ANW.L Regulatory News (ANW)

ABERDEEN NEW THAI INVESTMENT TRUST PLC

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 28 FEBRUARY 2021

FINANCIAL HIGHLIGHTS

FINANCIAL CALENDAR

STRATEGIC REPORT

CHAIRMAN'S STATEMENT

"The Investment Manager has been particularly active over the year, making some significant changes to reposition the portfolio in order to benefit from good quality companies that are poised for a turnaround."

Background and Results

For the year ended 28 February 2021 (the "Year"), the Stock Exchange of Thailand Index ("SET Index") posted a total return of 10.1% in sterling terms. As was the case across most global markets, Thai equities far outstripped the real economy, which was severely hampered by the lockdown restrictions designed to counter the spread of the COVID-19 pandemic ("COVID-19"). The outbreak of COVID-19 saw the Prime Minister declare a state of emergency in Thailand that remained in force throughout 2020, and continues to remain so. This has devastated the tourism sector, which accounts for almost a fifth of the Thai economy and also hurt manufacturing, another key sector. Similar to most economies around the world, Thailand's GDP contracted during 2020, falling by 6.1%. Despite the difficult economic climate, the Thai stock market rebounded towards the end of the Year, propelled by optimism that the rollout of COVID-19 vaccines would bring forward a turnaround.

Against this backdrop, your Company's net asset value ("NAV") per Ordinary share rose by only 1.2% on a total return basis, whereas the Ordinary share price total return was 4.5%, with dividends reinvested. Stock markets around the world focused on technology and internet-related 'growth' stocks which market exuberance rerated to steep or excessive valuations. Cyclical 'value' stocks performed poorly until the last quarter of the Year when hopes of a post COVID-19 economic recovery spurred investor interest. Your Company had a relatively poor showing compared to the SET Index, and the Investment Manager discusses this in greater detail in the Investment Manager's Report.

Earnings and Dividend

In total, the revenue earnings per Ordinary share were 14.6p for the Year (2020 - 19.8p), a decrease of 26.4%, reflecting the severe impact of COVID-19 on corporate earnings. An interim dividend of 8.0p per share (2020 - 8.0p) was paid to shareholders on 26 November 2020. The Board is declaring a second interim dividend per Ordinary share of 11.0p (2020 - second interim dividend of 11.0p), taking total dividends per share for the year to 19.0p (2020 - 19.0p). This unchanged total payment of 19.0p, which is in part funded by a transfer from revenue reserves, represents a yield of 4.4% based on the 28 February 2021 share price of 433.0p. The second interim dividend will be paid on 25 June 2021 to shareholders on the register as at 28 May 2021, with an ex-dividend date of 27 May 2021.

Overview

The Company's relative performance disappointed during the Year. In particular, a surge in the SET Index in the last four months, which reflected excess liquidity as governments and central banks rushed to inject money into the global financial system, failed to benefit the majority of the Company's holdings.

Investors drove stock prices higher on anticipation that the heralded vaccine rollouts around the globe would hasten the end of COVID-19. This greater appetite for risk supported a shift towards riskier, more cyclical stocks and valuations exceeded actual market fundamentals.

The Investment Manager has been particularly active over the Year, making some significant changes to reposition the portfolio in order to benefit from good quality companies that it believes are poised for a turnaround and continues to adjust the composition of the underlying holdings. The Investment Manager has increased the portfolio's exposure to energy and utility holdings that have recently benefited from the rise in energy prices and higher demand. The Company's ownership of key financial holdings, that traditionally pay out higher dividends and have proven resilient so far, has also been increased. As such, the Company's portfolio is strategically positioned to benefit from the rotation into these value-driven stocks. Meanwhile, your Investment Manager has pared back holdings that are more interest rate sensitive and less resilient. You will find further information about these portfolio changes in the Investment Manager's Report.

Gearing

During the Year, the Company maintained its loan of £10m (2020 - £10m) drawn down from its £15 million total facility with Industrial and Commercial Bank of China Limited, London Branch, which expires in October 2021. The net gearing level of 10.9% was unchanged over the Year.

Discount and share buybacks

The Board continues to monitor closely the discount of the Ordinary share price to the NAV per Ordinary share (including income) and pursues a policy of selective buybacks of shares where to do so is 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, the Company bought back and cancelled 367,127 Ordinary shares (2020 - 92,338 Ordinary shares), representing 2.2% (2020 - 0.6%) of the Company's issued share capital at the start of the Year. An additional 127,930 Ordinary shares were bought back for cancellation between 1 March 2021 and the date of approval of this Annual Report resulting in 15,995,506 Ordinary shares in issue, with voting rights.

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 2021, the Company traded at an average discount of 12.5% and, accordingly, no special resolution to wind up the Company will be put to shareholders at the upcoming AGM.

I also note the Board's continuing commitment to providing shareholders with an investment proposition of producing relative outperformance of the Company's benchmark over the long term. As I related in my Statement last year, should the performance over the three years to 28 February 2023 not show outperformance of the SET Index, the Board will undertake a full review of the Company's investment management arrangements which may include, but is not limited to, an option for shareholders to redeem shares for cash.

