Final Results

19 March 2026

LONDON STOCK EXCHANGE ANNOUNCEMENT

SCHRODER ASIAN TOTAL RETURN INVESTMENT COMPANY PLC

(the "Company")

ANNUAL REPORT AND FINANCIAL STATEMENTS

 FOR THE YEAR ENDED 31 DECEMBER 2025

Legal Entity Identifier: 549300TQNNGZ0JHO2L78

Information disclosed in accordance with DTR 4.1

The Company's Annual Report and Financial Statements for the year ended 31 December 2025 is being published in hard copy format and an electronic copy will shortly be available to view and download from the Company's web pages: www.schroders.co.uk/satric.

Key Highlights

Investor presentation

Our portfolio managers, Robin Parbrook and King Fuei Lee, will be giving presentations at an investor webinar on Thursday, 23 April 2026 at 12.00 pm. To sign up to watch the presentation online please click on this link to add this virtual presentation to your calendar: https://mybrand.schroders.com/m/76dbfd61185ffd2b/original/Schroder-Asian-Total-Inv_-Company-AGM-Presentation-by-Investment-Manager.ics.

Sarah MacAulay, Chair of Schroder Asian Total Return Investment Company plc, commented:

"It has been another year of strong absolute returns from your Company which delivered a share price total return of 19.3% and a NAV total return of 14.2%."

The Company has submitted a copy of its Annual Financial Report to the National Storage Mechanism and it will shortly be available for inspection at: National Storage Mechanism | FCA

Enquiries:

Schroder Investment Management Limited

Performance Summary

At 31 December 2025

Net Asset Value (NAV) per share total return1

14.2%

2024: +13.0%

Share price total return1

19.3%

2024: +12.6%

Reference Index2

20.6%

2024: +12.1%

Share price2

560.00p

2024: 483.00p

Share price discount to NAV per share1,2

1.1%

2024: 5.1%

Revenue return per share3

9.81p

2024: 9.61p

Net assets3

£529.45m

2024: £476.08m

Gearing1,3

5.5%

2024: 8.5%

Ongoing charges ratio1,3

0.8%

2024: 0.9%

1 Alternative performance measure, as defined by the European Securities and Markets Authority. Definitions of these performance measures, and other terms used in this Report, are given on pages l and l together with supporting calculations where appropriate.

2 Source: Morningstar.

3 Source: Schroders.

Chair's Statement

Performance and background

It has been another year of strong absolute returns from your Company which delivered a share price total return of 19.3% and a NAV total return of 14.2%. The share price benefited from a narrowing of the discount to NAV at which it trades which enhanced share price returns. However, performance in 2025 lagged the Reference Index, which produced a total return of 20.6% over the year. The principal headwinds to the Company's relative performance came from a combination of factors including not fully participating in a broad market rally in Korea, stock selection in Hong Kong and China, and some of the dramatic stock moves on possible winners and losers from AI disruption. These are examined in more detail in the Investment Manager's review.

Despite this short-term relative underperformance, it is worth noting that since the start of 2026 the strategy is once again outperforming the Reference Index. Furthermore, the Company's returns are ahead of both the peer group and the Reference Index over each of the three, five and ten year periods to 31 December 2025. The Company has generated relative outperformance in eight of the last ten years and cumulatively has returned 12.5% per annum vs. Reference Index returns of 9.5% per annum over the last decade¹.

We are delighted to report that this steady growth in the Company's assets has resulted in us joining the FTSE 250 in June of last year.

Further comments on performance and investment policy may be found in the Investment Manager's review.

Earnings and dividends

Revenue return from the portfolio for the year rose slightly to 9.81 pence per share, from 9.61 pence per share in 2024. While the Portfolio Managers view income as an important component of investment return, they focus on total return, rather than income. The Board has therefore recommended a final dividend of 11.5 pence per share, which maintains the dividend at the same level as the previous financial year.

Subject to shareholder approval at the Annual General Meeting ("AGM"), the dividend will be paid on 11 May 2026 to shareholders on the register on 10 April 2026. The ex-dividend date is 9 April 2026.

Discount management

The discount at which the Company's share price traded averaged 3.5% during the year and traded at a 1.1% discount to the NAV at the end of December 2025 compared to a 5.1% discount in December 2024.

2025 saw record buybacks across the investment trust sector as it struggled with persistently wide discounts. However, your Company did not buy back any shares during the year as the discount remained comfortably within the stated discount control policy of targeting a discount no wider than 5% in normal market conditions. Indeed the discount narrowed over the year and the share price is currently trading close to NAV. It is the Company's intention to issue shares at a premium, should that be achieved, as has been done in previous years. The Board will be seeking approval from shareholders to renew the issuance and buy back authorities at the AGM to be held on 23 April 2026, further details of which can be found on page 100.

Gearing

Gearing continued to be actively utilised by the Portfolio Managers during the year and ranged between 2% at its lowest and 8% at its highest. Gearing made a positive contribution to performance. The Company continues to utilise contracts for difference (CFDs) as a flexible and more cost-effective means of borrowing, and only a small £23.5 million revolving credit facility has been retained, both of which have helped to bring down borrowing costs. Borrowing continues to be utilised within the wider context of the derivative overlay strategy and net gearing will not exceed 30% of NAV.

Schroders combination with Nuveen

On 12 February 2026 the Board of Schroders plc announced that they had agreed the terms of a recommended cash acquisition by Nuveen, to combine the two businesses. The announcement indicated that the transaction is not expected to complete until Q4 2026.

Further details are available on the Schroders website: https://www.schroders.com/en/global/individual/nuveenoffer/ 

Investment Company of the Year winner

In November 2025 it was announced that the Company had won the Investment Week's Investment Company of the Year award in the Asia Pacific category. The shortlists for the awards were constructed using scores provided by the AIC, using Morningstar data, with oversight from the judging panel. Winners were then chosen by a judging panel where qualitative factors were also considered.

Outlook

The recent events in the Middle East have layered further uncertainty onto global stock markets, already unsettled by Trump's inconsistent application of tariffs, concern over US equity valuations and the ballooning budgets for investment in AI. The prospect of elevated oil prices is a negative for Asian equity markets which have experienced a period of very strong outperformance. It casts a shadow over Asian economic growth prospects, increases inflationary pressure and mitigates against prospective interest rate cuts. Consequently, the top-down picture in Asia is becoming more challenging with valuations having reached relatively high levels versus their history.

