ANW.L Regulatory News (ANW)

ABERDEEN NEW THAI INVESTMENT TRUST PLC

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 28 FEBRUARY 2019

STRATEGIC REPORT

Financial Highlights

Overview

Launched in 1989, Aberdeen New Thai Investment Trust PLC (the "Company") is an investment trust, with its Ordinary shares listed on the premium segment of the London Stock Exchange, which aims to provide shareholders with a high level of long-term, above average capital growth through investment in Thailand.

The Company is governed by a board of directors, all of whom are independent, and has no employees. Like most other investment companies, it outsources its investment management and other administration to third party providers. The Company has appointed Aberdeen Fund Managers Limited ("AFML", the "Manager", or "AIFM") as its alternative investment fund manager, which has in turn delegated certain responsibilities, including investment management, to Aberdeen Asset Management Asia Limited ("AAMAL" or the "Investment Manager"). AFML and AAMAL are subsidiaries of Standard Life Aberdeen plc.

The Company does not have a fixed life but there is a discount monitoring period which operates annually during the last 12 weeks of the Company's financial year. In the 12 weeks ending 28 February 2019, the Ordinary shares traded at an average discount of 13.6% to the underlying net asset value per share (including income), therefore no special resolution to wind up the Company will be put to shareholders at the forthcoming AGM.

Financial Calendar

CHAIRMAN'S STATEMENT

Introduction

It is my pleasure to write to you in my 6th year as Chairman of Aberdeen New Thai Investment Trust PLC and in the 30th year since the Company's launch.

The Company continues to pursue its investment objective of seeking to provide shareholders with a high level of long term, above average capital growth through investment in Thai companies, accepting that our Investment Manager's investment process may often lead to divergence from the Stock Exchange of Thailand Index ("SET Index"). The companies which make up the investment portfolio are considered by the Investment Manager, and the Board, to demonstrate quality as well as resilience in the context of the complicated Thai political situation. In addition, we continue to see our holdings offering opportunities for investors to benefit from the development of the broader Thai economy and the growing exposure to other regional markets that offer exciting opportunities such as Cambodia, Myanmar and Vietnam.

Long term performance continues to be the yardstick by which the Board measures the Investment Manager's performance. Accordingly, it is particularly pleasing to report that in the twentieth anniversary year of the launch of Individual Savings Accounts ("ISAs") in the UK, the Association of Investment Companies ("AIC") has identified your Company, for the second year running, as one that "if an investor had invested each year's maximum ISA limit from 1999 to 2018 - an investment of £206,560 in total - [your Company] would have turned it into a staggering £1,070,583" (AIC, 25 February 2019).

During the year, the net asset value ("NAV") per Ordinary share of your Company's portfolio fell by 5.1% on a total return basis, compared to the benchmark SET Index fall of 3.9%. The Ordinary share price fell by 3.7%, in total return terms, while the discount to NAV narrowed from 14.8% to 13.9%. The Thai Baht strengthened by 3.4% against broad Sterling weakness, given ongoing Brexit-related concerns. Further information on performance may be found in the Manager's Report.

Although the past has been volatile at times for Thai equities, I am pleased to report that overall your Company continues to achieve solid long term results with the NAV returning, on an absolute basis, 68.7% and 457.1% over 5 years and 10 years, respectively. Rising global risks and heightened market volatility recently have led to more indiscriminate capital flows in and out of the market than previously.

Your Board continues to monitor and review the impact of the initiatives introduced last year to improve the investment performance, which are being implemented into the portfolio, as appropriate. These included the Company's increased exposure to smaller capitalisation ("Small Cap") companies within the portfolio, the ability to invest in a limited number of unquoted Thai equities, the reallocation of a proportion of operating costs to capital, the introduction of an interim dividend and the potential to utilise more gearing. We expect to be able to observe the impact of these changes over the coming year and more information is set out below.

Details of, and Background to, the Results

During the year under review, Thai equities fell with the SET Index posting a total return of -3.9% in Sterling-adjusted terms. This came on the back of double-digit gains over the previous two financial years. The market's decline was largely in line with the broader Asian region, which was impacted by mounting trade friction between the world's two largest economies, the US and China. The threat of punitive tariffs from both sides took a toll on the world economy. In Asia, this could be seen in weakening exports towards the year end. The other key theme was monetary policy normalisation by the US Federal Reserve ("US Fed"), which spurred capital flows out of emerging markets. Despite healthy fundamentals, Thailand was not spared. As the year progressed, the US Fed switched to a more accommodative stance, driven partly by the deteriorating global environment. Markets were encouraged by this change of direction. Sentiment stabilised further when trade relations appeared to improve after Beijing and Washington returned to the negotiating table.

Investment Policy Changes announced in May 2018

At the AGM on 21 June 2018, shareholders approved a change to the Company's investment policy to permit investments in unquoted Thai equities provided that such investment was limited to 10%, in aggregate, of the Company's net assets at the time an investment is made.

Small Cap exposure

Our agreed investment parameters define Thai Small Cap stocks as those companies with a market capitalisation which is less than 50 billion Thai Baht ("THB"), currently equivalent to £1.2 billion. As at 28 February 2019 the proportion of the investment portfolio represented by Small Cap stocks had increased to 37.3%, from 35.2% at the previous year end, representing an overweight position to the SET index Small Cap weighting of 22.6% at the year end.

Gearing

During the year, the Company's £10 million loan facility with Scotiabank Ireland Limited was replaced with a competitively priced £15m loan facility with Industrial and Commercial Bank of China Limited, London Branch. The Company's drawn down loan was £5.65m at 28 February 2019 (2018 - £5.65m). As explained in the Investment Manager's Report, with valuations looking less expensive, as and when opportunities arise it is expected that gearing will increase within the overall limits set by the Board.

Earnings, Dividend and Ongoing Charges

As announced in last year's Annual Report, the Board introduced an interim dividend in November 2018 in order to accelerate the distribution of earnings to shareholders, much of which are received by the Company in the first half of the financial year. A first interim dividend of 7.0p per share was declared payable on 23 November 2018 to shareholders on the register as at 26 October 2018 with an ex-dividend date of 25 October 2018.

In total the revenue earnings per Ordinary share were 18.5p for the year ended 28 February 2019 (2018 - 11.1p). This increase partly reflects the Board's decision, announced in May 2018, to charge 75% of investment management fees and bank loan interest to capital with effect from 1 March 2018, better reflecting total return expectations. Previously, 100% of these costs were charged to income.

