report and Financial Statements.
6. Finance costs
2025 2025 2025 2024 2024 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Interest on bank loans and overdrafts 441 1,323 1,764 467 1,400 1,867
7. Taxation
(a) Analysis of tax charge for the year
2025 2025 2025 2024 2024 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Irrecoverable overseas withholding tax 1,850 - 1,850 1,777 - 1,777
Overseas capital gains tax - 2,028 2,028 - 5,916 5,916
Taxation for the year 1,850 2,028 3,878 1,777 5,916 7,693
The Company has no corporation tax liability for the year ended 30 September
2025 (2024: nil).
The provision for overseas capital gains tax pertains to the deferred tax
liability on the unrealised gain on Indian securities.
Until 23 July 2024, the headline rates of Indian capital gains tax were 10%
for long-term capital gains (LTCG) and 15% for short-term capital gains
(STCG), respectively, plus associated surcharges of approximately 1-1.5%. From
23 July 2024, the headline rates were increased to 12.5% for LTCG and 20% for
STCG, respectively, plus associated surcharges.
(b) Factors affecting tax charge for the year
The tax assessed for the year is lower (2024: lower) than the Company's
applicable rate of corporation tax for the year of 25% (2024: 25%) .
The factors affecting the current tax charge for the year are as follows:
2025 2025 2025 2024 2024 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Net return before taxation 20,306 105,349 125,655 21,092 114,340 135,432
Net return before taxation multiplied by the Company's
applicable rate of corporation tax for the year of 25% (2024: 25%) 5,077 26,337 31,414 5,273 28,585 33,858
Effects of:
Capital returns on investments - (27,676) (27,676) - (30,050) (30,050)
Income not chargeable to corporation tax (5,900) (75) (5,975) (6,073) (29) (6,102)
Irrecoverable overseas withholding tax 1,850 - 1,850 1,777 - 1,777
Provision for overseas capital gains tax - 2,028 2,028 - 5,916 5,916
Unrelieved expenses for the period 823 1,414 2,237 800 1,494 2,294
Taxation for the year 1,850 2,028 3,878 1,777 5,916 7,693
(c) Deferred tax
The Company has an unrecognised deferred tax asset of £24,443,000 (2024:
£22,206,000) based on a main rate of corporation tax of 25% (2024: 25%).
The deferred tax asset has arisen due to the cumulative excess of deductible
expenses over taxable income. Given the composition of the Company's
portfolio, it is not likely that this asset will be utilised in the
foreseeable future and therefore no asset has been recognised in the Financial
Statements.
Given the Company's intention to meet the conditions required to retain its
status as an Investment Trust Company, no provision has been made for deferred
UK capital gains tax on any capital gains or losses arising on the revaluation
or disposal of investments.
8. Return per share
2025 2024
£'000 £'000
Revenue return 18,456 19,315
Capital return 103,321 108,424
Total return 121,777 127,739
Weighted average number of shares in issue during the year 139,722,896 150,976,540
Revenue return per share (pence) 13.21 12.79
Capital return per share (pence) 73.95 71.82
Total return per share (pence) 87.16 84.61
9. Dividends
Dividends paid and proposed
2025 2024
£'000 £'000
2024 final dividend of 12.50p (2023: 12.00p) paid out of revenue profits 17,827 18,371
2025 2024
£'000 £'000
2025 final dividend proposed of 13.00p (2024: 12.50p) to be paid out of 17,418 18,324
revenue profits
The 2024 final dividend amounted to £18,324,000. However the amount actually
paid was £17,827,000, as shares were repurchased and cancelled after the
accounting date, but prior to the dividend record date.
The proposed final dividend amounting to £17,418,000 (2024: £18,324,000) is
the amount used for the basis of determining whether the Company has satisfied
the distribution requirements of section 1158 of the Corporation Tax Act 2010.
The revenue available for distribution for the year is £18,456,000 (2024:
£19,315,000).
