Quarterly Shareholder Update Q 1 January - 31 March 2020 1

Pacific Assets Trust plc Quarterly Shareholder Update Q 1 January - 31 March 2020 1

Image location: Mumbai This document is a financial promotion for Pacific Assets Trust plc (the “Trust”) only for those people resident in the UK for tax and investment purposes. Investing involves certain risks including: • The value of investments and any income from them may go down as well as up and are not guaranteed. Investors may get back significantly less than the original amount invested. • Emerging market risk: emerging markets may not provide the same level of investor protection as a developed market; they may involve a higher risk than investing in developed markets. • Currency risk: the Trust invests in assets which are denominated in currencies other than pound sterling; changes in exchange rates will affect the value of the Trust. • The Trust’s share price may not fully reflect net asset value. Reference to specific securities (if any) is included for the purpose of illustration only and should not be construed as a recommendation to buy or sell. Reference to the names of any company is merely to explain the investment strategy and should not be construed as investment advice or a recommendation to invest in any of those companies. For an overview of the terms of investment, risks, returns and costs and charges please refer to the Key Information Document which can be found on the Trust’s website: www.pacific-assets.co.uk. If you are in any doubt as to the suitability of the Trust for your investment needs, please seek investment advice. 03

Contents

04 COVID-19 11 Feature - Companies supporting the fight 05 Significant Trust against COVID-19 changes 12 Trip report - India 07 Commentary - Active versus passive investment 14 Other news in achieving sustainable - Implementing SDG 12: development Responsible Consumption and Production 09 Company profile - Modern Slavery and Human - Marico Trafficking Statement 2020 10 Proxy voting 15 Portfolio update

Investment objective

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

Q1 Update 2020 Pacific Assets Trust plc 04

COVID-19 The current environment and impact

Amidst the horror of daily accumulating behaviours are too early to predict but it is statistics on illness and fatality, it risks appearing plausible that spending patterns and attitude to irreverent to echo that overused idiom ‘business debt will be more cautious in the future. as usual’. This is not a usual time. It is a complex and harrowing period but we are confident that The re-establishment of global health is paramount we are well placed to carry out our investment and it invites reproach to count the cost of this process and philosophy: which aims to preserve pandemic. However, we are mindful that global and grow shareholders’ wealth by investing in debt is increasing while a powerful handbrake is high quality companies on behalf of the Trust. being applied to cash generation. This is an On a practical basis we have been committed to unsustainable combination and we are even more flexible working, including remotely, for many wary of the risks, including national service, facing years and we are adept at multi-location meetings some or all of our companies. Currently, we are from decades of investment trips. As such there reassured that a number of the companies held in 4 has been minimal disruption to our investment the Trust have net cash balance sheets - there are process from home confinement. sizeable buffers here to help weather storms. Over the last thirty years there has been a long catalogue On a philosophical basis, nothing has changed, of misfortunes impacting Asian markets and we and we continue to prefer high quality companies aim to invest with stewards who have a proven boasting strong cash-flows and robust balance history of successfully navigating such storms. sheets. These characteristics frequently become more popular during times of stress. It is early COVID-19 Shareholder Letter days and this time could be different but initial In April we published a shareholder letter on the signs tentatively suggest that this historical pattern impact of COVID-19 on investment returns in Asia 5 could repeat. It has already been a destructive time which you can access on the Trust’s website . globally (the MSCI AC World Index fell by 16.0% in 1 sterling terms ) and in Asia (the MSCI AC Asia 1 2 Source: FactSet, Index data is net of tax. For full ex-Japan Index fell by 12.8% in sterling terms ), discrete performance please refer to page 15. since the beginning of the year. 2 As footnote 1. During this awful period signs are that many 3 Source: https://trends.google.com/trends/ mind-sets have changed. Google search statistics explore?q=recession indicate that interest in the word ‘recession’ has 4 Net cash: a company’s total cash minus total more than quadrupled3. Meanwhile conservative liabilities when discussing financial statements. politicians have embraced big government and 5 Source: https://www.pacific-assets.co.uk/ investors have sought safety over risk. The trust-information/articles-and-insights/covid-19- longevity of these changes and the implications for and-investment-returns-in-asia/