However, the Portfolio Managers believe there to be attractive investment opportunities across the Asian region. Schroders' extensive commitment to the region with over 40 research analysts, primarily located in Hong Kong, Singapore and Shanghai, carrying out more than 2,200 company meetings per year provides in depth, on the ground analysis of a broad range of companies and sectors. Our Portfolio Managers have a proven track record and a wealth of investment experience. This, together with our Portfolio Manager's derivative overlay strategy which helps to reduce downside and volatility, gives us continued confidence in the strategy.

Results webinar, presentation and AGM

The Company's AGM will be held on Thursday, 23 April 2026 at 12 noon at 1 London Wall Place, London EC2Y 5AU.

The AGM will begin with a presentation by the Portfolio Managers which will also be available to watch online. To sign up to watch the presentation online please click on this link to add this virtual presentation to your calendar: https://mybrand.schroders.com/m/76dbfd61185ffd2b/original/Schroder-Asian-Total-Inv_-Company-AGM-Presentation-by-Investment-Manager.ics. Details on how to watch the presentation are also available on the Company's web pages which provide a selection of research and insights: www.schroders.co.uk/satric  

By making the Portfolio Managers' presentation also available as a webinar, I hope that shareholders who are unable to attend the presentation and AGM, along with interested parties, will be able to listen to the Portfolio Managers, and ask them any further questions.

The formal business of the AGM will commence immediately following the presentation by the Portfolio Managers. For shareholders who are unable to attend the AGM or those that are joining electronically, it is strongly encouraged to submit their proxy votes in advance of the meeting, so they are registered and recorded at the AGM.

AGM shareholder communication and engagement

The Board understands the significance of having regular access to information for our shareholders. In addition to our Company web pages, we provide shareholders with the opportunity to subscribe to Company email updates. These emails feature updates about the Company, along with news, opinion pieces, and market insights. Details on how to subscribe can be found on the inside front cover of this report.

We are pleased to note the strong contributions of all investment trust shareholders at recent votes, including those holding through retail platforms, across the sector following extensive proactive shareholder engagement. These investors have played a key role in the outcomes of these votes, and we would encourage them to continue to make their voices heard in all AGMs going forward. If any of the Company's shareholders are at all unsure of how to vote their holding, they should contact their nominee for immediate assistance as we, alongside many others, are keen to see that these improved participation figures are sustained across all investment trusts, including at this Company.

The Board encourages all shareholders to either attend the AGM or exercise their voting rights by proxy. Proxy votes can be submitted electronically through the registrar's portal, by post and also by email. Details are set out in the Explanatory Notes to the Notice of AGM in this Annual Report. The Board acknowledges that certain execution-only investment platforms are now enabling shareholders to vote electronically. We encourage shareholders to utilise this feature where it is available. The Board is committed to exercising the highest standard of corporate governance and accordingly, regularly considers the views of its shareholders, offering to meet with major shareholders annually. We also seek to engage with all shareholders where possible and should you wish to contact me, you can do so via the Company Secretary whose details are set out on page 108.

Sarah MacAulay

Chair

18 March 2026

Portfolio Managers' Report

2025 Review

2025 was a strong year for most Asian stockmarkets, however it was also a volatile year with a large dispersion of returns across both sectors and countries. The Korean and Taiwanese stockmarkets, with their high weightings in semiconductor and related stocks, performed best given many companies are beneficiaries of booming artificial intelligence ("AI") related capital expenditure. The region is also seeing improving corporate governance, with the Korean market seeing a notable re-rating after the new Government introduced a "Value-Up" programme to promote better protection of minority investors and made changes to the tax system to encourage the payment of dividends. In China we are also are starting to see better capital allocation as companies in some sectors move away from perennial investments in new capacity and instead start to pay more dividends or in the case of internet companies aggressively buyback shares. Overall, whilst India and select ASEAN markets lagged as economic momentum was more subdued, we see the combination of positive cyclical factors around AI and better capital allocation as supportive for the medium-term outlook for returns from the major stockmarkets in Asia.

As we close out 2025, it is appropriate to take stock of our performance over the calendar year and reflect candidly on the principal drivers of returns. Whilst the Company generated strong absolute returns in 2025, your Portfolio Managers were somewhat disappointed that the Company underperformed the Reference Index. The principal headwinds to the Company's relative performance came from three areas. Firstly, not participating or being too cautious on the Korean "Value-Up" programme, secondly stock selection in Hong Kong and China and finally some of the dramatic stocks moves around AI disruption and perceived AI losers and winners, proved to be a drag on performance.

Within Asia, AI returns were highly concentrated in China, Korea, and Taiwan. Of these, our zero weight in Alibaba (subsequently added a half index weight position, narrowing the underweight) was a significant detractor, costing the portfolio over 1% of relative performance. Alibaba's share price strength was driven largely by renewed optimism surrounding its cloud business following the "DeepSeek moment" in late January 2025, which catalysed a sharp shift in investor sentiment toward China's AI capabilities. This re-rating occurred despite ongoing deterioration in earnings, resulting in a pronounced divergence between fundamentals and share price performance. While our overweights in Tencent and NetEase in China, and our zero-weight positions in JD.com and Xiaomi, contributed positively, they were insufficient to offset the Alibaba drag, leaving the China AI complex as a net detractor to performance.

In Korea, our AI experience was similarly unforgiving. Our decision to reduce Samsung Electronics earlier in the year, driven by concerns over repeated Nvidia certification delays, proved poorly timed. A sharp acceleration in AI-driven memory demand in the latter part of the year led to severe supply shortages and a powerful rally in both Samsung Electronics and SK Hynix. While the Company was well positioned in the latter, our exposure was insufficient to counterbalance the opportunity cost of not owning Samsung Electronics. Compounding this, several AI-adjacent names where we have no exposure, such as SK Square and HD Hyundai Electric, also rose sharply as enthusiasm and often froth and hubris spread across the ecosystem. Although our Taiwan AI exposure, particularly Chroma ATE, provided some offset, we estimated the AI thematic as a whole detracted approximately 1.5% from performance relative to the Company's reference index.