10. Investments held at fair value through profit or loss
2024 2025
£'000 £'000
Opening book cost 751,478 708,664
Opening investment holding gains 123,056 246,393
Opening fair value 874,534 955,057
Purchases at cost 166,344 180,420
Sales proceeds (203,103) (252,354)
Gains/(losses) on investments held at fair value 117,282 110,620
Closing fair value 955,057 993,743
Closing book cost 708,664 651,122
Closing investment holding gains 246,393 342,621
Closing fair value 955,057 993,743
Sales proceeds amounting to £252,354,000 (2024: £203,103,000) were
receivable from disposals of investments in the year. The book cost of these
investments when they were purchased was £237,962,000 (2024: £209,159,000).
These investments have been revalued over time and until they were sold any
unrealised gains and losses were included in the fair value of the
investments.
The following transaction costs, comprising stamp duty and brokerage
commission, were incurred in the year:
2025 2024
£'000 £'000
On acquisitions 270 172
On disposals 462 381
732 553
11. Current assets
Debtors
2025 2024
£'000 £'000
Securities sold awaiting settlement 987 916
Dividends and interest receivable 1,162 1,361
Taxation recoverable 74 235
Other debtors 41 38
2,264 2,550
The Directors consider that the carrying amount of debtors approximates to
their fair value.
Cash and cash equivalents
Cash and cash equivalents comprise cash and demand deposits and may include
short-term, highly liquid investments which are readily convertible to known
amounts of cash and which are subject to insignificant risk of changes in
value.
12. Current liabilities
2025 2024
Creditors: amounts falling due within one year £'000 £'000
Bank loan 37,140 29,821
Repurchase of the Company's own shares into treasury awaiting settlement 341 825
Securities purchased awaiting settlement 2,002 2,111
Other creditors and accruals 2,030 2,144
41,513 34,901
The bank loan comprises US$50 million (£37.1 million) drawn down on the
Company's £75 million multicurrency revolving credit facility with Bank of
Nova Scotia, London Branch.
The facility was secured on 2 July 2025 and has a maturity date of 1 July
2026. The amendment and renewal of the facility are subject to covenants and
restrictions customary for a facility of this nature, all of which have been
complied with throughout the period.
The bank loan at the prior year end comprised US$50 million (£37.1 million)
drawn down on the Company's previous £75 million multicurrency credit
facility with Bank of Nova Scotia.
The Company has a £30 million overdraft facility with HSBC Bank plc, secured
by a floating charge. The facility was utilised during the year, and overdraft
interest was incurred. However, the overdraft was not drawn down at the
year-end date.
The Directors consider that the carrying amount of creditors falling due
within one year approximates to their fair value.
13. Deferred taxation
Deferred taxation comprises the deferred tax liability on the unrealised gain
on Indian securities. Indian capital gains tax arises on disposal of the
underlying asset.
14. Called-up share capital
2025 2024
£'000 £'000
Ordinary shares allotted, called up and fully paid:
Ordinary shares of 10p each:
Opening balance of 146,591,216 (2024: 154,800,716) shares 14,659 15,480
Repurchase and cancellation of 12,605,983 (2024: 8,209,500) shares (1,261) (821)
Closing balance of 133,985,233 (2024: 146,591,216) shares 13,398 14,659
During the year, the Company made market purchases of 12,605,983 of its own
shares, nominal value £1,260,598, for cancellation, representing 8.6% of the
shares outstanding at the beginning of the year. The total consideration paid
for these shares amounted to £70,459,000. The reason for these purchases was
to seek to manage the volatility of the share price discount to NAV per share.