Pacific Assets Trust plc Q1 Update 2020 05

Significant Trust changes Image location: Japan

During the quarter we were able to buy two new with some companies such Kasikornbank in high quality companies for the Trust. Shenzhen Thailand and Square Pharma in Bangladesh Inovance is a privately owned and managed indiscriminately sold down to very attractive engineering firm listed in Shenzhen. The valuations. The volatility was so great the founding partners trained at Emerson and started equity markets in Bangladesh and Sri Lanka Inovance in 2003 specialising in industrial were closed and circuit breakers were tested in automation and electric vehicles. They have many equity markets around the region. While instilled an excellent engineering culture and this is unwelcomed it is not unexpected and the spend 10%6 of their sales on innovating new patient capital provided by the Trust makes it products. Unlike many of their competitors they easier to withstand and take advantage of have a prudent balance sheet and good cash such developments. generation. Though there is a risk to them We also trimmed the position size of ten collecting receivables from their customers which companies in the Trust over the period. The most benefit from state subsidies. prominent of these were OCBC in Singapore The second company we are pleased to initiate a where we felt prospects for profitable loan growth holding in for the Trust is Astral Poly Technik. had diminished and Unicharm in Japan in order Since its incorporation in 1996 by Sandeep to control the position size. We reduced E.Sun Engineer the company has garnered an enviable Financial after strong performance and with the reputation amongst Indian plumbers as the leading prospect of a challenging macro environment. We brand of CPVC (chlorinated polyvinyl chloride) also reduced Delta Electronics and Chroma ATE pipes. Today, Astral is the only licensee of the which have similarities to the new purchases in Bendale brand of Lubrizol and they are building a the Trust, Shenzhen Inovance and Pentamaster. powerful cash generative business in adhesives. We were extremely sad to make the complete The track-record of profitability and financial divestments of Manila Water and BPI in the probity is excellent and we think the risk of Philippines. We have partnered with the Ayala periodic cyclical slowdowns is countered by a family for decades and have great respect for the long runway for growth from a large wonderful contribution they have made in the addressable market. development of the Philippines. However, the political climate has changed and the relationship In addition to these new purchases we were also with the government is now quite acrimonious. able to add to some of our existing holdings at This combined with higher gearing led us to lower valuations. conclude that the risk reward ratio was no longer in our favour. There was extreme volatility during the quarter

Q1 Update 2020 Pacific Assets Trust plc 06

The outlook for the health of people and economies in Asia is extremely uncertain. Many western economies have effectively shut down. Hopefully this will pass quickly but these economies house many of the customers for Asian companies. Consequently, we expect order and payment delays and possibly cancellations. Over the last decade debt has been rising across individuals and institutions in Asia thereby making the region more vulnerable to a demand halt. Domestic consumption may also be challenged as employment prospects deteriorate and consumption is deferred. Against this, the lower price of oil, interest rates and domestic currencies are a necessary but possibly insufficient elixir until orders recommence.

Sadly this is not the first time that Asia has experienced a shock and we are fortunate that many of the companies we own have vivid memories of difficult times. As such they are prepared with a robust balance sheet and enviable cash generation. This not only allows them to weather any economic storm but also take advantage of any capital allocation opportunities that may arise.

We believe that our disciplined, independent investment approach of owning quality companies in the region should continue to protect and grow shareholder’s investments.