This year the Board is proposing to shareholders a final dividend per Ordinary share of 11.0p. When taken together with the newly introduced interim dividend paid in November 2018 of 7.0p (2018 - nil), the total dividends per share for the year amount to 18.0p (2018 - final dividend paid only of 11.1p). Paying out the majority of the Company's earnings in keeping with its dividend policy together with the previously communicated move to charge a higher proportion of investment management fees and loan interest to capital means this represents an increase of 62.2% on last year. The total dividend for the year of 18.0p represents a yield of 3.3% using the 28 February 2019 share price of 552.0p. If approved at the Annual General Meeting ("AGM") on 25 June 2019, the final dividend will be paid on 28 June 2019 to shareholders on the register as at 31 May 2019. The ex-dividend date will be 30 May 2019.

It is pleasing to note also the fall in ongoing charges from 1.35% to 1.26% over the year and the Board continues to monitor operating costs closely. The reduced charge reflects, in part, the lower management fee agreed with the Manager with effect from 1 March 2018. From that date the Manager is entitled to a management fee payable monthly in arrears based on an annual amount of 0.9% (previously 1.0%) of the Company's assets less liabilities.

Overview

After a robust 2018, the ripple effects from the China-US tensions are starting to take effect. Anecdotal evidence suggests that residential property sales in Thailand are tapering off because of the weakening purchasing power of Chinese buyers who make up the largest share of foreign buyers in the condominium segment. Thai exports are also sliding, given that 10% of overseas shipments go directly to China and a similar amount to the US. A 6% fall in overseas sales dragged the trade balance into an unexpected deficit of US$4 billion in January 2019, a worrying development. With China's GDP growth moderating to its slowest pace in nearly 30 years and US economic activity also showing signs of cooling, it should not come as a surprise if exports were to fall further.

On the other hand, demand in Thailand remains buoyant. Indeed, it was healthy domestic consumption that powered the economy in 2018. A combination of rising employment and growth in personal loans allowed demand for both non-durable and durable goods, such as automobiles, to rise at a decent pace. This, along with a sturdy current account surplus and ample foreign exchange reserves, aided the Thai Baht's outperformance against other emerging market currencies over the reporting period, even if the local currency did weaken marginally against the US dollar. With inflationary pressures remaining benign, domestic demand may improve further, although elevated household debt remains an issue.

The Baht's relative outperformance could also be attributed to the Bank of Thailand's ("BOT's") December rate hike, its first in over three years. With the Fed raising policy rates three times, the US dollar strengthening and outflows from emerging markets accelerating over the reporting period, the BOT was keen to curb financial risks and protect its currency. Arguably, the BOT need not have been concerned as the Baht proved resilient even before the rate hike, underpinned by solid domestic fundamentals.

Domestically, politics took a backseat to external challenges for much of the reporting period. Nevertheless, markets were jolted in February 2019 by the sudden nomination and then disqualification of King Vajiralongkorn's sister as a prime ministerial candidate in the March election. The opposition party backed by populist ex-premier Thaksin Shinawatra that nominated the princess was subsequently dissolved by the Constitutional Court. Despite this disruptive turn of events, it is heartening to note that, at the time of writing, Thailand held its first election since 2011, presaging an end to military rule. Final results are expected in early May following the coronation celebrations for King Vajiralongkorn.

Board

The Board is conscious of the need for continual refreshment of its membership and initiated the recruitment of a new Director during the year, with assistance from an independent search consultancy. As a consequence the Board was delighted to announce the appointment of Sarah McCarthy as a Director on 1 March 2019. Sarah brings to the Board over twenty years' experience in financial services, fifteen years of which have been focused on investment marketing. She has a wealth of communications and marketing campaign knowledge gained across a wide range of investment products and client types. Sarah will seek formal election as a Director at the AGM and I encourage shareholders to vote in favour of her appointment.

Our Senior Independent Director ("SID"), Clare Dobie, is not standing for re-election as a Director at the AGM and will retire at its conclusion. I, and the other Directors, would like to recognise Clare's considerable contribution to the Board, and to the Company, across many areas but not least through her championing of clearer communications with our shareholders and planholders. We thank her and wish her well. Clare will be succeeded as SID by Andy Pomfret.

Discount and share buybacks

The Board continues to actively monitor the discount of the Ordinary share price to the NAV per Ordinary share (including income) and will continue to pursue a policy of selective buybacks of shares where to do so would be in the best interests of shareholders whilst also having regard to the overall size of the Company. In pursuit of this objective, during the year ended 28 February 2019 the Company bought back and cancelled 280,612 Ordinary shares (2018 - 1,665,119 Ordinary shares) at a cost of £1.6m (2018 - £9.0m), representing 1.7% (2018 - 9.0%) of the Company's issued share capital at the start of the year.

Duration

The Company does not have a fixed life. However, under the Articles of Association, if in the 12 weeks preceding the Company's financial year end (28 February) the Ordinary shares have been trading, on average, at a discount in excess of 15% to the underlying NAV (calculated including undistributed net revenue) over the same period, notice will be given of a special resolution to be proposed at the following AGM that the Company be put into voluntary liquidation. Over the 12 weeks ended 28 February 2019, the relevant figure was 13.6% and, accordingly, no special resolution to wind up the Company will be put to the AGM.

Promotional Activities

Your Board continues to promote the Company through the Investment Manager's promotional activities and the Company contributed £63,000 (excluding VAT) during the year ended 28 February 2019 (2018 - £66,000). The Board reviews regularly these promotional activities.

Electronic communications

The Board is proposing to take advantage of the ability, under the Company's Articles of Association, to communicate electronically with shareholders as well as making documents available on its website instead of sending out paper versions. Increased use of electronic communications will deliver savings to the Company in terms of administration, printing and postage costs, as well as accelerating the provision of information to shareholders. The reduced use of paper will also bring environmental benefits. The Company will therefore be writing to you later in the year seeking your consent to communicate with you electronically noting that shareholders are provided with regular opportunities to request a paper version.

Outlook

The ongoing trade issues are likely to remain uppermost in investors' minds. With negotiators from China and the US scheduling a new round of high-level talks, tensions may ease. Given that economic growth has already been damaged, both sides want the deal to succeed. A more complex dispute over technological advancement may be harder to resolve. It is clear that the US is seeking to constrain China's growing influence in the technology sector, while the latter is unlikely to comply without a fight. Nevertheless, this clash seems relatively contained and does not appear to be detrimental to the broader macroeconomic environment. A more dovish stance from the Fed and the People's Bank of China should also help cushion any slowdown.