15. Reserves
Capital reserves
Gains and Investment
Capital Warrant losses on holding
Share redemption exercise sales of gains and Revenue
premium(1) reserve(2) reserve(3) investments(4) losses(5) reserve(6)
£'000 £'000 £'000 £'000 £'000 £'000
At 30 September 2024 100,956 5,485 8,704 527,599 239,437 22,319
Losses on sales of investments based on the
carrying value at the previous balance sheet date - - - (12,026) - -
Net movement in investment holding gains and losses - - - - 122,646 -
Transfer on disposal of investments - - - 26,418 (26,418) -
Realised exchange gains on cash and short-term deposits - - - (138) - -
Exchange gains on the credit facility - - - - 221 -
Overseas capital gains tax - - - (669) (1,359) -
Special dividend allocated to capital - - - 302 - -
Management fee, administrative expenses and finance
costs allocated to capital - - - (5,656) - -
Repurchase and cancellation of the Company's own shares - 1,261 - (70,459) - -
Dividend paid - - - - - (17,827)
Retained revenue for the year - - - - - 18,456
At 30 September 2025 100,956 6,746 8,704 465,371 334,527 22,948
Capital & Reserves
Gains and Investment
Capital Warrant losses on holding
Share redemption exercise sales of gains and Revenue
premium(1) reserve(2) reserve(3) investments(4) losses(5) reserve(6)
£'000 £'000 £'000 £'000 £'000 £'000
At 30 September 2023 100,956 4,664 8,704 581,370 118,736 21,375
Losses on sales of investments based on the
carrying value at the previous balance sheet date - - - (10,491) - -
Net movement in investment holding gains and losses - - - - 127,773 -
Transfer on disposal of investments - - - 4,436 (4,436) -
Realised exchange losses on cash and short-term deposits - - - 340 - -
Exchange gains on the credit facility - - - - 2,577 -
Overseas capital gains tax - - - (703) (5,213) -
Special dividend allocated to capital - - - 117 - -
Management fee, administrative expenses and finance
costs allocated to capital - - - (5,976) - -
Repurchase and cancellation of the Company's own shares - 821 - (41,494) - -
Dividend paid - - - - - (18,371)
Retained revenue for the year - - - - - 19,315
At 30 September 2024 100,956 5,485 8,704 527,599 239,437 22,319
The Company's Articles of association permit dividend distributions out of
realised capital profits.
(1) The share premium is a non distributable reserve and represents
the amount by which the fair value of the consideration received from shares
issued exceeds the nominal value of shares issued.
(2) The capital redemption reserve represents the accumulated nominal
value of shares repurchased for cancellation. This reserve is not
distributable.
(3) The warrant exercise reserve is a non distributable reserve and
arose via an apportionment of the premium on the issue of shares with warrants
attached.
(4) This is a realised (distributable) capital reserve which may be
used to repurchase the Company's own shares or distributed as dividends.
(5) This reserve comprises holding gains on liquid investments (which
may be deemed to be realised) and other amounts which are unrealised. The
reserve is predominantly distributable.
(6) The revenue reserve may be distributed as dividends or used to
repurchase the Company's own shares.
16. Net asset value per share
2025 2024
£'000 £'000
Net assets attributable to shareholders (£'000) 952,650 919,159
Shares in issue at the year end 133,985,233 146,591,216
Net asset value per share (pence) 711.01 627.02
17. Transactions with the Manager
Under the terms of the AIFM Agreement, the Manager is entitled to receive a
management fee and a company secretarial and administration fee. Details of
the basis of the management fee calculation are given in note 4. Any
investments in funds managed or advised by the Manager or any of its
associated companies, are excluded from the assets used for the purpose of the
calculation and therefore incur no fee.
As at the year ended 30 September 2025, the Company held 9,173,923 shares
(2024: 11,471,124) in Schroder Asian Discovery Fund Class Z Accumulation GBP,
with the market value of £11,706,000 (2024: £14,500,000). During the year,
the Company sold 2,297,201 shares (2024: 1,567,762) and generated total
proceeds of £2,957,000 (2024: £1,745,000) from the sales.