6 Source: Stewart Investors Investment Team. 7 As footnote 6.

Pacific Assets Trust plc Q1 Update 2020 Commentary 07

Active versus passive investment in achieving sustainable development

Growing investor concerns about climate and rated Tesla as the worst car maker globally based societal crises have contributed to the on its metrics, MSCI ranked it the best and burgeoning demand for ‘sustainable Sustainalytics was roughly in the middle. investment’ funds that take into consideration Moreover, it is common to find that the top-rated environmental, social and governance (ESG) businesses on ESG issues also tend to be larger, factors. According to Morningstar, developed market companies, suggesting the data is skewed to large capitalisation firms that sustainability funds attracted USD20.6 billion7 have more formalised policies and more of new assets globally in 2019, almost four times transparent disclosure. higher than the previous year. This should be a positive development, as more capital should, in Using quantitative ESG data can be beneficial in theory, be channelled into helping resolve some some circumstances, but placing too much of the world’s greatest challenges. However, this emphasis on ‘ESG by numbers’ can be a risky may not necessarily be the case as not all strategy. It also is unlikely to fulfil the desired sustainability funds are created equal. outcome of shifting capital toward more productive purposes. A quick glance at the The biggest differences occur between active and constituents of the Dow Jones Sustainability passive funds, and more specifically, in how they World Index, BlackRock iShares ESG ETFs or the assess ESG factors, and how they engage with FTSE4Good Index, reveals the familiar names of companies. Passive investing typically uses Apple, Google’s parent Alphabet, and Bank of quantitative ESG data, procured from third-party America. These businesses offer useful products providers, to either exclude companies or tilt a and services, but are they really the most portfolio towards more ‘sustainable’ companies, sustainable businesses in the world? or a mixture of both. Active investment involves To invest in the highest quality companies that picking individual stocks and bonds based on an both contribute to and benefit from sustainable assessment of their underlying fundamentals, and development, there needs to be room for either uses qualitative or quantitative ESG qualitative judgements, on more nuanced areas analysis, or often both. such as:

Many questions remain about the validity of ESG • Are the products and services useful, and metrics, including a lack of standardisation in the making a valuable contribution to society? data, and the overall scoring methods being used. For example, in 2018 three well-known and highly • Is the company genuinely trying to improve regarded services came up with completely its approach to sustainability rather than different ratings for Tesla on ESG issues. FTSE just greenwashing?

Q1 Update 2020 Pacific Assets Trust plc 08

• Is the company able to navigate sustainability vote in line with management. For example, headwinds and tailwinds (e.g. changing BlackRock, Vanguard and State Street, the three consumer preferences or regulations)? largest passive firms all supported doubling the pay of the CEO at California utility PG&E Corp • How is the company’s corporate even after its stock plummeted over the USD30 governance? In other words, how does it billion liability from maintenance problems treat various constituents – shareholders, linked to the California wildfires. The firm has employees, customers? since filed for bankruptcy, becoming one of the largest utility bankruptcies in history, and one of It is not easy to find answers to these questions in the first to be tied directly to climate change. Even ESG data alone, and it is difficult to ascertain worse, recent research found a number of large when investing in hundreds and sometimes passive investors have repeatedly voted against thousands of companies. Genuinely active resolutions related to the environment or climate investment managers, with high active share and change at annual shareholder meetings even as more concentrated portfolios, should be better they publicly call on companies to consider placed to assess these grey areas and therefore climate risks. make more considered and conscious judgements. It seems that when it comes to sustainable Engagement is another important difference. For investment, there is an argument that you get what passive funds the approach to engagement can be you pay for, with passive funds offering a cheaper, limited by the breadth of their portfolios and is simpler product, versus active funds that can often conducted by groups that are separate from provide more in-depth and considered analysis. the investment team. In these cases the highly All sustainability funds, regardless of whether diversified nature of passive funds can work they are active or passive, need to be clear and against effective stewardship. Long-term active transparent about how they are delivering on their investors that hold stocks for five years or more sustainability promises, lest the industry once have the opportunity to build relationships over again finds itself the subject of criticism for failing time helping them to influence corporate policy to meet clients’ needs and expectations. and encourage better practices.