Integration of Environmental Social and Governance ("ESG") factors

There is growing evidence that suggests that ESG factors, when integrated into investment analysis and portfolio construction, may offer investors long-term performance advantages. The Board and Investment Manager believe that ESG considerations should ultimately help minimise the portfolio's exposure to non-financial risks such as severe weather events, climate change, water risk, supply chain risk and corruption, and this process should also help identify compelling investment opportunities in new technologies and robust, future-proofed companies with high standards of governance. We outline our Investment Manager's ESG commitment and investment approach below, followed by two case studies of portfolio companies with strong ESG credentials.

Promotional Activities

Your Board is committed to regular and effective communication with all stakeholders and continues to promote the Company through the Manager's promotional activities, to which the Company contributed £58,500 (excluding VAT) during the year ended 28 February 2021 (2020 - £58,500, excluding VAT). The Board reviews regularly these promotional activities and encourages the Manager to promote the benefits of the Company to a wider audience.

The Company's website and wider digital presence continues to be enhanced. The Manager's investment trusts, including the Company, may now be followed, on LinkedIn (linkedin.com/company/aberdeen-standard-investment-trusts) and on Twitter (twitter.com/AberdeenTrusts).

AGM

The Board has been watching closely the ongoing impact of the COVID-19 pandemic upon the arrangements for the Company's upcoming AGM on 17 June 2021. At the time of writing, Government advice means that shareholder attendance at AGMs is not legally permissible. It is very difficult to predict the extent to which the current restrictions may be relaxed in the near future. Accordingly, in order to provide certainty, whilst encouraging and promoting interaction and engagement with our shareholders, the Board has decided to hold an interactive Online Shareholder Presentation (the "Presentation") at 9.30 am on Tuesday 8 June 2021. During the Presentation, shareholders will receive updates from the Chairman and Investment Manager followed by an interactive question and answer session. After the Presentation, shareholders will have until 9.30am on 15 June 2021 to submit their proxy votes prior to the AGM and I would encourage all shareholders to lodge their votes in advance in this manner. Full details on how to join the Presentation, including how to register, may be found at www.workcast.com/register?cpak=1312670648328941

The Presentation will be available for viewing on the Company's website shortly after 8 June 2021.

The AGM will, by necessity, be a functional only AGM, and will be held at 9.30am on 17 June 2021 at Bow Bells House, 1 Bread Street, London EC4M 9HH. Arrangements will be made by the Company to ensure that the minimum number of shareholders required to form a quorum will attend the meeting in order that the meeting may proceed and the business be concluded. The Board considers these arrangements to be in the best interests of shareholders given the current circumstances.

The Board strongly discourages shareholders from attending the AGM on 17 June 2021 and entry will be refused if Government guidance so requires or if the Chairman considers it to be necessary. Instead, shareholders are encouraged to exercise their votes in respect of the meeting in advance. Any questions from shareholders who are unable to join the Presentation on 8 June 2021 may be submitted by email to: New.Thai@aberdeenstandard.com. The Board and/or the Manager will seek to respond to all such questions received either before, or after the AGM.

On behalf of the Board I should like to thank shareholders in advance for their co-operation and understanding and I very much look forward to presenting to shareholders on 8 June 2021.

Outlook

The recent approval and arrival in Thailand of the Chinese-made Sinovac Biotech vaccine, together with access to the AstraZeneca vaccine in the second half of the Year, is positive news. Whilst this points to a return to normality in 2022 and 2023, there will be bumps along the way as evidenced currently by a new wave of Covid-19 infections and the relatively slow rollout of vaccinations nationally.

While domestic consumption is on the rebound, aided by fiscal stimulus, the recovery in exports is still elusive, as is the recovery of international tourism. Both will come and I am thus cautiously optimistic that Thai equities will keep to their recovery path after the low point reached in March 2020.

Thai companies have held steady through the crisis thus far, through prudent cost management, healthy cash flow positions and robust balance sheets.

On the political front, while anti-government protests have been a recurrent theme over the last year, upheaval is not new in the Kingdom's political landscape. Although I expect these popular demands to continue, the stock market has proved remarkably resilient in the past despite this period of unrest.

Over the last ten years Thai equities have delivered total returns in sterling terms of 149.8%, as measured by the SET Index whilst the Company has provided shareholders with a NAV return of 116.6% and share price total return of 133.4%. While the Year has not been good in relative terms, I continue to have confidence in your Manager's ability to position the portfolio for the better days ahead.

Nicholas Smith,

Chairman

28 April 2021

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

The Company's 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 SET 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.

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 whose shares are admitted to listing on the London Stock Exchange, 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") in sterling-adjusted total return terms.

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, including emerging 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 which is available from the Company's website: newthai-trust.co.uk.

The principal risks and uncertainties faced by the Company are reviewed at least 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 the Board has identified two emerging risks which it considers are likely to become more relevant for the Company in the future. Namely the implications for the Company's investment portfolio of a changing climate, and the longer term prospect of volatility in international trade relations as a consequence of a more assertive foreign policy by the US towards both China and Russia. The Board assesses these emerging risks as they develop and will consider how the Company may mitigate these risks if they become material.