The management fee payable in respect of the year ended 30 September 2025
amounted to £5,778,000 (2024: £6,102,000), of which £1,499,000 (2024:
£1,590,000) was outstanding at the year end. The company secretarial and
administration fee payable in respect of the year ended 30 September 2025
amounted to £150,000 (2024: £150,000), of which £38,000 (2024: £38,000)
was outstanding at the year end.
No Director of the Company served as a Director of any member of the Schroder
Group, at any time during the year, or prior year.
18. Related party transactions
Details of the remuneration payable to Directors are given in the Directors'
Remuneration Report and details of Directors' shareholdings are given in the
Directors' Remuneration Report in the full Annual Report and Financial
Statements. Details of transactions with the Manager are given in note 17
above. There have been no other transactions with related parties during the
year (2024: nil).
19. Disclosures regarding financial instruments measured at fair value
The Company's financial instruments within the scope of FRS 102 that are held
at fair value comprise its investment portfolio and any derivative financial
instruments.
FRS 102 requires that financial instruments held at fair value are categorised
into a hierarchy consisting of the three levels below. A fair value
measurement is categorised in its entirety on the basis of the lowest level
input that is significant to the fair value measurement.
Level 1 - valued using unadjusted quoted prices in active markets for
identical assets.
Level 2 - valued using observable inputs other than quoted prices included
within Level 1.
Level 3 - valued using inputs that are unobservable.
Details of the Company's policy for valuing investments and derivative
instruments are given in note 1(b) and 1(g).
There were no derivative instruments held at the year-end date.
At 30 September 2025, the Company's investment portfolio was categorised as
follows:
2025 2025 2025
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Investments in equities and equity linked securities 982,037 11,706 - 993,743
Total 982,037 11,706 - 993,743
2024 2024 2024
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Investments in equities and equity linked securities 940,557 14,500 - 955,057
Total 940,557 14,500 - 955,057
The fair value of the Level 2 investment in the Schroder Asian Discovery Fund
Z Acc has been determined using the fund's published NAV, which is based on
observable prices of underlying assets but not quoted in an active market.
This investment is also disclosed in Note 17 - Transactions with the Manager,
as it represents a holding in a fund managed by Schroders.
20. Financial instruments' exposure to risk and risk management policies
The investment objective is set out on the inside front cover of this report.
In pursuing this objective, the Company is exposed to a variety of financial
risks that could result in a reduction in the Company's net assets or a
reduction in the profits available for dividends. These financial risks
include market risk (comprising currency risk, interest rate risk and market
price risk), liquidity risk and credit risk. The Directors' policy for
managing these risks is set out below. The Board coordinates the Company's
risk management policy.
The objectives, policies and processes for managing the risks and the methods
used to measure the risks that are set out below, have not changed from those
applying in the comparative year.
The Company's classes of financial instruments may comprise the following:
• investments in shares, warrants, depositary receipts and
government bonds which are held in accordance with the Company's investment
objective;
• short-term debtors, creditors and cash arising directly from its
operations;
• a multi-currency overdraft facility with HSBC Bank plc, the
purpose of which is to assist in financing the Company's operations; and
• a multi-currency revolving credit facility with Bank of Nova
Scotia, the purpose of which is to assist in financing the Company's
operations.
(a) Market risk
The fair value or future cash flows of a financial instrument held by the
Company may fluctuate because of changes in market prices. This market risk
comprises three elements: currency risk, interest rate risk and market price
risk. Information to enable an evaluation of the nature and extent of these
three elements of market risk is given in parts (i) to (iii) of this note,
together with sensitivity analyses where appropriate. The Board reviews and
agrees policies for managing these risks and these policies have remained
unchanged from those applying in the comparative year. The Manager assesses
the exposure to market risk when making each investment decision and monitors
the overall level of market risk on the whole of the investment portfolio on
an ongoing basis.
(i) Currency risk
The majority of the Company's assets, liabilities and income are denominated
in currencies other than sterling, which is the Company's functional currency
and the presentational currency of the Financial Statements. As a result,
movements in exchange rates will affect the sterling value of those items.