Proxy voting also provides an opportunity for investors to encourage businesses to improve their ESG performance. Research finds that active investors are more likely to hold management to 8 Source: https://www.morningstar.com/ account by voting against them on proxy ballots, articles/961765/sustainable-fund-flows-in-2019- versus passive investors who are more likely to smash-previous-records

Pacific Assets Trust plc Q1 Update 2020 Company profile 09

Marico SDGs supporting

Country India

Market Cap USD 4.5 billion

Shareholders since October 2011 > SDG 3 Good health and well-being: Marico’s products help to improve the Hair and skin care products, health, hygiene and wellbeing of more Description edible oils, health foods, people, mostly in India and South Asia, fabric care products Southeast Asia, Africa and the Middle East, by providing hair, skin and other personal Family - Founded in 1971 by care products, coconut and other edible oils, Harsh Mariwala, who health foods and fabric care products. Stewardship remains Chair and the family owns c53% > SDG 12 Responsible consumption and production: Marico supports farmers in their supply chain through productivity improvement programs, research, and Marico can trace its roots back to 1971 when its training to help improve overall agricultural founder, Harsh Mariwala, graduated and joined yields. They also provide ongoing financial, the family business, Bombay Oil Industries. He agricultural extension and cooperative had envisioned a branded fast moving consumer establishment support to increase supply chain resilience and the socioeconomic goods company (FMCG) market for coconut oil position of smallholder farmers. and refined edible oils in small consumer packs, and set up a nationwide distribution for the Parachute brand. Over the years Marico SDGs to engage on branched into shampoos, deodorants, skin care and healthy breakfast oats. Marico also set up copra collection centres to procure directly from farmers, increasing farmers’ margins by eliminating intermediaries (they also pay their raw material suppliers within a day). Today > SDG 5 Gender equality: Gender diversity Marico continues to expand within India and is in their management and Board. also steadily building a business in Bangladesh > SDG 12 Responsible consumption and and other emerging markets across South East production: Reducing plastic packaging Asia, Africa and the Middle East. The company across products. benefits from strong sustainability tailwinds as it contributes to improved personal hygiene and healthier foods. It also operates responsibly with a broad and inclusive commitment to serving all stakeholders and improving the lives of ordinary people. Risks relate to copra prices, changing consumer preferences and views on the health giving qualities of coconut oil.

The Stewart Investors Sustainable Funds Group supports the Sustainable Development Goals (SDGs). The full list of SDGs can be found on the United Nations website.

Q1 Update 2020 Pacific Assets Trust plc 10 Proxy Voting Proxy voting by country of origin

46% India 9% Republic of Korea 9% Philippines 9% Sri Lanka 27% Japan

Proxy voting by proposal categories

2% Audit/Financials 18% Board related 3% Changes to company statutes 76% Compensation 1% Merger and aqisition

During the quarter for the Pacific Assets Trust there were 50 company resolutions to vote on.

On behalf of shareholders, we voted against one If you would like a full list of all proxy voting for resolution relating to Commercial Bank of Ceylon’s the companies held in the Trust, please contact request to adopt an equity-based Employee Share us directly. Option Plan. We believe the scheme is Further information on our Stewardship and unnecessarily complex, we are not convinced by Corporate Engagement policy is available online using relative performance benchmarking in a http://stewartinvestors.com/scep system where the peer group is not of high quality and have a preference for employees being awarded shares as opposed to options.

Pacific Assets Trust plc Q1 Update 2020 Feature 11

Companies supporting the fight against COVID-19

The COVID-19 pandemic is having a • Dr Lal Pathlabs – An Indian-listed blood devastating personal and economic impact testing and diagnostic laboratory chain which worldwide and there is an urgent need for has been authorised for testing for COVID-19 governments, companies and individuals to in India. play their part in helping to slow the spread, • Godrej Consumer - An Indian-listed protect the vulnerable and minimise the human consumer goods company, which sells health and economic toll. and hygiene supplies has slashed the prices of Across the Trust, there are a number of companies their hand sanitisers for consumers. that are helping to play a crucial part, either by • Unicharm – A Japanese manufacturer of providing diagnostic tools, expanding their healthcare products whose medical masks healthcare services, providing extra hand- have played a critical role in controlling the washing and hygiene supplies or simply making spread of the virus. sure we still have food available on our supermarket shelves. Of course there are many, We trust these well stewarded companies will many more examples of companies helping remain focused on the long-term and not exploit through their business as usual operations; below the obvious opportunity to put short-term profits is a selection of the most notable examples: ahead of patient and society welfare.