The key risk facing the Company during the year was the outbreak of COVID-19 which caused significant economic disruption and contributed to global stock market volatility. The Manager, on behalf of the Board, sought assurances from its key service providers, as well as its own operations, that they were each invoking business continuity procedures and appropriate contingency arrangements to ensure that they were able to continue to meet their contractual obligations to the Company.

Other than as set out above, the Company's principal risks and uncertainties have not changed materially since the date of approval 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 with updates on the shareholder register and any changes in its composition.

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 2021 there were two male Directors and two female Directors (2020: two male Directors and two female Directors).

Our Focus on Environmental, Social and Governance ("ESG")

Environment

The Company has no material 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. The Investment Manager is mindful of the environmental policies of portfolio companies and seeks to ensure that all investee companies comply with both international and regional environmental regulations.

Social

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.

Governance

The Board acknowledges the risks associated with investment in companies which fail to conduct business responsibly. The Board has noted the corporate stewardship and sustainability programme of Aberdeen Standard Investments, which can be found at: aberdeenstandard.com/en/responsible-investing.

The Manager integrates ESG research and analysis across its investment process and further information may be found below.

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 (the "Review Period") is an appropriate period over which to report. The Board considers that the Review Period reflects a balance between looking out over a long term horizon and the inherent uncertainties of looking out further than three years.

In assessing the viability of the Company over the Review Period, the Directors have assessed the following factors:

· the Company's principal risks and uncertainties as set out in the Strategic Report above;

· the relevance of the Company's investment objective;

· the demand for the Company's shares indicated by the level of premium and/or discount;

· the level of income generated by the Company's portfolio as compared to its expenses;

· the overall liquidity of the Company's investment portfolio; and

· the £15m multi-currency revolving credit facility, which is repayable in October 2021, and any requirement for the Company to repay or refinance the drawn-down element of the credit facility prior to, or at, its maturity date.

In addition, the Board has considered that significant economic or stock market volatility, or further regulatory uncertainty, could have an impact on its assessment of the Company's prospects and viability in the future.

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 in particular the potential short and longer term impact of COVID-19, in the form of a large economic shock, a period of significant stock market volatility, a significant reduction in the liquidity of the portfolio or changes in investor sentiment, and how these factors might affect 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 2022 and 12 weeks ended 28 February 2023, individually, will not exceed 15%. This would negate the requirement to put a special resolution to wind up the Company to shareholders at the AGMs to be held in either 2022 or 2023.

Future

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

On behalf of the Board

Nicholas Smith,

Chairman

28 April 2021

PROMOTING THE SUCCESS OF THE COMPANY

The Board requires to report on how it has discharged, under section 172 of the Companies Act 2006, its duty to promote the success of the Company for the benefit of its members (shareholders) as a whole, taking into account the likely long term consequences of its decisions, the need to foster relationships with the Company's stakeholders, and the impact of the Company's operations on the environment. In addition the Board must act fairly between shareholders and be cognisant of maintaining the reputation of the Company. The following focusses on the year under review but forms part of the application of these duties over this and successive reporting periods.

The Purpose of the Company and Role of the Board

The purpose of the Company is to act as a vehicle to provide, over time, financial returns (both income and capital) to its shareholders. Investment trusts, such as the Company, are long-term investment vehicles and are typically externally managed, have no employees, and are overseen by an independent non-executive board of directors.

The Board, which during the year comprised four independent non-executive Directors with a broad range of skills and experience across all major functions that affect the Company, retains responsibility for taking all decisions relating to the Company's investment objective and policy, gearing, corporate governance and strategy, and for monitoring the performance of the Company's service providers.

The Board's philosophy is that the Company should operate in a transparent manner where all parties are treated with respect as well as the opportunity to offer practical challenge and participate in positive debate which is focused on the aim of achieving the expectations of shareholders and other stakeholders alike. The Board reviews the culture and manner in which the Manager operates at its regular meetings and receives regular reporting and feedback from the key service providers.

The Company's main stakeholders are Shareholders, the Manager, Investee Companies, Service Providers, Debt Providers and the Environment and Community.

How the Board Engages with Stakeholders

The Board considers its stakeholders at Board meetings and receives feedback on the Manager's interactions with them.

Specific Examples of Stakeholder Consideration During the Year

While the importance of giving due consideration to the Company's stakeholders is not new, and is considered as part of every Board decision, the Directors were particularly mindful of stakeholder considerations during the following decisions undertaken during the year ended 28 February 2021.

Share Buy Backs

During the year the Company bought back and cancelled 367,127 shares, providing a small accretion to the NAV per share and a degree of liquidity to the market at times when the discount to the NAV per share had widened in normal market conditions. It is the view of the Board that this policy is in the interest of all shareholders.

ESG

The Board is responsible for overseeing the work of the Investment Manager and this is not limited solely to the investment performance of the portfolio companies. The Board also has regard for environmental, social and governance matters that subsist within the portfolio companies. The Board is supportive of the Investment Manager's pro-active approach to ESG engagement.