Management of currency risk
The Manager monitors the Company's exposure to foreign currencies on a daily
basis and reports to the Board, which meets on at least four occasions each
year. The Manager measures the risk to the Company of the foreign currency
exposure by considering the effect on the Company's net asset value and income
of a movement in the rates of exchange to which the Company's assets,
liabilities, income and expenses are exposed. The Company may use foreign
currency borrowings or forward foreign currency contracts to limit the
exposure to anticipated changes in exchange rates which might otherwise
adversely affect the value of the portfolio of investments. Income denominated
in foreign currencies is converted into sterling on receipt.
Foreign currency exposure
The fair value of the Company's monetary items that have foreign currency
exposure at 30 September are shown below. The Company's investments (which are
not monetary items) have been included separately in the analysis so as to
show the overall level of exposure.
South
Hong Kong US Korean Taiwan Singapore Thai Indian Chinese
Dollars Dollars Won Dollars Dollars Baht Rupees Yuan Other Total
2025 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Current assets 352 4 271 1,699 - - 245 95 141 2,807
Current liabilities
Creditors: amounts falling due within one year - (37,281) (41) (1,043) - - - - - (38,365)
Foreign currency exposure on net monetary items 352 (37,277) 230 656 - - 245 95 141 (35,558)
Investments held at fair value through profit or loss(1) 239,262 18,404 71,408 199,309 77,854 33,927 153,715 42,339 76,805 913,023
Total net foreign currency
exposure 239,614 (18,873) 71,638 199,965 77,854 33,927 153,960 42,434 76,946 877,465
( )
(1) Excluding any stocks priced in sterling.
South
Hong Kong US Korean Taiwan Singapore Thai Indian Chinese
Dollars Dollars Won Dollars Dollars Baht Rupees Yuan Other Total
2024 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Current assets 2,389 286 377 592 - - 261 161 767 4,833
Current liabilities
Creditors: amounts falling due within one year (2,111) (29,953) (57) (41) - - - - - (32,162)
Foreign currency exposure on net monetary items 278 (29,667) 320 551 - - 261 161 767 (27,329)
Investments held at fair value through profit or loss(1) 239,262 18,404 71,408 199,309 77,854 33,927 153,715 42,339 76,805 913,023
Total net foreign currency exposure 239,540 (11,263) 71,728 199,860 77,854 33,927 153,976 42,500 77,572 885,694
(1) Excluding any stocks priced in sterling.
The above year end amounts are broadly representative of the exposure to
foreign currency risk during the current and comparative year.
Foreign currency sensitivity
The following tables illustrate the sensitivity of net profit for the year and
net assets with regard to the Company's monetary financial assets and
financial liabilities and exchange rates. The effect on capital return below
is predominantly due to the change in net monetary liabilities and the effect
on income return is predominantly due to change in dividends, or revenue items
that were subject to foreign exchange rate movement. The sensitivity analysis
is based on the Company's monetary currency financial instruments held at each
accounting date and assumes a 10% (2024: 10%) appreciation or depreciation in
sterling against all the currencies to which the Company is exposed, which is
considered to be a reasonable illustration based on the volatility of exchange
rates during the year.
If sterling had weakened by 10% this would have had the following effect:
2025 2024
Statement of Comprehensive Income - return after taxation £'000 £'000
Revenue return 2,056 2,116
Capital return (3,861) (3,453)
Total return after taxation (1,805) (1,337)
Net assets (1,805) (1,337)
Conversely if sterling had strengthened by 10% this would have had the
following effect:
2025 2024
Statement of Comprehensive Income- return after taxation £'000 £'000
Revenue return (2,056) (2,116)
Capital return 3,861 3,453
Total return after taxation 1,805 1,337
Net assets 1,805 1,337
In the opinion of the Directors, the above sensitivity analysis with respect
to monetary financial assets and liabilities is broadly representative of the
whole of the current and comparative year. The sensitivity with regard to the
Company's investments and foreign currency is subsumed into market price risk
sensitivity in part (iii) to this note.