Q1 Update 2020 Pacific Assets Trust plc 12 Trip Report

India Image location: Mumbai

holding company, buying shares in subsidiaries at a 78% discount of their market value.9

Flirting with madness was one This total breakdown of governance is mirrored in thing; when madness started the Yes Bank case. Not only did the bank pursue an flirting back, it was time to call aggressive growth strategy that involved lending large amounts to some of the most leveraged the whole thing off. companies in the country, the founder and CEO of the bank has now also been accused of personally Rohinton Mistry receiving large sums for disbursing these loans.10 Since this has become public, shareholders of Yes Bank have lost close to 88%.11 Quality of The ongoing crises making their way through the stewardship in these instances – competence, Indian financial system are indicative of the years integrity, and humility – is completely absent. of irrational exuberance in the decade prior. High profile examples of collapses of both non-banking financial companies (NBFCs) and private banks in “If what you create does not outlive the past two years point to the primacy that has been placed on growth above all else, breakdowns you, then you have failed” of ethics and sound governance, as well as the – Uday Kotak 12 many conflicts of interest that continue to prevail in the sector. Our trip to Mumbai in December 2019 The brazen behaviour of these financial highlighted the enduring quality of some of the institutions is in direct contrast with some of the Indian financial companies we hold on your behalf Indian financial companies we think are of the across our strategies, not only in the context of this highest quality. Kotak Mahindra Bank is amongst backdrop in India but also in a global one. these, where the founder Uday Kotak not only has a large stake but also has his name above the The cases of Infrastructure Leasing & Financial door, suggesting his reputation and economic Services (IL&FS) and Yes Bank in India interest are on the line alongside minority demonstrate how quickly the recipe of rapid shareholders. His letter in the most recent annual growth without a keen eye on asset quality and a report is a reassuring read, underlining the complete lack of checks and balances – from both importance of experience and expertise through the Board of Directors and external auditors – can economic cycles. The bank is managed the same lead to a complete unravelling of leveraged in times of optimism as in times of gloom: financial institutions. “Through turbulent times, a well-capitalised balance sheet, constant sniffing between risk and Only a few months prior to IL&FS defaulting on returns and early recognition of problems are our USD13bn of debt obligations8, not one but three financial and cultural compasses.”13 credit ratings agencies in the country had issued them with the highest AAA rating. Prior to this, This is not to say that the bank doesn’t take there were signs of trouble brewing in an opaque advantage of opportunities when they arise. They ‘Employee Welfare Trust’ owned by senior used the last financial crisis to set off on the path management, whom also had stakes in the of building a corporate loan book. Prior to 2009,