However, should a favourable outcome prove elusive, Thai exports, notably to China, may decelerate further. While this would prove disappointing, it is worth considering that the bulk of shipments go to near neighbours, such as Vietnam, Myanmar and Malaysia, and these remain intact. Domestic demand could also take up the slack. Private consumption makes up 50% of GDP. Tourism is still expected to be robust and contribute significantly to growth, given the positive spillover effects on the services sector, including financial services. Credit demand from both consumers and businesses remains firm.

The development of the Eastern Economic Corridor, the government initiative to enhance Thailand's eastern seaboard, a crucial manufacturing base, continues to gain traction. This area attracts the most foreign direct investments. To connect industries, a further expansion of road and rail networks is needed, so spending on construction and infrastructure should increase, giving additional impetus to private investments.

The smooth delivery of government initiatives will depend on a domestic environment that guarantees policy continuity following the conclusion of the election process. The new government will be keen to maintain the solid growth momentum that the military junta had engineered and not to dismantle policies that have been put in place. This should reassure investors.

I am encouraged by Thailand's longer-term prospects, which remain undiminished. Corporate fundamentals are also sound, notably those of your Company's portfolio. The Small Cap holdings, in particular, have great potential to grow in tandem with rising domestic wealth and consumption, coupled with expansion into nearby developing markets. The Investment Manager's Report highlights several of these smaller holdings that have done well. With the recent correction, valuations now appear reasonable and our Investment Manager continues to search for gems to add to the portfolio.

AGM

The AGM, which will be held at Bow Bells House, 1 Bread Street, London EC4M 9HH from 11.30am on 25 June 2019, provides shareholders with an annual opportunity to meet the Board and to ask any questions that they may have of either the non-executive directors or the Investment Manager.

The Board is happy to take general questions on the Annual Report and financial statements at the meeting but would request that questions of a technical nature should be advised to the Company Secretaries by email or by post, in advance.

I look forward to meeting as many shareholders as possible at the AGM which will be followed by a buffet lunch.

Action to be Taken

Shareholders will find enclosed with this Annual Report a Form of Proxy for use in relation to the AGM. Whether or not you propose to attend the AGM, you are encouraged to complete the Form of Proxy in accordance with the instructions printed on it. Please return it in the prepaid envelope as soon as possible but in any event so that it might be received no later than 11.30am on 21 June 2019. Completion of a Form of Proxy does not prevent you from attending and voting in person at the AGM if you wish to do so.

If you hold your shares in the Company via a share plan or a platform and would like to attend and/or vote at the AGM, then you will need to make arrangements with the administrator of your share plan or platform. For this purpose, investors that hold their shares in the Company via the Aberdeen Standard Investments Children's Plan, Share Plan and/or ISA will find a Letter of Direction enclosed. Shareholders are encouraged to complete and return the Letter of Direction in accordance with the instructions printed thereon.

For holders of shares via share plans and platforms, the website of the Association of Investment Companies (theaic.co.uk/aic/shareholder-voting-consumer-platforms) contains details of how to attend and vote at Company Meetings.

Nicholas Smith

Chairman

26 April 2019

OVERVIEW OF STRATEGY

Business Model

The business of the Company is that of an investment company which qualifies as an investment trust for UK capital gains tax purposes. The Directors do not envisage any change in this activity in the foreseeable future.

Investment Objective

The Company aims to provide shareholders with a high level of long term, above average capital growth through investment in Thailand.

Investment Policy

At the AGM held on 21 June 2018, shareholders approved changes to the Company's investment policy.

The Company's new investment policy is flexible enabling it to invest in a diversified portfolio of securities (substantially in the form of equities or equity-related securities such as convertible securities and warrants but which may also include debt securities) issued by companies, spread across a range of industries, which are either (i) quoted on the Stock Exchange of Thailand or (ii) that are unquoted and at, or near, initial public offering stage. There are no restrictions on which market segment or geographical region within Thailand that the Company may invest nor whether its investments are in small, mid or large capitalisation companies.

Details of the Company's investment policy prior to 21 June 2018 may be found on page 9 of the Company's Annual Report for the year ended 28 February 2018.

Risk Diversification

The Company's portfolio will comprise no less than 10 holdings and the Investment Manager will at all times have due regard to the spread of investment risk.

The Investment Manager is authorised to invest up to 10% of the Company's net assets in the securities of any single company although circumstances may occasionally arise when it may be in shareholders' interests to make an investment that exceeds this level.

The Investment Manager is authorised to invest in unquoted securities provided that such investment, in aggregate, is limited to 10% of the Company's net assets at the time any investment is made.

The Company complies with Section 1158 of the Corporation Tax Act 2010. The Company will not invest more than 10%, in aggregate, of the value of its gross assets in investment trusts or investment companies admitted to the Official List, provided that this restriction does not apply to investments in any such investment trusts or investment companies which themselves have stated investment policies to invest no more than 15% of their gross assets in other investment trusts or investment companies admitted to the Official List. In any event, the Company invests no more than 15% of its gross assets in other listed investment companies (including listed investment trusts).

In addition, the Company will not:

- invest in physical commodities;

- enter into derivative transactions for speculative purposes;

- take legal or management control of any of its investee companies; or

- conduct any significant trading activity.

Gearing

The Board is responsible for setting the gearing limits in place for the Company subject to a maximum level of 25% of net assets (measured when new borrowings are incurred). It is intended that this power should be used to leverage the Company's portfolio in order to enhance returns when and to the extent that it is considered appropriate to do so. Gearing will be tactical in nature and used in relation to specific opportunities or circumstances. The Directors will take care to ensure that borrowing covenants permit maximum flexibility of investment policy.

Benchmark

The Company's benchmark is the Stock Exchange of Thailand Index ("SET Index").

Key Performance Indicators ("KPIs")

The Board uses a number of financial performance measures to assess the Company's success in achieving its objective and to determine the progress of the Company in pursuing its investment policy. The main KPIs identified by the Board in relation to the Company, which are considered at each Board meeting, are as follows:

Principal Risks and Uncertainties

There are a number of risks which, if realised, could have a material adverse effect on the Company and its financial position, performance and prospects. The Board has carried out a robust assessment of these risks, which include those that would threaten its business model, future performance and solvency. The principal risks associated with an investment in the Company's shares are published monthly in the Company's factsheet or they can be found in the pre-investment disclosure document ("PIDD") published by the Manager, both of which are available from the Company's website: newthai-trust.co.uk.