Our lack of exposure to Korean defence stocks also detracted, though with an important nuance. We remain firm believers in a structural uplift in global defence spending, but continue to view Korean defence equities as flawed vehicles for expressing that view given persistent governance shortcomings. The widely publicised controversy surrounding Hanwha Aerospace's large rights offering earlier in the year, following significant cash outflows to a non-urgent affiliate transaction, only reinforced this conviction. Instead, we have chosen to express the defence thematic through India, particularly Bharat Electronics, resulting in a roughly neutral contribution from defence at the portfolio level.

The third source of underperformance stemmed from our stock selection in China and Hong Kong. Continued weakness in Chinese consumption, lingering regulatory overhangs in education and gaming, and being positioned on the wrong side of 2025's dominant market narratives (primarily AI capital expenditure) weighed on our holdings in Techtronic Industries, Swire Pacific, Galaxy Entertainment, and Trip.com even though all were up in absolute terms. In several cases, share price performance diverged from fundamentals, with valuation de-rating more than offsetting earnings growth during the year. We continue to hold these positions given our analysts' conviction in their long-term fundamentals, despite ongoing near-term headwinds. Based on current share prices and our analysts' calculations, these holdings continue to offer double-digit upside to their fair values.

Modest gains from stock selection in Taiwan were offset by Australian healthcare holdings. Meanwhile our positive stock selection in India was largely neutralised by positions in Vietnamese IT services provider FPT, Indonesian Bank Mandiri, and Thai private healthcare giant Bangkok Dusit. The Company's models used to determine whether to deploy hedging and gearing were mostly neutral on Asian stockmarkets during the year so we deployed little hedging and moderate gearing. Therefore, the impact from this area on performance was negligible.

OUTLOOK FOR THE YEAR OF THE HORSE

After strong gains in 2025 we are relatively cautious on Asian stockmarkets. Valuations are now high versus history and Asian earnings growth is increasingly dependent on one sector - AI related capital expenditure. Balancing this is for the major economies (China, India, Australia, Korea, Taiwan, Singapore, Hong Kong) a good or at least stable economic backdrop, and in most cases relatively low government debt, good fiscal positions and current account surpluses. Our key concerns are instead around valuations and the earnings outlook, particularly in those sectors exhibiting signs of AI related froth. As we will discuss we have been gradually positioning the Company more defensively and are now potentially looking to add some hedging strategies if option pricing becomes more attractive. Overall, we expect 2026 will see more muted returns given the current level of valuations, which in our opinion do not necessarily reflect potential underlying risks.

The two sections below firstly discuss our views on some of the key stockmarkets in Asia and secondly our top-down hedging and gearing models. For readers wanting a quick summary we would highlight the clusters below, which give a good snapshot of how to think about Asian equities and how the Company is positioned. Asian equities can be divided into four broad areas which are relatively equally weighted in the Company's reference benchmark.

Cluster One: China/Hong Kong

First there is the Hong Kong/China cluster which is more idiosyncratic and obviously comes with geopolitical risks. The trust remains underweight China but our exposure has risen over the last 12 months as we found new stock opportunities, and in some cases better capital return policies have improved the investment case.

Cluster Two: Korea/Taiwan

The second cluster is Korea and Taiwan, this is effectively a technology/semiconductor cluster. Historically the fund has been overweight technology stocks. However, we have been trimming positions as AI related hype has pushed valuations for many stocks above our long term fair values. The trust is now slightly underweight here.

Cluster Three: Australia/Singapore

The third cluster is Australia and Singapore. After taking profits in technology stocks, we increased exposure to more defensive names in Australia and Singapore, within what we refer to as our "yield/income cluster". The Company is now quite overweight these markets.

Cluster Four: India/ASEAN

The last cluster is India and ASEAN the supposed "growth" markets in Asia. In ASEAN we have turned more cautious as politics and geopolitical trends are increasingly unfavourable for the long-term earnings outlook. On India we remain positive at a macro-economic level but stockmarket valuations are expensive and earnings expectations unrealistic. We remain underweight India but we would look to add were we to see a further correction in the stockmarket.

SECTION 1 - DON'T BE A LEMMING: BACKING THE RIGHT HORSE - MARKET VIEWS

What began as an ad hoc exercise examining the consensus market views of sell-side strategists 11 years ago has become a regular feature of our annual Year-of-the-Chinese-Zodiac reports over the past four years. This year, we once again continue our "don't be a lemming" study by starting with a post-mortem of how sell-side consensus views at the beginning of the year have fared in 2025. And, in a fashion that has become increasingly familiar, consensus appears to have been mostly wrong yet again.

Looking back at the outcomes, the results were telling. With the exception of Thailand, where the market most disliked by sell-side strategists also went on to be the worst underperformer, most markets followed a fairly predictable pattern. The more favoured a market was at the start of the year, the worse it tended to perform, and vice versa. It is therefore unsurprising that India, a market that seven out of nine strategists held an overweight position in, ended up underperforming the region by around -20%, making it the worst-performing major market in Asia. In contrast, Korea, the second-most unloved market last year, delivered absolute returns of over 89%, outperforming the region by a whopping +50%.

Against that backdrop, the natural question for 2026 is what are consensus strategists recommending this time around, and what sits behind those calls.

We begin with the two markets that sell-side strategists favour most. And it looks like, undeterred by their experience last year, India has once again been identified as one of their preferred markets, with all but one advocating an overweight stance. Much of this optimism appears to rest on expectations of an earnings recovery following a period of moderation, supported by policy easing, resilient domestic demand, and a long-term reform narrative. Importantly, with global investor positioning still relatively light, some strategists believe the market could become increasingly sensitive to incremental inflows should earnings momentum return.

How much of this optimism is already reflected in current share prices, however, remains a key question from your portfolio managers' perspective. On almost all valuation measures, Indian equities are now trading at the upper end of their historical range, suggesting that expectations for an improvement in fundamentals are already demanding. Whether these expectations are ultimately met will depend in part on how current geopolitical uncertainties evolve. In mid-January, Indian exports to the US were briefly threatened with a sharp escalation in import tariffs after President Trump backed a Senate bill proposing duties of up to 500% on goods from countries purchasing Russian oil. Had it been enacted, the bill would have materially raised the risk of a near-freeze in trade between India and its largest export market, coming on top of the already steep US duties imposed last year.