(ii) Interest rate risk
Interest rate movements may affect the level of income receivable on cash
deposits and the interest payable on variable rate borrowings when interest
rates are re-set.
Management of interest rate risk
Liquidity and borrowings are managed with the aim of increasing returns to
shareholders. The Board would not expect gearing to exceed 20% where gearing
is defined as borrowings used for investment purposes, less cash, expressed as
a percentage of net assets.
The possible effects on cash flows that could arise as a result of changes in
interest rates are taken into account when the Company draws on the credit
facility. However, amounts drawn on this facility are for short-term periods
and therefore exposure to interest rate risk is not significant.
Interest rate exposure
The exposure of financial assets and financial liabilities to floating
interest rates, giving cash flow interest rate risk when rates are re- set, is
shown below:
2025 2024
Exposure to floating interest rates: £'000 £'000
Cash and cash equivalents 8,390 5,803
Creditors: amounts falling due within one year - borrowings on the credit (37,140) (29,821)
facility
Net exposure (28,750) (24,018)
Sterling cash deposits at call earn interest at floating rates based on
Sterling Overnight Index Average ("SONIA") rates, (2024: SONIA).
The Company has arranged a £75 million credit facility with Bank of Nova
Scotia, effective from 2 July 2025. Interest is payable at the aggregate of
the compounded Risk Free Rate ("RFR") for the relevant currency and loan
period, plus a margin. Amounts are normally drawn down on the facility for a
one month period, at the end of which it may be rolled over or adjusted. At 30
September 2025, the Company had drawn down US$50 million (£37.1 million) for
a one month period, at an interest rate of 5.26% per annum.
At the prior year end, the Company had drawn down US$40 million (£29.8
million) on the preceding facility with Bank of Nova Scotia.
The Company also has a £30 million overdraft facility with HSBC Bank plc,
secured by a floating charge.
The above year end amounts are not representative of the exposure to interest
rates during the year as the level of cash balances and drawings on the credit
facility have fluctuated. The maximum net cash/(debt) balances during the year
are as follows:
2025 2024
£'000 £'000
Maximum debit interest rate exposure during the year - debt (30,804) (27,981)
Maximum credit interest rate exposure during the year - net cash (12,312) 3,671
Interest rate sensitivity
The following table illustrates the sensitivity of the return after taxation
for the year and net assets to a 1.5% (2024: 1.5%) increase or decrease in
interest rates in regards to the Company's monetary financial assets and
financial liabilities. This level of change is considered to be a reasonable
illustration based on observation of current market conditions. The
sensitivity analysis is based on the Company's monetary financial instruments
held at the accounting date with all other variables held constant.
2025 2025 2024 2024
1.5% 1.5% 1.5% 1.5%
increase decrease increase decrease
in rate in rate in rate in rate
Statement of Comprehensive Income - return after taxation £'000 £'000 £'000 £'000
Revenue return (13) 13 (25) 25
Capital return (418) 418 (335) 335
Total return after taxation (431) 431 (360) 360
Net assets (431) 431 (360) 360
In the opinion of the Directors, this sensitivity analysis may not be
representative of the Company's future exposure to interest rate changes due
to fluctuations in the level of cash balances and drawings on the credit
facility.
(iii) Market price risk
Market price risk includes changes in market prices, other than those arising
from interest rate risk, which may affect the value of investments.
Management of market price risk
The Board meets on at least four occasions each year to consider the asset
allocation of the portfolio and the risk associated with particular countries
and industry sectors. The investment management team has responsibility for
monitoring the portfolio, which is selected in accordance with the Company's
investment objective and seeks to ensure that individual stocks meet an
acceptable risk/reward profile. The Board may authorise the Manager to enter
derivative transactions for the purpose of protecting the portfolio against
falls in market prices.