The principal risks and uncertainties faced by the Company are reviewed annually by the Audit and Management Engagement Committee in the form of a detailed risk matrix and heat map and are summarised in the table below, together with any mitigating actions.

In addition to these risks, the outcome and potential impact on the Company of the UK Government's ongoing Brexit discussions with the European Union remain unclear at the time of writing. The Company's Thai investments are limited in their direct exposure to the UK market and even a no-deal Brexit would pose an immaterial risk. However, as the Company is priced in Sterling, sharp movements in the Thai Baht/Sterling exchange rate, which may arise from Brexit, could affect the Company's net asset value. Separately, investor sentiment might lead to increased or reduced demand for the Company's shares, in light of Brexit uncertainty, which would be reflected in a narrowing or widening of the discount at which the Company's shares trade relative to their net asset value. Overall, the Board does not expect the Company's business model, over the longer term, to be affected by Brexit. In all other respects, the Company's principal risks and uncertainties have not changed materially since the date of the Annual Report and are not expected to change materially for the current financial year.

Promoting the Company

The Board recognises the importance of promoting the Company to prospective investors both for improving liquidity and enhancing the value and rating of the Company's shares. The Board believes an effective way to achieve this is through subscription to, and participation in, the promotional programme run by Aberdeen Standard Investments on behalf of a number of investment companies under its management. The Company's financial contribution to the programme is matched by Aberdeen Standard Investments. Representatives of Aberdeen Standard Investments report quarterly to the Board with analysis of the promotional activities as well as updates on the shareholder register and any changes in the composition of that register.

The purpose of the programme is both to communicate effectively with existing shareholders and to gain new shareholders with the aim of improving liquidity and enhancing the value and rating of the Company's shares. Communicating the long-term attractions of the Company is key and therefore the Company also supports Aberdeen Standard Investments investor relations programme which involves regional roadshows as well as promotional and public relations campaigns.

Board Diversity Policy

The Board recognises the importance of having a range of skilled, experienced individuals with the right knowledge represented on the Board in order to allow the Board to fulfil its obligations. The Board also recognises the benefits, and is supportive, of the principle of diversity in its recruitment of new Board members however it does not consider appropriate the setting of diversity targets. As at 28 February 2019 there were two male Directors and two female Directors (2018: two male Directors and two female Directors). Subsequent to the year end, a further female Director was appointed a Director on 1 March 2019.

Environmental, Social and Human Rights Issues

The Company has no employees as the Board has delegated day to day management and administrative functions to ASFML. There are therefore no disclosures to be made in respect of employees. The Company's socially responsible investment policy is outlined below.

Due to the nature of the Company's business, being a company that does not offer goods and services to customers, the Board considers that it is not within the scope of the Modern Slavery Act 2015 because it has no turnover. The Company is therefore not required to make a slavery and human trafficking statement.

Notwithstanding this, the Board considers the Company's supply chains, dealing predominantly with professional advisers and service providers in the financial services industry, to be low risk in relation to this matter.

Socially Responsible Investment Policy

The Board acknowledges that there are risks associated with investment in companies which fail to conduct business in a socially responsible manner. The Board has noted the corporate stewardship and sustainability programme of Aberdeen Standard Investments, which can be found at -

standardlifeaberdeen.com/corporate-stewardship-and-sustainability

Global Greenhouse Gas Emissions

The Company has no greenhouse gas emissions to report from the operations of its business, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013.

Viability Statement

The Company does not have a formal fixed period strategic plan but the Board does formally consider risks and strategy on at least an annual basis. The Board considers the Company, with no fixed life, to be a long term investment vehicle, but for the purposes of this viability statement has decided that a period of three years is an appropriate period over which to report. The Board considers that this period reflects a balance between looking out over a long term horizon and the inherent uncertainties of looking out further than three years.

Accordingly, taking into account the Company's current position and the potential impact of its principal risks and uncertainties, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due for a period of three years from the date of this report. In making this assessment, the Board has considered that matters such as a large economic shock, a period of significant stock market volatility, a significant reduction in the liquidity of the portfolio or changes in regulations and investor sentiment, could have an impact on its assessment of the Company's prospects and viability in the future.

In particular the Board recognises that this assessment makes the assumption that the Company's average discount to the NAV per Ordinary share (including income) for the 12 weeks ended 28 February 2020 and 12 weeks ended 28 February 2021, individually, does not exceed 15% which negates the requirement to put to shareholders at the AGMs to be held in either 2020 or 2021, a special resolution to wind up the Company.

Future

Further details on the Directors' expectations regarding the future, may be found in the Chairman's Statement whilst the Investment Manager's views are included in its Report.

On behalf of the Board

Nicholas Smith

Chairman

26 April 2019

INVESTMENT MANAGER'S REPORT

Overview

Thai equities were volatile in the year under review. Stocks initially rose and fell in tandem with the trade rhetoric between the US and China. As the year progressed, emerging markets came under pressure following comments from a hawkish US Federal Reserve and an appreciating US dollar. However, the Thai market held up well, testament to the economy's robust fundamentals which included a healthy current account surplus and the Baht becoming one of the best performing emerging market currencies over the period. Royal approval of laws to usher in fresh elections in March 2019 also supported investor sentiment.

Over the year, the economy remained robust. Gross Domestic Product (GDP) expanded by 4.1% in 2018, its fastest pace in six years, underpinned by tourism and higher domestic demand. The former was affected temporarily in July by a tragic boating accident in Phuket involving Chinese holidaymakers. Nevertheless, tourist numbers have since recovered, buttressed by the government's move to waive visa fees for two months for certain countries. In macroeconomic policy, the central bank raised rates in December last year, its first hike in over three years. It sought to reduce risks to financial stability and provide a buffer for the next downturn.

Portfolio

For the year ended 28 February 2019, the Stock Exchange of Thailand index (the "Index") fell by 3.9% while your Company's net asset value decreased by 5.1%, both figures in Sterling total return terms.

The portfolio's underlying stocks in the resources sector delivered solid returns, which was especially pleasing given weakness in the broader sector. Electricity Generating (Egco), the second largest local private power supplier, was buoyed by steady earnings growth and expectations that it would harness its solid balance sheet for new investments. The company, for instance, acquired a 49% stake in a new South Korean power plant that would raise its operational capacity, at a reasonable cost of 900 billion won (US$794 million).