Pacific Assets Trust plc Q1 Update 2020 13 the bank mostly disbursed retail loans but had quality, and oversight has been in name only, the been looking to enter the balance sheets of some likes of HDFC and Kotak Mahindra Bank shine of India’s largest corporations. While other banks through. They embody the crux of what we were dealing with the fall out of the financial believe it means to be a good financial institution crisis in 2009, Kotak Mahindra Bank set about – the trust put in both of these names. This is building a stable and profitable corporate loans layered onto with conservative cultures around business. This has grown at 20%14 compound growth, ability to take advantage of strategic annual growth rate (CAGR)15 since then, to about opportunities, and never forgetting the leveraged 39% of overall advances, and some of the lowest nature of their own balance sheets. This discipline non-performing loans (NPLs) in the industry. to look always to a long-term time horizon rather than to fall for what is faddish in the moment, HDFC demonstrates similar prudence and keep both HDFC and Kotak Mahindra Bank in caution, cultivated through decades of experience good stead to not only weather the brunt of this of conservatively disbursing loans and building crisis, but to come out of it in a better position the mortgage loans industry in the country. In than their competitors. times like these, it is worth remembering that the top four managers of the company alone have a total of 157 years of experience amongst them with HDFC, having witnessed and endured 9 multiple crises16. Source: https://www.business-standard.com/ article/finance/il-fs-employees-welfare-trust- “Reflecting back, in the first half of the financial the-link-that-paved-way-to-riches-for- year, we were often asked why we are not some-118101500217_1.html growing as aggressively as others in certain 10 As footnote 9. segments of the commercial real estate market. 11 Source: https://www.outlookbusiness.com/ We held our ground by consciously staying away strategy/trend/how-yes-banks-rana-kapoor- from funding what we perceived were riskier made-rs20-billion-from-loans-worth-rs60- assets. Unsurprisingly, in the second half of the billion-to-indiabulls-5516 year, we were asked what we did differently that 12 Source: Calculation from Bloomberg share price enabled us to stay resilient and be the preferred chart at date of writing. choice in the flight to safety. Perhaps a 13 Source: https://www.kotak.com/content/dam/ combination of experience and adhering to our Kotak/investor-relation/Financial-Result/ risk appetite held us in good stead.” – Deepak Annual-Reports/FY-2019/kotak-mahindra-bank/ Parekh, HDFC Annual Report 2019 Kotak_Mahindra_Bank_Limited_FY19.pdf 14 As footnote 13. As with Kotak Bank, HDFC has also used past crises to set themselves up for their next decade of 15 Source: Stewart Investors Investment Team. growth. The non-banking financial companies 16 Compound annual growth rate (CAGR): the rate (NBFC) crisis in the 1990s has many parallels with of return that would be required for an the pains of today, with large AAA rated firms investment to grow from its beginning balance defaulting on debt. The Reserve Bank of India to its ending balance, assuming the profits were tightened license norms in the wake of this, and reinvested at the end of each year of the investment’s lifespan. over the span of just four years, over 80% of NBFCs were shut down17. HDFC came out of this 17 Source: HDFC management team profiles from crisis with the ability to accelerate loan and profit their website https://www.hdfcbank.com/ growth in a manner that none of the other NBFCs personal/about-us/overview/management-team were able to match, with loans growing at 30% 18 Source: https://economictimes.indiatimes.com/ per year18. This has gone on to serve them well industry/banking/finance/will-shadow- through the decades, cementing their position in banking-in-india-be-able-to-bury-its-dubious- the industry. past-nbfcs-flourish/articleshow/53292953. cms?from=mdr In a country where many NBFCs have yet again 19 Source: CapitalIQ HDFC Annual reports been caught sleeping at the wheel, where banks https://www.hdfcbank.com/personal/about-us/ are disbursing loans without regard for asset investor-relations/annual-reports

Q1 Update 2020 Pacific Assets Trust plc 14 Other News

Implementing SDG 12: Responsible Consumption and Production

‘Earth Overshoot Day’, the day humanity has depleted all resources that our planet is capable of renewing for a whole year, occurs earlier every year that goes by. In 2019 it was 29 July, while in 1970 it was 29 December. Using company examples, this article19 written by Hanna Ranstrad, explains the philosophy of the circular economy that is helping to contribute towards the implementation of SDG 12.

Modern Slavery and Human Trafficking Statement 2020

As a business we are committed to maintaining and improving systems and processes to avoid complicity in human rights violations related to our own operations, our supply chain, and our products and services. We understand that slavery and human trafficking can occur in many forms, such as forced labour, child labour, domestic servitude, workplace abuse and human trafficking. Therefore, the terms “slavery and human trafficking” have been used in our wider group company, First State Investments, annual statement20 to encompass these various forms of coerced labour.

20 Source: https://www.stewartinvestors.com/en-gb/our-funds/sustainable-funds-group/our-articles/ implementing-the-sustainable-development-goal-12/ 21 Source: https://www.firststateinvestments.com/content/dam/cfsgam/emea/uk-policies/Slavery%20 and%20Human%20Trafficking%20Statement%202020.pdf

Pacific Assets Trust plc Q1 Update 2020 Portfolio Update 15

Pacific Assets Trust GBP - 31 March 2020 Fund Size £290m Number of Holdings 55

Ten Largest Holdings New Additions Portfolio Index Stock Name Sector Stock Name Weight (%) Weight (%) Astral Polytechnik Limited Industrials Tech Mahindra Limited 4.4 0.1 Shenzhen Inovance Technology Co Ltd Industrials Hoya Corp. 4.3 0.0 Vitasoy International Holdings 4.3 0.1 Unicharm Corporation 4.1 0.0 Complete Disposals Philippine Seven PHP1 3.1 0.0 Stock Name Sector Kotak Mahindra Bank Limited 3.0 0.0 Bank of the Philippine Islands Financials Marico Limited 2.9 0.0 Manila Water Co. Inc. Utilities Dr Lal Pathlabs Ltd 2.6 0.0 Housing Development Finance Corporation 2.5 0.8 Limited Koh Young Technology Inc 2.3 0.0 Total 33.5 1.0

Sector Breakdown Country Breakdown

Consumer Staples 26.6% (5.4%*) India 30.9% (8.5%*) Information Technology 19.1% (18.6%*) Taiwan 14.5% (13.5%*) Financials 18.0% (21.6%*) Japan 12.4% (0.0%*) Health Care 10.4% (3.7%*) Indonesia 6.7% (1.7%*) Industrials 5.7% (6.2%*) Bangladesh 5.2% (0.0%*) Consumer Discretionary 5.0% (15.5%*) Hong Kong 4.3% (9.8%*) Materials 2.0% (3.9%*) Philippines 4.3% (0.9%*) Communication Services 0.5% (13.1%*) South Korea 2.3% (13.0%*) Other 0.0% (11.9%*) Singapore 1.8% (3.2%*) Cash and Cash Equivalents 12.8% (0.0%*) Other 4.9% (49.3%*) Cash and Cash Equivalents 12.8% (0.0%*)

*Index Weight *Index Weight Cash Equivalents may include T-Bills.

Market Capitalisation 0 to 500m 500m to 1bn 1bn to 2.5bn 2.5bn to 5bn 5bn to 10bn 10bn to 50bn 50bn to 100bn 100bn+ Portfolio Weight 11.0 6.7 14.2 13.9 17.9 19.6 2.0 1.8 Benchmark Weight 0.0 0.4 5.5 9.6 13.8 33.4 6.2 31.1 Factset does not always have full stock coverage; weights may not total 100% Contribution Analysis - 12 Months Top Three Contributing Stocks Bottom Three Contributing Stocks Portfolio Value Added Portfolio Value Added Stock Name Weight (%) (bps) Stock name Weight (%) (bps) Hoya Corp. 4.3 67 Mahindra & Mahindra Ltd. 2.0 -214 Unicharm Corporation 4.1 64 Tech Mahindra Limited 4.4 -151 Nippon Paint Co., Ltd. 2.0 53 Cyient Ltd 0.7 -108

Annual Performance (% in GBP) to 31 March 2020 12 mths to 12 mths to 12 mths to 12 mths to 12 mths to 31/03/20 31/03/19 31/03/18 31/03/17 31/03/16 NAV -16.7 11.6 3.6 30.0 -6.0 Share Price -25.9 19.8 1.1 29.1 -9.0 Consumer Price Index (CPI) +6% 8.0 8.1 9.0 8.6 6.5 MSCI AC Asia ex Japan Index -9.0 2.0 12.2 35.0 -9.0

Cumulative Performance (% in GBP) to 31 March 2020 Since Inception 10 yrs 5 yrs 3 yrs 1 yr 6 mths 3 mths NAV 118.6 - 17.8 -3.6 -16.7 -20.3 -16.3 Share Price 119.2 - 5.6 -10.2 -25.9 -27.0 -22.5 Consumer Price Index (CPI) +6% 112.4 - 47.2 27.3 8.0 3.3 1.6 MSCI Asia AC ex Japan Index 83.6 - 28.0 4.1 -9.0 -9.3 -12.8

These figures refer to the past. Past performance is not a reliable indicator of future results.