Market price risk exposure
The Company's total exposure to changes in market prices at 30 September
comprises the following:
2025 2024
£'000 £'000
Investments held at fair value through profit or loss 993,743 955,057
The above data is broadly representative of the exposure to market price risk
during the year.
The Schroder Asian Discovery Fund Z Acc is a daily-priced collective
investment scheme, which is not a listed security, and is included within
Investments held at fair value through profit or loss.
Concentration of exposure to market price risk
An analysis of the Company's investments is given in the full Annual Report
and Financial Statements. This shows that the portfolio comprises investments
trading in Asian countries. Accordingly there is a concentration of exposure
to that region.
Market price risk sensitivity
The following table illustrates the sensitivity of the return after taxation
for the year and net assets to an increase or decrease of 25% (2024: 25%) in
the fair values of the Company's investments. This level of change is
considered to be a reasonable illustration based on observation of current
market conditions. The sensitivity analysis is based on the Company's
investments and adjusting for the change in the management fee, but with all
other variables held constant.
2025 2025 2024 2024
25% 25% 25% 25%
increase decrease increase decrease
in fair in fair in fair in fair
value value value value
Statement of Comprehensive Income - return after taxation £'000 £'000 £'000 £'000
Revenue return (368) 368 (358) 358
Capital return 247,331 (247,331) 237,690 (237,690)
Total return after taxation and net assets 246,963 (246,963) 237,332 (237,332)
Percentage change in net asset value 25.9% (25.9%) 25.8% (25.8%)
(b) Liquidity risk
This is the risk that the Company will encounter difficulty in meeting its
obligations associated with financial liabilities that are settled by
delivering cash or another financial asset.
Management of the risk
Liquidity risk is managed as the Company's assets comprise mainly readily
realisable securities, which can be sold to meet funding requirements if
necessary. Short-term flexibility is achieved through the use of a credit
facility and an overdraft facility.
The Board's policy is for the Company to remain fully invested in normal
market conditions and that borrowings be used to manage working capital
requirements and to gear the Company as appropriate.
Liquidity risk exposure
Contractual maturities of financial liabilities, based on the earliest date on
which payment can be required are as follows:
Three Three
months months
or less or less
2025 2024
Creditors: amounts falling due within one year £'000 £'000
Bank loan - including interest 37,140 29,861
Repurchase of the Company's own shares into treasury awaiting settlement 341 825
Securities purchased awaiting settlement 2,002 2,111
Other creditors and accruals 2,030 2,144
41,513 34,941
(c) Credit risk
Credit risk is the risk that the failure of the counterparty to a transaction
to discharge its obligations under that transaction could result in loss to
the Company.
Management of credit risk
This risk is not significant and is managed as follows:
Portfolio dealing
The Company invests almost entirely in markets that operate a "Delivery Versus
Payment" settlement process which mitigates the risk of losing the principal
of a trade during settlement. The Manager continuously monitors dealing
activity to ensure best execution, which involves measuring various indicators
including the quality of trade settlement and incidence of failed trades.
Counterparties must be pre-approved by the Manager's credit committee.
Exposure to the custodian
The custodian of the Company's assets at the balance sheet date was HSBC Bank
plc which has long-term credit ratings of AA- with Fitch and Aa3 with Moody's.
The Company's investments are held in accounts which are segregated from the
custodian's own trading assets. If the custodian were to become insolvent, the
Company's right of ownership of its investments is clear and they are
therefore protected. However the Company's cash balances are all deposited
with the custodian as banker and held on the custodian's balance sheet.
Accordingly, in accordance with usual banking practice, the Company will rank
as a general creditor to the custodian in respect of cash balances.
Credit risk exposure
The amounts shown in the balance sheet under debtors, cash and cash
equivalents represent the maximum exposure to credit risk at the current and
comparative year ends. No debtors are past their due date and none have been
provided for. There has been no stock lending during the year, or prior year.