At the other end of the energy value chain, PTT Exploration & Production (PTTEP) rode a cyclical oil price uptrend and an appreciating Baht to record higher earnings. It also won auctions for two key offshore natural gas fields in Thailand. Though subsequent concerns over the profitability of these concessions erased some of its gains, we are more optimistic given their longer reserve life and higher sales volume. Meanwhile, shares of its parent, national oil and gas conglomerate PTT, also advanced after its inclusion in the portfolio in July. Sentiment toward the largest stock in the Index improved due to a more positive outlook for oil prices, and the group's lower burden in subsidising fuel prices in Thailand. The proposed listing of its retail arm was another positive catalyst.

Further bolstering the Company's performance was the choice of industrial stocks. In particular, Thai Stanley Electric, posted solid earnings growth amid an automotive car industry recovery that was supported by faster GDP expansion, exports and launches of new car models. The firm, which makes car lightbulbs as well as moulds for automobile parts, is a compelling investment due to its production efficiencies and potential for greater capacity as it builds new factories.

On the flipside, insurance stocks were a major drag on performance, due to heightened competition in the sector and company specific factors. Thai Reinsurance's earnings were dampened by higher than expected claims in its public teachers' portfolio, and difficulties in generating underwriting profits elsewhere. We are monitoring its performance. Thaire Life Assurance was weighed down by heavier claims for its group health policies, while seeing lower margins in its new products. Notwithstanding the short term pressure, we still like the firm's prospects as the sole domestic life insurer in an underpenetrated sector. New players would face high barriers of entry due to strict regulations. Tougher competition hampered Muang Thai, with challenges in both its motor and non motor underwriting business pressuring its share price. The management is trying to phase out the unprofitable motor portfolio, and we remain confident in this reputable insurer which has always struck a sensible balance between profitability and market share.

Property and construction was another weak sector, following the government's move to tighten mortgage requirements for high end homes to curb speculation. Developers LPN and Sammakorn were hit as a result. Nevertheless, as buyers rushed to finalise their purchases ahead of the measures which take effect this April, the two companies could see a boost to their first quarter results. LPN was also hurt by market scepticism about the success of its diversification strategy, from low end condominium projects towards mid end apartments and landed housing. We are confident in the management's ability, given the developer's 30 year track record and its well known brand. The company is also marketing its project management services, a key strength that has enabled it to turn projects around quickly and achieve operational efficiencies. This forms another part of its new strategy that we believe has potential.

New Small and Mid Cap holdings

As in last year's report, we would like to shine the spotlight on two of our newer holdings. This time though it is on small and mid cap holdings following the approval by shareholders of the change to the investment mandate allowing us to increase the Company's exposure to growth companies through investment in companies close to IPO and listing.

The first of these is Osotspa, whose initial public offering we participated in as a cornerstone investor during the year under review. The century old consumer product conglomerate has a good portfolio of energy drinks and personal care products, ranging from baby soap to deodorants. First established in 1891 as a small pharmacy in downtown Bangkok selling traditional Chinese medicine for stomach pain, the group is better known today as the largest energy drinks distributor in the country. It carries flagship brands such as M-150 and Shark.

The family owned business brought in a new management team a few years ago as part of its transformation strategy. This team has years of professional experience under its belt, with many having cut their teeth at an international fast moving consumer goods conglomerate. The firm, which dominates the domestic energy drink market, is keen to defend its market share of over 50% and expand into other product categories where growth prospects are better.

In neighbouring countries such as Myanmar and Laos where rising incomes, improving infrastructure and first mover advantage present considerable growth potential, Osotspa has a good foothold; its M-150 product is a leading energy drink in these markets. The group has formed a joint venture with Burmese beverage manufacturer and distributor Loi Hein Co to tap their deep knowledge of the local market and customers. It is now building a manufacturing plant in Myanmar that will help the firm respond more quickly to market demand and manage its costs better. It also has plans to expand into Vietnam and China.

Another promising small cap holding worth highlighting is TOA Paint, the country's top paint producer. With a share of nearly half the market, the firm has pricing power in a sector that is likely to grow in line with, or even faster than, the country's economic development. TOA has about 200 brands in all, with the majority of it in decorative paint and coating products. However, it plans to raise its market share in the non decorative segment, which includes construction chemicals, heavy duty coatings, wood coatings, hardware and power tools, together with speciality paint. The firm has expanded into the region and, by the end of this year, will have 10 factories spread across Thailand, Cambodia, Vietnam, Laos, Malaysia, Indonesia and Myanmar.

Both these holdings are also among your portfolio's top contributors this past year, an endorsement by investors who believe in their growth prospects. Meanwhile, in other portfolio activity, we sold media company Prakit Holdings, broadcasting company BEC World and MFC Asset Management in favour of the new holdings mentioned earlier which we believe have better growth prospects.

Outlook

Among the many factors that could influence the Thai market in the current year are the elections held in March 2019, the country's first since 2011. At the time of writing, while the votes have been cast, the results are as yet unknown as the Election Commission has 60 days to release them. It is heartening for us to note that major candidates on both sides are pro business and recognise the importance of continued growth in the economy; the main differences are in personality rather than policy. The risk of possible political unrest remains. On the other hand, political stability following the elections would attract more foreign direct investments into the country.

Of course, external uncertainties exist. It remains to be seen whether the US and China can reach a trade deal, and how successful China's stimulus measures will be at perking up its economy again. Domestically, there are signs that slowing external demand could affect growth in its export sector which contributes to about two-thirds of GDP. High household debt is also likely to constrain private consumption.

On the corporate front though, share prices which have been dampened by political uncertainty in the run up to the elections have resulted in valuations appearing fairly cheap relative to historic levels, supported by what we expect to be low double digit earnings growth this year. Amid periods of uncertainty, your Company's quality holdings, which display durable competitive strengths and low debt levels, should stand out. At the same time, with many stocks now trading at attractive valuations, we continue to be on the lookout to acquire, possibly through an increased use of the ICBC loan facility, those with resilient earnings that could bolster future returns and add value for shareholders.

Aberdeen Standard Investments (Asia) Limited

Investment Manager

26 April 2019

FINANCIAL HIGHLIGHTS

DIVIDENDS

TEN YEAR FINANCIAL RECORD

INVESTMENT PORTFOLIO - TEN LARGEST INVESTMENTS

As at 28 February 2019

INVESTMENT PORTFOLIO - OTHER INVESTMENTS

As at 28 February 2019

DIRECTORS' REPORT

The Directors present their Report and the audited financial statements of the Company for the year ended 28 February 2019, taking account of any events between the year end and the date of approval of this Report.

Results and Dividend

The Directors declared an initial interim dividend per share of 7.0p, payable on 23 November 2018 to shareholders on the register as at 26 October 2018, with an ex-dividend date of 25 October 2018.