More recently, the two countries have struck an agreement to reduce tariffs on made-in-India goods to 18%, from 50%, while India will reciprocally cut tariffs on US imports to zero from an average rate of 17%. As with most things Trump, however, the situation remains fluid. Against this backdrop, your portfolio managers continue to view India as a stock-picker's market, where genuinely interesting bottom-up opportunities still exist, but only at the right valuations.

And while India remains a firm favourite, China has emerged as the most favoured market overall this year. Around three-quarters of strategists now hold a positive view, with virtually no outright detractors. This reflects a growing conviction that China has now moved into a recovery story, offering a more attractive balance of risk and reward. Low market valuations, ongoing policy support, and improving earnings expectations underpin this consensus view, with targeted stimulus, margin-restoration initiatives such as anti involution policies, and selective upgrades across technology and manufacturing seen as key contributors.

Your portfolio managers, however, continue to view China equities with cautious selectivity. While valuations for some stocks, particularly in consumer-related sectors, have come down and earnings expectations appear more realistic, the broader economy remains weighed down by structural headwinds, including a prolonged property downturn, deflationary pressures, and weak consumer confidence. In our view, the opportunity set here remains largely stock-specific, with a preference for selected internet platforms and companies with strong intellectual property and capital return discipline, while avoiding sectors plagued by overcapacity, opaque balance sheets, or policy-driven excesses.

Moving from the most favoured to the least favoured markets, Thailand sits at the other end of the spectrum. Here, a weak domestic demand outlook continues to be compounded by policy and political uncertainty. Concerns centre on the country's high household leverage, subdued consumption, and limited private investment, all of which are expected to keep earnings under pressure. At the same time, unclear policy direction keeps risk premiums elevated despite low valuations. Unlike other markets showing early signs of recovery, most strategists see little evidence of a clear earnings inflection in Thailand, reinforcing the view that cheapness alone is insufficient to drive performance in the face of structural and governance constraints.

On this occasion, there is little for your portfolio managers to significantly disagree with. In our view, Thailand remains one of the less compelling markets in the region, reflecting an economy that continues to lack a clear catalyst for recovery. For one, tourism has yet to return to pre-Covid levels and has softened again recently, weighing on the broader services economy. And while the current account surplus continues to support the baht, this largely reflects weak domestic demand and subdued imports rather than underlying strength. Any meaningful rebound in activity would therefore risk eroding this support rather than reinforcing it. More importantly, domestic conditions remain soft, with credit growth effectively stalled, wage growth flat, and key indicators such as autos, construction, and durables demand still under pressure. Corporate earnings also remain near long-term lows. While policy has eased, rates are already depressed, limiting the effectiveness of further cuts. In the absence of credible signs of a rebound in credit and household demand, the consensus underweight view on Thailand appears well grounded. That said, after years of lacklustre returns, Thailand now stands out as one of the higher dividend-yielding markets in the region. For investors with a focus on income rather than growth, this may at least offer selective opportunities, even if the broader investment case remains challenging.

By contrast, Taiwan is disliked by analysts for very different reasons as it is not struggling with weak fundamentals so much as the weight of investor enthusiasm. Sell-side strategists increasingly view Taiwan as the most crowded way to express the global AI theme, which has made them more cautious despite still-strong fundamentals. While earnings visibility remains solid, many believe that a significant portion of the upside from AI-related investment is already priced in. The market's heavy concentration in a small number of large stocks also means that sentiment can shift quickly if expectations change. As a result, strategists have shifted their focus away from the strength of the growth story and towards concerns around valuation and positioning, leaving Taiwan caught between still-solid fundamentals and more limited upside.

On this, your portfolio managers are more circumspect. There is little doubt that the AI investment theme across Asia is beginning to show familiar signs of froth, with share prices of AI supply-chain winners having run hard and investors increasingly questioning whether today's "extravagant" AI spending will ultimately translate into sustainable profits. At the same time, the broader AI investment cycle remains very much intact. Just last month, TSMC reported record profits driven by AI demand and guided to another step-up in capital spending in 2026, indicating that customers are still committing real capital rather than simply talking up the narrative. Beyond semiconductors, Asia's data centre buildout is also accelerating rapidly. As a result, while valuations and positioning do appear stretched, there is a real risk that the theme runs longer than sceptics expect. Moving underweight Taiwan at this stage may be premature.

As an aside, it appears that dividend-paying markets are also out of favour with sell-side strategists this year, probably reflecting a broader view that income alone is not a sufficient catalyst for 2026. As shown in the figure below, the relationship is effectively inverted. Lower-yield markets such as India and China attract the highest levels of conviction, while higher-yielding markets such as Australia, Thailand, and Taiwan fail to garner a single overweight recommendation despite offering dividend yields in the 3% to 4% range. This suggests strategists are prioritising earnings recovery and growth narratives over income. Indonesia stands out as a partial exception, combining a relatively high yield with a stronger overweight bias, although this elevated yield partly reflects the sharp sell-off in the market after MSCI, correctly in your portfolio managers' view, raised concerns around its investability and transparency and flagged a potential downgrade to frontier-market status.

That sell-side strategists are biased against dividend-yielding markets is understandable after a year like 2025, when price gains accounted for the bulk of total returns and dividends played a relatively minor role. Over the longer term, however, the evidence points in a different direction. Over the past four decades, dividends have contributed close to two-thirds of Asia's total equity returns. We believe maintaining a disciplined focus on income and reinvestment, rather than chasing short-term capital appreciation alone, remains one of the more reliable ways to compound returns in the region.

SECTION 2 - VALUATIONS, GEARING AND HEDGING: TIME TO REIN IN RISKS?

Long-time holders will know that hedging has long been an integral part of the Company's process. However rather than use these derivatives to express short-term market calls or to "trade" macro views, our hedging is a risk-management tool, designed to manage country and market-level risks flagged by our quantitative models, and to give our stock selection the best possible chance of translating into overall portfolio performance. In the case of the Company we also use a subset of these models to help determine whether to deploy gearing.

So what are our models telling us today?

On valuations, we continue to assess the region using both top-down and bottom-up lenses, and at the moment the two are telling slightly different stories. From a top-down perspective, the picture is becoming more challenging. Since the end of the third quarter last year, our proprietary composite valuation indicator has been hovering uncomfortably close to its sell threshold, defined as one standard deviation above long-term norms. Historically, periods when valuations have reached these levels have rarely been kind to equity markets. On average, the region has gone on to decline by more than 25% over the subsequent 12 to 18 months, with positive returns recorded in only two of the past thirty-five such episodes.