DIVIDENDS

TEN YEAR FINANCIAL RECORD

INVESTMENT MANAGER'S REPORT

Overview

Thai equities rose in the year ended 28 February 2021 (the "Year"), rebounding from the disruption caused by the state of emergency to contain the COVID-19 pandemic at the beginning of the Company's financial year. The unprecedented fiscal stimulus and monetary easing introduced worldwide, as well as the more recent vaccine rollout, helped share prices in the broader region to recover in the final quarter of the year. However, Thai stocks lagged as travel curbs temporarily crippled its large tourism sector. Separately, severe droughts heightened concerns around the kingdom's crucial agricultural exports. On the political front, pro-democracy protests in Bangkok also muted sentiment, alongside worries of a potential influx of refugees from Myanmar following the military coup.

Unsurprisingly, Thailand's GDP contracted by 6.1% in 2020, largely a result of nationwide curfews in the initial stages of the pandemic. The government's policy response included tax relief, loan repayment moratoriums, soft loans for small and medium-sized enterprises, aid for the tourism-related and medical sectors, as well as cash handouts for individuals.

Energy stocks rallied with the return of crude oil prices to pre-pandemic levels. China's 2060 carbon-neutral goal and the electric vehicle boom further lifted prospects for alternative energy power producers and related industrials.

The financial sector rebounded with the relaxation of lockdown measures in October. Levels of non-performing loans were lower than expected, against substantial loan provisioning made earlier in the Year. Moreover, the Bank of Thailand removed the restrictions that had been imposed on dividend payments by financial institutions, signalling that the risk of high levels of bad debt had abated. This led to hopes that net interest margins would improve, given the lower credit cost to lenders and central banks' shift away from last year's monetary easing.

Portfolio

Your Company's net asset value returned 1.2% in sterling total return terms for the Year, whereas the benchmark Stock Exchange of Thailand index ("SET Index") rose by 10.1%.

This was disappointing and due principally to the portfolio's positioning. Your Company's holdings lagged the SET Index, primarily owing to the volatility witnessed in utilities earlier in the Year, followed by an unprecedented rally in the technology sector towards the end of the financial year.

A significant detractor to performance was the lack of exposure to Delta Electronics (Thailand) ("Delta") whose share price soared over seven-fold in the Year on optimism generated by accelerated global electronics demand, such as from data centres. This was compounded by the relatively low free float which restricted the availability of Delta's shares. Despite the promising growth prospects, we believe the company's share price had become excessively optimistic. At its share price peak, Delta's market capitalisation exceeded even that of its parent company and major shareholder. Within this peer group, we prefer Hana Microelectronics as being more sensibly valued and offering quality exposure to consumer electronics and microelectronics demand, particularly in mobile devices, which continue to grow at a robust rate.

In the energy sector, your Company's sizeable exposure proved costly, and again, the pandemic was the primary factor in disrupting these infrastructure investments. At the stock level, Electricity Generating Public Co lagged as a relatively low growth outlook limited its capacity to pay dividends. The company's well-diversified portfolio includes natural gas, coal, biomass, hydro, solar, wind and geothermal fuel sources, but a lack of clarity around its expansion plans weighed on its share price. Nevertheless, we remain optimistic about the company as we believe its robust balance sheet and cash flow, as well as solid shareholder backing, should help it overcome these concerns. Moreover, it offers exposure to projects across various countries in the Asia Pacific rim. Encouragingly, its portfolio investments support Thailand's transition to a lower carbon economy which, in the longer term, stands to benefit from the push towards ambitious climate targets by regional governments.

Conversely, mitigating the poor performance were the Company's holdings in the services sector, which remains the portfolio's largest sectoral exposure. Haad Thip's new and efficient soft-drinks factory, as well as other productivity improvements, supported its share price. The company is the sole bottler and distributor of Coca-Cola in southern Thailand, as well as the market leader for non-alcoholic drinks. It remained financially and operationally sound throughout the pandemic and was able to maintain its dividend.

Another services holding that performed well was Mega Lifesciences, which manufactures prescription drugs, over-the-counter products and nutraceuticals. Not only has it developed an extensive local network, but it also offers exposure to interesting emerging and frontier markets, including Myanmar, Vietnam, and Cambodia. The company experienced robust revenue growth, supported by recurring orders from hospitals. Near term concerns arising from COVID-19 also boosted the sales of health supplements.

In the financial sector, we were encouraged that the overall asset quality of the portfolio's underlying holdings was maintained, defying the slow economic turnaround. Reported earnings from both Tisco Financial Group and AEON Thana Sinsap beat market expectations with a sharp decline in provisions for bad debts.

Portfolio Changes

We actively monitor about a hundred stocks, ranging from regional leaders to smaller ones that have the potential of evolving into larger companies over time. Our stock-picking process screens out many others that fail to meet our stringent quality criteria.

The prospect of a global economic recovery came with a greater risk appetite. During the past six months, our work on smaller companies which began about three years back bore fruit. Having been laggards for a few years, small caps in Asia finally began to rise faster than large caps during the second half of the Year. We took the opportunity to take profits from small cap holdings that had a good run, including top contributors such as Haad Thip, Mega Lifesciences, Hana Microelectronics, AEON Thana Sinsap and Thai Stanley Electric. We also made use of the small cap rally to exit ThaiRe Life and Dynasty Ceramic, and sell off illiquid names such as Siam City Cement and Krungthai Car. Against these, we built up positions which we believe are poised to benefit when the Kingdom emerges from the pandemic-related restrictions, which is likely to lift companies in the financial, retail and cyclical sectors.