The Directors are recommending that a final dividend per share of 11.0p (2018 - 11.1p per share) is paid on 28 June 2019 to shareholders on the register on 31 May 2019. The ex-dividend date is 30 May 2019. A resolution in respect of the final dividend will be proposed at the forthcoming AGM.

Investment Trust Status

The Company is registered as a public limited company in England & Wales under registration number 02448580 and has been accepted by HM Revenue & Customs as an investment trust for accounting periods beginning on or after 1 March 2012, subject to the Company continuing to meet the eligibility conditions of s1158 of the Corporation Tax Act 2010 (as amended) and S.I. 2011/2099. In the opinion of the Directors, the Company's affairs have been conducted in a manner to satisfy these conditions and enable it to continue to qualify as an investment trust for the year ended 28 February 2019.

Individual Savings Account

The Company intends to manage its affairs so that its shares will be qualifying investments for the stocks and shares component of an Individual Savings Account.

Capital Structure, Buybacks and Voting Rights

During the year ended 28 February 2019 the Company bought back and cancelled 280,612 Ordinary shares (2018 - 1,665,119 Ordinary shares). As at 28 February 2019, the Company's issued share capital consisted of 16,582,901 Ordinary shares (2018 - 16,863,513 Ordinary shares) with each share holding one voting right in the event of a poll. An additional 27,971 Ordinary shares were bought back between 1 March 2019 and the date of approval of this Annual Report resulting in 16,554,930 Ordinary shares in issue, with voting rights.

Ordinary shareholders are entitled to vote on all resolutions which are proposed at general meetings of the Company. The Ordinary shares carry a right to receive dividends. On a winding up, after meeting the liabilities of the Company, the surplus assets will be paid to Ordinary shareholders in proportion to their shareholdings. There are no restrictions on the transfer of Ordinary shares in the Company other than certain restrictions which may from time to time be imposed by law and regulation.

Manager and Company Secretary

The Company has appointed Aberdeen Standard Fund Managers Limited ("ASFML"), part of the Standard Life Aberdeen Group, as its alternative investment fund manager. ASFML has been appointed to provide the Company with investment management, risk management, administration and company secretarial services as well as promotional activities. The Company's portfolio is managed by Aberdeen Standard Investments (Asia) Limited ("ASIAL"), by way of a group delegation agreement in place between ASFML and ASIAL.

With effect from 1 March 2018, the management fee has been charged to the Company on the following basis: a monthly fee, payable in arrears, calculated at an annual rate of 0.9% (2018: 1.0%) of total assets less current liabilities, with a rebate to the Company for any fees received in respect of any investments by the Company in investment vehicles managed by Aberdeen Standard Investments (see note 4 to the financial statements).

The fees payable to Aberdeen Standard Investments during the year ended 28 February 2019 are disclosed in Notes 4 and 5 to the financial statements. The investment management fees and bank loan interest costs were charged 25% to revenue and 75% to capital during the year ended 28 February 2019 (2018 - 100% to revenue).

The management agreement is terminable by either party on not less than 12 months' notice. In the event of termination on less than the agreed notice period, compensation is payable in lieu of the unexpired notice period. There are no performance fee arrangements.

The terms and conditions of the Manager's appointment, including an evaluation of performance and fees, are reviewed by the Board on an annual basis. The Board also undertakes a review of the management fees in comparison with other funds and believes that the Company's current level of management fees, as reduced with effect from 1 March 2018, remains competitive. Accordingly, the Board believes that the continuing appointment of the Investment Manager (through the Manager) on the terms agreed is in the interests of shareholders as a whole.

In addition, ASFML has sub-delegated promotional activities to Aberdeen Asset Managers Limited ("AAM") and administrative and secretarial services to Aberdeen Asset Management PLC (the "Company Secretaries").

Corporate Governance

The Company is committed to high standards of corporate governance. The Board is accountable to the Company's shareholders for good governance and, as required by the Listing Rules of the UK Listing Authority, this statement describes how the Company applies the principles identified in the UK Corporate Governance Code published in April 2016 (the "UK Code") for the year ended 28 February 2019. The UK Code is available on the Financial Reporting Council's ("the FRC") website: frc.org.uk.

The Board has also considered the principles and recommendations of the AIC Code of Corporate Governance as published in July 2016 ("the AIC Code") by reference to the AIC Corporate Governance Guide for investment Companies ("the AIC Guide"). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to investment trusts. The AIC Code and AIC Guide are available on the AIC's website: theaic.co.uk

The Board considers that reporting against the principles and recommendations of the AIC Code, and by reference to the AIC Guide (which incorporates the UK Code), will provide better information to shareholders.

The Board confirms that, during the year, the Company complied with the recommendations of the AIC Code and the relevant provisions of the UK Code, except as set out below.

The UK Code includes provisions relating to:

- the role of the chief executive (A.1.2);

- executive directors' remuneration (D.1.1 and D.1.2); and

- the need for an internal audit function (C.3.6).

For the reasons set out in the AIC Guide and UK Code, the Board considers that these provisions are not relevant to the position of the Company, being an externally managed investment company. In particular, all of the Company's day-to-day management and administrative functions are outsourced to third parties. As a result, the Company has no executive directors, employees or internal operations. The Company has therefore not reported further in respect of these provisions. The full text of the Company's Statement of Corporate Governance can be found on its website: newthai-trust.co.uk

Directors

The current Board consists of a non-executive Chairman and four non-executive Directors, all of whom held office throughout the year under review with the exception of Sarah McCarthy who was appointed a Director on 1 March 2019. The Senior Independent Director is Clare Dobie.

The names and biographies of each of the Directors are shown on in the published Annual Report and indicate their range of experience as well as length of service. Each Director has the requisite high level and range of business and financial experience which enables the Board to provide clear and effective leadership and proper stewardship of the Company.

The Directors attended Board and formal Committee meetings during the year ended 28 February 2019 as follows (with their eligibility to attend the relevant meeting in brackets):

There were an additional three meetings of a Committee of the Board. One of the Board meetings held during the year included a focus on strategic matters including review of the relevance to investors of the Company's investment objective and policy, consideration of feedback from retail and institutional shareholders, an assessment of the future prospects for the Company and a review of the Company's longer term performance and the associated terms of the management agreement with ASFML.