That said, the bottom-up picture is more balanced. Our bottom-up valuation indicator, which measures the proportion of stocks under our coverage trading below our analysts' fair values, currently sits at 57.7%, squarely in neutral territory. In other words, while parts of the market look stretched, there remains a reasonable mix of attractively valued and fully valued opportunities across the region. Taken together, these signals point to a more cautious backdrop overall, with at least one important valuation measure warning that downside risks to Asian equity returns have risen over the medium term. With this in mind we have reduced gearing substantially, and will continue to monitor our model readings and adjust positions accordingly.

When we look at our strategic country models for individual Asian markets, which are also largely valuation-driven, they broadly echo the same message as our bottom-up valuation indicator. Most major Asian markets remain in neutral territory, where risks and opportunities appear broadly balanced. Interestingly, for some of the smaller ASEAN markets such as Thailand and the Philippines, our models have turned more constructive, largely reflecting how cheap valuations have become. The clear outlier is India, where valuations remain elevated and our strategic model is now signalling a higher risk of downside over the next couple of years.

Turning to the shorter-term picture, our tactical hedging model has been less decisive. Over the past couple of months, it has oscillated between hold and sell signals, briefly dipping into sell territory several times before moving back to a more neutral stance. Much of this reflects the same top-down valuation pressures discussed earlier. Other inputs into the model, such as economic momentum, financial system risk, and the commodity complex, remain relatively supportive and have helped offset the valuation signal.

Putting all of this together, and with put options on the Indian market still attractively priced, we continue to hedge part of our exposure to Indian equities using put options on the NIFTY index. This approach allows us to retain our underlying stock positions while managing the elevated valuation risk highlighted by our models. After accounting for this hedge, the Company's net equity exposure currently stands at around 95%, and as mentioned earlier use of gearing is now minimal.

Overall, our models very much tie in with our bottom-up analysis and findings. Valuations in Asia are elevated, and risks of a market correction are rising. We are not outright bearish, but we are positioning the Company more cautiously as we enter the year of the horse and expect returns in 2026 to be moderate, particularly after the strong market performance in 2025.

Robin Parbrook and Lee King Fuei

Portfolio Managers

Schroder Investment Management Limited

18 March 2026

For illustrative purposes only and does not constitute to any recommendation to buy or sell the above-mentioned security/sector/country.

Please note that the value of investments and the income from them can go down as well as up and investors may not get back the amounts originally invested.

Risk Report

The Board, through its delegation to the Audit and Risk Committee, is responsible for the Company's system of risk management and internal control and for reviewing its effectiveness. The Board has adopted a detailed matrix of principal, and, where applicable, emerging, risks affecting the Company's business as an investment trust and has established associated policies and processes designed to manage and, where possible, mitigate those risks, which are monitored by the Audit and Risk Committee on an ongoing basis.

This system assists the Board in determining the nature and extent of the risks it is willing to take in achieving the Company's strategic objectives.

Emerging risk

Risk assessment and internal controls review by the Board

Risk assessment includes consideration of the scope and quality of the systems of internal control operating within key service providers, and ensures regular communication of the results of monitoring by such providers to the Audit and Risk Committee, including the incidence of significant control failings or weaknesses that have been identified at any time and the extent to which they have resulted in unforeseen outcomes or contingencies that may have a material impact on the Company's performance or condition. The internal control environment of the Manager, Investment Manager, the depositary, custodian, administrator and the registrar are tested annually by independent external auditors. The full reports are provided to the Audit and Risk Committee alongside abridged summaries.

Although the Board believes that it has a robust framework of internal controls in place, this can provide only reasonable, and not absolute, assurance against material financial misstatement or loss and is designed to manage, not eliminate, risk. Both the principal and emerging risks and the monitoring system are also subject to robust review at least annually. The last assessment took place in March 2026.

During the year, the Board discussed and monitored a number of risks which could potentially impact the Company's ability to meet its strategic objectives. The Board receives updates from the Manager, Investment Manager, Company Secretary and other service providers on emerging risks that could affect the Company. The Board was mindful during the year of the global environment including territorial disputes, regional conflicts, trade tensions and sanctions, all of which may disrupt global markets and economic stability. Regarding the Trump administration in the US, the Board remains mindful of uncertainty surrounding potential changes to financial and public policy, particularly concerns related to the implementation of the tariff regime. However, these were not considered to be factors which explicitly impacted the Company's performance. These risks are seen as exacerbating existing risks and have been incorporated in the macro factors, including the geopolitical/economic environment and climate change risk section in the table below.

The Board considered in detail whether there were any material emerging risks and has continued to include the development of AI as an emerging risk in the table below.

No significant control failings or weaknesses were identified from the Audit and Risk Committee's ongoing risk assessment which has been in place throughout the financial year and up to the date of this report. The Board is satisfied that it has undertaken a detailed review of the risks facing the Company. A full analysis of the financial risks facing the Company is set out in note 22 to the financial statements on pages 91 to 95.

Actions taken by the Board and, where appropriate, its Committees, to manage and mitigate the Company's principal risks and uncertainties are set out in the table below. The "Change" column on the right highlights, at a glance, the Board's assessment of any increases or decreases in risk during the year after mitigation and management. The arrows show the risks as increased, decreased or unchanged.

Statement of Directors' Responsibilities

in respect of the Annual Report and Financial Statements

The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising Financial Reporting Standard ("FRS") 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the return or loss of the Company for that period. In preparing these financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and accounting estimates that are reasonable and prudent;

· state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

· prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006.

The Directors are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Manager is responsible for the maintenance and integrity of the web pages dedicated to the Company. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' Statement

Each of the Directors, whose names and functions are listed on pages 54 and 55, confirm that to the best of their knowledge:

· the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and applicable law), give a true and fair view of the assets, liabilities, financial position and net return of the Company;

· the Annual Report and Financial Statements includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal and emerging risks that it faces; and

· the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

On behalf of the Board

Sarah MacAulay

Chair

18 March 2026

Income Statement

for the year ended 31 December 2025

The "Total" column of this statement is the profit and loss account of the Company. The "Revenue" and "Capital" columns represent supplementary information prepared under guidance issued by the AIC. The Company has no other items of other comprehensive income, and therefore the net return/(loss) after taxation is also the total comprehensive income/(loss) for the year.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year.