All performance data is as at 31 March 2020. The NAV performance data is on a net basis after deducting all fees (e.g. investment management fee) and costs (e.g. transaction and custody costs) incurred by the Trust. The NAV includes dividends reinvested on a net of tax basis. The comparator shown is the MSCI All Countries Asia ex Japan Net Index, on an income reinvested net of tax basis. It is shown here as a comparator to provide additional context for investors seeking exposure to the region. The Performance Objective is considered to be appropriate given the Investment Manager’s index agnostic investment philosophy and will not change its style or strategy, or the make-up of the portfolio. Sources: i] Lipper for Trust share prices returns; ii] Trust Administrator and Bloomberg for NAV performance data. iii] CPI data from Factset and quoted on a one month lag.

*Performance since inception, Stewart Investors was appointed as Investment Manager with effect from the 01 July 2010.

Q1 Update 2020 Pacific Assets Trust plc Important information This document has been prepared for informational purposes only and is only intended to provide a summary of the subject matter covered and does not purport to be comprehensive. The views expressed are the views of the writer at the time of issue and may change over time. It does not constitute investment advice and/or a recommendation and should not be used as the basis of any investment decision. This document is not an offer document and does not constitute an offer or invitation or investment recommendation to distribute or purchase securities, shares, units or other interests or to enter into an investment agreement. No person should rely on the content and/or act on the basis of any material contained in this document.

This document is confidential and must not be copied, reproduced, circulated or transmitted, in whole or in part, and in any form or by any means without our prior written consent. The information contained within this document has been obtained from sources that we believe to be reliable and accurate at the time of issue but no representation or warranty, express or implied, is made as to the fairness, accuracy, or completeness of the information. We do not accept any liability whatsoever for any loss arising directly or indirectly from any use of this information.

References to “we” or “us” are references to Stewart Investors. Stewart Investors is a trading name of First State Investment Management (UK) Limited.

In the UK, issued by First State Investment Management (UK) Limited which is authorised and regulated by the Financial Conduct Authority (registration number 119367). Registered office 23 St. Andrew Square, Edinburgh, EH2 1BB number SCO79063.

Pacific Assets Trust plc (“The Trust”) is an investment trust, incorporated in Scotland with registered number SC091052, whose shares have been admitted to the Official List of the London Stock Exchange plc. The Trust is a Small Registered UK Alternative Investment Fund Manager under the Alternative Investment Fund Managers Directive. The Trust has delegated certain portfolio management responsibilities to First State Investment Management (UK) Limited. Further information is available from Client Services, Stewart Investors, 23 St Andrew Square Edinburgh, EH2 1BB or by telephoning 0800 587 4141 between 9am and 5pm Monday to Friday or by visiting www.pacific-assets.co.uk. Telephone calls with Stewart Investors may be recorded.

The distribution or purchase of shares in the Trust, or entering into an investment agreement with Stewart Investors may be restricted in certain jurisdictions.

First State Investments entities referred to in this document are part of First Sentier Investors a member of MUFG, a global financial group. First Sentier Investors includes a number of entities in different jurisdictions, operating in Australia as First Sentier Investors and as First State Investments elsewhere. MUFG and its subsidiaries do not guarantee the performance of any investment or entity referred to in this document or the repayment of capital. Any investments referred to are not deposits or other liabilities of MUFG or its subsidiaries, and are subject to investment risk including loss of income and capital invested.

The First State Investments logo is a trademark of the Commonwealth Bank of Australia or an affiliate thereof and is used by FSI under licence. Contact details Edinburgh London Singapore Sydney 23 St Andrew Square Finsbury Circus House 58 Duxton Road Suite 10, Level 3 Edinburgh EH2 1BB 15 Finsbury Circus 2nd & 3rd Floor 13 Hickson Road United Kingdom London EC2M 7EB Singapore 089522 Dawes Point t. +44 (0) 131 473 2900 United Kingdom t. +65 680 59670 Sydney NSW t. +44 (0) 207 332 6500 Australia 2000 t. +61 2 8274 8000 [email protected] stewartinvestors.com