All of the Directors will retire at the AGM in accordance with corporate governance best practice. Nicholas Smith, Andy Pomfret and Sarah MacAulay, being eligible, offer themselves for individual re-election as Directors of the Company. Sarah McCarthy, being eligible, offers herself for election as a Director of the Company. Clare Dobie has decided not to seek re-election as a Director and will retire at the conclusion of the AGM. Clare will be succeeded as Senior Independent Director by Andy Pomfret. The Board as a whole believes that each Director standing for re-election or election remains independent of the Manager and free of any relationship which could materially interfere with the exercise of his or her independent judgement on issues of strategy, performance, resources and standards of conduct and confirms that, following formal performance evaluations, each Director's individual performance continues to be effective and demonstrates commitment to the role. The Board therefore has no hesitation in recommending at the AGM the re-election as Directors of Nicholas Smith, Andy Pomfret and Sarah MacAulay and the election as a Director of Sarah McCarthy.

Directors' Insurances and Indemnities

The Company maintains insurance in respect of Directors' and Officers' liabilities in relation to their acts on behalf of the Company. Furthermore, each Director of the Company is entitled to be indemnified out of the assets of the Company to the extent permitted by law against all costs, charges, losses, expenses and liabilities incurred by them in the actual or purported execution and/or discharge of their duties and/or the exercise or purported exercise of their powers and/or otherwise in relation to or in connection with their duties, powers or office. These rights are included in the Articles of Association of the Company and the Company has granted indemnities to each Director on this basis.

Substantial Interests

As at 28 February 2019 the following were registered, or had notified the Company, as being interested in 3% or more of the Company's Ordinary share capital:

The above share interests were unchanged as at the date of approval of this Report other than notifications to the Company by Standard Life Aberdeen Group on 3 April 2019 of a holding of 2,913,985 shares, equivalent to 17.7% of the Company's issued share capital at that date, and by City of London on 4 April 2019 of a holding of 4,313,024 shares, equivalent to 26.1% of the Company's issued share capital at that date.

Management of Conflicts of Interest and Anti-Bribery Policy

The Board has a procedure in place to deal with a situation where a Director has a conflict of interest. As part of this process, the Directors prepare a list of other positions held and all other conflict situations that may need to be authorised either in relation to the Director concerned or his/her connected persons. The Board considers each Director's situation and decides whether to approve any conflict, taking into consideration what is in the best interests of the Company and whether the Director's ability to act in accordance with his/her wider duties is affected. Each Director is required to notify the Company Secretaries of any potential, or actual, conflict situations which will need authorising by the Board. Authorisations given by the Board are reviewed at each Board meeting.

No Director has a service contract with the Company although Directors are issued with letters of appointment upon taking up office. There were no contracts with the Company during, or at the end of the year, in which any Director was interested.

The Board takes a zero tolerance approach to bribery and has adopted appropriate procedures designed to prevent bribery. Aberdeen Standard Investments also takes a zero tolerance approach and has its own detailed policy and procedures in place to prevent bribery and corruption.

In relation to the corporate offence of failing to prevent tax evasion, it is the Company's policy to conduct all business in an honest and ethical manner. The Company takes a zero-tolerance approach to facilitation of tax evasion whether under UK law or under the law of any foreign country and is committed to acting professionally, fairly and with integrity in all its business dealings and relationships.

Board Committees

The Directors have appointed a number of Committees as set out below. Copies of their terms of reference, which define the responsibilities and duties of each Committee, are available on the Company's website and from the Company Secretaries, on request.

Audit and Management Engagement Committee

The Audit and Management Engagement Committee's Report may be found in the published Annual Report.

Nomination Committee

All appointments to the Board of Directors are considered by the Nomination Committee which comprises the whole Board and was chaired during the year by Nicholas Smith.

The Committee's overriding priority in appointing new Directors to the Board is to identify the candidate with the optimal range of skills and experience to complement the existing Directors. The Board also recognises the benefits, and is supportive, of the principle of diversity in its recruitment of new Directors.

As the Company has no employees and the Board is comprised wholly of non-executive Directors and, given the size and nature of the Company, the Board has not established a separate Remuneration Committee. Directors' remuneration is determined by the Nomination Committee.

Accountability and Audit

The responsibilities of the Directors and the Auditor, in connection with the financial statements, may be found in the published Annual Report.

The Directors who held office at the date of this Report each confirm that, so far as he or she is aware, there is no relevant audit information of which the Company's Auditor is unaware, and that he or she has taken all the steps that he or she could reasonably be expected to have taken as a Director in order to make him or her aware of any relevant audit information and to establish that the Company's Auditor is aware of that information. Additionally there have been no important events since the year end which warrant disclosure. This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2016.

The Directors have reviewed the level of non-audit services provided by the Auditor during the year, together with the Auditor's procedures in connection with the provision of such services, and remain satisfied that the Auditor's objectivity and independence is being safeguarded.

Going Concern

The Directors have undertaken a rigorous review and consider both that there are no material uncertainties and that the adoption of the going concern basis of accounting is appropriate. The Company's investments consist entirely of equity shares in companies listed on the Stock Exchange of Thailand which are, in most circumstances, realisable within a short timescale.

The Board has set limits for borrowing and regularly reviews the level of any gearing, cash flow projections and compliance with banking covenants.

In October 2018, the Company entered into a £15m three-year multi-currency revolving loan facility ("the Facility") with Industrial and Commercial Bank of China Limited, London Branch of which £5.65m was drawn down under the Facility at 28 February 2019.

In advance of expiry of the Facility in October 2021, the Company will enter into negotiations with its bankers. If acceptable terms are available from the existing bankers, or any alternative, the Company would expect to continue to access the Facility. However, should these terms not be forthcoming, any outstanding borrowing will be repaid through the proceeds of equity sales.

After making enquiries, including a review of forecasts detailing revenue and liabilities, the Directors have a reasonable expectation that the Company possesses adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis of accounting in preparing the financial statements.

The Directors are mindful of the principal risks and uncertainties disclosed in the published Annual Report and in note 15 to the financial statements. After making enquiries, including a review of forecasts detailing revenue and liabilities, the Directors have a reasonable expectation that the Company possesses adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis of accounting in preparing the financial statements.

Continuance of the Company

The Company does not have a fixed life. However, under Article 156 of the Articles of Association, if, in the 12 weeks preceding the Company's financial year-end (28 February), the Ordinary shares have been trading, on average, at a discount in excess of 15% to the underlying NAV per share over the same period, notice will be given of a special resolution to be proposed to wind up the Company. In the 12 weeks ended 28 February 2019, the Ordinary shares traded at an average discount of 13.6% to the underlying NAV per share (including income), therefore no such resolution will be put to the Company's shareholders at the forthcoming AGM. In October 2016 the Directors announced that the relevant NAV for these purposes would be calculated including undistributed net revenue for the period.