The notes on pages 81 to 96 form an integral part of these financial statements.

Statement of Changes in Equity

for the year ended 31 December 2025

The notes on pages 81 to 96 form an integral part of these financial statements.

Statement of Financial Position

at 31 December 2025

These financial statements were approved and authorised for issue by the Board of Directors on 18 March 2026 and signed on its behalf by:

Sarah MacAulay

Chair

The notes on pages 81 to 96 form an integral part of these financial statements.

Registered in England and Wales as a public company limited by shares.

Company registration number: 02153093.

Cash Flow Statement

for the year ended 31 December 2025

Dividends received during the year amounted to £11,276,000 (2024: £12,488,000), deposit interest and other income receipts amounted to £104,000 (2024: £108,000). These amounts are shown within net cash inflow from operating activities.

The notes on pages 81 to 96 form an integral part of these financial statements.

Notes to the Accounts

1. Accounting Policies

(a) Basis of accounting

Schroder Asian Total Return Investment Company plc ("the Company") is registered in England and Wales as a public company limited by shares. The Company's registered office is 1 London Wall Place, London EC2Y 5AU.

The financial statements are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice (UK GAAP), in particular in accordance with Financial Reporting Standard (FRS) 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", and with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" (the "SORP") issued by The Association of Investment Companies in July 2022. All of the Company's operations are of a continuing nature.

The financial statements have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments and derivative financial instruments held at fair value through profit or loss. The Directors believe that the Company has adequate resources to continue operating for the period to 31 March 2027, which is at least 12 months from the date of approval of these financial statements. In forming this opinion, the Directors have taken into consideration: the controls and monitoring processes in place; the Company's low level of debt and other payables; the low level of operating expenses, comprising largely variable costs which would reduce pro rata in the event of a market downturn; and that the Company's assets comprise cash and readily realisable securities quoted in active markets. In forming this opinion, the Directors have also considered any potential impact of climate change on the viability of the Company. Further details of Directors' considerations regarding any potential impact of climate change are given in the Chair's Statement, Investment Managers' Review, Going Concern Statement, Viability Statement and under the Risk Report heading on page 46.

In preparing these financial statements the Directors have also considered the impact of climate change on the value of the listed investments that the Company holds. As the portfolio mainly consists of listed equities, which are valued using quoted bid prices for investments in an active market, then fair value reflects market participants view of climate change risk.

The financial statements are presented in sterling and amounts have been rounded to the nearest thousand.

The accounting policies applied to these financial statements are consistent with those applied in the financial statements for the year ended 31 December 2024.

No significant judgements, estimates or assumptions have been required in the preparation of the financial statements for the current or prior financial year.

(b) Valuation of investments

The Company's business is investing in financial assets with a view to profiting from their total return in the form of income and capital growth. This portfolio of financial assets and derivative financial instruments is managed, and its performance evaluated, on a fair value basis, in accordance with a documented investment strategy and information is provided internally on that basis to the Company's Board of Directors. Accordingly, upon initial recognition the investments are classified by the Company as "held at fair value through profit or loss". Investments are included initially at transaction price, excluding expenses incidental to purchase, which are written off to capital at the time of acquisition. Subsequently, investments are valued at fair value, which are quoted bid prices at the close of each market on the accounting date, for investments traded in active markets.

The contracts for difference ("CFD") held in the portfolio are valued based on the price of the underlying security or index which they are purchased to reflect. The fair value of the CFDs is the difference between the strike price and the underlying shares in the contract.

All purchases and sales are accounted for on a trade date basis.

(c) Accounting for reserves

Gains and losses on sales of investments are included in the Income Statement and in capital reserves within "gains on sales of investments". Increases and decreases in the valuation of investments held at the year end are included in the Income Statement and in capital reserves within change in unrealised gains on investment at fair value through profit or loss.

Gains and losses on sales of CFDs and increases and decreases in the valuation of CFDs are included in the Income Statement and in capital reserves within "gains on derivatives".

Foreign exchange gains and losses on cash and deposit balances and unrealised exchange gains and losses on foreign currency loans are included in the Income Statement and in capital reserves.

The cost of repurchasing the Company's own shares for cancellation or to hold in treasury, including the related stamp duty and transactions costs is charged to a distributable capital reserve.

(d) Income

Dividends receivable are included in revenue on an ex-dividend basis except where, in the opinion of the Board, the dividend is capital in nature, in which case it is included in capital.

Dividends from overseas companies are included gross of any withholding tax.

Where the Company has elected to receive dividends in the form of additional shares rather than in cash, the amount of the cash dividend foregone is recognised in revenue. Any excess in the value of the shares received over the amount of the cash dividend is recognised in capital.

Deposit interest outstanding at the year end is calculated and accrued on a time apportionment basis using market rates of interest.

(e) Expenses

All expenses are accounted for on an accruals basis. Expenses are allocated wholly to the revenue column of the Income Statement with the following exceptions:

· The management fee is allocated 25% to revenue and 75% to capital in line with the Board's expected long-term split of revenue and capital return from the Company's investment portfolio. The board reviews this allocation on an annual basis.

· Any performance fee is allocated 100% to capital.

· Expenses incidental to the purchase or sale of an investment are charged to capital. These expenses are commonly referred to as transaction costs and mainly comprise brokerage commission. Details of transaction costs are given in note 10 on page 86.

(f) Finance costs

Finance costs, including collateral and finance costs paid on CFDs, any premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis using the effective interest method in accordance with FRS 102.

Finance costs are allocated 25% to revenue and 75% to capital in line with the Board's expected long-term split of revenue and capital return from the Company's investment portfolio. The board reviews this allocation on an annual basis.

(g) Other financial instruments

Cash and cash equivalents may comprise cash, overdrafts, amounts held at derivative clearing houses and demand deposits which are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value.

Other debtors and creditors do not carry any interest, are short-term in nature and are accordingly stated at nominal value, with debtors reduced by appropriate allowances for estimated irrecoverable amounts.