In the financial sector, we took the opportunity to increase our high conviction positions, while selling companies with less resilient balance sheets. Among these additions were Kasikornbank, which we see as being best-placed to take advantage of the shift towards digital banking. We also increased our holding in Bangkok Bank, which we believe offers the strongest asset quality in an uncertain economic outlook.

Among the smaller companies, we introduced insurance broker TQM Corp and added to Tisco Financial. TQM started as a non-life insurance business before developing new business channels in other fragmented insurance segments. We believe its large client base of over a million domestic customers and digital platforms will help it gain market share. Additionally, we like its solid balance sheet, low debt and steady premium growth.

Two new holdings with interesting growth stories bought by the Company stemmed from the boom in online shopping. We initiated a holding in Kerry Express Thailand, an integrated logistics services provider with extensive networks across Southeast Asia. We also subscribed to the initial public offer of SCG Packaging, a subsidiary of Siam Cement Group, which the Company already owns. SCG Packaging offers exposure to the recovery in domestic consumption via packaging products and services, including in Vietnam and Indonesia. The company has put resources into developing a diverse range of packaging products using high-quality and eco-friendly materials. We also introduced CP All, the undisputed leader of Thailand's convenience retail sector. Its 7-Eleven master franchise has over 10,000 outlets across the kingdom. Its other notable business segments include retail warehouse operator Siam Makro and the recently acquired hypermarket chain Tesco Lotus.

We also adjusted the Company's resources holdings to benefit from higher energy and water consumption. New companies purchased included WHA Utilities and Power, Gulf Energy Development and B Grimm Power (see the case study below).

In the first six months of the Year, we introduced Airports of Thailand and Intouch Holdings, the major shareholder of Thailand's largest mobile network operator Advanced Info Service, another portfolio company. Against these, to reduce some financial risk where balance sheets were more highly geared or business models less resilient in the wake of the pandemic, we sold completely Asset World Corporation, Banpu, Banpu Power, Bumrungrad Hospital, Interhides, Krungthai Car, LPN Development, Dynasty Ceramic, Siam City Cement, Kiatnakin Bank, Siam Commercial Bank, and ThaiRe Life Assurance.

Outlook

Thai equities are likely to benefit from the rotation from sectors in North Asian markets with lofty valuations into cyclical stocks in the domestic market. The government has done well in curbing the spread of COVID-19 early in the pandemic, although the risks of new infections remain including a resurgence of cases in April. As the world learns to manage new outbreaks, the rollout of vaccines globally should eventually lead to a revival of the tourist trade, boosting the economy. We believe the portfolio is well-positioned for a domestic recovery and leveraged growth through banks and other financials, and via its balanced exposure to energy and utilities. Moreover, exports are benefiting from higher activity levels among its trading partners, including China, Japan, the US and Vietnam. In the longer term, the country is expected to gain from its membership of the Regional Comprehensive Economic Partnership, the world's largest trading bloc, formed in late 2020. Its membership includes China, several developed economies in the Asia Pacific, as well as certain other countries in Southeast Asia and Indochina.

Importantly, we have continued to intensify our Environmental, Social and Governance ("ESG") engagement with portfolio companies, including Siam Cement and CP All, and encourage all of our investee companies to improve their disclosures in this regard. This should improve their ratings where it can be demonstrated that businesses have a responsible and more sustainable proposition. Your Company currently has an ESG ranking of 'AA' from ratings agency MSCI which is higher than that of 'A' for the SET Index.

Thailand is home to many outstanding businesses and is also the gateway to a handful of rapidly-growing frontier markets, including Cambodia, Laos, Myanmar and Vietnam. As such, the Company is poised to benefit from their transformation, with many Thai corporates already positioned to become regional leaders. Investment due diligence is conducted by experienced professionals in Thailand, and supported by regional sector specialists as well as third-party resources. As long-term investors, we remain confident that the portfolio's high-quality underlying holdings, with steady credit lines, robust balance sheets, strong cash flow and prudent management will stand the Company in good stead beyond the current global health crisis.

Aberdeen Standard Investments (Asia) Limited,

Investment Manager

28 April 2021

INVESTMENT PORTFOLIO - TEN LARGEST INVESTMENTS

As at 28 February 2021

INVESTMENT PORTFOLIO - OTHER INVESTMENTS

As at 28 February 2021

ENVIRONMENTAL, SOCIAL AND GOVERNANCE ENGAGEMENT

Whilst the management of the Company's investments is not undertaken with any specific instructions to exclude certain asset types or classes, the Investment Manager embeds Environmental, Social and Governance ("ESG") factors into the research of each asset class as part of the investment process. ESG investment is about active engagement, in the belief that the performance of assets owned by the Company can be improved over the longer term.

What is ESG, and why do we do it?

ESG considerations have been an integral part of the Investment Manager's decision-making process for almost 30 years. The Investment Manager believes that ESG factors are financially material and can meaningfully affect a company's performance. Hence, a company's ability to generate returns sustainably for investors depends on the management of its environmental impact, its consideration of the interests of society and all stakeholders, and on the way it is governed. By putting ESG factors at the heart of its investment process, the Investment Manager aims to generate better outcomes for the Company's shareholders. The three factors can be considered as follows:

· Environmental factors relate to how a company conducts itself with regard to environmental conservation and sustainability. Types of environmental risks and opportunities include a company's energy consumption, waste disposal, land development and carbon footprint, among others.

· Social factors pertain to a company's relationship with its employees and suppliers. Risks and opportunities can include (but are not limited to) a company's initiatives on employee health and well-being, and how supplier relationships align with corporate values.

· Corporate governance factors can include the corporate decision-making structure, independence of board members, the treatment of minority shareholders, executive compensation and political contributions, among others.

At the investment stage, ESG factors and analysis help to frame where best to invest by considering material risks and opportunities alongside other financial metrics. Due diligence can ascertain whether such risks are being adequately managed, and whether the market has understood and priced them accordingly.

The Investment Manager is an active owner, voting at shareholder meetings in a deliberate manner, working with companies to drive positive change, and engaging with policymakers on ESG and stewardship matters.

Can we measure it?

There are elements of ESG that can be quantified, for example the diversity of a board, the net carbon impact of a company, and the level of employee turnover. While diversity can be monitored, measuring inclusion is more of a challenge. Although it is possible to measure the level of staff turnover, it is more challenging to quantify corporate culture. Relying on calculable metrics alone would lead potentially to misleading insights. As active managers, quantitative and qualitative assessments are blended to better understand the ESG performance of a company.

The Investment Manager's analysts consider such factors in a systematic and globally-applied approach to assess and compare companies consistently on their ESG credentials, both regionally and against their peer group. Some of the key questions asked of companies include:

· How material are ESG issues for this company, and how are they being addressed?

· What is the quality of this company's governance, ownership structure and management?

· Are incentives and key performance indicators aligned with the company's strategy and the interests of shareholders?

The questions asked differ from company to company; the type of questions poised to a bank would be quite different from those of a semiconductor manufacturing firm. Having considered the regional universe and peer group in which the company operates, an ESG score is assigned ranging from 1 to 5. This proprietary ESG score is applied to every stock within the Manager's investment universe.

The ESG Scoring System

Having considered the regional universe and peer group in which a company operates, the Investment Manager allocates it an ESG score between one and five. This is applied across every stock covered globally. Examples of each category and a small sample of the criteria used are detailed below:

Climate Change

Climate change is one of the most significant challenges of the 21st century and has big implications for investors. The energy transition is underway in many parts of the world, and policy changes, falling costs of renewable energy, and a change in public perception are happening at a rapid pace. Assessing the risks and opportunities of climate change is a core part of the investment process. In particular, the Investment Manager considers:

· Transition risks and opportunities

Governments could take robust climate change mitigation actions to reduce emissions and transition to a low-carbon economy. This is reflected in targets, policies and regulation and can have a considerable impact on high-emitting companies.

· Physical risks and opportunities

Insufficient climate change mitigation action will lead to more severe and frequent physical damage. This results in financial implications, including damage to crops and infrastructure, and the need for physical adaptation such as flood defences.

The Investment Manager has aligned its approach with that advocated by the investor agenda of the Principles for Responsible Investment ("PRI") - a United Nations-supported initiative to promote responsible investment as a way of enhancing returns and better managing risk.

The PRI provides an intellectual framework to steer the massive transition of financial capital towards a more sustainable global economy. It also encourages fund managers to demonstrate climate action across four areas: investments; corporate engagement; investor disclosure; and policy advocacy as explained below:

Importance of Engagement

The Investment Manager is committed to regular, ongoing engagement with the companies in which it invests, to help to maintain and enhance their ESG standards into the future.

As part of the investment process, the Investment Manager undertakes a significant number of company meetings each year on behalf of the Company. Your Company is supported by on-desk ESG analysts, as well as a well-resourced specialist ESG Investment team. These meetings provide an opportunity to discuss various relevant ESG issues including board composition, remuneration, audit, climate change, labour issues, human rights, bribery and corruption. Companies are strongly encouraged to set clear targets or key performance indicators on all material ESG risks.

ESG engagements are conducted with consideration of the 10 principles of the United Nations Global Compact, and companies are expected to meet fundamental responsibilities in the areas of human rights, labour, the environment and anti-corruption.

This engagement is not limited to a company's management team. It can include many other stakeholders such as non-government agencies, industry and regulatory bodies, as well as activists and the company's customers and clients.

ESG CASE STUDIES

B.Grimm Power

What does the company do?

B.Grimm Power is one of the largest decentralised power producers in Thailand, supporting the industrial sector and economic growth in Southeast Asia. It builds and operates gas-fired and renewable energy plants in Thailand, Laos, Cambodia, Vietnam, the Philippines and South Korea. It is owned by multinational conglomerate, B.Grimm Group, which has been in existence for over a century.

What is the company's environmental impact?

Co-generation power plants, which lower energy costs and carbon footprint, comprise about two-thirds of B.Grimm Power's portfolio. Such facilities recycle heat when electricity is generated and are installed near the point of consumption to reduce energy loss during distribution to end-users. The other one third of its power generating assets focus on renewable energy, such as hydroelectricity, solar energy and wind. The power producer does not use coal-fired energy, which is a major source of air pollution and greenhouse gas emissions.

The environmental importance of B.Grimm's work was evidenced by Asian Development Bank financing of the company's certified climate bond for a mega-sized solar farm in Vietnam. Separately, this is the first major Thai power utility to officially announce a target for Net Zero Carbon Emission by 2050.

What are its investment merits and competitive advantage?

B.Grimm Power grew its net operating profits by 21% last year despite the adverse impact of COVID-19. The healthy earnings profile is driven by an under-penetrated industrial market and overseas expansion. Being more reliable and cost-effective than the national grid, the company sees untapped potential in converting factories to its power supply service. It also operates some of the largest solar projects in Vietnam, which is the fasting-growing Southeast Asian market for renewable energy investments. We believe B.Grimm Power's reputation and track record will help it to maintain a good project pipeline for expansion in the region.

CP ALL

What does the company do?

CP ALL is a retail chain business and the sole operator of 7-Eleven convenience stores in Thailand. With around 11,640 stores nationwide, it is the dominant convenience store operator in the country. It has also diversified its business through its various subsidiaries, offering services such bill payment collections, information technology and logistics and maintenance for retail equipment. In 2013, CP ALL acquired Siam Makro, which operates membership-based Cash-and-Carry trade centres, while in 2020 it bought hypermarket chain Tesco Lotus, with its network of over 2,000 stores across Thailand.

How does the company rate in ESG terms and what is our interaction?

CP ALL has clear and well defined guidelines that support its environmental, social and governance goals. The company's key goals in terms of environmental sustainability are with regard to supply chain management and materials resourcing. It is aware of the impacts on the environment of its business operations throughout the value chain, and is committed to reducing the negative impacts arising from business operations, as well as from its products and services. For example, the company began rethinking its beverages packing (coffee cups and lids), it replaced plastic straws with paper ones and installed bins for waste separation at all stores. Since January 2020, it ceased providing plastic bags at its 7-Eleven stores nationwide. This also resulted in a cost saving of 800 million baht.

In terms of corporate governance, we engaged with CP ALL to better understand the improvements made to its internal controls since an insider trading incident seven years ago. We were pleased with the progress, most notably the establishment of a corporate governance committee, which is also responsible for sustainability issues. Separately, we also used the opportunity to encourage better disclosure for issues, such as product safety and quality, carbon emissions, and raw material sourcing. There have also been encouraging discussions on increasing both board independence and diversity of skillsets, which were well received. We are encouraged by CP ALL's response and will continue our dialogue on these issues.

CP ALL was rated "excellent" according to the Corporate Governance Report of Thai-listed companies published in 2020 by the Thai Institute of Directors' Association.

What are the company's investment merits and competitive advantage?

CP ALL is a defensive consumer holding with improving sales and resilient margins. Like other consumer holdings it was hurt by the pandemic, with lower footfall and tighter margins pressuring sales growth. We expect that improving consumption trends will fuel CP ALL's earnings growth momentum.

DIRECTORS' REPORT

The Directors present their Report and the audited financial statements of the Company for the year ended 28 February 2021, taking account of any events between the year end and the date of approval of this Report.

Results and Dividend

The financial statements for the year ended 28 February 2021 indicate a total return attributable to shareholders of £543,000 (2020 - loss of £16,937,000).

The Directors declared an interim dividend per share of 8.0p (2020 - 8.0p), payable on 26 November 2020 to shareholders on the register as at 30 October 2020 with an ex-dividend date of 29 October 2020.

The Directors are declaring a second interim dividend per share of 11.0p (2020 - second interim dividend of 11.0p per share) to be paid on 25 June 2021 to shareholders on the register on 28 May 2021. The ex-dividend date is 27 May 2021.

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 2021.

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 2021 the Company bought back and cancelled 367,127 Ordinary shares (2020 - 92,338 Ordinary shares). As at 28 February 2021, the Company's issued share capital consisted of 16,123,436 Ordinary shares (2020 - 16,490,563 Ordinary shares) with each share holding one voting right in the event of a poll. An additional 127,930 Ordinary shares were bought back for cancellation between 1 March 2021 and the date of approval of this Annual Report resulting in 15,995,506 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, company secretarial services and 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. 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").

Until 28 February 2020, the management fee was charged to the Company on the following basis: a monthly fee, payable in arrears, calculated at an annual rate of 0.9% of NAV, with a rebate to the Company for any fees received in respect of any investments by the Company in investment vehicles managed by the Standard Life Aberdeen Group.

From 1 March 2020, the management fee is charged to the Company on the following basis: a monthly fee, payable in arrears, calculated at an annual rate of 0.9% of the Company's market capitalisation, with a rebate to the Company for any fees received in respect of any investments by the Company in investment vehicles managed by the Standard Life Aberdeen Group (see Note 4 to the financial statements). In addition, there is an annual cap which limits the management fee to the equivalent of 1.15% of NAV, calculated monthly.

The fees payable to ASFML during the year ended 28 February 2021 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 2021 (2020: 25%/75%).

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 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.

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 July 2018 (the "UK Code") for the year ended 28 February 2021. The UK Code is available on the Financial Reporting Council's ("the FRC") website: frc.org.uk.

Governance

The Board has also considered the principles and recommendations of the AIC Code of Corporate Governance as published in February 2019 ("the AIC Code"). 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 from theaic.co.uk, the AIC's website. 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 (provision 9);

· the need for an internal audit function (provision 25); and

· executive directors' remuneration and establishment of a remuneration committee (provision 33 and provisions 35 to 40).

For the reasons set out in the AIC Code 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 Board consists of a non-executive Chairman and three non-executive Directors. The Senior Independent Director is Andy Pomfret.

The Directors attended scheduled Board and Committee meetings during the year ended 28 February 2021 as follows (with their eligibility to attend the relevant meeting in brackets):

There were an additional three meetings of a Committee of the Board during the year. 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.

The names and biographies of each of the Directors are shown 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 as a whole to provide clear and effective leadership and proper stewardship of the Company.

The Directors have agreed a tenure policy that the Chairman of the Board should not serve as a Director beyond the Annual General Meeting following the ninth anniversary of their appointment to the Board. However, this period may be extended in exceptional circumstances, or to facilitate effective succession planning and the development of a diverse Board. The Company announced previously that, in accordance with the implementation of this policy, the Board had expected the current Chairman, Nicholas Smith, to retire from the Board at the AGM due in June 2022, following the ninth anniversary of his appointment as a Director in March 2022. However, the other Directors, led by Andy Pomfret as Senior Independent Director, have determined that it is in the best interests of shareholders that Nicholas Smith defer his retirement pending the conclusion of the three year performance measurement period which is due to end on 28 February 2023, which was announced in the Annual Report for the year ended 28 February 2020 (see the Chairman's Statement).

All of the Directors will retire at the AGM in 2021 in accordance with the AIC Code. Nicholas Smith, Andy Pomfret, Sarah MacAulay and Anne Gilding, all being eligible, offer themselves for individual re-election as Directors of the Company. The Board as a whole believes that each Director standing for re-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. In support of their re-election as Directors at the AGM each Board member's individual contribution is set out in the published Annual Report. The Board therefore has no hesitation in recommending the re-election as Directors of Nicholas Smith, Andy Pomfret, Sarah MacAulay and Anne Gilding at the AGM.

The Role of the Chairman and Senior Independent Director

The Chairman is responsible for providing effective leadership to the Board, by setting the tone of the Company, demonstrating objective judgement and promoting a culture of openness and debate. The Chairman facilitates the effective contribution of, and encourages active engagement by, each Director. In conjunction with the Company Secretary, the Chairman ensures that Directors receive accurate, timely and clear information to assist them with effective decision-making. The Chairman acts upon the results of the Board evaluation process by recognising strengths and addressing any weaknesses and also ensures that the Board engages with major shareholders and that all Directors understand shareholder views.

The Senior Independent Director acts as a sounding board for the Chairman and acts as an intermediary for other directors, when necessary. The Senior Independent Director takes responsibility for an orderly succession process for the Chairman and leads the annual appraisal of the Chairman's performance. The Senior Independent Director is also available to shareholders to discuss any concerns they may have.

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.

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. The Standard Life Aberdeen Group 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, appear 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 2006.

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.

Substantial Interests

As at 28 February 2021 the following were registered, or had notified the Company, as being interested in 3% or more of the voting rights for the Company's Ordinary share capital:

The above share interests were unchanged as at the date of approval of this Report other than in relation to the following notifications, with the date of notification to the Company shown in brackets:

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 £10m was drawn down under the Facility at 28 February 2021.

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.

The Directors are mindful of the principal risks and uncertainties and emerging risks disclosed in the Overview of Strategy and in note 16 to the financial statements. Having given careful consideration to market developments since the end of the financial year, including the continued impact of COVID-19, the Directors believe that the Company has adequate financial resources to continue in operational existence for at least twelve months from the date of this Report. 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 (including income) 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 2021, the Ordinary shares traded at an average discount of 12.5% to the underlying NAV per share (including income), therefore no such resolution will be put to the Company's shareholders at the forthcoming AGM.

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 2022 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 note 16 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 the Standard Life Aberdeen Group, 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 the Manager's 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 17 June 2021 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 AGM:-

Authority to Allot Relevant Securities

Ordinary Resolution 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 2022 or on 31 August 2022, whichever is earlier. This means that the authority will have to be renewed at the AGM in 2022.

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 2022 or 31 August 2022, 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 2.4m 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 2022 and 31 August 2022, whichever is earlier, unless renewed prior to such time.

Recommendation

The Board considers that all Resolutions to be put to shareholders at the AGM are in the best interests of the Company and its members as a whole. The Board believes that the passing of each Resolution is likely to promote the success of the Company for the benefit of all its members. Accordingly, the Board unanimously recommends that shareholders should vote in favour of the resolutions to be proposed at the AGM, as they intend to do in respect of their own shareholdings, amounting to 18,000 Ordinary shares.

On behalf of the Board

Nicholas Smith,

Chairman28 April 2021

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

28 April 2021

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 2021