(d) Fair values of financial assets and financial liabilities
All financial assets and liabilities are either carried in the balance sheet
at fair value, or the balance sheet amount is a reasonable approximation of
fair value.
21. Capital management policies and procedures
The Company's objectives, policies and processes for managing capital are
unchanged from the preceding year.
The Company's debt and capital structure comprises the following:
2025 2024
£'000 £'000
Debt
Bank loan 37,140 29,821
Equity
Called-up share capital 13,398 14,659
Reserves 939,252 904,500
952,650 919,159
Total debt and equity 989,790 948,980
The Company's capital management objectives are to ensure that it will
continue as a going concern and to maximise the capital return to its equity
shareholders through an appropriate level of gearing.
The Board would not expect gearing to exceed 20%. Gearing for this purpose is
defined as borrowings used for investment purposes, less cash, expressed as a
percentage of net assets. If the figure so calculated is negative, this is
shown as a "Net cash" position.
2025 2024
£'000 £'000
Borrowings used for investment purposes, less cash 28,750 24,018
Net assets 952,650 919,159
Gearing 3.0% 2.6%
The Board, with the assistance of the Manager, monitors and reviews the broad
structure of the Company's capital on an ongoing basis. This review includes:
• the planned level of gearing, which takes into account the
Manager's views on the market;
• the need to buy back the Company's own shares for cancellation or
to hold in treasury, which takes into account the share price discount;
• the opportunity for issue of new shares; and
• the amount of dividends to be paid, in excess of that which is
required to be distributed.
22. Events after the accounting date that have not been reflected in the
Financial Statements
The Depositary, Administration and Custody services of the Company
transitioned from HSBC Bank plc to J.P. Morgan Europe Limited and JPMorgan
Chase Bank, N.A., London Branch effective 3 October 2025.
There have been no other events we are aware of since the balance sheet date
which either require changes to be made to the figures included in the
Financial Statements or to be disclosed by way of note.
Status of results announcement
2025 Financial Information
The figures and financial information for 2025 are extracted from the Annual
Report and Financial Statements for the year ended 30 September 2025 and do
not constitute the statutory accounts for that year. The Annual Report and
Financial Statements include the Report of the Independent Auditors which is
unqualified and does not contain a statement under either section 498(2) or
section 498(3) of the Companies Act 2006. The Annual Report and Accounts will
be delivered to the Registrar of Companies in due course.
2024 Financial Information
The figures and financial information for 2024 are extracted from the
published Annual Report and Financial Statements for the year ended 30
September 2024 and do not constitute the statutory accounts for the year. The
Annual Report and Financial Statements have been delivered to the Registrar of
Companies and included the Report of the Independent Auditors which was
unqualified and did not contain a statement under either section 498(2) or
section 498(3) of the Companies Act 2006.
Neither the contents of the Company's web pages nor the contents of any
website accessible from hyperlinks on the Company's web pages (or any other
website) is incorporated into, or forms part of, this announcement.
3 December 2025
For further information:
Natalia de Sousa
Schroder Investment Management Limited
E-mail: AMCompanySecretary@Schroders.com
(mailto:AMCompanySecretary@Schroders.com)
Issued by Schroder Investment Management Limited. Registration No 1893220
England.
Authorised and regulated by the Financial Conduct Authority. For regular
updates by e-mail please register online at www.schroders.com
(https://www.schroders.com/en/global/individual/) for our alerting service.
ENDS
A copy of the 2025 Annual Report will shortly be submitted to the FCA's
National Storage Mechanism and will be available for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
The 2025 Annual Report will shortly be available on the Company's web pages at
www.schroders.co.uk/asiapacific (http://www.schroders.co.uk/asiapacific) where
up-to-date information on the Company, including daily NAV and share prices,
factsheets and portfolio in formation can also be found.
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. END FR FSSESDEISEIE
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