Bank loans are classified as financial liabilities at amortised cost. They are initially measured at the proceeds received, net of direct issue costs, and subsequently measured at amortised cost using the effective interest method

Forward foreign currency contracts are held at fair value through profit or loss based on the gain or loss if the contracts had been closed out at the accounting date, at prevailing market rates.

(h) Taxation

The tax charge for the year includes a provision for all amounts expected to be received or paid.

Deferred tax is provided on all timing differences that have originated but not reversed by the balance sheet date.

Deferred tax liabilities are recognised for all taxable timing differences but deferred tax assets are only recognised to the extent that it is probable that taxable profits will be available against which those timing differences can be utilised.

Deferred tax is measured at the tax rate which is expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates that have been enacted or substantively enacted at the balance sheet date and is measured on an undiscounted basis.

(i) Value added tax (VAT)

Expenses are disclosed inclusive of any related irrecoverable VAT.

(j) Foreign currency

In accordance with FRS 102, the Company is required to determine a functional currency, being the currency in which the Company predominantly operates. The board, having regard to the currency of the Company's share capital and the predominant currency in which its shareholders operate, has determined that sterling is the functional currency and the currency in which the accounts are presented.

Transactions denominated in foreign currencies are converted at actual exchange rates as at the date of the transaction. Monetary assets, liabilities and equity investments, denominated in foreign currencies at the year end, are translated at the rates of exchange prevailing at the year end.

(k) Dividends payable

In accordance with FRS 102, the final dividend is included in the financial statements in the year in which it is approved by shareholders.

(l) Repurchases of shares into treasury and subsequent reissues

The cost of repurchasing the Company's shares into treasury, including the related stamp duty and transaction costs is dealt with in the Statement of Changes in Equity and is charged to capital reserves. Share repurchase transactions are accounted for on a trade date basis.

The sales proceeds of treasury shares reissued are treated as a realised profit up to the amount of the purchase price of those shares and is transferred to capital reserves. The excess of the sales proceeds over the purchase price is transferred to "share premium".

2. Gains on investments held at fair value through profit or loss

3. Income

4. Management and performance fees

Under the terms of the AIFM agreement, the Manager is entitled to a fee at a rate of 0.65% of gross assets less cash and cash equivalents, which is calculated and payable quarterly.

A performance fee is payable amounting to 10% of any outperformance of the NAV over an annual hurdle of 7%, provided that the closing NAV per share exceeds the "high water mark" NAV at the date the last performance fee was paid. The sum of the base fee and any performance fee payable is capped at 1.25% of the closing net assets. In addition, the Manager may only be paid a performance fee when the Company's NAV total return is equal or greater to the total return of the Reference Index. If the Company invests in funds managed or advised by the Manager, any fees earned by the Manager from those investments are rebated to the Company. The management fee chargeable in respect of the year ended 31 December 2025 amounted to £3,124,000 (2024: £3,176,000). No performance fee is payable for the year (2024: £2,767,000).

The Manager is also entitled to a fee for providing administrative, accounting and company secretarial services to the Company. For these services in the year ended 31 December 2025, the Manager received a fee of £75,000 (2024: £75,000). Details of all amounts payable to the Manager are given in note 19 on page 90.

5. Administrative expenses

1 Details of all amounts payable to Directors are given in the Directors' Remuneration Report on page 67.

2 No amounts are payable to the auditor for non-audit services.

6. Finance costs

7. Taxation

(a) Analysis of tax charge for the year

The Company has no corporation tax liability for the year (2024: nil).

The overseas capital gains tax relates to the deferred tax liability on unrealised gains on Indian investments held at the year end. Further details can be found in note 13.

(b) Factors affecting tax charge for the year

The standard rate of corporation tax in the UK is 25%, effective from 1 April 2023. Accordingly, the Company's profits for this accounting year would be taxed at a rate of 25% (2024: 25%). However the corporation tax charge for the year is nil (2024: nil), as dividends and capital gains are not subject to corporation tax. The tax charge comprises irrecoverable withholding tax deducted at source from dividends receivable and overseas capital gains tax.

The table below shows how taxable income is reduced to zero by reconciling the expected corporation tax due on the net return before tax based on current tax rates, to the actual tax charge for the year.

(c) Deferred taxation

The Company has an unrecognised deferred tax asset of £21,134,000 (2024: £19,925,000) based on a prospective corporation tax rate of 25% (2024: 25%).

This deferred tax asset has arisen due to the cumulative excess of deductible expenses over taxable income. Given the composition of the Company's portfolio, it is not likely that this asset will be utilised in the foreseeable future and therefore no asset has been recognised in the financial statements.

Given the Company's intention to meet the conditions required to retain its status as an investment trust company, no provision has been made for UK capital gains tax on any capital gains or losses arising on the revaluation or disposal of investments. Please refer to note 13 for details of the deferred taxation in relation to overseas capital gains tax.

8. Return per share

9. Dividends

(a) Dividends paid and declared

(b) Dividends for the purposes of Section 1158 of the Corporation Tax Act 2010 ("Section 1158")

The requirements of Section 1158 are considered on the basis of dividends declared in respect of the financial year as shown below. The revenue available for distribution by way of dividend for the year is £9,178,000 (2024: £9,164,000).

10. Investments held at fair value through profit or loss

(a) Movement in investments

Sales proceeds amounting to £204,328,000 (2024: £136,629,000) were receivable from disposals of investments in the year. The book cost of these investments when they were purchased was £193,001,000 (2024: £116,950,000). These investments have been revalued over time and until they were sold any unrealised gains and losses were included in the fair value of the investments.

(b) Transaction costs

The following transaction costs, mainly comprising brokerage commissions, were incurred during the year:

(c) Contracts for Difference

The CFDs are held as a cost effective and flexible form of borrowing. The total market exposure on the CFDs held at the year end is £31,713,000 (2024: £15,307,000) and the notional value attached to these CFDs is £31,873,000 (2024: £15,531,000). This resulted in an unrealised loss of £160,000 (2024: £224,000).

11. Current assets

Debtors

The Directors consider that the carrying amount of debtors approximates to their fair value.

Cash and cash equivalents

The carrying amount of cash represents its fair value. No cash equivalents were held at the year end (2024: none).

Derivative financial instruments held at fair value through profit or loss

Details of the CFDs and index put options held at the year end are given on pages 28 to 30

12. Current liabilities

The Directors consider that the carrying amount of creditors falling due within one year approximates to their fair value.