Independent Auditor

As explained in the Audit and Management Engagement Committee's Report, the Directors will propose resolutions at the AGM to re-appoint Deloitte LLP as auditor for the year to 28 February 2020 and to authorise the Directors to determine Deloitte LLP's remuneration.

Disclosures in Strategic Report

The Company has chosen, in accordance with section 414C(11) of the Companies Act 2016 to include in the Strategic Report, likely future developments in the Company's business as well as information relating to the Company's greenhouse gas emissions, and in the Strategic Report and in note 15 to the financial statements, information concerning the Company's use of financial instruments.

The UK Stewardship Code and Proxy Voting

Responsibility for actively monitoring the activities of portfolio companies has been delegated by the Board to the Manager which has sub-delegated that authority to the Investment Manager. The Directors note the corporate stewardship and sustainability programme of Aberdeen Standard Investments, which can be found at - standardlifeaberdeen.com/corporate-stewardship-and-sustainability

Relations with Shareholders

The Directors place great importance on communication with shareholders. The Annual Report is widely distributed to other parties who have an interest in the Company's performance. Shareholders and investors may obtain up-to-date information on the Company through its website, newthai-trust.co.uk, or via Aberdeen Standard Investments Customer Services Department. The Company responds to shareholder correspondence.

The Board's policy is to communicate directly with shareholders and their representative bodies without the involvement of Aberdeen Standard Investments in situations where direct communication is required and representatives from the Board offer to meet with major shareholders on an annual basis in order to gauge their views.

In addition, members of the Board accompany the Manager when undertaking a series of meetings with institutional shareholders.

The Company Secretary only acts on behalf of the Board, not the Manager, and there is no filtering of communication. At each Board meeting the Board receives full details of any communication from shareholders to which the Chairman responds, as appropriate, on behalf of the Board.

The Notice of AGM included within the Annual Report is normally sent out at least 20 working days in advance of the meeting. All shareholders have the opportunity to put questions to the Board and Investment Manager at the Company's AGM.

Special Business at the AGM

The AGM will be held on 25 June 2019 and the AGM Notice and related notes may be found in the published Annual Report. Resolutions relating to the following items of special business will be proposed at the forthcoming AGM:-

Authority to Allot Relevant Securities

Ordinary Resolution No. 10 in the Notice of AGM will renew the authority to allot the unissued share capital up to 10% of the Company's issued share capital as at the date of the passing of the resolution (equivalent to approximately 1.6m Ordinary shares). Such authority will expire on the date of the AGM in 2020 or on 27 August 2020, whichever is earlier. This means that the authority will have to be renewed at the AGM in 2020.

Limited Disapplication of Pre-emption Provisions

Resolution 11, which is a Special Resolution, will, if passed, renew the Directors' existing authority to make limited allotments of shares for cash other than according to the statutory pre-emption rights which require all shares issued for cash to be offered first to all existing shareholders provided such allotments are made at a price per Ordinary share above the prevailing NAV per Ordinary share. This authority includes shares that the Company sells or transfers out of Treasury which have been previously bought back into Treasury (if any) pursuant to the authority conferred by Resolution 12 below. The Board will only consider buying in Ordinary shares for cancellation, or for holding in Treasury, at a price which represents a discount to their prevailing NAV. In line with the authority sought under Resolution 10, Resolution 11 will, if passed, give the Directors power to allot, for cash, securities up to 10% of the total issued share capital at the date of the passing of the resolution (equivalent to approximately 1.6m Ordinary shares) other than according to the statutory pre-emption rights.

Such authority, which will expire on the date of the earlier of the AGM in 2020 or 27 August 2020, will give the Board flexibility to take advantage of any opportunities to issue new Ordinary shares within a shorter period than would otherwise be the case.

Directors' Authority to Purchase the Company's Ordinary Shares

Resolution 12, a Special Resolution, will be proposed to renew the Directors' authority to make market purchases of the Company's Ordinary shares, in accordance with the provisions contained in the Companies Act and the Listing Rules of the UK Listing Authority.

Accordingly, the Company is seeking authority, under Resolution 12, to purchase up to a maximum of approximately 2.5m Ordinary shares, or if less, that number of Ordinary shares equivalent to 14.99% of the issued Ordinary share capital at the date of the passing of the Resolution at a minimum price of not less than 25p per Ordinary share (being the nominal value) and a maximum price of not more than the higher of (i) an amount equal to 5% above the average of the middle market quotation for an Ordinary share taken from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which the Ordinary share is purchased; and (ii) the higher of the price of the last independent trade and the current highest independent bid on the stock market where the purchase is carried out.

If passed, Resolution 12 will permit the Company to purchase Ordinary shares under the guidelines described above. Any Ordinary shares purchased in this way will either be cancelled, and the number of Ordinary shares in issue reduced accordingly or, under the power granted by Resolution 12, may be held in Treasury. The authority sought under Resolution 12 will expire on the earlier of date of the AGM in 2020 and 27 August 2020, whichever is earlier, unless renewed prior to such time.

Recommendation

The Board considers each of Resolutions 10, 11 and 12 under Special Business at the AGM to be in the best interests of the Company and its members as a whole and is likely to promote the success of the Company for the benefit of its members as a whole. Accordingly, the Board unanimously recommends that shareholders should vote in favour of the resolutions to be proposed under Special Business at the AGM, as they intend to do in respect of their own shareholdings, amounting to 16,264 Ordinary shares.

On behalf of the Board

Nicholas Smith

Chairman

26 April 2019

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and the financial statements, in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with UK Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the company for that period. In preparing these financial statements, the Directors are required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and 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 the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Statement of Corporate Governance that comply with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website but not for the content of any information included on the website that has been prepared or issued by third parties. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility Statement of the Directors in respect of the Annual Financial Report

We confirm to the best of our knowledge, that:

- the financial statements have been prepared in accordance with applicable accounting standards and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

- the Strategic Report and Directors' Report include a fair review of the development and performance of the business and the position of the Company together with a description of the principal risks and uncertainties that the Company faces.

We consider that 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

Nicholas Smith

Chairman

26 April 2019

STATEMENT OF COMPREHENSIVE INCOME

STATEMENT OF FINANCIAL POSITION

STATEMENT OF CHANGES IN EQUITY

STATEMENT OF CASHFLOWS

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 28 FEBRUARY 2019