During the year the Company held a 364 day multicurrency credit facility with The Bank of Nova Scotia, London Branch, expiring in July 2026. On 20 October 2025 the loan was repaid in full to The Bank of Nova Scotia. The bank overdraft at 31 December 2025 was repaid during the year. There is no longer an overdraft facility in place.

13. Deferred taxation

Deferred taxation comprises the deferred tax liability on the unrealised gains on Indian investments. Indian capital gains tax crystallises on disposal of the underlying asset and is charged based on a 12 month holding period of the asset. The current rate of tax is 12.5% (plus applicable surcharge and cess) for holdings over 12 months and 20% (plus applicable surcharge and cess) for holdings under 12 months.

The provision for deferred taxation at the year end was £1,944,000 (2024: £1,551,000).

14. Called-up share capital

1 Represents 109,114,651 (2024: 109,114,651) shares of 5p each, including 15,590,197 (2024: 15,590,197) held in treasury.

15. Reserves

1 The share premium is a non distributable reserve and represents the amount by which the fair value of the consideration received from shares issued exceeds the nominal value of shares issued.

2 The capital redemption reserve represents the accumulated nominal value of shares repurchased for cancellation. This reserve is not distributable.

3 This is a distributable capital reserve arising from the cancellation of the share premium, and may be distributed as dividends or used to repurchase the Company's own shares.

4 Capital Reserves represent a realised and unrealised net amount and a positive balance may be used to purchase the companys own shares. This reserve may include some holding gains on liquid investments (which may be deemed to be realised) and other amounts which are unrealised. An analysis has not been made between those amounts that are realised (and may be distributed as dividends or used to repurchase the Company's own shares) and those that are unrealised.

5 A positive balance on the revenue reserve may be distributed as dividends or used to repurchase the Company's own shares.

16. Net asset value per share

17. Reconciliation of net return before finance costs and taxation to net cash inflow from operating activities

18. Analysis of changes in net debt

19. Transactions with the Manager

Under the terms of the Alternative Investment Fund Manager Agreement, the Manager is entitled to receive management, secretarial and performance fees. Details of the basis of these calculations are given in the Directors' Report on page 57. If the Company invests in funds managed or advised by the Manager, any fees earned by the Manager are rebated to the Company. The management fee payable in respect of the year ended 31 December 2025 amounted to £3,124,000 (2024: £3,176,000) of which £830,000 (2024: £799,000) was outstanding at the year end.

The performance fee payable in respect of the year amounted to £nil.(2024: £2,767,000).

The secretarial fee payable for the year amounted to £75,000 (2024: £75,000) of which £19,000 (2024: £19,000) was outstanding at the year end.

No Director of the Company served as a Director of any company within the Schroder Group at any time during the year.

20. Related party transactions

Details of the remuneration payable to Directors are given in both note 5 and in the Directors' Remuneration Report on page 67. Details of Directors' shareholdings are given in the Directors' Remuneration Report on page 68. Details of transactions with the Manager are given in note 19 above. There have been no other transactions with related parties during the year (2024: nil).

21. Disclosures regarding financial instruments measured at fair value

The Company's financial instruments within the scope of FRS 102 that are held at fair value include its investment portfolio and derivative financial instruments.

FRS 102 requires financial instruments to be categorised into a hierarchy consisting of the three levels below.

Level 1 - valued using unadjusted quoted prices in active markets for identical assets.

Level 2 - valued using inputs, other than quoted prices included within Level 1, that are directly or indirectly observable (based on market data such as quoted prices for similar instruments in active markets, broker quoted prices, or yield curves).

Level 3 - valued using inputs that are unobservable.

Details of the Company's policy for valuing investments and derivative instruments are given in note 1(b) on page 81.

The following table sets out the fair value measurements using the FRS 102 hierarchy at 31 December:

22. Financial instruments' exposure to risk and risk management policies

In pursuing its objective, the Company is exposed to a variety of financial risks including market risk (comprising currency risk, interest rate risk and market price risk), liquidity risk and credit risk. The Directors' policy for managing these risks is set out below.

The process for managing risk is unchanged from the previous year. The Company's financial instruments may comprise:

· investments in equities and equity related securities which are held in accordance with the Company's investment objective;

· short-term debtors, creditors and cash arising directly from its operations;

· a multicurrency credit facility with The Bank of Nova Scotia, the purpose of which is to assist in financing the Company's operations;

· index put options, which are used to protect the capital value of the portfolio;

· forward currency contracts, the purpose of which is to manage the currency risk arising from the Company's investment activities; and

· contract for differences, which are used for the purpose to gain further exposure to Asian markets.

(a) Market risk

Market risk comprises three elements - foreign currency risk, interest rate risk and market price risk. Information to enable an evaluation of the nature and extent of these three elements of market risk is given in parts (i) to (iii) of this note, together with sensitivity analyses where appropriate.

(i) Foreign currency risk

The majority of the Company's assets, liabilities and income are denominated in currencies other than sterling, which is the Company's functional currency and the presentational currency of the financial statements. As a result, movements in exchange rates will affect the sterling value of those items.

Management of foreign currency risk

The Manager monitors the Company's exposure to foreign currencies on a daily basis and reports to the Board. The Board has authorised the use of derivative instruments to hedge currency exposure as part of the investment strategy to protect the capital value of the portfolio, or for efficient portfolio management.

Foreign currency exposure

The fair value of the Company's monetary items that have foreign currency exposure at 31 December are shown below. The Company's investments, CFDs and index put options (which are not monetary items) have been included separately in the analysis so as to show the overall level of exposure.

1 Excluding any stocks or CFDs priced in sterling.

The above year end amounts are broadly representative of the exposure to foreign currency risk during the current and prior year.

Foreign currency sensitivity

The following tables illustrate the sensitivity of net profit for the year and net assets with regard to the Company's monetary financial assets and financial liabilities and exchange rates. The sensitivity analysis is based on the Company's monetary currency financial instruments held at each balance sheet date and assumes a 10% (2024: 10%) appreciation or depreciation in sterling against the currencies to which the Company is exposed, which is considered to be a reasonable illustration based on the volatility of exchange rates during the year.

If sterling had weakened by 10% this would have had the following effect: