2023

REPORT AND ACCOUNTS

EMERGING CITIES | EMERGING WEALTH | EMERGING OPPORTUNITIES

TRUSTED

A closed end fund

focused on long-term

total return

DIVERSIFIED

A diverse portfolio of

operational cash

generative investments

PROVEN

Strong management team

with a long-term record

of outperformance

Utilico Emerging Markets Trust plc’s investment

objective is to provide long-term total return

through a flexible investment policy that permits

UEM to make investments predominantly in

infrastructure, utility and related sectors, mainly in

emerging markets.

International Container Terminal Services, Inc. (The Philippines)

Report and Accounts for the year to 31 March 2023

WHY UTILICO EMERGING MARKETS TRUST PLC?

UNIQUE EXPOSURE

UEM offers a diverse portfolio of high conviction, bottom-

up investments in utilities and infrastructure, providing

unique exposure to emerging markets megatrends.

REAL ASSETS DRIVING COMPELLING RETURNS

The portfolio of operational infrastructure assets

benefitting from megatrends typically offers attractive

growth and yields. As a result of long term cash flows,

which are often underpinned by established regulatory

frameworks, the portfolio provides predictable,

sustainable and growing income.

EXPERIENCED MANAGEMENT

Since UEM’s inception in 2005, the portfolio has been

managed by a dedicated, active investment team with

a long track record of investing successfully in this

highly specialised asset class.

STRONG PERFORMANCE

As at 31 March 2023,

UEM has delivered a 9.3%

annualised NAV total return over 17 years with a 3.8%

dividend yield and has outperformed the MSCI Emerging

Markets Index over the last one, three, and five years and

since inception.

Utilico Emerging Markets Trust plc is a unique

UK listed fund focused on global infrastructure

megatrends in emerging markets.

Utilico Emerging Markets Trust plc

CONTENTS

FINANCIAL CALENDAR

Year End

31 March

Annual General Meeting

19 September 2023

Half Year

30 September

Dividends Payable

March, June, September

and December

The business of Utilico Emerging

Markets Trust plc ( UEM or

the Company ) consists of

investing the pooled funds of

its shareholders in accordance

with its investment objective and

policy, with the aim of spreading

investment risk and generating

a return for shareholders. The

joint portfolio managers of the

Company are ICM Investment

Management Limited (“ICMIM”)

and ICM Limited (“ICM”), together

referred to as the “Investment

Managers”.

PERFORMANCE

4 Current Year Performance

5 Performance Summary

6 Chairman’s Statement

10 Geographical Investment Exposure

11 Top Thirty Companies

13 Performance Since Inception (20 July 2005)

14 Ten Year Performance

STRATEGIC REPORT AND INVESTMENTS

15 Investment Managers’ Report

19 Megatrends Driving Upside in Emerging Markets

22 Our Investment Approach

24 ESG Spotlight

25 Largest Holdings Overview

31 Strategic Report

40 Investment Managers and Team

GOVERNANCE

42 Directors

43 Directors’ Report

49 Corporate Governance Statement

55 Directors’ Remuneration Report

58 Audit & Risk Committee Report

61 Directors’ Statement of Responsibilities

FINANCIAL STATEMENTS

62 Independent Auditor’s Report

68 Accounts

72 Notes to the Accounts

ADDITIONAL INFORMATION

91 Notice of Annual General Meeting

95 Company Information

96 Alternative Performance Measures

98 Historical Performance

China Gas Holdings Limited (China)

Front cover image – Alupar Investimento S.A.

(Brazil) – Andre S Prietsch

Report and Accounts for the year to 31 March 2023

FINANCIAL HIGHLIGHTS

NET ASSET VALUE

(“NAV”) TOTAL RETURN

PER SHARE*

2.1%

(2022: 14.9%)

SHARE PRICE TOTAL

RETURN PER SHARE*

0.8%

(2022: 17.6%)

REVENUE EARNINGS

OF 9.40P PER SHARE

 15.1%

(2022: 0.5%)

DIVIDENDS OF 8.45P

PER SHARE

 5.6%

(2022: 2.9%)

* See Alternative Performance Measures on pages 96 and 97

Petalite Limited (UK)

UEM turned in a strong performance in the second

half of the year and delivered a positive NAV total

return of 2.1% for the year to 31 March 2023.

Utilico Emerging Markets Trust plc

CURRENT YEAR PERFORMANCE

TOTAL RETURN COMPARATIVE PERFORMANCE

(1)

from 31 March 2022 to 31 March 2023

Source: ICM and Bloomberg

(1)

Rebased to 100 as at 31 March 2022

MSCI Emerging Markets total return Index (GBP adjusted)

NAV total return per share

Mar 23Feb 23Jan 23Dec 22Nov 22Oct 22Sep 22Aug 22Jul 22Jun 22May 22Apr 22Mar 22

100

105

DIVIDENDS OF 8.45P

PER SHARE

 5.6%

(2022: 2.9%)

DIVIDENDS PAID

£17.2m

(2022: £17.5m)

INVESTED

£108.9m

(2022: £124.5m)

REALISED

£126.6m

(2022: £176.9m)

NAV TOTAL RETURN

PER SHARE*

2.1%

(2022: 14.9%)

SHARE PRICE

TOTAL RETURN

PER SHARE*

0.8%

(2022: 17.6%)

NAV OF 250.91P

PER SHARE*

1.3%

(2022: 11.2%)

SHARE PRICE

OF 217.00P

 3.1%

(2022: 13.4%)

12.5M SHARES

BOUGHT BACK

£27.2m

(2022: £13.9m)

TOTAL REVENUE

RETURN INCOME

£24.3m

(2022: £22.6m)

ONGOING CHARGES*

1.4%

(2022: 1.4%)

NET DEBT

INCREASED TO

£36.1m

(2022: £23.2m)

* See Alternative Performance Measures on pages 96 and 97

Report and Accounts for the year to 31 March 2023

PERFORMANCE SUMMARY

31 March

2023

31 March

2022

% change

2023/22

NAV total return per share

(1)

(annual) (%) 2.1 14.9 n/a

Share price total return per share

(1)

(annual) (%) 0.8 17.6 n/a

Annual compound NAV total return

(1)

(since inception - 20 July 2005) (%) 9.3 9.7 n/a

NAV per share

(1)

(pence) 250.91 254.22 (1.3)

Share price (pence) 217.00 224.00 (3.1)

Discount

(1)

(%) (13.5) (11.9) n/a

Earnings per share (basic)

- Capital (pence) (6.61) 24.49 (127.0)

- Revenue (pence) 9.40 8.17 15.1

Total (pence) 2.79 32.66 (91.5)

Dividends per share

- 1st quarter (pence) 2.00 2.00 0.0

- 2nd quarter (pence) 2.15 2.00 7.5

- 3rd quarter (pence) 2.15 2.00 7.5

- 4th quarter (pence) 2.15

(2)

2.00 7.5

Total (pence) 8.45 8.00 5.6

Gross assets

(3)

(£m) 542.5 569.6 (4.8)

Equity holders’ funds (£m) 507.4 545.9 (7.1)

Shares bought back (£m) 27.2 13.9 95.7

Net (overdraft)/cash (£m) (1.0) 0.5 (300.0)

Bank loans (£m) (35.1) (23.7) 48.1

Net debt (£m) (36.1) (23.2) 55.6

Gearing

(1)

(%) (7.1) (4.3) n/a

Management and administration fees and other expenses 7.4 7.3 1.4

Ongoing charges figure

(1)

1.4 1.4 n/a

(1)

See Alternative Performance Measures on pages 96 and 97

(2)

The fourth quarterly dividend has not been included as a liability in the accounts

(3)

Gross assets less liabilities excluding loans

On 3 April 2018, as a result of the proposals to redomicile Utilico Emerging Markets Limited (“UEM Limited”) from Bermuda to the

United Kingdom, the shareholders of UEM Limited exchanged all their shares in UEM Limited for shares in UEM on a one for one

basis and UEM Limited became a wholly owned subsidiary of UEM. All performance data relating to periods prior to 3 April 2018 are

in respect of UEM Limited.

Utilico Emerging Markets Trust plc

The year to 31 March 2023

has continued to be truly

challenging for all, including

investors. From the war in

Ukraine through to inflation

and sharply higher central

bank interest rates; to rising

geopolitical friction; and to

the challenges on climate

change and significant natural

disasters. Understandably,

volatility in most markets has

been elevated as uncertainty has dominated.

UEM turned in a strong performance in the second

half of the year and importantly delivered a positive

NAV total return of 2.1% for the year to 31 March 2023.

This was once again significantly ahead of the MSCI EM

total return Index which was down 5.0% over the same

period.

UEM measures its performance on a total return basis

over the long term and the Investment Managers are

seeking long term performance to be above 10.0% per

annum including a rising dividend. Over one, three and

five years and since inception, UEM has outperformed

the MSCI EM Index. It is pleasing to highlight the

long term annual compound NAV total return since

inception to 31 March 2023 of 9.3% exceeding the

MSCI EM total return Index of 7.6%.

GLOBAL ECONOMY

As referred to earlier, there are numerous headwinds

currently faced by the markets, each of which is

challenging in its own right. We have historically

discussed a number of these and they largely remain

unresolved. We continue to witness a significant rise in

nationalism, wealth inequality and global immigration.

All of these issues and challenges no doubt tear at the

fabric of our societies and institutions.

One positive is that Covid looks to be behind us. The

World Health Organisation finally declared the Covid

emergency over in May 2023. At the time of publishing

UEM’s half yearly report in November 2022, we were

deeply concerned about the challenges faced by

China given their zero Covid policy. The about-turn by

China on Covid was a surprise in both its timing and

approach. We had expected China to vaccinate its

population and slowly lift restrictions in the summer

this year. Faced with the highly infectious Omicron

variant already penetrating the wider Chinese

population and the heavy burden of ineffective

lockdowns, the decision to go from zero Covid

tolerance to total tolerance was bold. Certainly, at an

investee level, it has had very limited impact on the

ability of corporates to run their businesses today.

Unfortunately the same cannot be said of the war in

Ukraine. It remains devastating on a number of levels.

The harshness of the Russian army will be a wound on

CHAIRMAN’S STATEMENT

JOHN RENNOCKS

Chairman

Source Bloomberg

Consumer

staples

Consumer

discretionary

UEM NAV

total return

per share

Energy Industrials Communication

services

Financials Information

technology

Utilities Healthcare Materials

5 8%

2 3%

2 1%

1 3%

(0 3)%

(1 5)%

(8 0)%

(8 4)%

(8 9)%

(10 0)%

(10 2)%

MSCI EMERGING MARKETS SECTOR INDEX TOTAL RETURNS (GBP ADJUSTED)

from 31 March 2022 to 31 March 2023

Report and Accounts for the year to 31 March 2023

liberal societies for decades to come. The need to have

resilient and diversified supply chains, energy security,

green energy and increased defence capabilities will

see resources diverted and reinvested with an urgency

and scale not witnessed in our lifetime. This shift will

give rise to new opportunities for investors, including

UEM.

The legacy of Covid and the West’s response to it has

undoubtedly led to higher debt and higher inflation,

and the Russian war in Ukraine has seen sharply higher

commodity prices and accelerating inflation. The

response by the Central Banks to higher inflation has

been to rapidly raise interest rates to bring inflation

under control. The surprising part has been the

resilience in the labour market where in most Western

countries, unemployment levels are at record lows.

This is good for workers but ultimately negative for the

inflation outlook if it persists, as wage demands will

keep inflation high.

EMERGING MARKETS

Most EM markets were down over the year reflecting

local headwinds, higher interest rates and lower

valuations. Brazil’s Bovespa Index was down 15.1%, the

Philippine PSEI Index was down 9.8% and the Hong

Kong Hang Seng Index was down 7.3%. Some markets

have held up, most notably India’s Sensex which was

up by 0.7%. A common theme has been rising inflation

in Latam and Eastern Europe and weakening property

markets in Asia. Of note is the volatility – at its low

the Hang Seng Index was down over 30.0% and the

Philippine PSEI was down over 20.0%.

In comparison most currencies were up against UK

Sterling although for UEM notably the Brazilian Real,

Chinese Renminbi and Indian Rupee were all down

0.2%, 1.7% and 1.8% respectively. Again, volatility was

high. The Hong Kong Dollar was at one point during the

year up over 20.0% and the Indian Rupee was up by

15.0% against Sterling.

Most commodities have moved lower during the

period under review as supply chains have adjusted,

with oil down by 26.1%, wheat down by 31.2% and

soybean down by 12.6%. Although copper moved

higher, up by 16.0%. But most remain elevated

compared to historic levels which is feeding through

into inflation.

UNLISTED INVESTMENTS (LEVEL 3 INVESTMENTS)

UEM has over the years invested in unlisted businesses

at a modest level. This remains true today. As at

31 March 2023 the value of the unlisted portfolio has

risen to 10.8% which has been driven primarily by

the revaluation of Petalite Limited ( Petalite ). UEM is

unable to invest further in unlisted investments while

the valuation of its unlisted portfolio is over 10.0% of

gross assets. Petalite is a disruptive technology start

Source Bloomberg

Mar

2023

Dec

2022

Sep

2022

Jun

2022

Mar

2022

PSEi – Philippine SE Index

Shanghai SE Composite Index

Brazil Ibovespa Index

Rebased to 100 as at 31 March 2022

100

110

Hang Seng Index

NIFTY 50 Index

INDICES MOVEMENTS

from 31 March 2022 to 31 March 2023

Utilico Emerging Markets Trust plc

up business and gives UEM exposure to the electric

vehicles revolution through charging infrastructure.

UEM invested a modest amount, some £1.5m for an

interest of approximately 30.0%. Following external

fund raising, in which UEM invested a further £1.25m,

and significant progress, our holding in Petalite was

valued upwards in the year to £28.6m.

REVENUE EARNINGS AND DIVIDEND

It is excellent to see UEM’s revenue earnings per share

(“EPS”) increase by 15.1% to 9.40p given the wider

market challenges as inflation and interest rates have

risen sharply during the year to 31 March 2023.

UEM has declared one quarterly dividend of 2.00p and

three quarterly dividends of 2.15p each, totalling 8.45p

per share, a 5.6% increase over the previous year.

Dividends remain fully covered by income. The retained

earnings revenue reserves increased by £2.3m in the

year to £9.6m as at 31 March 2023, equal to 4.74p per

share.

The Board would like to re-emphasise that UEM’s

portfolio is predominantly invested in relatively liquid,

cash-generative companies which have long-duration

operational, infrastructure and utility assets that

the Company’s Investment Managers believe are

structurally undervalued and offer the potential for

excellent total returns.

SHARE BUYBACKS

Disappointingly UEM’s share price discount widened

over the year from 11.9% as at 31 March 2022 to 13.5%

as at 31 March 2023. This remains above the level that

the Board would wish to see over the medium term.

The Company has continued buying back shares for

cancellation, with 12.5m shares bought back in the year

to 31 March 2023, at an average price of 215.45p and

total cost of £27.2m.

While the Board is keen to see the discount narrow, any

share buyback remains an independent investment

decision. Historically the Company has bought back

shares if the discount widens in normal market

conditions to over 10.0%. Since inception, UEM has

bought back 75.1m ordinary shares totalling £138.8m.

The buybacks now represent significantly more than

the initial IPO capitalisation of UEM Limited when it

came to market in July 2005. The share buybacks have

contributed 0.8% to UEM's total returns.

ONGOING CHARGES

Ongoing charges were unchanged at 1.4% for the year

to 31 March 2023, a good result especially given the

wider inflationary environment.

Source: Bloomberg

Hong Kong Dollar

Brazilian Real

Philippine Peso

Romanian Leu

Dec

2022

Sep

2022

Jun

2022

Mar

2022

Rebased to 100 as at 31 March 2022

100

110

120

130

Mar

2023

Indian Rupee

CURRENCY MOVEMENTS vs STERLING

from 31 March 2022 to 31 March 2023

CHAIRMAN’S STATEMENT (continued)

Report and Accounts for the year to 31 March 2023

BOARD

We announced plans for board refreshment in 2021,

which included the appointments of Mark Bridgeman

and Isabel Liu later that year and after the 2022 Annual

General Meeting (“AGM”) Anthony Muh stepped down

from the Board. Continuing with these initiatives,

Susan Hansen has confirmed her intention to retire

from the Board following the conclusion of UEM’s next

AGM in September 2023. Susan has brought significant

insight, experience and challenge to the Board since

she joined in 2013.

As noted in the half yearly report, the Directors have

reviewed the composition of the Board and the current

intention is to continue as a Board of four Directors.

This will be kept under review as part of the annual

Board evaluation process.

ADVISER AND INVESTOR COMMUNICATION

We referred to proposals for increased investor

communication in the half yearly report and the

continued focus on marketing UEM to the wider

investment community. As part of these initiatives

we were pleased to announce, after a competitive

pitch process, the appointments of Barclays as joint

corporate broker alongside Shore Capital, and RMS

Partners to help lead investor engagement with

regional institutions and private client fund managers.

We also draw investors’ attention to UEM’s website

which has extended its content significantly, providing

comprehensive insights from the Investment Managers

on areas such as individual EM countries and portfolio

stocks.

UEM is working with its advisers to rejuvenate the

marketing presentation and draw attention to a

number of megatrend tailwinds benefitting UEM, see

page 19. Our drive is to improve investor knowledge

and broaden its investor base, especially retail.

OUTLOOK

The megatrends driving much of the global growth

in emerging markets are strengthening. We see

UEM’s portfolio as well placed to benefit from these

megatrends.

The investee company’s management teams have

demonstrated an enviable ability to seize the

opportunity even in these challenging markets. We

remain optimistic for UEM.

John Rennocks

Chairman

16 June 2023

DIVIDEND PER SHARE OF 8.45P, UP BY

5.6%

FOR THE YEAR TO 31 MARCH 2023

Santos Brasil Participacoes S.A. (Brazil)

Utilico Emerging Markets Trust plc

GEOGRAPHICAL INVESTMENT EXPOSURE

AS AT 31 MARCH 2023

Source: ICM

Figures in brackets as at 31 March 2022.

Mexico

5.4%

(4 2%)

Chile

3.7%

(1 8%)

Brazil

20.9%

(20.9%)

Colombia

2.2%

(3.5%)

Other Europe

5.9%

(6.9%)

China

(including Hong Kong)

15.8%

(15.9%)

South Korea

4.1%

(5.4%)

The Philippines

4.9%

(4.6%)

India

10.7%

(11.3%)

Middle East/

Africa

5.8%

(5.6%)

Other Asia

4.8%

(7 2%)

Vietnam

7.0%

(7.1%)

6.2%

(3.8%)

Poland

2.6%

(1.8%)

Report and Accounts for the year to 31 March 2023

TOP THIRTY COMPANIES

5.2%

Petalite Limited

Renewables

An electric

vehicle charging

infrastructure

company based in

the UK.

28,607

Fair value £’000s

3.1%

Gujarat State

Petronet Limited

Gas

A natural gas

transmission and

distribution company

in India.

17,085

Fair value £’000s

3.8%

Alupar

Investimento S.A.

Electricity

A Brazilian

holding company

for electricity

transmission and

renewable assets.

20,643

Fair value £’000s

4.9%

International

Container Terminal

Services, Inc.

Ports and Logistics

A global port

management

company

headquartered in the

Philippines.

26,584

Fair value £’000s

3.4%

Orizon Valorizacao

de Residuos S.A.

Water and Waste

A waste treatment

operator in Brazil.

18,432

Fair value £’000s

2.8%

India Grid Trust

Electricity

An infrastructure

investment trust

with electricity

transmission and

solar assets in India.

15,057

Fair value £’000s

2.3%

Citic Telecom

International

Holdings Limited

Telecommunications

telecommunications

service provider in

Asia.

12,489

Fair value £’000s

2.4%

FPT Corporation

Data Services

and Digital

Infrastructure

An information

technology and

telecommunications

service company in

Vietnam.

12,983

Fair value £’000s

2.4%

Grupo

Aeroportuario del

Centro Norte, S.A.B.

de C.V.

Airports

A Mexican airport

operator.

13,146

Fair value £’000s

2.3%

Power Grid

Corporation of India

Limited

Electricity

An electricity

transmission

company in India.

12,755

Fair value £’000s

Note: % of total investments

For more information on the top ten companies, see the holdings review starting on page 26.

Utilico Emerging Markets Trust plc

31 March

2023 Company (Country) Description

Fair value

£’000s

% of total

investment

11 VinaCapital Vietnam Opportunity Fund Ltd

(Vietnam)

Investment trust 12,092 2.2

12 CGN Capital Partners Infra Fund 3

(Hong Kong)

Renewable assets fund 11,615 2.1

13 China Gas Holdings Limited (China) Gas distributor 11,395 2.1

14 Rumo S.A. (Brazil) Rail-based logistics operator 10,939 2.0

15 China Datang Corporation Renewable

Power Co., Limited (China)

Electricity generation 10,857 2.0

16 Engie Energia Chile S.A. (Chile) Electricity generation and transmission 10,745 2.0

17 Korean Internet Neutral Exchange Inc.

(South Korea)

Data centre operator 10,388 1.9

18 Aguas Andinas S.A. (Chile) Water distributor and sanitation 9,708 1.8

19 Umeme Limited (Uganda) Electricity distributor 9,637 1.8

20 Centrais Eletricas Brasileiras S.A. (Brazil) Electricity generation and transmission 9,621 1.8

21 Santos Brasil Participacoes S.A. (Brazil) Port operator 9,612 1.8

22 KunLun Energy Company Limited (China) Gas transmission and distributor 9,473 1.7

23 InPost S.A. (Poland) Logistics operator 9,345 1.7

24 Grupo Aeroportuario del Pacifico, S.A.B. de

C.V. (Mexico)

Airport operator 8,901 1.6

25 Vamos Locacao de Caminhoes Maquinas e

Equipamentos S.A. (Brazil)

Trucks and machinery leasing and

sales

8,875 1.6

26 Powergrid Infrastructure Investment Trust

(India)

Infrastructure investment trust 8,181 1.5

27 Conversant Solutions Pte Ltd (Singapore) Technology company 7,877 1.4

28 Telelink Business Services Group (Bulgaria) Information technology service

provider

7,726 1.4

29 Shanghai International Airport Co., Ltd

(China)

Airport operator 7,508 1.4

30 Grupo Traxion S.A.B. de C.V. (Mexico) Logistics operator 7,220 1.3

Other investments 176,161 32.3

Total portfolio 545,657 100.0

TOP THIRTY COMPANIES (continued)

Report and Accounts for the year to 31 March 2023

PERFORMANCE SINCE INCEPTION (20 JULY 2005)

NAV ANNUAL

COMPOUND TOTAL

RETURN*

9.3%

NAV TOTAL RETURN

PER SHARE*

381.6%

SHARE PRICE TOTAL

RETURN PER SHARE*

329.7%

Source: ICM and Bloomberg

Mar

Jul

Share price total return

(2)

MSCI Emerging Markets

total return

Index (GBP adjusted)

NAV total return per share

(2)

(1)

Rebased to 100 as at 20 July 2005

(2)

Adjusted for the exercise of warrants and subscription shares

100

150

200

250

300

350

400

450

500

Mar

MSCI Emerging Markets

Utilities total return

Index (GBP adjusted)

Mar

HISTORIC NAV AND SHARE PRICE PERFORMANCE (pence)

(1)

from 20 July 2005 to 31 March 2023

75.1M SHARES

BOUGHT BACK

£138.8m

DIVIDENDS PER SHARE

INCREASED FROM

1.50P TO

8.45p

DIVIDENDS PAID

CUMULATIVE

£220.6m

* See Alternative Performance Measures on pages 96 and 97

Utilico Emerging Markets Trust plc

TEN YEAR PERFORMANCE

202120202019201820172016201520142013

Source: ICM

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

2022 2023

202120202019201820172016201520142013

Source ICM

0 0

2 0

4 0

6 0

8 0

10 0

2022 2023

DIVIDENDS PER SHARE (pence)

from March 2013 to March 2023

REVENUE EARNINGS PER ORDINARY SHARE (pence)

from March 2013 to March 2023

202120202019201820172016201520142013

Source: ICMPurchases

Realisations

100

150

200

250

300

2022 2023

Source: ICM

Largest investment

Value of 2–10

Value of 11–20

Value of 21–40 Value of 41 and over

20202019201820172016201520142013 2021

100

200

300

400

500

600

700

2022

92 87 92

88 79

2023

INVESTMENT PURCHASES AND REALISATIONS (£m)

from March 2013 to March 2023

PORTFOLIO PROGRESSION (£m) AND NUMBER

OFHOLDINGS

from March 2013 to March 2023

UEM invests primarily in companies and sectors

displaying the characteristics of essential services

or monopolies, benefitting from global megatrends.

Report and Accounts for the year to 31 March 2023

INVESTMENT MANAGERS’ REPORT

It is pleasing to see UEM deliver

another positive NAV gain, with

a NAV total return for the year

of 2.1%, building on last year’s

14.9% uplift and the prior year’s

30.2% return. This performance

was again significantly ahead of

the MSCI EM total return Index

which was down by 5.0% during

the year to 31 March 2023 and

down by 6.9% in the year to

31 March 2022. As previously

noted, UEM’s asset sector class was largely overlooked

by the markets early in the pandemic, which focused

on the shift to working from home. This led to markets

rewarding the technology sector shares, but since the

approval of the Covid-19 vaccines, the market has shifted

and now the embedded value in UEM’s portfolio is being

increasingly recognised.

UEM’s one year, three years, five years and since

inception performance is ahead of the MSCI Index. UEM

has delivered this together with a rising dividend; a low

Beta (as at 31 March 2023, UEM’s five year Beta was

0.76x); and with a portfolio which is very different from

the MSCI Index (UEM’s active share is over 95.0%). This

should be compelling to investors who want exposure to

emerging markets, top performance and comparatively

low levels of volatility.

We were surprised by China's decision to go from zero

Covid tolerance to total tolerance. We assumed China

would vaccinate then exit their zero Covid policy in the

summer of 2023. It has been very pleasing to see that

globally the focus on Covid has evaporated and in our

travels to India, Poland, Mexico, Chile and Brazil this year,

Covid was hardly mentioned.

However, the world is still faced with a number of

unresolved deep-seated challenges. As noted in the

Chairman’s Statement these range from inflation to

climate change. Given we have highlighted a number

of these issues before we will focus on four topics in

particular that we discuss at length as an investment

team. Finding consensus on these issues has been and

continues to be challenging.

INFLATION AND INTEREST RATES

Inflation has risen sharply and remained elevated in the

developed economies. An undoubted driver of this has

been tight labour markets which has led to wage inflation

as buying power shifts to the wider workforce. If left

unaddressed this will cause further inflationary pressures

and may become embedded in economies.

We have been surprised by the tightness of labour

markets. Unemployment levels are at record lows in

many countries. Our view is that the combination of

workers suffering from long Covid and increased social

care falling on families, together with early retirement has

all contributed to the reduction in the available labour

force.

Inflation has also been exacerbated by changes in supply

chains. The drive for food security, energy independence

and the shift to nearshoring however will all have likely

added to the cost of supply chains. The lowest cost of

production is no longer the sole driver of decisions.

Commodities have also played a part in inflation

reflecting an imbalance as demand exceeds supply in

certain products. This is likely to continue as decades of

under-investment cannot be redressed overnight.

Further, the response to the Ukraine war will see an

increased drive for energy security, supply chain security

and military security. These three challenges are likely

to be pursued at a significant pace and will result in

heightened demand for commodities. Structurally we

therefore see commodity demand rising and pricing to

remain on the upside.

To address the rising inflationary outlook in the

developed world, Central Banks have raised interest rates

at a rapid pace. We expect we are at the point where

interest rates plateau before declining. The “lower for

longer” mantra has been replaced by “higher for longer”.

A point to note is that Latam has seen inflationary

pressures well ahead of the developed world and its

Central Banks have responded firmly and early. Most

Latam countries have Central Bank interest rates of

over 10.0%. Correspondingly we are seeing inflation in

Latam firmly roll over. Our expectation is that a number

of Central Banks are now in a position to lower interest

rates.

CHARLES JILLINGS

Investment Manager

Utilico Emerging Markets Trust plc

Inflation has not been as much of a challenge in Asia. We

suspect this results from higher unemployment levels at

the start of Covid. As a consequence, wage pressures are

lower, as is inflation. It is worth noting China’s inflation is

running at under 2.0%.

UKRAINE

The war in Ukraine has gone on longer than we expected

but has had less of a long-term impact on energy and

wheat markets than we thought. Both these commodities

have seen their prices fall significantly over the year. As

such, inflationary pressures are much reduced for these

two commodities.

However, the wider global inflationary legacy is expected

to persist. The threat from energy supply and supply chain

security will require significant investment to address

these two concerns and inflationary pressures will remain.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”)

Climate change remains at the forefront of global debate,

heightened by the increased impact of climate disasters

worldwide. ICM has committed to measuring and reducing

its own carbon emissions through a range of initiatives. As

an investor who expects our investees to consider their

impact on the environment, it is therefore important to

lead by example.

Energy transition is a megatrend which is the catalyst that

will enable nations to reach their net zero commitments.

As the transition intensifies attention will turn to new

technologies within supply chains. Production will face

increased scrutiny from downstream industries, investors

and the public over ESG issues. The transition will need

UMEME LIMITED (UGANDA) (“UMEME”)

Umeme is the largest energy distributor in Uganda,

distributing around 97.0% of all the electricity in the

country.

to be carefully managed to ensure that the impact

generated from clean technologies is maximised.

ICM’s approach therefore encompasses the need to

understand the upstream supply chains of investees’

products.

CLIMATE CHANGE

The war in Ukraine has been a true setback for the

globally supported aim of reducing carbon emissions.

However, the best way to address the energy shortfall

may be to invest in green technologies and electric

vehicles, thereby achieving two ambitions at once, energy

security and green energy supply.

The past year has provided a stark reminder of the

devastation that can arise from climate change-related

disasters. Climate-driven events are becoming more

frequent and severe. China featured twice in the ten

most costly climate change-related disasters in 2022.

Climate change risk is monitored across the portfolio,

however predicting the likelihood and impact of events

remains a difficult task. Currently, we see geographical

diversification as the best way to mitigate the risk posed

by climate-related disasters.

PORTFOLIO

UEM’s gross assets (less liabilities excluding loans)

decreased to £542.5m as at 31 March 2023 from

£569.6m as at 31 March 2022. This reflects valuation

uplifts offset by net realisations to fund, in part, the share

buybacks of £27.2m in the year.

At the year end the top thirty holdings accounted for

67.7% of the total portfolio (31 March 2022: 65.6%).

There have been nine new entrants into the top thirty

holdings over the year. UEM increased its investment

in China Gas Holdings Limited (“China Gas”) by 42.9%,

Aguas Andinas S.A. (“Aguas Andinas”) by 203.1%,

Centrais Eletricas Brasileiras S.A. (“Eletrobras”) by 73.6%,

InPost S.A. (“InPost”) by 53.2% and Vamos Locacao de

Caminhoes Macquinas e Equipamentos S.A. (“Vamos”)

by 93.6%. Shanghai International Airport Co., Ltd (“SHIA”)

is a new investment in the year. This together with some

strong share price performances from China Gas up

by 10.4%, Aguas Andinas up 38.6%, InPost up 46.0%

and SHIA up 13.3% moved them all into the top thirty

holdings. Umeme Limited saw its share price recover by

74.2% and is now in nineteenth position in our portfolio.

Grupo Traxion S.A.B. de C.V. rose into the top thirty as we

reduced other holdings.

INVESTMENT MANAGERS’ REPORT (continued)

Report and Accounts for the year to 31 March 2023

BRAZIL REMAINS UEM’S LARGEST

COUNTRY EXPOSURE

20.9%

(2022: 20.9%)

CHINA REMAINS UEM’S SECOND

LARGEST COUNTRY EXPOSURE

15.8%

(2022: 15.9%)

INDIA REMAINS UEM'S THIRD

LARGEST COUNTRY EXPOSURE

10.7%

(2022: 11.3%)

LATAM’S EXPOSURE

32.2%

(2022: 30.4%)

ASIA’S EXPOSURE

47.3%

(2022: 51.5%)

REST OF THE WORLD

20.5%

(2022: 18.1%)

IN THE YEAR TO 31 MARCH 2023

See page 10 for the full geographic exposure

SECTOR SPLIT OF INVESTMENTS

Electricity

17.4%

(15 . 5%)

orts and Logistics

17.0%

(19.3%)

ata Services and

igital Infrastructure

13.1%

(15.6%)

Renewables

12.7%

(9.7%)

Gas

7.5%

(8.4%)

Airports

7.4%

(4.8%)

Telecommunications

6.7%

(8.6%)

Water and Waste

6.6%

(4.0%)

Other

4.5%

(5.6%)

Infrastructure

Investment Funds

3.7%

(4.9%)

Road and Rail

3.4%

(3.6%)

Source ICM

Figures in brackets as at 31 March 2022

Utilico Emerging Markets Trust plc

UEM exited from PT Link Net Tbk following an offer for

the business at a premium. UEM reduced its investment

in Simpar S.A., My E.G. Services Berhad, Ocean Wilsons

Holdings Limited, Corporacion Financiera Colombiana S.A.,

China Everbright Greentech Limited, Societe Nationale des

Telecommunications du Senegal, Naver Corporation Limited

and KT Corporation, all of which fell outside the top thirty

holdings.

Purchases in the portfolio decreased again to £108.9m in the

year ended 31 March 2023 (31 March 2022: £124.5m) and

realisations decreased to £126.6m (31 March 2022: £176.9m).

This reflects investment activity more in line with long term

averages. An active decision was taken to slowly increase

UEM’s debt as confidence in investee companies grew. UEM

ended the year with its bank loans drawn to £35.1m, 70.2%

of the available £50.0m facility.

There have been some small sector shifts during the year to

31 March 2023 and more detail is set out on page 17. On a

geographical basis there were some small changes again and

more detail is set out on page 10.

LEVEL 3 INVESTMENTS

UEM ended the year with level 3 investments totalling

£58.7m (31 March 2022: £48.1m), representing 10.8% of

total investments (31 March 2022: 8.4%). UEM’s level 3

investments increased mainly as a result of the revaluation

of Petalite. UEM first invested in Petalite in March 2020,

since which time the electric vehicle charging technology

company has won several UK government innovation

grants, and further developed, patented and certified its

core SDC technology. SDC, or Sinusoidal Direct Current,

is a revolutionary method of converting AC to DC more

efficiently and with a higher degree of reliability than existing

“full bridge” technology used in electric vehicle chargers.

In June 2022 Petalite received investment from AM Impact

Partners, a strategic investor, in a funding round in which

UEM also participated. The funding round was completed at

a premium to the carrying valuation as reported in the March

2022 annual accounts, which resulted in an uplift of £9.9m

to NAV during the period ended 31 March 2023. Attention

is drawn to note 26(d) of the accounts which provides more

information on Petalite’s valuation methodology and the 50%

level of sensitivity to its fair value which has been applied.

UEM is a 28.6% shareholder in Petalite.

BANK DEBT

UEM’s net debt, being bank loans and net overdrafts,

increased from £23.2m as at 31 March 2022 to £36.1m as at

31 March 2023, as UEM actively increased its investment

positions. UEM’s £50.0m committed multicurrency loan

facility is with The Bank of Nova Scotia, London Branch,

and matures in March 2024.

REVENUE RETURN

Revenue income increased by 7.7% to £24.3m in the year

to 31 March 2023, from £22.6m in the prior year. This is a

good outcome given the uncertain markets.

Management fees and other expenses were flat at £3.0m

in the year to 31 March 2023, unchanged from the year

to 31 March 2022. This is a positive given the inflationary

pressures in the wider market. Finance costs remained

modest at £0.2m (31 March 2022: £0.1m). Taxation

remained largely unchanged at £1.6m during the year

ended 31 March 2023 (31 March 2022: £1.5m).

Profit for the year increased by 8.6% to £19.5m from

£17.9m for the prior year. EPS was higher, increasing by

15.1% to 9.40p compared to the prior year of 8.17p due

to the higher earnings and reduced average number of

shares in issue following the buybacks. Dividends per

share ( DPS ) of 8.45p were fully covered by earnings.

Retained revenue reserves rose to £9.6m as at 31 March

2023, equal to 4.74p per share.

CAPITAL RETURN

The portfolio losses were £8.4m on the capital account

during the year to 31 March 2023. Losses on foreign

exchange were £0.5m and therefore the resultant total

income loss on the capital account was £8.9m against

prior year gains of £59.6m.

Management and administration fees were almost flat at

£4.3m (31 March 2022: £4.2m).

Finance costs increased to £0.7m from £0.5m as a result

of higher interest costs. There was a taxation gain of

£0.2m (31 March 2022: loss of £1.2m) which arose mainly

from Indian capital gains tax reductions. The net effect of

the above was a loss on capital return of £13.7m (31 March

2022: a gain of £53.7m).

Charles Jillings

ICM Investment Management Limited

and ICM Limited

16 June 2023

INVESTMENT MANAGERS’ REPORT (continued)

Report and Accounts for the year to 31 March 2023

MEGATRENDS DRIVING UPSIDE IN EMERGING MARKETS

ENERGY TRANSITION

• Lower or net zero emissions targets to combat climate change requires

decarbonisation of the energy matrix.

• Geopolitical concerns are driving energy security higher up the agenda as countries

look to cut reliance on imported oil/gas.

• Huge investment in wind/solar assets and supporting grid and battery storage

infrastructure across EM.

• Displacement of dirty coal- and oil-fired assets with cleaner and more flexible gas-

fired facilities.

SOCIAL INFRA

• Most emerging market countries lack adequate essential social infrastructure.

• The growing middle class is demanding better quality services and infrastructure.

• Rapid urbanisation is driving the need for huge investments in infrastructure,

transportation, communication and internet services, creating exciting opportunities

for portfolio companies.

GLOBAL TRADE

• Emerging market economies offer strong domestically-driven growth, as well as a

growing share of world exports driving international trade.

• The increasingly multi-polar world and the reshaping of the competitive environment

will provide EM countries with new opportunities.

• As a result of Covid-19 and recent geopolitical pressures, there has been an increase

in nearshoring and the need to diversify supply chains.

DIGITAL INFRA

• Data drives innovation, enables personalisation and enhances decision making

driving social and commercial returns.

• Technology facilitates EM companies to market and deliver goods and services to a

potentially global customer base.

• New innovative and disruptive applications developed in EM are driving new business

models and efficiencies

Utilico Emerging Markets Trust plc

ALUPAR INVESTIMENTO S.A.

Alupar Investimento S.A. is a holding company for electricity generation and

transmission assets in Brazil, Peru and Colombia. It has 30 transmission

projects, with 6,974km of operational electricity lines and 822MW renewable

energy generation assets. UEM first invested in 2013.

IN THE YEAR TO 31 DECEMBER 2022,

REVENUES INCREASED

15.5%

AND EBITDA 17.1%

Andre S Prietsch

Report and Accounts for the year to 31 March 2023

FPT CORPORATION

FPT Corporation is the largest information technology service

company in Vietnam. It also provides fibre broadband and

data centre services. Its education division has over 100,000

students enrolled in its private schools, colleges and university.

UEM first invested in 2019.

IN THE YEAR TO 31 DECEMBER 2022,

REVENUES INCREASED

23.4%

AND EBITDA 16.6%

GRUPO AEROPORTUARIO DEL CENTRO NORTE, S.A.B. DE C.V.

Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. is a

Mexican airport operator. It operates thirteen international

airports in central and northern states of Mexico, including

Monterrey, one of Mexico’s largest business and industrial

areas. In 2022, it served over 23.0m passengers. UEM first

invested in 2015.

IN THE YEAR TO 31 DECEMBER 2022,

REVENUES INCREASED

34.0%

AND EBITDA 43.9%

Utilico Emerging Markets Trust plc

OUR INVESTMENT APPROACH

ICM is a long-term investor and typically operates focused

portfolios with narrow investment remits. ICM has several

dedicated research teams who have deep knowledge and

understanding in their specific sectors, which improves

the ability to source and make compelling investments.

ICM has approximately USD 1.8bn of assets directly

under management and is responsible indirectly for a

further USD 22.5bn of assets in subsidiary investments.

ICM looks to exploit market and pricing opportunities and

concentrates on absolute performance. The investments

are not market index driven and the investment portfolio

comprises a series of bottom-up decisions. ICM typically

does not participate in either an IPO or an auction unless

there is compelling value.

UEM seeks to leverage ICM’s investment abilities to

both identify and make investments across a range of

industries within the EM sector. New investments usually

offer an attractive valuation with strong risk/return

expectations at the time of investment.

When reviewing investment opportunities, as part of

the investment process ICM will look to understand the

material ESG factors.

Long Term Deep Value Operational Cash Generative

Bottom Up Approach Investee Relationships

Detailed Company Knowledge Infrastructure Sector FocusedExtensive Industry Experience

SUPERIOR, CONSISTENT PERFORMANCE

DEEP SECTOR KNOWLEDGE

INDEPENDENCE & INTEGRITY

STABLE & SUPPORTIVE FRAMEWORK

We seek out and make compelling investments

UNDERSTANDING

In-depth analysis of the key issues that

face potential and current holdings, as

well as a deep understanding of the

industry in which they operate.

INTEGRATION

Incorporate the output of the

‘Understanding’ component into the

full company analysis to ensure a clear

and complete picture of the investment

opportunity is obtained.

ENGAGEMENT

Engage with investee companies on

the key issues on a regular basis,

both virtually and on location, where

possible, to discuss and identify any

gaps in their ESG policy to further

develop and improve their ESG

disclosure and implementation.

ACTIVE

INVESTORS

ICM incorporates ESG factors into the investment process in three key ways:

Report and Accounts for the year to 31 March 2023

ICM works to create

value by harnessing

our experience and

expertise to generate

and grow strong

relationships with

our stakeholders

VALUES

ICM’s origins date back to 1988 and our organisation has evolved with

offices now spanning the globe. We are focused on our values of:

• Independence and Integrity • Excellence

• Creativity and Innovation • Accountability

TEAM

We are proud of our diverse and inclusive environment for

our teams to work in, which reflects the diversity of our

communities.

COMMUNITIES

ICM supports the ICM Foundation, which has identified

sustainable, effective and focused education where

the biggest impact can be made on individuals and in

communities. Over the past decade ICM and its stakeholders

have contributed over USD 16.5m to not-for-profit and

community organisations.

We are focused

on creating

sustainable

long-term

value for our

shareholders,

team and

the broader

community

through our:

PLATFORMS

Technology, and digital and analytics enable our

investment platforms to deliver growth for our

shareholders.

INVESTMENT PRACTICES

Our deep and extensive research and

understanding of the companies, sectors and

markets we invest in moderates our risk and

creates value for our investors. Our status as

a signatory of the United Nations-supported

Principles of Responsible Investment emphasises

our commitment to integrating ESG factors into

our investment decision making process.

FINANCIAL

Strong balance sheet and disciplined

capital allocation to drive sustainable

growth and shareholder value.

Utilico Emerging Markets Trust plc

A leader in Brazil offering a

comprehensive range of waste

management and value recovery

solutions, from recycling through

biogas and power generation.

ESG ANALYSIS:

Orizon has strong environmental credentials and its

core business plays a crucial role in reducing greenhouse

gas emissions. Orizon was the first company in Brazil

to implement clean power generation systems at its

ecoparks. The facilities can capture and treat the methane

gas produced by decomposing waste, either for sale or for

on-site use. The ecoparks handle approximately 10% of all

compliantly treated waste volumes in Brazil, with this figure

due to grow as capacity increases. On-site biogas power

plants at two of Orizon's ecoparks have a generation

capacity greater than 190,000 MWh per year, enough to

supply power to 290,000 people.

ICM ESG CONCLUSION:

As a company that promotes the circular economy, Orizon

is well placed to benefit from the opportunities that arise

from climate change and the energy transition.

A leading e-commerce logistics

infrastructure player primarily

in Poland operating automated

parcel machines, with a growing

presence in France and the UK.

ESG ANALYSIS:

InPost continues to be focused on its ESG

commitments and has a comprehensive ESG

approach. Although having an aggressive expansion

policy, InPost has and continues to make good steps to

reach its target of becoming climate neutral by 2025 in

scope 1 and 2 emissions and the entire supply chain

(including scope 3) by 2040.

ICM ESG CONCLUSION:

Only a year after InPost released its ESG strategy

there is evidence of the strategy taking shape with the

most significant achievement being the development

of InPost’s decarbonisation strategy. There is a clear

path to implementation which will enable InPost to

efficiently continue its ESG journey.

ESG SPOTLIGHT

The Board believes that it is in shareholders’ interests to consider ESG factors when selecting and retaining

investments and has asked the Investment Managers to take these into account when investing. Details of how ESG

forms part of the integrated research analysis, decision-making and ongoing monitoring are set out on page 38.

Where companies in the portfolio are assessed as having a relatively low ESG score ICM’s approach is to engage

with the companies directly with the objective of seeing improvements over time. Set out below are examples of the

approach taken with two of UEM’s investments.

Report and Accounts for the year to 31 March 2023

LARGEST HOLDINGS OVERVIEW

THE VALUE OF THE TEN

LARGEST HOLDINGS

REPRESENTS

32.6%

(2022: 31.0%) OF

TOTAL INVESTMENTS

THE VALUE OF THE

TWENTY LARGEST

HOLDINGS REPRESENTS

52.3%

(2022: 50.3%) OF

TOTAL INVESTMENTS

THE VALUE OF THE

THIRTY LARGEST

HOLDINGS REPRESENTS

67.7%

(2022: 65.6%) OF

TOTAL INVESTMENTS

THE TOTAL NUMBER

OF COMPANIES

INCLUDED IN THE

PORTFOLIO IS

(2022: 79)

The value of convertible securities represents 0.0% (2022: 1 8%) of the portfolio. The value of fixed income securities represents 3.4% (2022: 2.6%) of the portfolio.

Rumo SA (Brazil)

Utilico Emerging Markets Trust plc

PETALITE LIMITED (“PETALITE”) is an unlisted early-stage company based

in the UK. Petalite has developed an innovative electric vehicle charging

technology called SDC which offers greater reliability and efficiency than is

currently available in the market, filing its first patent application in 2016.

UEM first invested in Petalite in March 2020, enabling it to validate the

technology with certification of the Power Core modular unit. UEM’s funding

was augmented by Innovate UK awards, and to date Petalite has won seven

grants totalling over £12.0m to support the UK’s transition to net zero. This

includes a £1.4m grant won in November 2022 for developing charging

infrastructure for electric vertical take-off and landing aircraft.

In June 2022 strategic investor AM Impact Partners (“AMIP”) invested in a

funding round alongside UEM, which also converted its convertible loan

note into equity as part of the transaction. AMIP co-founder Ashley Unwin

was subsequently appointed Chairman of the Board, and Petalite has now

established a go-to-market strategy to commercialise its technology in the

coming year. At the end of March 2023, the carrying value of Petalite was

increased to the valuation of the June 2022 fundraise.

Country UK

Sector Renewables

Fair Value £’000s 28,607

% of total

investments

5.2%

INTERNATIONAL CONTAINER TERMINAL SERVICES, INC. (“ICT”) is a global

port management company in the business of acquiring, developing, managing

and operating container ports and terminals worldwide. ICT operates 33

terminals in 20 countries across six continents, handling 12.2m containers in

2022.

During 2022, ICT continued to benefit from the improvement in trade activities

and easing of Covid-19 lock down restrictions, resulting in volumes for the full

year 2022 increasing by 9.4%. Volume growth coupled with management’s

continued focus on improving container tariff rates and container mix, resulted

in yields increasing 9.0% and gross revenues for FY22 increasing by 20.3%.

Despite the inflationary pressures witnessed during the year, management's

ongoing stringent cost control ensured that EBITDA for 2022 increased by

23.7% and EBITDA margin expanded to 62.8%, another record high. Adjusted

net income was up by 43.3% with the dividend again increasing by 15.0%

to PHP 10.0, which includes a special dividend of PHP 1.44, payable as ICT

continues to experience an increasing free cash flow position.

ICT’s share price decreased by 5.1% in the year to 31 March 2023. UEM

increased its position in ICT by 4.2%.

Country The Philippines

Sector Ports and

Logistics

Fair Value £’000s 26,584

% of total

investments

4.9%

TEN LARGEST HOLDINGS REVIEW

Report and Accounts for the year to 31 March 2023

ALUPAR INVESTIMENTO S.A. (“ALUPAR”) is a holding company for assets

focused on the electricity transmission and generation sectors in Brazil, Peru and

Colombia. It has 30 transmission projects totalling 7,964km of electricity lines

of which 6,974km are operational, and 822MW of renewable energy generation

assets.

Over the past three years Alupar has been investing heavily in several new

projects, expanding its transmission network kilometres by over 40% and

commissioning a new 94MW hydro plant in Peru. All operational transmission

lines are in Brazil with fixed revenue concession contracts which benefit from

annual inflation adjustments. In July 2022 indexation increases of 11.7% for IPCA-

linked concessions and 10.7% for IGPM-linked concessions were applied. These

inflation adjustments, combined with the contribution of new projects resulted

in underlying group revenue growth of 15.5% and EBITDA growth of 17.1% in its

financial year to 31 December 2022. Dividends per share increased by 46%.

Alupar’s share price decreased by 2.5% in the year to 31 March 2023. UEM’s

shareholding in Alupar was unchanged over the period.

Country Brazil

Sector Electricity

Fair Value £’000s 20,643

% of total

investments

3.8%

ORIZON VALORIZACAO DE RESIDUOS S.A. (“ORIZON”) is Brazil's leader

in waste management and operates 15 sanitary landfill sites. Referred to as

ecoparks by Orizon, these sites are sophisticated complexes which require

specialised infrastructure to safely process waste. This includes sorting facilities

to remove recyclable materials such as metals, plastics and cardboard; leachate

collection and treatment; biogas extraction; and waste-to-energy services. With

over 8.0m tons of waste processed in 2022, Orizon is the market leader in a

highly fragmented market with 10.2% market share. The UN recognises the

collection and use of biogas as directly reducing emissions, thereby qualifying

Orizon's activities for carbon credits.

In 2022, Orizon acquired Estre's landfill assets, a milestone acquisition which

almost doubled its processed volume. This acquisition will also increase

significantly Orizon's capacity in value-added activities, like biogas extraction. In

the financial year to 31 December 2022, Orizon delivered 65.0% and 76.0% pro

forma revenue and EBITDA growth, respectively.

UEM’s position in Orizon increased 68.7% in the year to 31 March 2023.

Orizon’s share price was up by 18.2% during the period.

Country Brazil

Sector Water and Waste

Fair Value £’000s 18,432

% of total

investments

3.4%

Andre S Prietsch

Utilico Emerging Markets Trust plc

GUJARAT STATE PETRONET LIMITED (“GSPL”) is the main gas transmission

company in Gujarat State in India, controlled by Gujarat State Petronet, a

government entity. GSPL has 2,700km of gas pipelines connected to domestic

gas fields and LNG terminals. GSPL also has a 54% stake in Gujarat Gas, a listed

city gas distribution company.

Elevated LNG prices have resulted in an extremely challenging operating

environment for GSPL. In the twelve months to 31 March 2023, gas

transmission volumes declined by 25.0% as the economic impact of high prices

stifled demand and encouraged customers to switch to alternate fuel sources.

Demand from the power sector plummeted by almost 75% as gas-fired

electricity was uneconomic. However, several successive tariff increases offset

this and preserved margins, with revenues and EBITDA increasing by 1.9% and

3.6% respectively. DPS relating to March 2023 year end was up by 150% on the

prior year.

In the twelve months to 31 March 2023 GSPL’s share price increased by 2.1%;

UEM’s shareholding in GSPL was unchanged over the period.

INDIA GRID TRUST (“INDIGRID”) is an infrastructure investment trust listed on

the Bombay Stock Exchange which owns power transmission assets in India.

It has 42 lines totalling 7,790km and 12 substations, with the assets having an

average of 29 years' remaining contract life. The trust is managed by KKR, which

is also a 24% shareholder.

In November 2022, Indigrid completed the acquisition of the 208km Raichur

Sholapur transmission project and subsequently signed an agreement with

Sterlite to acquire the 626km KTL project. These two projects increase the

AUM of the trust by 8.0% to INR228bn (USD 2.8bn). In the twelve months to

31 March 2023, revenue and EBITDA grew by 5.1% and 4.3% respectively. The

trust is required to pay out at least 90% of cash flows, which is paid in quarterly

dividends, and over the twelve-month period the aggregate dividends per unit

were increased by 4.7%.

UEM’s position in Indigrid was reduced by 8.4% in the period and during the

year Indigrid’s share price declined by 8.8%.

Country India

Sector Gas

Fair Value £’000s 17,085

% of total

investments

3.1%

Country India

Sector Electricity

Fair Value £’000s 15,057

% of total

investments

2.8%

TEN LARGEST HOLDINGS REVIEW (continued)

Report and Accounts for the year to 31 March 2023

GRUPO AEROPORTUARIO DEL CENTRO NORTE, S.A.B. DE C.V. (“OMA”)

is one of the three listed airport operators in Mexico that has a 50-year

concession ending in 2048 to operate, manage and develop 13 international

airports in central and northern Mexico. OMA’s concession includes Monterrey

International Airport, located in Mexico’s second largest business and industrial

centre, and contributes to 47.1% of total traffic. Of the 23.3m passengers

handled by OMA in 2022, 88.3% were domestic and 11.7% international, with

around two thirds of passengers travelling for corporate purposes rather than

visiting family and friends or for leisure. FY22 passenger volumes were higher

than pre-pandemic levels illustrating the robust recovery OMA has witnessed,

which is reflected in the strong financial results, with full year 2022 revenues up

by 34.0% YoY and up by 22.6% compared to pre-Covid-19 levels in 2019. Given

the high operational leverage of an airport, EBITDA for FY22 was up 43.9%

YoY and increased by 25.5% versus FY19 with EBITDA margin in FY22 reaching

71.2%. Net income was up by 26.5% for the year with dividends increasing

233.1%.

OMA’s share price increased by 35.9% in the year to 31 March 2023, with UEM

maintaining its position in OMA.

Country Mexico

Sector Airports

Fair Value £’000s 13,146

% of total

investments

2.4%

FPT CORPORATION (“FPT”) is a Vietnamese technology and

telecommunications company. FPT provides IT services to large multinationals

globally, and to the public sector and enterprise customers domestically.

Additionally, FPT is a major provider of fixed line broadband, internet, data

centre and cloud services in Vietnam though its FPT Telecom subsidiary.

2022 was another good year for FPT with strong growth reported in each of

its three primary segments. The global IT services segment reported revenues

growing by 30.1% to over USD 800m, and profit before tax (“PBT”) up 22.9% in

the year to 31 December 2022. Domestic IT services also reported impressive

PBT growth of 19.2% on an 8.1% increase in sales. FPT Telecom reported

revenue growth of 16.1% for the year and PBT advanced by 17.6% driven by a

9.0% increase in broadband subscribers and Pay TV customer growth of over

20.0%, as well as strong demand for its data centres. FPT continues to expand

its broadband network into new districts and is investing in new long distance

and undersea fibre to meet customers’ increasing data demands. Overall, FPT

reported consolidated revenue growth of 23.4% and a 22.2% growth in net

profit attributable to shareholders.

FPT’s share price declined by 11.3% for the year to 31 March 2023 (adjusted

for the 20.0% bonus issue in June 2022). The MSCI Vietnam Index declined by

35.2% over the same period. UEM’s position in FPT increased 6.5% during the

year.

Country Vietnam

Sector Data Services and

Digital Infrastructure

Fair Value £’000s 12,983

% of total

investments

2.4%

Utilico Emerging Markets Trust plc

POWER GRID CORPORATION OF INDIA (“POWERGRID”) is the national

electricity grid operator in India and is 51% owned by the Indian government.

Powergrid transmits 45% of the country’s power through 174,000km of

transmission lines and 270 substations. Tariffs for most of its transmission lines

are regulated and are calculated on a return on asset base.

With the rapid rollout of new renewable assets in India, there is a significant

need for additional grid connectivity and capacity. As the dominant player,

Powergrid has been in a strong position to win several Tariff Based Competitive

Bidding auctions for new projects. In the twelve months to 31 March 2023,

Powergrid reported INR 92bn in capital expenditure investing in new

transmission line projects, with revenue growth of 9.5% and EBITDA increasing

by 7.5%. Total dividends per share were flat even though the special dividend in

the prior period was not repeated.

During the year Powergrid’s share price increased by 4.0% and UEM’s

shareholding in Powergrid was unchanged.

CITIC TELECOM INTERNATIONAL HOLDINGS LIMITED (“CITIC”) is a

telecommunications and IT services provider principally operating in and

connecting Hong Kong, Macau and mainland China to the rest of the world

with international voice, text message and secure data connections. Citic also

provides data centre, cloud computing, cyber security and related services.

Citic controls CTM, the dominant telecoms operator in Macau and Acclivis, a

Singapore based IT services provider.

Despite the headwinds of low visitor numbers to Hong Kong and Macau

and suppressed business confidence, especially in Macau, Citic reported

pleasing results for the full year to 31 December 2022. Revenues grew by

6.6% in the year to 31 December 2022 and reported net profit was 10.7%

higher than 2021. Citic raised dividends by 8.9%. Citic continues to report

very strong growth of 52.4% for its corporate messaging services, driven by

SMS notifications (e.g. for passcodes, payment verification and marketing

applications). These services generated over HKD 2.5bn (USD 325m) in 2022,

over a quarter of Citic’s revenue.

Citic’s share price rose by 11.1% in the year to 31 March 2023 and additionally

Citic’s shareholders received significant dividends during the period equating

to 8.0% of the share price on 31 March 2022. UEM’s position in Citic decreased

11.3% during the year.

Country India

Sector Electricity

Fair Value £’000s 12,755

% of total

investments

2.3%

Country China

Sector Telecommunications

Fair Value £’000s 12,489

% of total

investments

2.3%

TEN LARGEST HOLDINGS REVIEW (continued)

Report and Accounts for the year to 31 March 2023

STRATEGIC REPORT

PRINCIPAL ACTIVITY

UEM carries on business as an investment trust and its

principal activity is portfolio investment.

INVESTMENT OBJECTIVE

UEM’s objective is to provide long-term total return

through a flexible investment policy that permits it to

make investments predominantly in infrastructure,

utility and related sectors, mainly in EM.

STRATEGY AND BUSINESS MODEL

UEM invests in accordance with the objective set

out above. The Board is collectively responsible

to shareholders for the long-term success of the

Company. Since the Company has no employees

it outsources its activities to third party service

providers, including the appointment of external

investment managers to deliver investment

performance. The Board oversees and monitors the

activities of the service providers with the Board

setting investment policy and risk guidelines, together

with investment limits.

ICMIM, an English incorporated company authorised

and regulated by the Financial Conduct Authority

(“FCA”) as an alternative investment fund manager

(“AIFM”) pursuant to the AIFM Regulations, is the

Company’s AIFM and joint portfolio manager alongside

ICM. The investment team responsible for the

management of the portfolio is headed by Charles

Jillings.

ICMIM and ICM, operating under guidelines

determined by the Board, have direct responsibility

for the decisions relating to the day to day running of

the Company and are accountable to the Board for

the investment, financial and operating performance

of the Company. Other service providers include

JPMorgan Chase Bank N.A. – London Branch which

Utilico Emerging Markets Trust plc

provides administration and custodial services, JP

Morgan Europe Limited (“JPMEL”) which acts as the

Company’s Depositary under the AIFM Directive

and Computershare Investor Services which acts as

registrar. ICMIM has also been appointed Company

Secretary.

INVESTMENT POLICY

UEM’s investment policy is flexible and its investments

include (but are not limited to) water, sewerage,

waste, electricity, gas, telecommunications, ports,

airports, service companies, rail, roads, any business

with essential service or monopolistic characteristics

and any new infrastructure or utilities which may

arise mainly in emerging markets. The Company may

also invest in businesses which supply services to,

or otherwise support, the infrastructure, utility and

related sectors.

The Company focuses on the under-developed and

developing markets of Asia, Latin America, Emerging

Europe and Africa but has the flexibility to invest in

markets worldwide. The Company generally seeks

to invest in emerging market countries where the

Directors believe that there are attributes such

as political stability, economic development, an

acceptable legal framework and an encouraging

attitude to foreign investment.

The Company has the flexibility to invest in shares,

bonds, convertibles and other types of securities,

including non-investment grade bonds and to invest in

unlisted securities.

The Company may also use derivative instruments

such as American Depository Receipts, promissory

notes, foreign currency hedges, interest rate hedges,

contracts for difference, financial futures, call and

put options, warrants and similar instruments

for investment purposes and efficient portfolio

management, including protecting the Company’s

portfolio and Statement of Financial Position from

major corrections and reducing, transferring or

eliminating investment risks in its investments. These

investments will be long term in nature.

INVESTMENT RESTRICTIONS

The Board has prescribed the following limits on

the investment policy, all of which are at the time of

investment unless otherwise stated:

• Investments in unquoted and untraded

investments in aggregate must not exceed 10.0%

of gross assets at the time of investment;

• No single investment may exceed 20.0% of gross

assets at the time of investment;

• Investments other than in infrastructure, utility

and related companies must not exceed 20.0% of

gross assets at the time of investment;

• Investments in a single country must not exceed

50.0% of gross assets at the time of investment

(and for these purposes investments will be

considered to have been made in the countries

where the relevant investee company reports

that it carries out its business operations, as

determined on a look-through basis);

• Not more than 10.0% in aggregate of the value

of the total assets of the Company at the time

the investment is made will be invested in other

closed-ended investment funds which are listed

on the Official List (except to the extent that those

investment funds have stated investment policies

to invest no more than 15.0% of their total assets

in other investment companies which are listed on

the Official List); and

• Regardless of the investment policy of other

closed-ended investment funds listed on the

Official List and which are invested in by the

Company, the Company shall not invest in such

funds more than 15.0% in aggregate of the value

of the total assets of the Company at the time the

investment is made.

The above limits only apply at the time the investment

is made and the Company will not be required to

realise any assets or rebalance the portfolio where

any limit is exceeded as a result of any increases or

decreases in the valuation of the particular assets

which occurs after the investment is made, but no

further relevant assets may be acquired or loans made

by the Company until the relevant limit can again be

complied with.

BORROWING AND GEARING POLICY

UEM may use bank borrowings for short-term

liquidity purposes. In addition, the Board may gear

the Company by borrowing on a longer-term basis for

investment purposes.

STRATEGIC REPORT (continued)

Report and Accounts for the year to 31 March 2023

The Board has set a current limit on gearing (being

total borrowings measured against gross assets) not

exceeding 25% at the time of drawdown. Borrowings

may be drawn down in Sterling, US Dollars or any

currency for which there are corresponding assets

within the portfolio (at the time of drawdown the value

drawn must not exceed the value of the relevant assets

in the portfolio).

The Company has a £50.0m committed multicurrency

revolving facility with The Bank of Nova Scotia, London

Branch until 15 March 2024. Further details on the

Company’s loan facility are set out in note 13 to the

accounts.

INVESTMENT APPROACH

UEM seeks to identify and invest in undervalued

investments predominantly in the infrastructure and

utility sectors, mainly in EM. The Investment Managers

aim to identify securities where underlying value and

growth prospects are not reflected in the market

price. This is often as a result of strong growth drivers,

but can include changes in regulation, technology,

market motivation, potential for financial engineering,

competition or shareholder indifference.

The Company seeks to minimise risk by investing mainly

in companies and sectors displaying the characteristics

of essential services or monopolies such as utilities,

transportation infrastructure, communications or

companies with a unique product or market position.

Most investee companies are asset backed, have

good cash flows and offer good dividend yields. UEM

generally seeks to invest in companies with strong

management who have the potential to grow their

business and who have an appreciation of, and ability

to manage, risk.

UEM believes it is generally appropriate to support

investee companies with their capital requirements

while at the same time maintaining an active

and constructive shareholder approach through

encouraging a review of capital structures and business

efficiencies. The Investment Managers maintain regular

contact with the investee companies and UEM is often

among the largest international shareholders.

The Company aims to maximise value for shareholders

by holding a relatively concentrated portfolio of

securities and investing through instruments

appropriate to the particular situation. UEM is prepared

to hold investments in unlisted securities when the

attractiveness of the investment justifies the risks and

lower liquidity associated with unlisted investments.

ICMIM, as the Company’s AIFM, controls stock-specific,

sector and geographic risk by continuously monitoring

the exposures in the portfolio. In depth continual

analysis of the fundamentals of investee companies

allows ICMIM to assess the financial risks associated

with any particular stock. The portfolio is typically made

up of 60 to 90 stocks.

DIVIDEND POLICY

The Board’s objective is to maintain or increase the

total annual dividend. Dividends are expected to be

paid quarterly each year in September, December,

March and June. In determining dividend payments,

the Board will take account of factors such as

income forecasts, retained revenue reserves and

the Company’s dividend payment record. However,

in order to maintain its approval as an investment

trust, the Company will distribute at least 85.0% of

its distributable income earned in each financial year

by way of dividends. The Board also has the flexibility

to pay dividends from capital reserves and special

reserve.

RESULTS AND DIVIDENDS

Details of the Company’s performance are set out in

the Investment Managers’ Report. The results for the

year ended 31 March 2023 are set out in the attached

accounts. The dividends in respect of the year, which

total 8.45p per share, have been declared by way of

four interim dividends.

KEY PERFORMANCE INDICATORS

Delivery of shareholder value is achieved through the

increase in capital value of the Company’s shares and

by its income return. The Board reviews performance

by reference to a number of Key Performance

Indicators (“KPIs”) that include the following:

• NAV total return relative to the MSCI EM total

return Index

• Share price

• Discount to NAV

• Revenue earnings

• Ongoing charges figure

Utilico Emerging Markets Trust plc

While some elements of performance against KPIs are

beyond management control, they provide measures

of the Company’s absolute and relative performance

and are therefore monitored by the Board on a regular

basis. These KPIs fall within the definition of Alternative

Performance Measures under guidance issued by

the European Securities and Markets Authority and

additional information explaining how these are

calculated is set out on pages 96 and 97.

Year ended 31 March 2023 2022

NAV total return per share (%) 2.1 14.9

MSCI EM total return Index

(GBP adjusted) (%) (5.0) (6.9)

Share price (pence) 217.00 224.00

Discount to NAV (%) (13.5) (11.9)

Percentage of issued shares bought back

during the year (based on opening share

capital) (%) 5.8 3.0

Revenue earnings per share (pence) 9.40 8.17

Ongoing charges figure (%) 1.4 1.4

A graph showing the NAV total return performance

compared to the MSCI EM total return Index, can be

found on page 4. The ten-year record on page 98 shows

historic data for the Company and its predecessor, UEM

Limited.

Discount to NAV: The Board monitors the premium/

discount at which the Company’s shares trade in

relation to its NAV. During the year the Company’s

shares traded at a discount relative to NAV in a range

of 10.8% to 17.2% and an average discount of 13.8%.

The Board and Investment Managers closely monitor

both movements in the Company’s share price and

significant dealings in the shares.

The Board believes that the best way of addressing the

discount over the long term is to continue to generate

good performance and to create natural demand for

the Company’s shares in the secondary market through

increasing awareness of the Company, its philosophy

and management style. The Board has maintained

expenditure on marketing the Company. The Board

continues to seek authority from shareholders to

buyback and issue shares which can assist in the

management of the discount and/or any premium

at which the shares trade to their NAV. A total of

12,531,811 shares were bought back and cancelled

during the year, representing 5.8% of the Company’s

opening issued share capital.

Earnings and dividends per share: As referred to

in “Dividend Policy” above, the Board’s objective is to

maintain or increase the total annual dividend. The

Board and the Investment Managers attach great

importance to maintaining dividends per share since

dividends form a key component of the total return to

shareholders.

The Board declared one quarterly dividend of 2.00p per

share and three quarterly dividends, each of 2.15p per

share, in respect of the year ended 31 March 2023. The

fourth quarterly dividend will be paid on 23 June 2023

to shareholders on the register on 2 June 2023. The

total dividend for the year was 8.45p per share (2022:

8.00p per share).

Ongoing charges: These are calculated in accordance

with the industry measure of costs as a percentage of

NAV. The expenses of the Company are reviewed at

every Board meeting, with the aim of managing costs

incurred and their impact on performance. The ongoing

charges figure for the year ended 31 March 2023 was

1.4% (2022: 1.4%). This ratio is sensitive to the size of

the Company, as well as the level of costs.

PRINCIPAL RISKS AND RISK MITIGATION

During the year ended 31 March 2023, ICMIM was

the Company’s AIFM and had sole responsibility for

risk management, subject to the overall policies,

supervision, review and control of the Board.

As required by the Association of Investment

Companies (“AIC”) Code of Corporate Governance,

the Board has undertaken a robust assessment of

the principal risks facing the Company. It seeks to

mitigate these risks through regular review by the

Audit & Risk Committee of the Company’s risk register

which identifies the risks facing the Company and the

likelihood and potential impact of each risk, together

with the controls established for mitigation.

During the year the Audit & Risk Committee also

discussed and monitored a number of emerging risks

that could potentially impact the Company, the principal

ones being geopolitical risk and climate change risk. The

Audit & Risk Committee has determined that they are

not currently sufficiently material to be categorised as

STRATEGIC REPORT (continued)

Report and Accounts for the year to 31 March 2023

separate key risks and are considered within investment

risk and market risk below. The Covid-19 pandemic,

which emerged in 2020, gave rise to significant

challenges for businesses worldwide and this was also

taken into account as part of the assessment of risks to

the Company.

The principal risks and uncertainties currently faced by

the Company and the controls and actions to mitigate

those risks, are described below. There have been no

significant changes to the principal risks during the year.

KEY RISK FACTORS

INVESTMENT

RISK:

The risk that the investment strategy

does not achieve long-term positive

total returns for the Company’s

shareholders.

The Board monitors the performance of the Company and has

established guidelines to ensure that the approved investment

policy is pursued by the Investment Managers. These guidelines

include sector and market exposure limits.

The investment process employed by the Investment Managers

combines assessment of economic and market conditions in the

relevant countries with stock selection. Fundamental analysis

forms the basis of the Company’s stock selection process, with

an emphasis on sound balance sheets, good cash flows, the

ability to pay and sustain dividends, good asset bases and market

conditions. In addition, ESG factors are also considered when

selecting and retaining investments and political risks associated

with investing in EM are also assessed. The Investment Managers

try to reduce risk by ensuring that the Company’s portfolio

is always appropriately diversified. Overall, the investment

process aims to achieve absolute returns through an active

fund management approach and the Board monitors the

implementation and results of the investment process with the

Investment Managers.

MARKET RISK: The Company’s assets consist mainly

of listed securities and its principal

risks are therefore market related and

adverse market conditions could lead

to a fall in NAV.

The Company’s portfolio is exposed to equity market risk and

foreign currency risk. Adverse market conditions may result

from factors such as economic conditions, political change, geo-

political confrontations, climate change, natural disasters and

health epidemics. At each Board meeting the Board reviews the

diversification of the portfolio, asset allocation, stock selection,

unquoted investments and levels of gearing and has set

investment restrictions and guidelines which are monitored and

reported on by the Investment Managers.

The Company’s results are reported in Sterling, although the

majority of its assets are priced in foreign currencies and

therefore any rise or fall in Sterling will lead, respectively, to a fall

or rise in the Company’s reported NAV. Such factors are out of

the control of the Board and the Investment Managers and may

give rise to distortions in the reported returns to shareholders. It

is difficult and expensive to hedge EM currencies.

KEY STAFF RISK: Loss by the Investment Managers

of key staff could affect investment

returns.

The quality of the investment management team is a crucial

factor in delivering good performance. There are training and

development programmes in place for employees and the

remuneration packages have been developed in order to retain

key staff. Any material changes to the management team are

considered by the Board at its next meeting; the Board discusses

succession planning with the Investment Managers at regular

intervals.

Utilico Emerging Markets Trust plc

DISCOUNT RISK: The Company’s shares may trade at a

discount to their NAV and a widening

discount may undermine investor

confidence in the Company.

The Board monitors the price of the Company’s shares in relation

to their NAV and the premium/discount at which they trade.

The Board generally buys back shares for cancellation in normal

market conditions if they are trading at a discount in excess

of 10% and the Investment Managers agree that it is a good

investment decision.

OPERATIONAL

RISK:

Failure by any service provider to carry

out its obligations to the Company

in accordance with the terms of its

appointment could have a materially

detrimental impact on the operation

of the Company and could affect the

ability of the Company to successfully

pursue its investment policy.

The Company’s main service providers are listed on page 95.

The Audit & Risk Committee monitors the performance and

controls (including business continuity procedures) of the service

providers at regular intervals.

All listed and a number of unlisted investments are held in

custody for the Company by JPMorgan Chase Bank N.A. – London

Branch. JPMEL, the Company’s depositary services provider,

also monitors the movement of cash and assets across the

Company’s accounts. The Audit & Risk Committee reviews the JP

Morgan SOC1 reports, which are reported on by Independent

Service Auditors, in relation to its administration, custodial and

information technology services.

The Board reviews the overall performance of the Investment

Managers and all the other service providers on a regular basis.

The risk of cybercrime is high, as it is with most organisations,

but the Board regularly seeks assurances from the Investment

Managers and other service providers on the preventative steps

that they are taking to reduce this risk.

GEARING RISK: Whilst the use of borrowings should

enhance total return where the

return on the Company’s underlying

securities is rising and exceeds the

cost of borrowing, it will have the

opposite effect where the underlying

return is falling.

Gearing levels may change from time to time in accordance with

the Board and Investment Managers’ assessment of risk and

reward. As at 31 March 2023, UEM had net gearing on net assets

of 7.1%. ICMIM monitors compliance with the banking covenants

when each drawdown is made and at the end of each month.

The Board reviews compliance with the banking covenants at

each Board meeting.

REGULATORY

RISK:

Failure to comply with applicable

legal and regulatory requirements

such as the tax rules for investment

companies, the FCA’s Listing Rules and

the Companies Act 2006 could lead to

suspension of the Company’s Stock

Exchange listing, financial penalties, a

qualified audit report or the Company

being subject to tax on capital gains.

The Investment Managers and the Company’s professional

advisers monitor developments in relevant laws and regulations

and provide regular reports to the Board in respect of the

Company’s compliance.

VIABILITY STATEMENT

The Board makes an assessment of the longer-term

prospects of the Company beyond the timeframe

envisaged under the going concern basis of accounting,

having regard to the Company’s current position and

the principal risks it faces. The Company is a long-term

investment vehicle and the Board believes that it is

appropriate to assess the Company’s viability over a

long-term horizon. For the purposes of assessing the

Company’s prospects in accordance with provision

31 of the UK Corporate Governance Code, the Board

considers that assessing the Company’s prospects over

a period of five years is appropriate given the nature of

the Company, reflecting the long-term strategy of the

Company and is in line with the five-yearly cycle of the

Company's continuation vote.

In its assessment of the viability of the Company, the

Board has considered each of the Company’s principal

risks and uncertainties detailed above, as well as the

impact of a significant fall in the EM equity markets on

STRATEGIC REPORT (continued)

Report and Accounts for the year to 31 March 2023

the value of the Company’s investment portfolio. All

of the key operations required by the Company are

outsourced to third party providers and it is considered

that alternative providers could be engaged at relatively

short notice if necessary. The Directors have also

considered the Company’s income and expenditure

projections and the fact that the Company’s operating

expenses comprise a very small percentage of net

assets while the majority of the Company’s investments

comprise readily realisable securities which can be

sold to meet funding requirements if necessary.

The next opportunity for shareholders to vote on

the continuation of the Company is at the AGM in

September 2026.

As part of this assessment the Board considered a

number of stress tests, including short term reverse

stress testing, and scenarios which considered the

impact of severe stock market and currency volatility

on shareholders’ funds over a five-year period. Initially,

the Company’s projections were adjusted to reflect a

material reduction in the value of its investments in

line with that experienced during the emergence of the

Covid-19 pandemic in the first quarter of 2020. The first

stress test considered a fall in markets of 30% in the

first year with recovery of 10% per annum thereafter.

A second test considered a fall in markets of 30% and

adverse sterling movement, the Company’s reporting

currency, of 10% in the first year with a further fall in

markets of 20% in the second year and no movement

thereafter. The results demonstrated the impact on the

Company’s NAV, its expenses, and its ability to meet its

liabilities over that period. As a result of this analysis,

the Board has concluded that there is a reasonable

expectation that the Company will be able to continue

in operation and meet its liabilities as they fall due over

the next five years.

SECTION 172 STATEMENT

Under Section 172 of the Companies Act 2006, the

Directors have a duty to promote the success of

the Company for the benefit of its members as a

whole. This includes having regard (amongst other

matters) to fostering relationships with the Company’s

stakeholders and maintaining a reputation for high

standards of business conduct.

As an externally managed investment trust, the

Company has no employees, customers, operations or

premises. Therefore, the Company’s key stakeholders

(other than its shareholders) are considered to be

its service providers, including lenders. The need

to promote business relationships with the service

providers and maintain a reputation for high standards

of business conduct is central to the Directors’

decision-making. The Directors believe that fostering

constructive and collaborative relationships with

the Company’s service providers will assist in their

promotion of the success of the Company for the

benefit of all shareholders and their performance

is monitored by the Board and its committees. The

principal service provider is the Investment Managers,

who are responsible for managing the Company’s

assets in order to achieve its stated investment

objective, and the Board maintains a good working

relationship with them. Whilst strong long term

investment performance is essential, the Board

recognises that to provide an investment vehicle that

is sustainable over the long term, both it and the

Investment Managers must have regard to ethical and

environmental issues that impact society. Accordingly,

ESG considerations are an important part of the

Investment Managers’ investment process as explained

more fully below.

The Board seeks to engage with its Investment

Managers and other service providers in a collaborative

and collegiate manner, whilst also ensuring that

appropriate and regular challenge is brought and

evaluation conducted. The aim of this approach is to

enhance service levels and strengthen relationships

with a view to ensuring the interests of the Company’s

shareholders are best served by keeping cost levels

proportionate and competitive, and by maintaining the

highest standards of business conduct.

The Directors aim to act fairly as between the

Company’s shareholders and the approach to

shareholder relations is summarised in the Corporate

Governance Statement on pages 49 to 54. As part of

this, the AGM provides a key forum for the Board and

Investment Managers to present to shareholders on the

performance of UEM and its future prospects. It also

allows shareholders the opportunity to meet with the

Board and Investment Managers and to raise questions

and concerns. The Chairman is available to meet with

shareholders as appropriate and the Investment

Managers meet regularly with shareholders and their

respective representatives, reporting back on views

to the Board. Shareholders may also communicate

Utilico Emerging Markets Trust plc

with the Company at any time by writing to the Board

at the Company’s registered office or contacting the

Company’s broker. These communication opportunities

help inform the Board when considering how best to

promote the success of the Company for the benefit of

all shareholders over the long term.

In addition to ensuring that the Company’s stated

investment objective was being pursued, the Directors

confirm that they have considered Section 172 factors

when making decisions, including in relation to:

• the appointment of a joint broker and a regional

marketing adviser, following a competitive pitch

process;

• the repurchase of the Company’s shares, in line

with the Board’s policy to buy back shares for

cancellation in normal market conditions if they are

trading at a discount in excess of 10%;

• the recommendation that shareholders vote in

favour of the Company’s dividend policy at the

forthcoming AGM; and

• the recommendation that shareholders vote in

favour of the renewal of the buyback and allotment

authorities as set out in the notice of AGM.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE

POLICY

The Board believes that it is in the shareholders’

interests to consider ESG factors when selecting and

retaining investments, and has asked the Investment

Managers to take these into account when investing.

The concept of responsible investing has always been

a core component of the investment process and the

Investment Managers employ a disciplined investment

process that seeks to both uncover opportunities

and evaluate potential risks, while striving for the

best possible return outcomes. When reviewing any

investment opportunity, the Investment Managers look

to understand the relevant ESG issues in conjunction

with the financial, macro and political drivers as part of

its investment process, populating an internally built

ESG framework due to lack of appropriate coverage

from external providers. Relevant and material ESG

opportunities and risks can meaningfully affect

investment performance, therefore the consideration

of ESG issues forms part of the integrated research

analysis, decision-making and ongoing monitoring.

The Investment Managers believe that “G” is the

core foundation on which all else is built, as strong

governance within a company ensures that minority

shareholder interests are aligned with other

shareholders, management and stakeholders. The

Investment Managers’ “G” assessment therefore

includes questions covering shareholders’ rights,

transparency and related parties, as well as audit and

accounting, board composition and effectiveness,

executive oversight and compensation. Each area is

assessed and weighted, and the Investment Managers

then apply an aggregated weighting towards “G” in

line with the strong empirical evidence linking robust

corporate governance and performance.

The “E” and “S” are also focal points for the Investment

Managers, as assessing key environmental and social

risks are essential to a long-term sustainable business

model. The Investment Managers identify the most

material “E” and “S” risks that are believed to affect

each sector and companies are then assessed against

each risk. The results from this analysis feed into an

“E” and “S” score for each company reflecting, for each

material risk, whether suitable/sustainable plans are in

place, how clear the company has been in disclosing its

approach and how well it is doing against its objective

to manage such risk.

Where a portfolio company is assessed as having a

relatively low “E”, “S” and/or “G” score, ICM’s approach

is to engage with the company to see improvements

over time. ESG considerations provide a way to identify

and review the long-term drivers of an investment that

are not found within the financial accounts, thereby

enabling the Investment Managers to fully question

a company’s investment potential from a number

of perspectives. Examples of ESG progress on two

portfolio companies are set out on page 24.

Where possible, the Investment Managers aim to

visit companies to access an in-person opportunity

to ask management teams what they perceive to

be the key operational, social, and environmental

issues, as well as a chance to see assets operating

first-hand. ESG disclosures are not always easy to

understand given they may not be openly reported

or consistently disclosed. The Investment Managers

believe that engaging with companies directly is the

best first step. Where necessary, the Investment

Managers will question and challenge an investee

STRATEGIC REPORT (continued)

Report and Accounts for the year to 31 March 2023

company’s management team directly to ensure a full

understanding of any challenges and opportunities.

Given the Investment Managers are long term investors,

engagement with management teams is and will remain

paramount to the investment approach. On behalf

of UEM as shareholder, the Investment Managers

work actively with investee companies to incorporate

stronger ESG principles and vote in a considered

manner (including against resolutions) to drive positive

change. As referred to above, the Investment Managers

believe that governance factors are fundamental to an

investment.

ICM is a signatory to the United Nations-supported

Principles for Responsible Investment, which is an

international network of investors working together to

implement its six aspirational principles. The Investment

Managers believe that good stewardship is essential

and these principles align with its philosophy to protect

and increase the value of its investments.

MODERN SLAVERY ACT

Due to the nature of the Company’s business, being

a company that does not offer goods and services to

customers, the Board considers that it is not within the

scope of the Modern Slavery Act 2015 because it has

no turnover. The Company is therefore not required

to make a slavery and human trafficking statement.

In any event, the Board considers the Company’s

supply chains, dealing predominantly with professional

advisers and service providers in the financial services

industry, to be low risk in relation to this matter.

GENDER DIVERSITY

The Board consists of three male directors and two

female directors. The Company has no employees

and therefore there is nothing further to report in

respect of gender representation within the Company.

The Company’s policy on diversity is detailed in the

Corporate Governance Statement on pages 52 and 53.

GREENHOUSE GAS EMISSIONS AND STREAMLINED

ENERGY AND CARBON REPORTING ("SECR")

All the Company’s activities are outsourced to third

parties. The Company therefore has no greenhouse gas

emissions to report from its operations. In addition, the

Company considers itself to be a low energy user under

the SECR regulations and therefore is not required to

disclose energy and carbon information.

BRIBERY ACT

The Company has a zero-tolerance policy towards

bribery and is committed to carrying out business fairly,

honestly and openly. The Investment Managers also

adopt a zero-tolerance approach and have policies and

procedures in place to prevent bribery.

CRIMINAL FINANCES ACT

The Company has a commitment to zero tolerance

towards the criminal facilitation of tax evasion.

SOCIAL, HUMAN RIGHTS AND COMMUNITY MATTERS

As an externally managed investment trust, the

Company does not have any employees or maintain any

premises. It therefore has no material, direct impact on

the environment or any particular community and the

Company itself has no environmental, human rights,

social or community policies. The Board however notes

the Investment Managers’ policy statement in respect of

ESG issues, as outlined on page 38.

OUTLOOK

The Board’s main focus is on the achievement of the

Company’s objective of delivering a long-term total

return and the future of the Company is dependent

upon the success of its investment strategy. The

outlook for the Company is discussed in the Chairman’s

Statement and the main trends and factors likely to

affect the future development, performance and

position of the Company’s business can be found in the

Investment Managers’ Report.

This Strategic Report was approved by the Board of

Directors on 16 June 2023.

By order of the Board

ICM Investment Management Limited

Company Secretary

16 June 2023

Utilico Emerging Markets Trust plc

INVESTMENT MANAGERS AND TEAM

ICMIM, a company authorised and regulated by

the FCA, was the Company’s AIFM during the year

ended 31 March 2023 with sole responsibility for

risk management, subject to the overall policies,

supervision, review and control of the Board and is

joint portfolio manager of the Company, alongside ICM.

The Investment Managers are focused on finding

investments at valuations that do not reflect their true

long-term value. Their investment approach is to have

a deep understanding of the business fundamentals

of each investment and its environment versus its

intrinsic value. The Investment Managers are long

term investors and see markets as a place to exchange

assets.

ICM MANAGES OVER

USD 1.8bn

IN FUNDS DIRECTLY AND IS RESPONSIBLE INDIRECTLY FOR A FURTHER USD 22.5BN OF ASSETS IN SUBSIDIARY

INVESTMENTS. ICM HAS OVER 80 STAFF BASED IN OFFICES IN BERMUDA, CAPE TOWN, DUBLIN, LONDON, SEOUL,

SINGAPORE, SYDNEY, VANCOUVER AND WELLINGTON.

CHARLES JILLINGS

Charles Jillings, a director of ICM and chief executive of ICMIM, is responsible for

the day-to-day running of UEM and the investment portfolio. He qualified as a

chartered accountant and has extensive experience in corporate finance and asset

management. He is an experienced director having previously been a non-executive

director in the financial services, water and waste sectors. He is currently a director

of Somers Limited and Waverton Investment Management Limited.

DUNCAN SAVILLE

Duncan Saville, a director of ICM, is a chartered accountant with experience in

corporate finance and asset management. He was formerly a non-executive director

of Utilico Investment Trust plc and is an experienced non-executive director having

been a director in multiple companies in the financial services, utility, mining and

technology sectors. He is currently a non-executive director of ASX listed Resimac

Group Limited and H.R.L Morrison & Co Limited.

The investment teams are led by Charles Jillings and Duncan Saville.

Report and Accounts for the year to 31 March 2023

SENIOR CORE TEAM ASSISTING ON UEM INCLUDE:

COMPANY SECRETARY – ICM INVESTMENT MANAGEMENT LIMITED

The Investment Managers’ approach is to

have a deep understanding of the business

fundamentals of each investment and its

environment versus its intrinsic value.

Jacqueline Broers, deputy portfolio manager, has been involved in the running of UEM since

September 2010. Mrs Broers is focused on the transport sector worldwide with particular

emphasis on emerging markets. Prior to joining the investment team, Mrs Broers worked in the

corporate finance team at Lehman Brothers and Nomura. Mrs Broers is a qualified chartered

accountant.

Alastair Moreton, a chartered accountant, joined the team in 2017 to provide company secretarial

services to UEM and UIL Limited. Mr Moreton has over thirty years’ experience in corporate finance

with Samuel Montagu, HSBC, Arbuthnot Securities and, prior to joining ICM, Stockdale Securities,

where he was responsible for the company’s closed end fund corporate clients.

Jonathan Groocock, deputy portfolio manager, has been involved in the running of UEM since

February 2011. Mr Groocock is focused on the utilities sector worldwide with particular emphasis

on emerging markets. Prior to joining the investment team Mr Groocock had nine years of

experience in sell side equity research. Mr Groocock qualified as a CFA charterholder in 2005 and is

a non executive director of Petalite Limited.

Mark Lebbell has been involved in the running of UEM since its inception and before that was

involved with Utilico Investment Trust plc and The Special Utilities Investment Trust PLC since

2000. Mr Lebbell is focused on the communications sector worldwide with particular emphasis on

emerging markets. Mr Lebbell is an associate member of the Institute of Engineering and Technology.

Utilico Emerging Markets Trust plc

DIRECTORS

JOHN RENNOCKS (CHAIRMAN)*

John Rennocks joined the Board in 2015 and was appointed Chairman in 2016. He previously

served as deputy chairman and senior independent director of Inmarsat plc and as finance

director of a number of public limited companies (including Smith and Nephew plc, PowerGen

plc, British Steel plc and Corus Group plc) and as a non-executive chairman or director of several

companies, including Foreign & Colonial Investment Trust plc and JP Morgan Overseas Investment

Trust plc. He is a Fellow of the Institute of Chartered Accountants of England and Wales.

MARK BRIDGEMAN*

Mark Bridgeman joined the Board in 2021. He is UEM’s Senior Independent Director and

Chairman of the Remuneration Committee. His background is in fund management spending 19

years with Schroders plc with various roles including Emerging Markets Fund Manager and Global

Head of Research. He left Schroders in 2009 to manage a rural estate and farming business in

Northumberland and was formerly President of the Country Land & Business Association. He is

currently a non-executive director of abrdn China Investment Company Limited.

SUSAN HANSEN

Susan Hansen joined the Board in 2013. She is a chartered accountant and MBA graduate and

has worked in financial services since 1980. She is currently a director of Resimac Group Limited

(see page 45) a non-bank lending company listed on the Australian Securities Exchange and the

principal of a financial training organisation in New Zealand. She is a member of the Institute of

Chartered Accountants of Australia and New Zealand and a graduate of the Australian Institute of

Company Directors.

ISABEL LIU*

Isabel Liu joined the Board in 2021. She has over 25 years' global experience investing equity in

infrastructure, including the AIG Asian Infrastructure Fund, the ABN AMRO Global Infrastructure

Fund and was managing director of the Asia Pacific investment business of John Laing plc. More

recently Isabel served as a non-executive director of Pensions Infrastructure Platform. She has been

a board member of Transport Focus, the consumer watchdog for public transport and England's

highways, and Heathrow Airport’s Consumer Challenge Board. She is currently a non-executive

director of Schroder Oriental Income Fund Limited and Gresham House Energy Storage Fund plc.

ERIC STOBART*

Eric Stobart joined the Board in 2019 and is Chairman of UEM’s Audit & Risk Committee. He has

spent most of his career in merchant and commercial banking, latterly as a senior executive at

Lloyds Banking Group. He was for 12 years chair of the investment committee of the £25.0bn

Lloyds Bank Pension Scheme as well as having been chair of the audit and risk committee

of a substantial investment management group. Currently he chairs or is a member of the

trustee board of three pension schemes with combined assets of some £2.7bn. Mr Stobart is a

chartered accountant with an MBA from London Business School.

*Independent director and member of the Audit & Risk Committee, Remuneration Committee and Management Engagement Committee

Report and Accounts for the year to 31 March 2023

The Directors present the Annual Report and Accounts

of the Company for the year ended 31 March 2023.

STATUS OF THE COMPANY

UEM was incorporated on 7 December 2017. On 3 April

2018, as a result of the proposals to redomicile UEM

Limited to the United Kingdom, the shareholders of

UEM Limited exchanged all their shares in UEM Limited

for shares in the Company on a one for one basis

and UEM Limited became a wholly owned subsidiary

of the Company. All the assets of UEM Limited were

transferred to the Company and UEM Limited was

dissolved on 7 March 2019. UEM’s shares are listed on

the premium segment of the Official List of the Financial

Conduct Authority and traded on the main market of

the London Stock Exchange.

UEM carries on business as an investment trust. It

has been approved by HM Revenue & Customs as an

investment trust in accordance with sections 1158 and

1159 of the Corporation Tax Act 2010, subject to the

Company continuing to meet the eligibility conditions.

The Directors are of the opinion that the Company has

conducted its affairs in a manner which will satisfy the

conditions for continued approval.

UEM is domiciled in the UK as an investment company

within the meaning of section 833 of the Companies Act

2006. It is not a close company and has no employees.

UEM is a member of the AIC in the UK.

THE ALTERNATIVE INVESTMENT FUND MANAGERS

DIRECTIVE (“AIFMD”)

The Company is an Alternative Investment Fund

(“AIF”) falling within the scope of, and subject to,

the requirements of the AIFMD. The Company has

appointed ICMIM, an English incorporated company

which is regulated by the FCA, as its AIFM, with sole

responsibility for risk management and ICM and ICMIM

jointly to provide portfolio management services.

The AIFMD requires certain information to be made

available to investors in AIFs before they invest and

requires that material changes to this information be

disclosed in the annual report of each AIF. An Investor

Disclosure Document, which sets out information

on the Company’s investment strategy and policies,

leverage, risk, liquidity, administration, management,

fees, conflicts of interest and other shareholder

information, is available on the Company’s website at

www.uemtrust.co.uk.

UEM also appointed JPMEL as its depositary service

provider. JPMEL’s responsibilities include general

oversight over the issue and cancellation of the

Company’s shares, the calculation of the NAV, cash

monitoring and asset verification and record keeping.

JPMEL receives an ad-valorem fee of 2.5bps of the

Company’s NAV for its services, subject to a minimum

fee of £25,000 per annum, payable monthly in arrears.

FUND MANAGEMENT ARRANGEMENTS

In accordance with the Investment Management

Agreement (“IMA”), the Company pays to ICMIM and

ICM a management fee based on a tiered structure

comprising 1.0% of NAV up to £500m; 0.9% of NAV

above £500m up to £750m; 0.85% of NAV above £750m

up to £1,000m; and 0.75% of NAV above £1,000m. This

structure has been in place since 1 April 2021 and

replaced the previous arrangement which comprised a

management fee of 0.65% per annum of NAV together

with a performance related fee. The management fee is

payable quarterly in arrears, with such fee apportioned

between ICMIM and ICM as agreed by them. The IMA

may be terminated on not less than six months’ notice

in writing and further details of the amounts payable to

ICMIM and ICM are disclosed in note 4 to the accounts.

Under the IMA, ICMIM has been appointed as Company

Secretary.

The Board continually reviews the policies and

performance of the Investment Managers. The

Board’s philosophy and the Investment Managers’

approach are that the portfolio should consist of shares

considered attractive irrespective of their inclusion or

weighting in any index. The portfolio’s composition and

performance are likely, therefore, to be very different,

for example, from those of the MSCI EM total return

Index. Over the short term, there may be periods

of sharp underperformance or outperformance

compared with the index. Over the long term, the

Board expects the combination of the Company’s and

Investment Managers’ approach to result in a significant

degree of outperformance compared with the index.

The Board continues to believe that the appointment of

ICMIM and ICM on the terms agreed is in the interests

of shareholders as a whole.

DIRECTORS’ REPORT

Utilico Emerging Markets Trust plc

ADMINISTRATION

The provision of accounting and administration services

has been outsourced to JPMorgan Chase Bank N.A. –

London Branch (the “Administrator”). The Administrator

provides financial and general administrative services to

the Company for an annual fee based on the Company’s

month end NAV (5 bps on the first £100m NAV, 3bps on

the next £150m NAV, 2bps on the next £250m NAV and

1.5bps on the next £500m NAV). The Administrator and

any of its delegates are also entitled to reimbursement

of certain expenses incurred by it in connection with

its duties. In addition, ICMIM has appointed Waverton

Investment Management Limited (“Waverton”) to

provide certain support services (including middle

office, market dealing and information technology

support services). Waverton is entitled to receive an

annual fee of 3bps of the Company’s NAV and the

Company reimburses ICMIM for its costs and expenses

incurred in relation to this agreement.

Annually, the Management Engagement Committee

considers the ongoing administrative requirements of

the Company and assesses the services provided.

SAFE CUSTODY OF ASSETS

During the year ended 31 March 2023, all listed and a

number of unlisted investments were held in custody

for the Company by JPMorgan Chase Bank N.A. –

London Branch (the “Custodian”). Operational matters

with the Custodian are carried out on the Company’s

behalf by ICMIM and the Administrator in accordance

with the IMA and the Administration Agreement. The

Custodian is paid a variable fee dependent on the

number of trades transacted and the location of the

securities held.

FINANCIAL INSTRUMENTS

The Company’s financial instruments comprise its

investment portfolio, cash balances, bank borrowings

and debtors and creditors which arise directly from

its operations such as sales and purchases awaiting

settlement, and accrued income. The financial risk

management objectives and policies arising from its

financial instruments and the exposure of the Company

to risk are disclosed in note 26 to the accounts.

DIVIDENDS

A dividend of 2.00p per share was paid on

23 September 2022 and a dividend of 2.15p per share

was paid on 16 December 2022 and 24 March 2023.

A dividend of 2.15p per share was declared on 22 May

2023 and will be paid on 23 June 2023.

ISA AND NMPI

UEM remains a qualifying investment under the

Individual Savings Account (ISA) regulations and it

is the intention of the Board to continue to satisfy

these regulations. Furthermore, the Company

currently conducts its affairs so that its shares can

be recommended by IFAs to ordinary retail investors

in accordance with the FCA’s rules in relation to non-

mainstream pooled investments and intends to

continue to do so for the foreseeable future.

GOING CONCERN

The Board has reviewed the going concern basis

of accounting for the Company. The Company’s

assets consist substantially of equity shares in listed

companies and in most circumstances are realisable

within a short timescale. The Board has performed

a detailed assessment of the Company’s operational

risk and resources including its ability to meet its

liabilities as they fall due, by conducting stress tests and

scenarios which considered the impact of severe stock

market and currency volatility. This is set out in note 25

to the accounts. In light of this work and there being no

material uncertainties related to events or conditions

that may cast significant doubt about the ability of the

Company to continue as a going concern, the Board

has a reasonable expectation that the Company

has adequate resources to continue in operational

existence for a period of at least the next twelve months

from the date of approval of these financial statements.

Accordingly, the Board considers it appropriate to

continue to adopt the going concern basis in preparing

the accounts.

DIRECTORS

UEM currently has a Board of five non-executive

directors who oversee and monitor the activities of

the Investment Managers and other service providers

and ensure that the Company’s investment policy is

adhered to. The Board is supported by an Audit & Risk

Committee, a Management Engagement Committee

and a Remuneration Committee, which deal with

specific aspects of the Company’s affairs. The Corporate

Governance Statement, which is set out on pages 49 to

54, forms part of this Directors’ Report.

DIRECTORS’ REPORT (continued)

Report and Accounts for the year to 31 March 2023

The Directors have a range of business, financial and

asset management skills, as well as experience relevant

to the direction and control of the Company. Brief

biographical details of the members of the Board are

shown on page 42. All the Directors are independent

other than Ms Hansen who is also a director of

Resimac Group Limited, a company associated with the

Investment Managers.

All appointments to the Board and re-elections of

Directors are carried out in accordance with the

Companies Act 2006 and the Company’s Articles of

Association. The Company’s Articles of Association

provide that all the Directors retire each year. The

Board may also appoint Directors but any Director so

appointed must stand for election by the shareholders

at the next AGM.

DIRECTORS’ INDEMNITY AND INSURANCE

As at the date of this report, a deed of indemnity

has been entered into by the Company and each of

the Directors under which the Company has agreed

to indemnify each Director, to the extent permitted

by law, in respect of certain liabilities incurred as a

result of carrying out his/her role as a Director of the

Company. Each Director is indemnified against the

costs of defending any criminal or civil proceedings

or any claim by the Company or a regulator as they

are incurred provided that where the defence is

unsuccessful the Director must repay those defence

costs to the Company. The indemnities are qualifying

third party indemnity provisions for the purposes of the

Companies Act 2006.

UEM also maintains Directors’ and Officers’ liability

insurance which provides appropriate cover for any

legal action brought against the Directors.

DIRECTORS’ INTERESTS

The Directors’ interests in the share capital of the

Company are disclosed in the Directors’ Remuneration

Report on page 57.

No Director was a party to, or had any interests in,

any contract or arrangement with the Company at any

time during the year or at the year end. There are no

agreements between the Company and the Directors

concerning compensation for loss of office.

A Director must avoid a situation where he/she has,

or can have, a direct or indirect interest that conflicts,

or possibly may conflict, with the Company’s interests.

The Directors have declared any potential conflicts of

interest to the Company, which are reviewed regularly

by the Board. The Directors have undertaken to advise

the Company Secretary and/or Chairman as soon as

they become aware of any potential conflicts of interest.

SHARE CAPITAL

As at 31 March 2023 the issued share capital of the

Company and the total voting rights were 202,212,256

shares. As at the date of this report, the share capital of

the Company and total voting rights were 201,471,467

shares. There are no restrictions on the transfer of

securities in the Company and there are no special

rights attached to any of the shares.

SHARE ISSUES AND REPURCHASES

UEM has the authority to purchase shares in the

market to be held in treasury or for cancellation and to

issue new shares for cash. During the year ended

31 March 2023 the Company purchased 12,531,811

shares for cancellation. The current authority to

repurchase shares was granted to Directors on

20 September 2022 and expires at the conclusion of

the next AGM. The Directors are proposing that their

authority to buy back up to 14.99% of the Company’s

shares for cancellation or to be held in treasury and

to issue new shares or sell shares from treasury be

renewed at the forthcoming AGM.

TENDER FACILITY

At the Directors’ discretion, the Company can operate

a tender facility subject to certain limitations. The

tender facility is not expected to be made available

in circumstances where the annual compound

growth rate of the Company’s gross assets exceeds

10% or where the Company’s net assets total return

performance exceeds 10% in the relevant period. The

maximum number of shares which may be tendered

pursuant to the tender facility in any financial year

would be limited to 12.5% of the shares in issue at the

commencement of the relevant financial year, with any

excess tender requests being scaled back pro-rata.

The tender facility has not been operated to date by

the Company or previously by its predecessor, UEM

Limited.

Utilico Emerging Markets Trust plc

CONTINUATION OF THE COMPANY

UEM has been established with an unlimited life

although the Company’s Articles of Association provide

for a continuation vote to be put to shareholders every

five years. The continuation vote was passed at the

AGM held in 2021 and shareholders will therefore have

further opportunities to vote on the continuation of the

Company in 2026 and every fifth AGM thereafter.

SUBSTANTIAL SHARE INTERESTS

As at the date of this report, the Company had received

notification of the following holdings of voting rights:

Number of

shares held % held

City of London Investment

Management Company Limited 34,425,869 17.1

UIL Limited 20,126,014 10.0

Lazard Asset Management LLC 18,737,825 9.3

Rathbone Investment

Management Limited 10,728,364 5.3

Ameriprise Financial, Inc. 10,127,839 5.0

THE COMMON REPORTING STANDARD

Tax legislation under The OECD (Organisation for

Economic Co-operation and Development) Common

Reporting Standard for Automatic Exchange of

Financial Account Information (the “Common Reporting

Standard”) was introduced on 1 January 2016. The

legislation requires an investment trust company to

provide personal information to HMRC about investors

who purchase shares. The Company is required to

provide information annually on the tax residences of

a number of non-UK based certificated shareholders.

HMRC may in turn exchange the information with the

tax authorities of another country or countries in which

the shareholder may be tax resident, where those

countries (or tax authorities in those countries) have

entered into agreements to exchange financial account

information.

All new shareholders entered onto the share register,

excluding those whose shares are held in CREST, will be

sent a certification form for the purposes of collecting

this information.

AUDIT INFORMATION AND AUDITOR

As required by section 418 of the Companies Act 2006,

the Directors who held office at the date of approval of

this Directors’ Report confirm that, so far as they are

aware, there is no relevant audit information of which

the Company’s auditor is unaware; and each Director

has taken all the steps that they ought to have taken as

a Director to make themselves aware of any relevant

audit information and to establish that the Company’s

auditor is aware of that information.

LISTING RULE 9.8.4R

There are no instances where the Company is required

to make disclosures in respect of Listing Rule 9.8.4R

(information to be included in annual report and

accounts).

ARTICLES OF ASSOCIATION

Any amendments to the Company’s Articles of

Association must be made by special resolution.

ANNUAL GENERAL MEETING

The following information to be discussed at the

forthcoming AGM is important and requires your

immediate attention. If you are in any doubt about the

action you should take, you should seek advice from

your stockbroker, bank manager, solicitor, accountant or

other financial adviser authorised under the Financial

Services and Markets Act 2000 (as amended).

If you have sold or transferred all of your shares in the

Company, you should pass this document, together

with any other accompanying documents including the

form of proxy, at once to the purchaser or transferee,

or to the stockbroker, bank or other agent through

whom the sale or transfer was effected, for onward

transmission to the purchaser or transferee.

The business of the AGM consists of 12 resolutions.

Resolutions 1 to 10 (inclusive) will be proposed as

ordinary resolutions and resolutions 11 and 12 will be

proposed as special resolutions.

Ordinary Resolution 1 – Annual Report and

Financial Statements

This resolution seeks shareholder approval to receive

the report of the Directors and financial statements for

the year ended 31 March 2023 and the Auditor’s report

thereon.

DIRECTORS’ REPORT (continued)

Report and Accounts for the year to 31 March 2023

Ordinary Resolution 2 – Approval of the Directors’

Remuneration Report

This resolution is an advisory vote on the Directors’

Remuneration Report.

Ordinary Resolution 3 – Approval of the Company’s

dividend policy

This resolution seeks shareholder approval of the

Company’s dividend policy to pay four interim

dividends per year. Under the Company’s Articles of

Association, the Board is authorised to approve the

payment of interim dividends without the need for

the prior approval of the Company’s shareholders.

Having regard to corporate governance best practice

relating to the payment of interim dividends without

the approval of a final dividend by a company’s

shareholders, the Board has decided to seek express

approval from shareholders of its dividend policy to pay

four interim dividends per year. If this resolution is not

passed, it is the intention of the Board to refrain from

authorising any further interim dividends until such

time as the Company’s dividend policy is approved by

its shareholders.

Ordinary Resolutions 4 to 7 (inclusive) – Re-election

of the Directors

The biographies of the Directors are set out on page 42

and are incorporated into this report by reference.

Resolution 4 relates to the re-election of Mr John

Rennocks. Mr Rennocks’ leadership of the Board as

Chairman draws on his long and varied experience

on the boards of many public limited companies

and investment companies. His focus is on long-

term strategic issues, which are key topics of Board

discussion.

Resolution 5 relates to the re-election of Mr Mark

Bridgeman. Mr Bridgeman’s experience in the

investment management industry and with other

investment funds means that he brings significant

expertise in investment matters to his role on the

Board.

Resolution 6 relates to the re-election of Ms Isabel Liu.

Ms Liu’s long career in infrastructure investing brings

in-depth knowledge and expertise in such matters to

her role as Director.

Resolution 7 relates to the re-election of Mr Eric

Stobart. Mr Stobart has extensive accounting

knowledge and many years of experience of audit

and risk committees in the financial services sector.

He therefore brings this strong background and skills

to his role as the Company’s Audit & Risk Committee

Chairman.

Ordinary Resolutions 8 and 9 – Appointment of the

external Auditor and the Auditor’s Remuneration

These resolutions relate to the appointment and

remuneration of the Company’s auditor. The Company,

through its Audit & Risk Committee, has considered

the independence and objectivity of the external

auditor and is satisfied that the proposed Auditor is

independent. Further information in relation to the

assessment of the existing Auditor’s independence can

be found in the report of the Audit & Risk Committee.

Resolutions relating to the following items of special

business will be proposed at the forthcoming AGM:

Ordinary Resolution 10 – Authority to allot shares

The Directors may only allot shares for cash if

authorised to do so by shareholders in a general

meeting. This resolution seeks authority for the

Directors to allot shares for cash up to an aggregate

nominal amount of £201,470 per annum, which is

equivalent to 20,147,000 ordinary shares of 1p each and

represents approximately 10% of the Company’s issued

ordinary share capital (excluding treasury shares) as

at the date of the Notice of the AGM. This resolution

will expire at the conclusion of the next AGM of the

Company to be held in 2024 unless renewed prior to

that date at an earlier general meeting.

Utilico Emerging Markets Trust plc

Special Resolution 11 – Authority to disapply pre-

emption rights

By law, Directors require specific authority from

shareholders before allotting new shares or selling

shares out of treasury for cash without first offering

them to existing shareholders in proportion to their

holdings. This resolution empowers the Directors

to allot new shares for cash or to sell shares held by

the Company in treasury, otherwise than to existing

shareholders on a pro rata basis, up to an aggregate

nominal amount of £201,470 which is equivalent to

20,147,000 ordinary shares of 1p each and represents

approximately 10% of the Company’s issued ordinary

share capital (excluding treasury shares) as at the

date of the Notice of the AGM. Any such sale of shares

would only be made at prices greater than NAV and

would therefore increase the assets underlying each

share. This resolution will expire at the conclusion

of the next AGM of the Company to be held in 2024

unless renewed prior to that date at an earlier general

meeting.

Special Resolution 12 – Authority to buy back shares

This resolution seeks to renew the authority granted

to the Directors enabling the Company to purchase

its own shares. The Directors will only consider

repurchasing shares in the market if they believe it

to be in shareholders’ interests and as a means of

correcting any imbalance between supply and demand

for the Company’s shares.

The Directors are seeking authority to purchase up

to 30,200,000 ordinary shares (being approximately

14.99% of the issued ordinary share capital excluding

treasury shares as at the date of the Notice of the

AGM). This authority, unless renewed at an earlier

general meeting, will expire at the conclusion of the

next AGM of the Company to be held in 2024.

Any shares purchased pursuant to this resolution

shall be cancelled immediately upon completion of

the purchase or held, sold, transferred or otherwise

dealt with as treasury shares in accordance with the

provisions of the Companies Act 2006.

RECOMMENDATION

The Board considers that each of the resolutions to be

proposed at the AGM is likely to promote the success

of the Company for the benefit of its members as a

whole and is in the best interests of the Company and

its shareholders as a whole. The Directors unanimously

recommend that shareholders vote in favour of all the

resolutions as they intend to do in respect of their own

beneficial holdings.

By order of the Board

ICM Investment Management Limited, Secretary

16 June 2023

DIRECTORS’ REPORT (continued)

Report and Accounts for the year to 31 March 2023

THE COMPANY‘S CORPORATE GOVERNANCE

FRAMEWORK

Corporate Governance is the process by which the

board of directors of a company protects shareholders’

interests and by which it seeks to enhance shareholder

value. Shareholders hold the directors responsible

for the stewardship of a company’s affairs, delegating

authority and responsibility to the directors to

manage the company on their behalf and holding

them accountable for its performance. Responsibility

for good governance lies with the Board. The Board

considers the practice of good governance to be an

integral part of the way it manages the Company and

is committed to maintaining high standards of financial

reporting, transparency and business integrity.

The governance framework of the Company reflects

the fact that, as an investment company, it has no full-

time employees and outsources its activities to third

party service providers.

CORPORATE GOVERNANCE STATEMENT

Five non-executive directors (NEDs)

CHAIRMAN: John Rennocks

SENIOR INDEPENDENT DIRECTOR: Mark Bridgeman

AUDIT & RISK

COMMITTEE

MANAGEMENT

ENGAGEMENT

COMMITTEE

NOMINATION

COMMITTEE

REMUNERATION

COMMITTEE

All independent NEDs

CHAIRMAN:

Eric Stobart

KEY OBJECTIVE:

• to oversee the

financial reporting and

control environment.

All independent NEDs

CHAIRMAN:

John Rennocks

KEY OBJECTIVES:

• to review the

performance of

the Investment

Managers and the

Administrator; and

• to review the

performance of other

service providers.

The Board as a whole

performs this function

KEY OBJECTIVES:

• to regularly review

the Board’s structure

and composition; and

• to consider any new

appointments.

All independent NEDs

CHAIRMAN:

Mark Bridgeman

KEY OBJECTIVE:

• to set the

remuneration policy

for the Directors of

the Company.

THE BOARD

KEY OBJECTIVES:

• to set strategy, values

and standards;

• to provide leadership within

a framework of prudent

and effective controls which

enable risk to be assessed and

managed; and

• to constructively challenge

and scrutinise performance

of all outsourced activities.

Utilico Emerging Markets Trust plc

THE AIC CODE OF CORPORATE GOVERNANCE

As a UK-listed investment trust the Board’s principal

governance reporting obligation is in relation to the UK

Corporate Governance Code (the “UK Code”) issued

by the Financial Reporting Council (“FRC”) in July 2018.

However, it is recognised that investment companies

have special circumstances which have an impact

on their governance arrangements. An investment

company typically has no employees and the roles of

portfolio management, administration, accounting

and company secretarial tend to be outsourced to a

third party. The AIC has therefore drawn up its own

set of guidelines known as the AIC Code of Corporate

Governance (the “AIC Code”) issued in February 2019,

which recognises the nature of investment companies

by focusing on matters such as board independence

and the review of management and other third party

contracts. The FRC has endorsed the AIC Code and

confirmed that companies which report against the

AIC Code will be meeting their obligations in relation to

the UK Code and paragraph LR9.8.6 of the FCA’s Listing

Rules. The Board believes that reporting against the

principles and recommendations of the AIC Code will

provide better information to shareholders.

The UK Code is available from the FRC’s website at

www.frc.org.uk. The AIC Code is available from the

Association of Investment Companies’ website at www.

theaic.co.uk.

COMPLIANCE WITH THE AIC CODE

During the year ended 31 March 2023, the Company

complied with the recommendations of the AIC Code

and the relevant provisions of the UK Code, except

those relating to:

• the role of the chief executive

• executive directors’ remuneration

• the need for an internal audit function

• membership of the Audit & Risk Committee by the

Chairman of the Board

For the reasons set out in the AIC Code and as

explained in the UK Code, the Board considers these

provisions are not relevant to the position of the

Company, being an externally managed investment

company. As explained in the Audit & Risk Committee

Report, the Chairman of the Board is also a member

of the Audit & Risk Committee, as permitted by the AIC

Code.

Information on how the Company has applied the

principles of the AIC Code and the UK Code is set out

below.

THE BOARD

The Board is responsible to shareholders for the

overall stewardship of the Company. A formal schedule

of matters reserved for the decision of the Board has

been adopted. Investment policy and strategy are

determined by the Board and it is also responsible for

the gearing policy, dividend policy, public documents,

such as the Annual Report and Financial Statements,

the buy-back policy and corporate governance

matters. In order to enable the Directors to discharge

their responsibilities effectively the Board has full and

timely access to relevant information.

The Board meets at least quarterly, with additional

Board and Committee meetings being held on an ad

hoc basis to consider particular issues as they arise.

Key representatives of the Investment Managers

attend each meeting and between these meetings

there is regular contact with the Investment Managers.

Two board meetings a year are usually held in

countries where the Company holds investments

and, as part of its monitoring and risk management

responsibilities, the Board will meet with investee

companies and local experts.

The Board has direct access to the advice and

services of the company secretary, who is an

employee of ICMIM. The company secretary, with

advice from the Company’s lawyers and financial

advisers, is responsible for ensuring that the Board

and Committee procedures are followed and that

applicable rules and regulations are complied with.

The company secretary is also responsible to the

Board for ensuring timely delivery of information

and reports and that the statutory obligations of

the Company are met. The company secretary is

responsible for advising the Board, through the

Chairman, on all governance matters.

There is an agreed procedure for Directors, in the

furtherance of their duties, to take legal advice at the

Company’s expense, having first consulted with the

Chairman.

CORPORATE GOVERNANCE STATEMENT (continued)

Report and Accounts for the year to 31 March 2023

During the year, none of the Directors took on any

significant new commitments or appointments. All of

the Directors consider that they have sufficient time to

discharge their duties.

There were four Board meetings, three Audit & Risk

Committee meetings, one Management Engagement

Committee meeting and one Remuneration Committee

meeting held during the year ended 31 March 2023 and

the attendance by the Directors was as follows:

Board

Audit & Risk

Committee

Management

Engagement

Committee

Remuneration

Committee

Number of meetings held during the year 4 3 1 1

John Rennocks 4 3 1 1

Mark Bridgeman 4 3 1 1

Susan Hansen 4 n/a n/a n/a

Isabel Liu 4 3 1 1

Anthony Muh (retired 20 September 2022) 2/2 1/1 1 1

Eric Stobart 4 3 1 1

Apart from the meetings detailed above, there were a

number of meetings held by committees of the Board

to approve the declaration of quarterly dividends and

other ad hoc items.

AUDIT & RISK COMMITTEE

The Audit & Risk Committee comprises all the

independent Directors of the Company and is chaired

by Mr Stobart. Further details of the Audit & Risk

Committee are provided in its report starting on

page 58.

MANAGEMENT ENGAGEMENT COMMITTEE

The Management Engagement Committee, which

is chaired by Mr Rennocks, comprises all the

independent Directors of the Company and meets at

least once a year.

The Investment Managers’ performance is considered

by the Board at every meeting, with a formal evaluation

by the Management Engagement Committee annually.

The Board received detailed reports and views from

the Investment Managers on investment policy, asset

allocation, gearing and risk at each Board meeting in

the year ended 31 March 2023, with ad hoc market/

company updates if there were significant movements

in the intervening period.

The Management Engagement Committee also

considers the effectiveness of the administration

services provided by the Investment Managers and

Administrator and the performance of other third

party service providers. In this regard the Committee

assessed the services provided by the Investment

Managers, the Administrator and the other service

providers to be good.

REMUNERATION COMMITTEE

The Remuneration Committee, which is chaired by Mr

Bridgeman, comprises all the independent Directors

of the Company. Further details are provided in the

Directors’ Remuneration Report on page 55.

INTERNAL CONTROLS

The Directors acknowledge that they are responsible

for ensuring that the Company maintains a sound

system of internal financial and non-financial controls

(“internal controls”) to safeguard shareholders’

investments and the Company’s assets.

The Company’s system of internal control is designed

to manage rather than eliminate risk of failure to

achieve the Company’s investment objective and/

or adhere to the Company’s investment policy and/

or investment limits. The system can therefore only

provide reasonable and not absolute assurance

against material misstatement or loss.

The Investment Managers, Administrator and

Custodian maintain their own systems of internal

controls and the Board and the Audit & Risk

Utilico Emerging Markets Trust plc

Committee receive regular reports from these service

providers.

The Board meets regularly, at least four times a year.

It reviews financial reports and performance against

relevant stock market criteria and the Company’s peer

group, amongst other things. The effectiveness of

the Company’s system of internal controls, including

financial, operational and compliance and risk

management systems is reviewed at least bi-annually

against risk parameters approved by the Board. The

Board confirms that the necessary actions are taken to

remedy any significant failings or weaknesses identified

from its review. No significant failings or weaknesses

occurred during the year ended 31 March 2023 or

subsequently up to the date of this report.

BOARD DIVERSITY, APPOINTMENT, RE-ELECTION

AND TENURE

The Board as a whole undertakes the responsibilities

which would otherwise be assumed by a nomination

committee. It considers the size and structure of

the Board, including the balance of expertise and

skills brought by individual Directors. It supports the

principles of boardroom diversity, including gender

and ethnicity, progressive refreshing and succession

planning and such matters are discussed by the Board

as a whole at least annually. The Company’s policy is

that the Board should be comprised of directors with

a diverse range of skills, knowledge and experience

and that any new appointments should be made on

the basis of merit, against objective criteria including

diversity. The Listing Rules, requires companies to

report against the following three diversity targets:

(i) At least 40% of individuals on the board are

women;

(ii) At least one of the senior board positions (defined

in the Listing Rules as the chair, CEO, SID and CFO)

is held by a woman; and

(iii) At least one individual on the board is from a

minority ethnic background

As at 31 March 2023, UEM complies with targets (i) and

(iii). As provided for in the Listing Rules, investment

companies do not need to report against target (ii) if

it is inapplicable. The Board believes that, since UEM

is an externally managed investment company which

does not have executive management functions,

including the roles of CEO or CFO, this target is not

applicable.

The Board has chosen to align its diversity reporting

reference date with the Company’s financial year

end. As required by the Listing Rules, further details

in relation to the three diversity targets are set out in

the tables below. The information was obtained by

asking each of the Directors how they wished to be

categorised for the purposes of these disclosures:

CORPORATE GOVERNANCE STATEMENT (continued)

31 March 2023 Number of Board members Percentage of the Board

Number of senior positions on

the Board (CEO, CFO, SID,

Chair)

Men 3 60%

Women 2 40% Not applicable

Other – – See above

Not specified/prefer not to say – –

Report and Accounts for the year to 31 March 2023

The Board currently consists of three men and two

women. As referred to in the Chairman’s statement,

Ms Hansen has indicated her intention to retire from

the Board at this year’s AGM and the current intention

is to continue as a Board of four Directors. This will

mean that target (i) will not be complied with following

19 September 2023. Given the relatively small size of

UEM’s Board, any change in membership has a much

greater impact on the representation of a particular

group. The Board will continue to have regard to

boardroom diversity, including gender and ethnicity,

during its consideration of succession planning and

future Board appointments.

The Board is of the view that length of service does

not necessarily compromise the independence or

contribution of directors of an investment company,

where continuity and experience can add significantly

to the strength of the Board. This is supported by the

views on independence expressed in the AIC Code.

No limit on the overall length of service of any of the

Company’s Directors has been imposed. All Directors

are subject to annual re-election.

The Board reviews succession planning at least

annually. Appointments of new Directors will be made

on a formalised basis with the Chairman agreeing, in

conjunction with his colleagues, a job specification

and other relevant selection criteria and the methods

of recruitment (where appropriate using an external

recruitment agency), selection and appointment. The

potential Director would meet with Board members

prior to formal appointment. An induction process

will be undertaken, with new appointees to the

Board being given a full briefing on the workings and

processes of the Company and the management of the

Company by the Chairman, the Investment Managers,

the company secretary and other appropriate

persons. All appointments are subject to subsequent

confirmation by shareholders in general meeting.

BOARD, COMMITTEE AND DIRECTORS’

PERFORMANCE APPRAISAL

The Directors recognise the importance of the AIC

Code’s recommendations in respect of evaluating

the performance of the Board, the Committees

and individual Directors. This encompasses both

quantitative and qualitative measures of performance

including:

• attendance at meetings;

• the independence of individual Directors;

• the ability of Directors to make an effective

contribution to the Board and Committees

through the range and diversity of skills and

experience each Director brings to their role; and

• the Board’s ability to challenge the Investment

Managers’ recommendations, suggest areas

of debate and set the future strategy of the

Company.

The Board opted to conduct performance evaluation

through questionnaires and discussion between

the Directors, the Chairman and the chairmen

of the Committees. This process is conducted by

the Chairman reviewing individually with each of

the Directors their performance, contribution and

commitment to the Company and the possible

further development of skills. In addition, the Senior

Independent Director reviews the performance of

the Chairman with the other Directors, taking into

account the views of the Investment Managers. The

relevant points arising from these meetings are then

31 March 2023

Number of Board

members Percentage of the Board

Number of senior positions

on the Board (CEO, CFO,

SID, Chair)

White British or other White (including

minority-white groups) 4 80%

Mixed/Multiple Ethnic Groups - -

Asian/Asian British 1 20% Not applicable

Black/African/Caribbean/Black British - - See above

Other ethnic group, including Arab - -

Not specified/prefer not to say - -

Utilico Emerging Markets Trust plc

reported to, and discussed by, the Board as a whole.

This process has been carried out in respect of the

period under review and will be conducted on an

annual basis. The result of this period’s performance

evaluation process was that the Board, the Committees

of the Board and the Directors individually were all

assessed to have performed satisfactorily. No follow-

up actions were required.

It is not felt appropriate currently to employ the

services of, or to incur the additional expense of, an

external third party to conduct the evaluation process

as an appropriate process is in place; this will, however,

be kept under review.

RELATIONS WITH SHAREHOLDERS

UEM welcomes the views of shareholders and

places great importance on communication with

shareholders. All shareholders have the opportunity

to attend and vote at the Company’s AGM. The Notice

of AGM sets out the business of the meeting and

each resolution is explained in the Directors’ Report.

In addition, the Investment Managers will review

the Company’s portfolio and performance at the

AGM, where the Directors and representatives of

the Investment Managers will be available to answer

shareholders’ questions.

The prime medium by which the Company

communicates with shareholders is through the

half-yearly and annual financial reports, which aim to

provide shareholders with a full understanding of the

Company’s activities and its results. This information

is supplemented by the calculation and publication,

via a Regulatory Information Service, of the NAV of

the Company’s shares and by monthly factsheets

produced by the Investment Managers. Shareholders

can visit the Company’s website: www.uemtrust.

co.uk in order to access copies of half-yearly and

annual financial reports, factsheets and regulatory

announcements.

There is a regular dialogue between the Investment

Managers and institutional shareholders, including

private client wealth managers, to discuss aspects of

investment performance, governance and strategy

and to listen to shareholder views in order to help

develop an understanding of their issues and

concerns. General presentations to institutional

shareholders and analysts follow the publication of the

annual results. All meetings between the Investment

Managers and institutional and other shareholders

are reported to the Board. The Chairman, Senior

Independent Director and other Directors are available

to discuss any concerns with shareholders if required

and shareholders may communicate with the Company

at any time by writing to the Board at the Company’s

registered office or contacting the Company’s broker.

By order of the Board

ICM Investment Management Limited

Company Secretary

16 June 2023

CORPORATE GOVERNANCE STATEMENT (continued)

Report and Accounts for the year to 31 March 2023

DIRECTORS’ REMUNERATION REPORT

STATEMENT OF THE

CHAIRMAN

As Chairman of the

Remuneration Committee,

I am pleased to present the

Directors’ Remuneration Report

to shareholders. The report

comprises a remuneration

policy, which is subject to a

triennial binding shareholder

vote, or sooner if an alteration

to the policy is proposed, and

a report on remuneration,

which is subject to an annual advisory vote. An ordinary

resolution for the approval of this report will therefore be

put to shareholders at the Company’s forthcoming AGM.

The law requires the Company’s auditor to audit certain

parts of the disclosures provided. Where disclosures

have been audited, they are indicated as such. The

auditor’s opinion is included in their report starting on

page 62.

The Remuneration Committee is responsible for

reviewing and making recommendations to the Board in

respect of the fees of Directors. In line with the AIC Code,

it reviews the ongoing appropriateness of the Company’s

remuneration policy and the individual remuneration of

Directors by reference to the activities of the Company

and in comparison with other companies of a similar

structure and size. Any views expressed by shareholders

on the fees being paid to Directors will also be taken into

consideration. Following recommendations from the

Remuneration Committee, the Board reviews the fees

payable to the Chairman and Directors annually. There

were no changes to the remuneration policy during the

year.

All the Directors invest the full amount of their fees

(net of tax) in the shares of the Company. The review in

respect of the year ending 31 March 2024 has resulted

in the increases being applied to the annual fees as

detailed in the table below.

Year ending 31 March

2024

£’000s

2023*

£’000s

Chairman 52.5 50.0

Chairman of the Audit & Risk Committee 49.1 46.7

Directors 38.9 37.0

*Actual

DIRECTORS’ REMUNERATION POLICY

The Board, on the recommendation of its Remuneration

Committee, considers the level of the Directors fees

at least annually. The Board determines the level of

Directors’ fees within the limit currently set by the

Company’s Articles, which limit the aggregate fees

payable to the Board of Directors to a total of £250,000

per annum.

The Board’s policy is to set Directors’ remuneration at

a level commensurate with the skills and experience

necessary for the effective stewardship of the Company

and the expected contribution of the Board as a whole

in continuing to achieve the investment objective. Time

committed to the Company’s business and the specific

responsibilities of the Chairman, Directors and the

chairman of the Audit & Risk Committee are taken into

account. The policy aims to be fair and reasonable in

relation to comparable investment companies.

The fees are fixed and the monetary amount (net of

tax) is used by the Directors to purchase shares in the

Company quarterly in arrears. Directors are entitled to

be reimbursed for any reasonable expenses properly

incurred by them in connection with the performance

of their duties and attendance at Board and general

meetings and Committee meetings. Directors are not

eligible for bonuses, pension benefits, share options,

long-term incentive schemes or other benefits.

Directors are provided with a letter of appointment

when they join the Board. There is no provision for

compensation upon early termination of appointment.

The letters of appointment are available on request at

the Company’s registered office during business hours.

VOTING AT ANNUAL GENERAL MEETING

A resolution to approve the Remuneration Report was

put to shareholders at the AGM of the Company held on

20 September 2022. Of the votes cast, 99.95% were in

favour and 0.05% were against; this resolution will be put

to shareholders again this year. In accordance with the

Companies Act 2006, the Company is required to seek

shareholder approval for its remuneration policy on a

triennial basis and a binding resolution was last put to

shareholders at the AGM held on 20 September 2022.

Of the votes cast, 99.94% were in favour and 0.06% were

against. A resolution to approve the remuneration policy

will be put to shareholders at the AGM in 2025.

MARK BRIDGEMAN

Chairman of the

Remuneration Committee

Utilico Emerging Markets Trust plc

Director

2022/23

purchased

(1)

2022/23

Entitlement

(2)

2022/23

Taxable

benefits

(3)

2022/23

Total

2021/22

purchased

(1)

2021/22

Entitlement

(2)

2021/22

Taxable

benefits

(3)

2021/22

Total

John Rennocks

(Chairman) 12,982 50,000 – 50,000 11,855 47,600 – 47,600

Mark Bridgeman 9,819 37,000 451 37,451 5,200 18,548 413 18,961

Susan Hansen 17,340 37,000 1,000 38,000 15,721 35,200 850 36,050

Isabel Liu 12,432 37,000 – 37,000 4,129 12,681 18 12,699

Gareth Milne

(4)

– – – – 4,050 16,697 – 16,697

Anthony Muh

(5)

8,191 17,409 1,000 18,409 15,721 35,200 850 36,050

Eric Stobart 11,933 46,725 – 46,725 10,841 44,500 – 44,500

Totals 72,697 225,134 2,451 227,585 67,517 210,426 2,131 212,557

(1)

All the shares were purchased in the market, using the net fee entitlement after applicable tax deductions of each director, as set out in note 1(j) to

the accounts

(2)

The Directors’ entitlement to fees is calculated in arrears

(3)

Taxable benefits comprise amounts reimbursed for expenses incurred in carrying out business for the Company

(4)

Retired 21 September 2021

(5)

Retired 20 September 2022

(6)

There were no payments to third parties included in the fees referred to in the table above. There are no further fees to disclose as the Company

has no employees, chief executive or executive directors.

DIRECTORS’ ANNUAL REPORT ON REMUNERATION (AUDITED)

A single figure for the total remuneration of each Director who served during the year ended 31 March 2023 is set out

in the table below.

RELATIVE IMPORTANCE OF SPEND ON PAY

The following table compares the remuneration

paid to the Directors with aggregate distributions to

shareholders relating to the year ended 31 March

2023 and the prior year. Although this disclosure is

a statutory requirement, the Directors consider that

comparison of Directors’ remuneration with annual

dividends and share buybacks does not provide a

meaningful measure relative to the Company’s overall

performance as an investment company with an

objective of providing shareholders with long-term

total return.

Year ended 31 March

2023

£’000s

2022

£’000s

Change

£’000s

Aggregate Directors’

emoluments 225 210 15

Aggregate dividends 17,239 17,379 (140)

Aggregate share buybacks 27,159 13,898 13,261

ANNUAL PERCENTAGE CHANGE IN DIRECTORS’

REMUNERATION

The following table sets out the annual percentage

change in Directors’ remuneration compared to the

previous year.

Year ended 31 March

2023

Fees

2022

Fees

2021

Fees

John Rennocks 5.0 3.5 0.0

Mark Bridgeman 5.1 n/a n/a

Susan Hansen 5.1 3.5 0.0

Isabel Liu 5.1 n/a n/a

Anthony Muh 5.1 3.5 0.0

Eric Stobart 5.0 3.5 0.0

DIRECTORS’ REMUNERATION REPORT (continued)

Report and Accounts for the year to 31 March 2023

TOTAL RETURN COMPARATIVE PERFORMANCE

from 31 March 2013 to 31 March 2023

Source ICM and BloombergRebased to 100 as at 31 March 2013

MSCI Emerging Markets total return Index (GBP adjusted)

UEM ordinary share price total return adjusted

for the exercise of subscription shares

Mar 23Mar 22Mar 21Mar 20Mar 19Mar 18Mar 17Mar 16Mar 15Mar 14Mar 13

100

150

200

DIRECTORS’ BENEFICIAL SHARE INTERESTS (AUDITED)

The beneficial shareholdings of the Directors who

served during the year are set out below:

As at 31 March

16 June

2023

31 March

2023

31 March

2022

John Rennocks

(1)

208,227 208,227 192,343

Mark Bridgeman 15,019 15,019 3,337

Susan Hansen 162,150 162,150 140,921

Isabel Liu

(2)

23,230 20,348 10,931

Anthony Muh n/a 250,069

(3)

239,998

Eric Stobart

(4)

60,000 60,000 43,000

(1)

Including 2,645 shares held by Mrs Rennocks

(2)

The shares are held by Ms Liu's husband, Mak Lo Chiu

(3)

As at 20 September 2022, the date Mr Muh retired from the Board

(4)

Including 5,500 shares held by Mrs Stobart

COMPANY PERFORMANCE

Including the performance of UEM Limited, the graph

below compares, for the ten years ended 31 March

2023, the share price total return (assuming all

dividends are reinvested and adjusted for the exercise

of warrants and subscription shares) to shareholders

with the MSCI EM total return Index. The MSCI EM total

return Index has been used as the Company invests

across a broad spread of emerging markets.

On behalf of the Board

Mark Bridgeman

Chairman of the Remuneration Committee

16 June 2023

Utilico Emerging Markets Trust plc

As Chairman of the Audit & Risk

Committee, I am pleased to

present the Committee’s report

to shareholders for the year

ended 31 March 2023.

ROLE AND RESPONSIBILITIES

UEM has established a

separately chaired Audit &

Risk Committee whose duties

include considering and

recommending to the Board

for approval the contents of

the half yearly and annual financial statements and

providing an opinion as to whether the annual report

and accounts, taken as a whole, are fair, balanced

and understandable and provide the information

necessary for shareholders to assess the Company’s

performance, business model and strategy. The

Committee also reviews the external Auditors’

report on the annual financial statements and is

responsible for reviewing and forming an opinion

on the effectiveness of the external audit process

and audit quality. Other duties include reviewing the

appropriateness of the Company’s accounting policies

and ensuring the adequacy of the internal control

systems and standards.

The Audit & Risk Committee meets at least three times

a year. Two of the planned meetings are held prior to

the Board meetings to approve the half yearly and

annual results. Representatives of the Investment

Managers attend all meetings.

COMPOSITION

During the year ended 31 March 2023, the Audit & Risk

Committee consisted of all the independent Directors

of the Company. It is considered that there is a range of

recent and relevant financial experience amongst the

members of the Audit & Risk Committee together with

experience of the investment trust sector.

In light of the Chairman of the Board’s relevant

financial experience, his continued independence and

his valued contributions in Committee meetings, the

Audit & Risk Committee considers it appropriate that

he is a member.

RESPONSIBILITIES AND REVIEW OF THE EXTERNAL

AUDIT

During the year the principal activities of the Audit &

Risk Committee included:

• considering and recommending to the Board for

approval the contents of the half yearly and annual

financial statements and reviewing the external

auditor’s report;

• management of the relationship with the external

auditor, including its appointment and the

evaluation of scope, execution, cost effectiveness,

independence and objectivity;

• reviewing and approving the external auditors’

plan for the financial year, with a focus on

the identification of areas of audit risk, and

consideration of the appropriateness of the level

of audit materiality adopted;

• reviewing and recommending to the Board for

approval the audit and non-audit fees payable

to the external auditor and the terms of its

engagement;

• evaluation of reports received from the external

auditor with respect to the annual financial

statements and its review of the half-yearly report;

• reviewing the efficacy of the external audit process

and making a recommendation to the Board with

respect to the reappointment of the external

auditors;

• evaluation of the effectiveness of the internal

control and risk management systems including

reports received on the operational controls of the

Company’s service providers and reports from the

Company’s depositary;

• reviewing the appropriateness of the Company’s

accounting policies; and

• monitoring developments in accounting and

reporting requirements that impact on the

Company’s compliance with relevant statutory and

listing requirements.

AUDIT & RISK COMMITTEE REPORT

ERIC STOBART, FCA

Chairman of the Audit & Risk

Committee

Report and Accounts for the year to 31 March 2023

SIGNIFICANT AREA HOW ADDRESSED

Value of the level 1

investments

Actively traded level 1 investments are valued using stock exchange prices provided by third party

pricing vendors. The Audit & Risk Committee regularly reviews the portfolio. The Audit & Risk

Committee reviews the annual internal control reports produced by the Investment Managers and

Administrator which detail the systems, processes and controls around the daily pricing of the

securities.

Value of the level 3

investments

Investments that are classified as level 3 are valued using a variety of techniques to determine a fair

value, as set out in note 1(c) to the accounts, and all such valuations are carefully reviewed by the

Audit & Risk Committee with the Investment Managers.

The Audit & Risk Committee receives detailed information on all level 3 investments and it discusses

and challenges the valuations with the Investment Managers. It considers market comparables and

discusses any proposed revaluations with the Investment Managers.

AUDITOR AND AUDIT TENURE

KPMG LLP has been the auditor of the Company since

2018 and prior to that, auditor of UEM Limited since

2012. Listed companies are required to tender the

external audit at least every ten years and change

auditor at least every twenty years. The Company

will be required to tender the external audit no later

than for the year ending 31 March 2028. The audit

partner has rotated regularly. Mr John Waterson was

appointed the lead audit partner in 2020. The Audit

& Risk Committee has considered the independence

of the auditor and the objectivity of the audit process

and is satisfied that KPMG has fulfilled its obligations to

shareholders as independent auditor to the Company.

It is the Company’s policy not to seek substantial non-

audit services from its auditor, unless they relate to a

review of the half-yearly report as the Board considers

the auditor is best placed to provide this work. If the

provision of significant non-audit services were to

be considered, the Committee would procure such

services from an accountancy firm other than the

auditor. Non-audit fees paid to KPMG amounted to £nil

for the year ended 31 March 2023 (2022: £nil).

The partner and manager of the audit team at

KPMG presented their audit plan to the Audit & Risk

Committee in advance of the financial year end. Items

of audit focus were discussed, agreed and given

particular attention during the audit process. KPMG

reported to the Audit & Risk Committee on these

items, their independence and other matters. This

report was considered by the Audit & Risk Committee

and discussed with KPMG and the Investment

Managers prior to approval of the annual financial

report.

Members of the Audit & Risk Committee meet in

camera with the external auditor at least annually.

ACCOUNTING MATTERS AND SIGNIFICANT AREAS

For the year ended 31 March 2023 the accounting

matters that were subject to specific consideration by

the Audit & Risk Committee were as follows:

The Audit & Risk Committee reviewed the external audit plan at an early stage and concluded that the appropriate

areas of audit risk relevant to the Company had been identified and that suitable audit procedures had been

put in place to obtain reasonable assurance that the financial statements as a whole would be free of material

misstatements.

As a result, and following a thorough review process, the Audit & Risk Committee advised the Board it is

satisfied that, taken as a whole, the annual financial report for the year to 31 March 2023 is fair, balanced and

understandable and provides the information necessary for shareholders to assess the Company’s performance,

business model and strategy. In reaching this conclusion, the Audit & Risk Committee has assumed that the reader

of the report would have a reasonable level of knowledge of the investment company industry.

Utilico Emerging Markets Trust plc

EXTERNAL AUDIT, REVIEW OF ITS EFFECTIVENESS

AND AUDITOR REAPPOINTMENT

The Audit & Risk Committee advises the Board on the

appointment of the external auditor, its remuneration

for audit and non-audit work and its cost effectiveness,

independence and objectivity.

As part of the review of the effectiveness of the audit

process, a formal evaluation process incorporating

views from the members of the Audit & Risk

Committee and relevant personnel at the Investment

Managers is followed and feedback is provided to

KPMG. Areas covered by this review include:

• the calibre of the audit firm, including reputation

and industry presence;

• the extent of quality controls including review

processes, second director oversight and annual

reports from its regulator;

• the performance of the audit team, including

skills of individuals, specialist knowledge, partner

involvement, team member continuity and quality

and timeliness of audit planning and execution;

• audit communication including planning, relevant

accounting and regulatory developments,

approach to significant accounting risks,

communication of audit results and

recommendations on corporate reporting;

• ethical standards including independence and

integrity of the audit team, lines of communication

to the Audit & Risk Committee and partner

rotation; and

• reasonableness of the audit fees.

For the year ended 31 March 2023, the Audit & Risk

Committee is satisfied that the audit process was

effective.

Resolutions proposing the reappointment of KPMG as

the Company’s auditor and authorising the Directors

to determine its remuneration will be put to the

shareholders at the forthcoming AGM.

INTERNAL CONTROLS AND RISK MANAGEMENT

UEM’s risk assessment focus and the way in which

significant risks are managed is a key area of focus

for the Audit & Risk Committee. Work here was

driven by the Audit & Risk Committee’s assessment

of the risks arising in the Company’s operations and

identification of the controls exercised by the Board

and its delegates, the Investment Managers, the

Administrator and other service providers. These

are recorded in risk matrices produced by ICMIM,

as the Company’s AIFM with responsibility for risk

management, which continue to serve as an effective

tool to highlight and monitor the principal risks, details

of which are provided in the Strategic Report on pages

34 to 36. It also received and considered, together with

representatives of the Investment Managers, reports in

relation to the operational controls of the Investment

Managers, Administrator and Custodian. These reviews

identified no issues of significance.

WHISTLEBLOWING POLICY

The Committee has also reviewed and accepted the

‘whistleblowing’ policy that has been put in place by

the Investment Managers under which their staff,

in confidence, can raise concerns about possible

improprieties in matters of financial reporting or other

matters, in so far as they affect the Company.

INTERNAL AUDIT

Due to the nature of the Company, being an externally

managed investment company with no executive

employees, the Company does not have its own

internal audit function. The Committee and the Board

have concluded that there is no current need for such

a function, based on the satisfactory operation of

controls within the Company’s service providers.

Eric Stobart

Chairman of the Audit & Risk Committee

16 June 2023

AUDIT & RISK COMMITTEE REPORT (continued)

Report and Accounts for the year to 31 March 2023

The Directors are responsible for preparing the Annual

Report and financial statements in accordance with

applicable United Kingdom law and regulations.

Company law requires the Directors to prepare

financial statements for each financial year. Under

that law, they are required to prepare the financial

statements in accordance with UK adopted

International Accounting Standards and the Companies

Act 2006.

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 its profit or loss 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,

relevant and reliable;

• state whether they have been prepared in

accordance with UK adopted International

Accounting Standards and of the Companies Act

2006;

• assess the Company’s ability to continue as a going

concern, disclosing, as applicable, matters related to

going concern; and

• use the going concern basis of accounting unless

they either intend to liquidate the Company or to

cease operations, or have no realistic alternative but

to do so.

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 comply with the Companies Act

2006. They are responsible for such internal control as

they determine is necessary to enable the preparation

of financial statements that are free from material

misstatement, whether due to fraud or error, and

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

Corporate Governance Statement that complies with

that law and those regulations.

In accordance with Disclosure Guidance and

Transparency Rule 4.1.14R, the financial statements

will form part of the annual financial report prepared

using the single electronic reporting format under

the TD ESEF Regulation. The auditor’s report on these

financial statements provides no assurance over the

ESEF format.

The Directors are responsible for the maintenance and

integrity of the corporate and financial information

included on the Company’s website, which is

maintained by the Company’s Investment Managers.

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 that to the best of our knowledge:

• the financial statements, prepared in accordance

with the applicable set of accounting standards, 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 it faces.

We consider the annual report and accounts, 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.

Approved by the Board on 16 June 2023 and signed on

its behalf by:

John Rennocks

Chairman

DIRECTORS’ STATEMENT OF RESPONSIBILITIES

in respect of the Annual Report and the Financial Statements

1. Our opinion is unmodified

We have audited the financial statements of Utilico

Emerging Markets Trust plc (“the Company”) for the

year ended 31 March 2023 which comprise the

Statement of Comprehensive Income, Statement of

Changes in Equity, Statement of Financial Position,

Statement of Cash Flows and the related notes,

including the accounting policies in note 1.

In our opinion the financial statements:

— give a true and fair view of the state of Company’s

affairs as at 31 March 2023 and of its return for the

year then ended;

— have been properly prepared in accordance with UK-

adopted international accounting standards; and

— have been prepared in accordance with the

requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with

International Standards on Auditing (UK) (“ISAs (UK)”)

and applicable law. Our responsibilities are described

below. We believe that the audit evidence we have

obtained is a sufficient and appropriate basis for our

opinion. Our audit opinion is consistent with our report

to the Audit and Risk Committee.

We were first appointed as auditor by Directors on 7

February 2018. The period of total uninterrupted

engagement is for the five financial years ended 31

March 2023. We have fulfilled our ethical

responsibilities under, and we remain independent of

the Company in accordance with, UK ethical

requirements including the FRC Ethical Standard as

applied to listed public interest entities. No non-audit

services prohibited by that standard were provided.

Independent

auditor’s report

to the members of Utilico Emerging Markets Trust plc

Overview

Materiality:

financial

statements as a

whole

£5.5m (2022:£5.7m)

1% (2022: 1%) of total assets

Key audit matters vs 2022

Recurring risks Valuation of certain

Level 3 Investments

▲

Carrying amount of non

– derivative level 1

investments

◄►

2. Key audit matters: our assessment of risks of material misstatement

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements

and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those

which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the

engagement team. We summarise below the key audit matters (unchanged from 2022), in decreasing order of audit significance, in

arriving at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest

entities, our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, in the

context of, and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and

consequently are incidental to that opinion, and we do not provide a separate opinion on these matters.

The risk Our response

Valuation of certain level 3

investments

(Certain specific investments within the

total of level 3 investments of £58.7

million; 2022: £48.1million)

Refer to page 59 (Audit Committee

Report), page 72 (accounting policy),

pages 77 to 78 and 86 to 89 (financial

disclosures).

Subjective Valuation

10.7% (2022: 8.4%) of the Company’s

total assets (by value) is held in

investments where no quoted market

price is available. Level 3 investments

are measured at fair value, which is

established in accordance with the

International Private Equity and

Venture Capital Valuation Guidelines

by using measurements of value such

as prices of recent orderly

transactions, milestone analysis,

revenue multiples and valuing fund

interest by reference to their reported

Net Asset Value.

There is a significant risk over the

judgements and estimates inherent in

the valuation and therefore this is one

of the key areas that our audit has

focused on. The effect of this matter is

that, as part of our risk assessment, we

determined that certain level 3

investment valuations have a high

degree of estimation uncertainty, with

a potential range of reasonable

outcomes greater than our materiality

for the financial statements as a whole

The factors considered in assessing

which unlisted investments were

subject to significant risk included the

quantum of the individual investment,

performance of the investment, nature

of the asset held as well as the

estimation uncertainty of the

methodology and inputs used.

We assessed that the level of risk

associated with this matter has

increased in the year as both the

quantum of the balance, and the level

of judgement associated with certain

unobservable inputs have increased.

The quantum of the investments

subject to the significant risk is £28.6m

out of a total unlisted investment

balance of £58.7m.

The financial statements note 26(d)

discloses the range/sensitivity

estimated by the Company.

We performed the detailed tests below rather than seeking to

rely on controls, because the nature of the balance is such that

we would expect to obtain audit evidence primarily through

the detailed procedures described below:

Our procedures included:

— Methodology choice: In the context of observed industry

best practice and the provisions of the International Private

Equity and Venture Capital Valuation Guidelines, we

challenged the appropriateness of the valuation basis

selected;

— Our valuation experience: We challenged the investment

manager on key judgements affecting investee company

valuations, such as discount factors and the choice of

benchmark for multiples. We compared key underlying

operational and financial data inputs to external sources,

accounts and management information as applicable. We

challenged the assumptions around sustainability of

revenue based on the plans of the investee companies and

whether these are achievable and we obtained

understanding of milestones completed during the year.

We also obtained an understanding of existing and

prospective investee company cash flows to understand

whether refinancing may be required. Our work included

consideration of events which occurred subsequent to the

year end up until the date of this audit report;

— Comparing valuations: Where a recent transaction has

been used to value a holding, we obtained an

understanding of the circumstances surrounding the

transaction and vouched the price to supporting

documentation. We also assessed whether subsequent

changes or events such as market or entity specific factors

would imply a change in value;

— Our Corporate Finance Expertise: Through the use of our

Corporate Finance specialists, we assessed the valuation

methodology and the completeness and accuracy of peer

group comparable companies, as well as relevant

benchmarks or multiples based on their knowledge and

experience of the industry; and

— Assessing transparency: We considered the

appropriateness, in accordance with relevant accounting

standards, of the disclosures in respect of certain Level 3

investments and the effect of changing one or more inputs

to reasonably possible alternative valuation assumptions

Our results:

— We found the Company’s valuation of certain Level 3

investments to be acceptable (2022: acceptable).

3. Our application of materiality and an overview of the

scope of our audit

Materiality for the financial statements as a whole was set

at £5.5m (2022: £5.7m), determined with reference to a

benchmark of total assets, of which it represents 1% (2022:

1%).

In line with our audit methodology, our procedures on

individual account balances and disclosures were

performed to a lower threshold, performance materiality,

so as to reduce to an acceptable level the risk that

individually immaterial misstatements in individual account

balances add up to a material amount across the financial

statements as a whole. Performance materiality was set at

75% (2022 : 75%) of materiality for the financial statements

as a whole, which equates to £4.1m (2022 : £4.3m). We

applied this percentage in our determination of

performance materiality because we did not identify any

factors indicating an elevated level of risk.

In addition, we applied materiality of £1.0m (2022: £0.9m)

and performance materiality of £0.8m (2022: £0.7m) to

investment and other income, for which we believe

misstatements of lesser amounts than materiality for the

financial statements as a whole could reasonably be

expected to influence the Company’s members’ assessment

of the financial performance of the Company.

We agreed to report to the Audit and Risk Committee any

corrected or uncorrected identified misstatements

exceeding £0.27m (2022: £0.28m), or £0.1m in relation to

investment and other income (2022: £0.09m) in addition to

other identified misstatements that warranted reporting on

qualitative grounds.

Our audit of the Company was undertaken to the

materiality and performance materiality levels specified

above and was performed by a single audit team.

The scope of the audit work performed was fully

substantive as we did not rely upon the Company’s internal

control over financial reporting.

Total Assets

£547.5m (2022 £574.2m)

Materiality

£5.5m (2022: £5.7m)

£5.4m

Whole financial

statements materiality

(2022: £5.7m)

£4.1m

Whole financial statements

performance materiality (2022:

£4.3m)

£1.0m

Investment and other income

materiality

(2022: £0.9m)

Total Assets Materiality

The risk Our response

Carrying amount of non-derivative

Level 1 investments

(£483.1m; 2022: £519.9m)

Refer to page 59 (Audit Committee

Report), page 72 (accounting policy),

pages 77 to 78 and 89 (financial

disclosures).

Low risk, high value:

The Company’s portfolio of non-derivative

Level 1 investments makes up 88.2% (2022:

90.5%) of the Company’s total assets by

value and is considered to be one of the key

drivers of results. We do not consider these

investments to be at a high risk of significant

misstatement, or to be subject to a

significant level of judgement because they

comprise liquid, quoted investments.

However, due to their materiality in the

context of the financial statements as a

whole, they are considered to be one of the

areas which had the greatest effect on our

overall audit strategy and allocation of

resources in planning and completing our

audit.

We performed the detailed tests below rather than

seeking to rely on controls, because the nature of

the balance is such that detailed testing is

determined to be the most effective manner of

obtaining audit evidence.

Our procedures included:

— Tests of detail: Agreed the valuation of 100% of

non-derivative Level 1 investments in the

portfolio to externally quoted prices; and

— Enquiry of custodians: All investments in non-

derivative level 1 investments were agreed to

independently received third party

confirmations from investment custodians.

Our results

— We found the carrying amount of non-derivative

Level 1 investments to be acceptable (2022:

acceptable).

2. Key audit matters: our assessment of risks of material misstatement (continued)

£0.27m

Misstatements reported to the

Audit and Risk Committee

(2022:

£0.28m)

5. Fraud and breaches of laws and regulations – ability to detect

Identifying and responding to risks of material misstatement due to

fraud

To identify risks of material misstatement due to fraud (“fraud risks”)

we assessed events or conditions that could indicate an incentive or

pressure to commit fraud or provide an opportunity to commit fraud.

Our risk assessment procedures included:

— Enquiring of Directors as to the Company’s high-level policies and

procedures to prevent and detect fraud, as well as whether they

have knowledge of any actual, suspected or alleged fraud;

— Assessing the segregation of duties in place between the Directors,

the Administrator and the Company’s Investment Manager; and

— Reading Board and Audit and Risk Committee minutes.

We communicated identified fraud risks throughout the audit team and

remained alert to any indications of fraud throughout the audit.

As required by auditing standards, we perform procedures to address

the risk of management override of controls, in particular to the risk

that management may be in a position to make inappropriate

accounting entries and the risk of bias in accounting estimates and

judgements such as the valuation of level 3 investments. We evaluated

the design and implementation of the relevant controls over journal

entries and other adjustments and made inquiries of the Administrator

about inappropriate or unusual activity relating to the processing of

journal entries and other adjustments. Based on these procedures, we

selected journal entries for testing, which included material post-

closing journal entries.

On this audit we have rebutted the fraud risk related to revenue

recognition because the revenue is non-judgemental and

straightforward, with limited opportunity for manipulation. We did not

identify any significant unusual transactions or additional fraud risks.

Identifying and responding to risks of material misstatement due to

non-compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be

expected to have a material effect on the financial statements from our

general commercial and sector experience and through discussion with

the Directors, the Investment Manager and the Administrator (as

required by auditing standards), and discussed with the Directors the

policies and procedures regarding compliance with laws and

regulations. As the Company is regulated, our assessment of risks

involved gaining an understanding of the control environment including

the entity’s procedures for complying with regulatory requirements.

We communicated identified laws and regulations throughout our team

and remained alert to any indications of non-compliance throughout

the audit .

The potential effect of these laws and regulations on the financial

statements varies considerably.

Firstly, the Company is subject to laws and regulations that directly

affect the financial statements including financial reporting legislation

(including related companies legislation), distributable profits

legislation, and its qualification as an Investment Trust under UK

taxation legislation, any breach of which could lead to the Company

losing various deductions and exemptions from UK corporation tax, and

we assessed the extent of compliance with these laws and regulations

as part of our procedures on the related financial statement items.

4. Going concern

The directors have prepared the financial statements on the

going concern basis as they do not intend to liquidate the

Company or to cease its operations, and as they have concluded

that the Company’s financial position means that this is realistic.

They have also concluded that there are no material

uncertainties that could have cast significant doubt over its

ability to continue as a going concern for at least a year from the

date of approval of the financial statements (“the going concern

period”).

We used our knowledge of the Company, its industry, and the

general economic environment to identify the inherent risks to

its business model and analysed how those risks might affect the

Company’s financial resources or ability to continue operations

over the going concern period. The risks that we considered most

likely to adversely affect the Company’s available financial

resources and its ability to operate over this period were:

— The impact of a significant reduction in the valuation of

investments and the implications for the Company’s debt

covenants;

— The liquidity of the investment portfolio and its ability to

meet the liabilities of the Company as and when they fall due;

— The operational resilience of key service organisations.

We considered whether these risks could plausibly affect the

liquidity in the going concern period by assessing the degree of

downside assumption that, individually and collectively, could

result in a liquidity issue, taking into account the Company’s

liquid investment position (and the results of their stress testing).

We considered whether the going concern disclosure in note 1

and 25 of the financial statements gives a full and accurate

description of the Directors’ assessment of going concern,

including the identified risks and related sensitivities.

Our conclusions based on this work:

— we consider that the Directors’ use of the going concern basis

of accounting in the preparation of the financial statements is

appropriate;

— we have not identified, and concur with the Directors’

assessment that there is not, a material uncertainty related

to events or conditions that, individually or collectively, may

cast significant doubt on the Company's ability to continue as

a going concern for the going concern period;

— we have nothing material to add or draw attention to in

relation to the Directors’ statement in note 1 and note 25 to

the financial statements on the use of the going concern

basis of accounting with no material uncertainties that may

cast significant doubt over the Company’s use of that basis

for the going concern period, and we found the going

concern disclosure in note 1 and note 25 to be acceptable;

and

— the related statement under the Listing Rules set out on page

44 is materially consistent with the financial statements and

our audit knowledge.

However, as we cannot predict all future events or conditions

and as subsequent events may result in outcomes that are

inconsistent with judgements that were reasonable at the time

they were made, the above conclusions are not a guarantee that

the Company will continue in operation.

5. Fraud and breaches of laws and regulations – ability to

detect (continued)

Identifying and responding to risks of material misstatement

due to non-compliance with laws and regulations (continued)

Secondly, the Company is subject to many other laws and

regulations where the consequences of non-compliance could

have a material effect on amounts or disclosures in the financial

statements, for instance through the imposition of fines or

litigation. We identified the following areas as those most likely

to have such an effect: money laundering, data protection,

bribery and corruption legislation and certain aspects of company

legislation recognising the financial and regulated nature of the

Company’s activities and its legal form. Auditing standards limit

the required audit procedures to identify non-compliance with

these laws and regulations to enquiry of the Directors and the

Administrator and inspection of regulatory and legal

correspondence, if any. Therefore if a breach of operational

regulations is not disclosed to us or evident from relevant

correspondence, an audit will not detect that breach.

Context of the ability of the audit to detect fraud or breaches

of law or regulation

Owing to the inherent limitations of an audit, there is an

unavoidable risk that we may not have detected some material

misstatements in the financial statements, even though we have

properly planned and performed our audit in accordance with

auditing standards. For example, the further removed non-

compliance with laws and regulations is from the events and

transactions reflected in the financial statements, the less likely

the inherently limited procedures required by auditing standards

would identify it.

In addition, as with any audit, there remained a higher risk of

non-detection of fraud, as these may involve collusion, forgery,

intentional omissions, misrepresentations, or the override of

internal controls. Our audit procedures are designed to detect

material misstatement. We are not responsible for preventing

non-compliance or fraud and cannot be expected to detect non-

compliance with all laws and regulations.

6. We have nothing to report on the other information in the Annual

Report

The directors are responsible for the other information presented in the

Annual Report together with the financial statements. Our opinion on

the financial statements does not cover the other information and,

accordingly, we do not express an audit opinion or, except as explicitly

stated below, any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so,

consider whether, based on our financial statements audit work, the

information therein is materially misstated or inconsistent with the

financial statements or our audit knowledge. Based solely on that work

we have not identified material misstatements in the other information.

Strategic report and directors’ report

Based solely on our work on the other information:

— we have not identified material misstatements in the strategic

report and the directors’ report;

— in our opinion the information given in those reports for the

financial year is consistent with the financial statements; and

— in our opinion those reports have been prepared in accordance with

the Companies Act 2006.

Directors’ remuneration report

In our opinion the part of the Directors’ Remuneration Report to be

audited has been properly prepared in accordance with the Companies

Act 2006.

Disclosures of emerging and principal risks and longer-term viability

We are required to perform procedures to identify whether there is a

material inconsistency between the directors’ disclosures in respect of

emerging and principal risks and the viability statement, and the

financial statements and our audit knowledge.

Based on those procedures, we have nothing material to add or draw

attention to in relation to:

— the directors’ confirmation within the Strategic Report on page 34

they have carried out a robust assessment of the emerging and

principal risks facing the Company, including those that would

threaten its business model, future performance, solvency and

liquidity;

— the Principal Risks and Risk mitigation disclosures describing these

risks and how emerging risks are identified, and explaining how they

are being managed and mitigated; and

— the directors’ explanation in the viability statement of how they

have assessed the prospects of the Company, over what period they

have done so and why they considered that period to be

appropriate, and their statement as to whether they have a

reasonable expectation that the Company will be able to continue in

operation and meet its liabilities as they fall due over the period of

their assessment, including any related disclosures drawing

attention to any necessary qualifications or assumptions.

6. We have nothing to report on the other information in the

Annual Report (continued)

We are also required to review the viability statement, set out on

page 36 and 37 under the Listing Rules. Based on the above

procedures, we have concluded that the above disclosures are

materially consistent with the financial statements and our audit

knowledge.

Our work is limited to assessing these matters in the context of

only the knowledge acquired during our financial statements

audit. As we cannot predict all future events or conditions and as

subsequent events may result in outcomes that are inconsistent

with judgements that were reasonable at the time they were

made, the absence of anything to report on these statements is

not a guarantee as to the Company’s longer-term viability.

Corporate governance disclosures

We are required to perform procedures to identify whether

there is a material inconsistency between the directors’

corporate governance disclosures and the financial statements

and our audit knowledge.

Based on those procedures, we have concluded that each of the

following is materially consistent with the financial statements

and our audit knowledge:

— the directors’ statement that they 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;

— the section of the annual report describing the work of the

Audit Committee, including the significant issues that the

audit committee considered in relation to the financial

statements, and how these issues were addressed; and

— the section of the annual report that describes the review of

the effectiveness of the Company’s risk management and

internal control systems.

We are required to review the part of the Corporate Governance

Statement relating to the Company’s compliance with the

provisions of the UK Corporate Governance Code specified by the

Listing Rules for our review. We have nothing to report in this

respect.

7. We have nothing to report on the other matters on which

we are required to report by exception

Under the Companies Act 2006, we are required to report to you

if, in our opinion:

— adequate accounting records have not been kept, or returns

adequate for our audit have not been received from

branches not visited by us; or

— the financial statements and the part of the Directors’

Remuneration Report to be audited are not in agreement

with the accounting records and

returns; or

— certain disclosures of directors’ remuneration specified by

law are not made; or

— we have not received all the information and explanations

we require for our audit.

We have nothing to report in these respects.

8. Respective responsibilities

Directors’ responsibilities

As explained more fully in their statement set out on page 61,

the directors are responsible for: the preparation of the financial

statements including being satisfied that they give a true and fair

view; such internal control as they determine is necessary to

enable the preparation of financial statements that are free from

material misstatement, whether due to fraud or error; assessing

the Company’s ability to continue as a going concern, disclosing,

as applicable, matters related to going concern; and using the

going concern basis of accounting unless they either intend to

liquidate the Company or to cease operations, or have no

realistic alternative but to do so.

Auditor’s responsibilities

Our objectives are to obtain reasonable assurance about whether

the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue our

opinion in an auditor’s report. Reasonable assurance is a high

level of assurance, but does not guarantee that an audit

conducted in accordance with ISAs (UK) will always detect a

material misstatement when it exists. Misstatements can arise

from fraud or error and are considered material if, individually or

in aggregate, they could reasonably be expected to influence the

economic decisions of users taken on the basis of the financial

statements.

A fuller description of our responsibilities is provided on the

FRC’s website at www.frc.org.uk/auditorsresponsibilities

The Company will be including these financial statements in an

annual financial report prepared using the single electronic

reporting format specified in the TD ESEF Regulation. This

auditor’s report provides no assurance over whether the annual

financial report has been prepared in accordance with that

format

9. The purpose of our audit work and to whom we owe our

responsibilities

This report is made solely to the Company’s members, as a body,

in accordance with Chapter 3 of Part 16 of the Companies Act

2006. Our audit work has been undertaken so that we might

state to the Company’s members those matters we are required

to state to them in an auditor’s report and for no other purpose.

To the fullest extent permitted by law, we do not accept or

assume responsibility to anyone other than the Company and the

Company’s members, as a body, for our audit work, for this

report, or for the opinions we have formed.

John Waterson (Senior Statutory Auditor)

for and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants

Saltire Court

20 Castle Terrace

Edinburgh

EH1 2EG

16 June 2023

Utilico Emerging Markets Trust plc

STATEMENT OF COMPREHENSIVE INCOME

for the year to

31 March 2023

for the year to

31 March 2022

Notes

Revenue

return

£’000s

Capital

return

£’000s

Total

return

£’000s

Revenue

return

£’000s

Capital

return

£’000s

Total

return

£’000s

(Losses)/gains on investments – (8,389) (8,389) – 58,293 58,293

Foreign exchange (losses)/gains – (515) (515) – 1,333 1,333

Investment and other income 24,326 – 24,326 22,593 – 22,593

Total income/(loss) 24,326 (8,904) 15,422 22,593 59,626 82,219

Management and administration fees (1,394) (4,336) (5,730) (1,451) (4,240) (5,691)

Other expenses (1,651) – (1,651) (1,590) – (1,590)

Profit/(loss) before finance costs and taxation 21,281 (13,240) 8,041 19,552 55,386 74,938

Finance costs (169) (674) (843) (119) (469) (588)

Profit/(loss) before taxation 21,112 (13,914) 7,198 19,433 54,917 74,350

Taxation (1,638) 212 (1,426) (1,500) (1,188) (2,688)

Profit/(loss) for the year 19,474 (13,702) 5,772 17,933 53,729 71,662

Earnings per share (basic) – pence 9.40 (6.61) 2.79 8.17 24.49 32.66

All items in the above statement derive from continuing operations.

The ‘Total’ column of this statement is the profit and loss account of the Company and the ‘Revenue’ and ‘Capital’ columns represent supplementary

information prepared under guidance issued by the Association of Investment Companies.

The Company does not have any income or expense that is not included in the profit for the year and therefore the profit for the year is also the total

comprehensive income for the year, as defined in International Accounting Standard 1 (revised).

All income is attributable to the equity holders of the Company.

The notes on pages 72 to 89 form part of these financial statements.

Report and Accounts for the period to 31 March 2023

STATEMENT OF CHANGES IN EQUITY

for the year to 31 March 2023

Notes

Ordinary

capital

£’000s

Merger

reserve

£’000s

Capital

redemption

reserve

£’000s

Special

reserve

£’000s

Retained earnings

Total

£’000s

Capital

reserves

£’000s

Revenue

reserve

£’000s

Balance as at 31 March 2022 2,148 76,706 197 459,736 (139) 7,268 545,916

16, 18,

Shares purchased by the

Company and cancelled (125) – 125 (27,159) – – (27,159)

20,21

(Loss)/profit for the year – – – – (13,702) 19,474 5,772

Dividends paid in the year – – – – – (17,155) (17,155)

Balance as at 31 March 2023 2,023 76,706 322 432,577 (13,841) 9,587 507,374

for the year to 31 March 2022

Notes

Ordinary

capital

£’000s

Merger

reserve

£’000s

Capital

redemption

reserve

£’000s

Special

reserve

£’000s

Retained earnings

Total

£’000s

Capital

reserves

£’000s

Revenue

reserve

£’000s

Balance as at 31 March 2021 2,213 76,706 132 473,634 (53,868) 6,879 505,696

16, 18,

Shares purchased by the

Company and cancelled (65) – 65 (13,898) – – (13,898)

20,21

Profit for the year – – – – 53,729 17,933 71,662

Dividends paid in the year – – – – – (17,544) (17,544)

Balance as at 31 March 2022 2,148 76,706 197 459,736 (139) 7,268 545,916

The notes on pages 72 to 89 form part of these financial statements.

Utilico Emerging Markets Trust plc

Notes as at 31 March

2023

£’000s

2022

£’000s

Non-current assets

10 Investments 545,657 571,686

Current assets

11 Other receivables 1,444 1,477

Cash and cash equivalents 456 1,104

1,900 2,581

Current liabilities

12 Other payables (3,461) (2,799)

13 Bank loans (35,102) –

(38,563) (2,799)

Net current liabilities (36,663) (218)

Total assets less current liabilities 508,994 571,468

Non-current liabilities

13 Bank loans – (23,662)

14 Provision for capital gains tax (1,620) (1,890)

Net assets 507,374 545,916

Equity attributable to equity holders

16 Ordinary share capital 2,023 2,148

17 Merger reserve 76,706 76,706

18 Capital redemption reserve 322 197

19 Special reserve 432,577 459,736

20 Capital reserves (13,841) (139)

21 Revenue reserve 9,587 7,268

Total attributable to equity holders 507,374 545,916

22 Net asset value per share

Basic – pence 250.91 254.22

The notes on pages 72 to 89 form part of these financial statements.

Approved by the Board on 16 June 2023 and signed on its behalf by

John Rennocks

Chairman

Utilico Emerging Markets Trust plc

Registered in England, No 11102129

STATEMENT OF FINANCIAL POSITION

Report and Accounts for the period to 31 March 2023

Year to 31 March

2023

£’000s

2022

£’000s

Operating activities

Profit before taxation 7,198 74,350

Deduct investment income – dividends (22,671) (21,604)

Deduct investment income – interest (1,627) (988)

Deduct bank Interest received (28) (1)

Add back interest charged 843 588

Add back losses/(gains) on investments 8,389 (58,293)

Add back foreign exchange losses/(gains) 515 (1,333)

Increase in other receivables (31) (16)

Decrease in other payables (88) (4,701)

Net cash outflow from operating activities before dividends and interest (7,500) (11,998)

Interest paid (646) (600)

Dividends received 22,417 21,556

Investment income – interest 475 190

Bank interest received 28 1

Taxation paid (1,691) (2,465)

Net cash inflow from operating activities 13,083 6,684

Investing activities

Purchase of investments (106,821) (122,600)

Sales of investments 125,649 176,372

Net cash inflow from investing activities 18,828 53,772

Financing activities

Repurchase of shares for cancellation (27,159) (13,898)

Dividends paid (17,155) (17,544)

Drawdown of bank loans 35,385 52,101

Repayment of bank loans (24,440) (77,576)

Net cash outflow from financing activities (33,369) (56,917)

(Decrease)/increase in cash and cash equivalents (1,458) 3,539

Cash and cash equivalents at the start of the year 452 (3,184)

Effect of movement in foreign exchange (20) 97

Cash and cash equivalents as at the end of the year (1,026) 452

Comprised of:

Cash 456 1,104

Bank overdraft (1,482) (652)

Total (1,026) 452

The notes on pages 72 to 89 form part of these financial statements.

STATEMENT OF CASH FLOWS

Utilico Emerging Markets Trust plc

1. ACCOUNTING POLICIES

The Company is an investment company incorporated in the United Kingdom with a premium listing on the London Stock

Exchange.

(a) Basis of accounting

The accounts have been prepared on a going concern basis (see note 25) in accordance with UK adopted International Accounting

Standards, which comprise standards and interpretations approved by the IASB and International Accounting Standards and

Standing Interpretations Committee interpretations approved by the IASC that remain in effect and the Companies Act 2006.

The accounts have been prepared on a historical cost basis, except for the measurement at fair value of investments and

derivative financial instruments.

The Board has determined by having regard to the currency of the Company’s share capital and the predominant currency in

which its shareholders operate, that Sterling is the functional and reporting currency.

Where presentational recommendations set out in the Statement of Recommended Practice “Financial Statements of

Investment Trust Companies and Venture Capital Trusts” (“SORP”), issued in the UK by the AIC in July 2022, do not conflict with

the requirements of International Financial Reporting Standards ( IFRS ), the Directors have prepared the accounts on a basis

consistent with the recommendations of the SORP.

In accordance with the SORP, the Statement of Comprehensive Income has been analysed between a revenue return (dealing with

items of a revenue nature) and a capital return (relating to items of a capital nature). Revenue returns include, but are not limited

to, dividend income, operating expenses, finance costs and taxation (insofar as they are not allocated to capital, as described

in notes 1(h), 1(i), 1(k) and 1(l) below). Net revenue returns are allocated via the revenue return to the Revenue Reserve. Capital

returns include, but are not limited to, profits and losses on the disposal and the valuation of non-current investments, derivative

instruments and on cash and borrowings, operating costs and finance costs (insofar as they are not allocated to revenue as

described in notes 1(i) and 1(k) below). Net capital returns are allocated via the capital return to Capital Reserves.

Dividends on shares may be paid out of Special Reserve, Capital Reserves and Revenue Reserve.

A number of new standards and amendments to standards and interpretations, which have not been applied in preparing these

accounts, were in issue but not effective. None of these are expected to have a material effect on the accounts of the Company.

(b) Financial instruments

Financial Instruments include fixed asset investments, derivative assets and liabilities and long-term debt instruments.

Accounting Standards recognise a hierarchy of fair value measurements for Financial Instruments which gives the highest priority

to unadjusted quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable

inputs (level 3). The classification of instruments depends on the lowest significant applicable input.

Investment purchases and sales are accounted for on the trade date, inclusive of transaction costs. Investments, including

both equity and loans, used for efficient portfolio management are classified as being at fair value through profit or loss. As the

Company’s business is investing in financial assets with a view to profiting from their total return in the form of dividends, interest

or increases in fair value, its investments (including those ordinarily classified as subsidiaries under IFRS 10 but exempted by that

financial reporting standard from requirement to be consolidated) are designated as being at fair value through profit or loss on

initial recognition. Derivatives comprising forward foreign exchange contracts, options and credit default swaps are accounted

for as a financial asset/liability at fair value through profit or loss. The Company manages and evaluates the performance of these

investments and derivatives on a fair value basis in accordance with its investment strategy and information about the Company

is provided internally on this basis to the Company’s Directors and key management personnel. Gains and losses on investments

and on derivatives are analysed within the Statement of Comprehensive Income as capital return. Quoted investments are shown

at fair value using market bid prices. The fair value of unquoted investments is determined by the Board in accordance with IFRS

and International Private Equity and Venture Capital Valuation Guidelines. In exercising its judgement over the value of these

investments, the Board uses valuation techniques which take into account, where appropriate, latest dealing prices, valuations

from reliable sources, net asset values, earnings multiples, recently orderly transactions in similar securities, time to expected

repayment and other relevant factors (see key valuation techniques on pages 86 to 88).

(d) Subsidiary undertakings

Subsidiary undertakings of the Company, which are held as part of the investment portfolio (see note 1(c) above), are accounted for

as investments at fair value through profit and loss.

NOTES TO THE ACCOUNTS

Report and Accounts for the year to 31 March 2023

(e) Cash and cash equivalents

Cash and cash equivalents in the Statement of Financial Position comprise cash at bank and short term deposits with an original

maturity of three months or less. Bank overdrafts are included as a component of cash and cash equivalents for the purpose of the

cash flow statement only.

(f) Debt instruments

The Company’s debt instruments can include short-term and long-term bank borrowings and overdrafts, initially measured at fair

value and subsequently measured at amortised cost using the effective interest method. No debt instruments held during the year

required hierarchical classification.

(g) Foreign currency

Foreign currency assets and liabilities are expressed in Sterling at rates of exchange ruling at the Statement of Financial Position

date. Foreign currency transactions are translated at the rates of exchange ruling at the dates of those transactions. Exchange

profits and losses on currency balances are credited or charged to the Statement of Comprehensive Income and analysed as

capital or revenue as appropriate. Forward foreign exchange contracts are valued in accordance with quoted market rates.

(h) Investment and other income

Dividends receivable are shown gross of withholding tax and are analysed as revenue return within the Statement of

Comprehensive Income (except where, in the opinion of the Directors, their nature indicates they should be recognised as

capital return) on the ex-dividend date or, where no ex-dividend date is quoted, when the Company’s right to receive payment

is established. Where the Company has elected to receive its dividends in the form of additional shares rather than in cash, the

amount of the cash dividend foregone is allocated as revenue in the Statement of Comprehensive Income. Any excess in the value

of the shares received over the amount of the cash dividend foregone is allocated as capital in the Statement of Comprehensive

Income. Interest on debt securities is accrued on a time basis using the effective interest rate method. Bank and short-term

deposit interest is recognised on an accruals basis.

(i) Expenses

All expenses are accounted for on an accruals basis. Expenses are charged through the Statement of Comprehensive Income and

analysed under revenue return except as stated below:

– the management fees, company secretarial fees and research fees payable to ICM and ICMIM are allocated 80% to capital return

and 20% to revenue return.

– expenses incidental to the acquisition or disposal of Investments are allocated to capital return.

(j) Directors’ fees

Directors’ fees are charged quarterly through the revenue column of the Statement of Comprehensive Income. The net fee

entitlement after any applicable tax deductions of each Director is satisfied in shares of the Company, by either purchasing shares

in the market around each quarter end or, if the shares are trading at a premium to the net asset value, allotting new shares by

dividing the net fee entitlement by the net asset value on the date of allotment.

(k) Finance costs

Finance costs are accounted for using the effective interest method, recognised through the Statement of Comprehensive Income.

Finance costs are allocated 80% to capital return and 20% to revenue return.

(l) Taxation

Taxation currently payable is calculated using tax rules and rates in force at the year end, based on taxable profit for the year, which

differs from the net return before tax. Note 7(b) sets out those items which are not subject to UK Corporation Tax.

Deferred tax is provided on an undiscounted basis on all timing differences that have originated but not reversed by the Statement

of Financial Position date, based on the tax rates that have been enacted at the Statement of Financial Position date and that

are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax assets are only recognised

if it is considered more likely than not that there will be suitable profits from which the future reversal of timing differences can

be deducted. In line with the recommendations of the SORP, the allocation method used to calculate the tax relief on expenses

charged to capital is the “marginal” basis. Under this basis, if taxable income is capable of being offset entirely by expenses charged

through the revenue account, then no tax relief is transferred to the capital account.

NOTES TO THE ACCOUNTS (continued)

Utilico Emerging Markets Trust plc

(m) Dividends payable

Dividends paid by the Company are accounted for in the period in which the Company is liable to pay them and are reflected in

the Statement of Changes in Equity.

(n) Merger reserve

The surplus of the net assets of UEM Limited received from the issue of new ordinary shares over the nominal value of such

shares was credited to this account which is non-distributable. The nominal value of the shares issued is recognised in called up

share capital.

(o) Capital reserves

Capital reserves are distributable reserves to the extent gains arising from investments held are from liquid holdings. The

following items are accounted for through the Statement of Comprehensive Income as capital returns and transferred to capital

reserves:

Capital reserve – arising on investments sold

– gains and losses on disposal of investments and derivative instruments

– exchange differences of a capital nature

– expenses allocated in accordance with notes 1(i) and 1(k)

Capital reserve – arising on investments held

– increases and decreases in the valuation of investments and derivative instruments held at the year end.

2. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The presentation of the financial statements in conformity with IFRS requires management to make judgements, estimates and

assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses.

Estimates and judgements are continually evaluated and are based on perceived risks, historical experience, expectations of

plausible future events and other factors. Actual results may differ from these estimates.

The area requiring the most significant judgement and estimation in the preparation of the financial statements is the accounting

for the value of unquoted investments.

The policy for valuation of unquoted securities is set out in note 1(c) to the accounts and further information on Board

procedures is contained in the Audit & Risk Committee Report and note 26(d) to the accounts. The fair value of unquoted (level 3)

investments, as disclosed in note 27 to the accounts, represented 10.8% of total investments as at 31 March 2022 (8.4% of total

investments as at 31 March 2022).

3. INVESTMENT AND OTHER INCOME

Year to 31 March 2023 2022

Revenue

£’000s

Capital

£’000s

Total

£’000s

Revenue

£’000s

Capital

£’000s

Total

£’000s

Investment income

Dividends* 22,671 – 22,671 21,604 – 21,604

Interest 1,627 – 1,627 988 – 988

Total investment income 24,298 – 24,298 22,592 – 22,592

Other income

Bank interest 28 – 28 1 – 1

Total income 24,326 – 24,326 22,593 – 22,593

*Includes scrip dividends of £346,000 (2022: £948,000)

Report and Accounts for the year to 31 March 2023

4. MANAGEMENT AND ADMINISTRATION FEES

Year to 31 March 2023 2022

Revenue

£’000s

Capital

£’000s

Total

£’000s

Revenue

£’000s

Capital

£’000s

Total

£’000s

Payable to: ICM/ICMIM

– management, secretarial and

research fees 1,084 4,336 5,420 1,124 4,496 5,620

– performance fee adjustment in

respect of prior year – – – – (256) (256)

Administration fees 310 – 310 327 – 327

1,394 4,336 5,730 1,451 4,240 5,691

The Company has appointed ICMIM as its Alternative Investment Fund Manager and joint portfolio manager with ICM, for which

they are entitled to a management fee. The aggregate fees payable by the Company are apportioned between the Investment

Managers as agreed by them.

The relationship between ICMIM and ICM is compliant with the requirements of the UK version of the EU Alternative Investment

Fund Managers Directive as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended

and also such other requirements applicable to ICMIM by virtue of its regulation by the Financial Conduct Authority.

The annual management fee is a tiered structure as follows: 1.0% of NAV up to and including £500m; 0.9% of NAV exceeding

£500m up to and including £750m; 0.85% of NAV exceeding £750m up to and including £1,000m; and 0.75% of NAV exceeding

£1,000m, payable quarterly in arrears. The management fee is allocated 80% to capital return and 20% to revenue return. The

investment management agreement may be terminated upon six months’ notice.

ICMIM also provides company secretarial services to the Company, with the Company paying £70,000 (31 March 2022: £70,000)

equivalent to 45% of the costs associated with this office and recharges research fees to the Company based on a budget of

£0.3m per annum, paid quarterly in arrears. These charges are allocated 80% to capital return and 20% to revenue return.

JPMorgan Chase Bank N.A. – London Branch has been appointed Administrator and ICMIM has appointed Waverton to provide

certain support services (including middle office, market dealing and information technology support services).

5. OTHER EXPENSES

Year to 31 March 2023 2022

Revenue

£’000s

Capital

£’000s

Total

£’000s

Revenue

£’000s

Capital

£’000s

Total

£’000s

Auditor's remuneration:

for audit services

(1)

111 – 111 86 – 86

Broker and consultancy fees 109 – 109 128 – 128

Custody fees 549 – 549 648 – 648

Depositary fees 129 – 129 138 – 138

Directors’ fees for services to the Company

(see Directors’ Remuneration Report on pages 55 to 57) 225 – 225 210 – 210

Travel expenses 215 – 215 5 – 5

Professional fees 48 – 48 118 – 118

Sundry expenses 265 – 265 257 – 257

1,651 – 1,651 1,590 – 1,590

All expenses are stated gross of irrecoverable VAT, where applicable.

(1)

Total auditor’s remuneration for audit services, exclusive of VAT, amounted to £110,000, £100,000 for the year to 31 March 2023 and £10,000 for

additional audit costs for the year to 31 March 2022 (2022: £85,000, £75,000 for the year to 31 March 2022 and £10,000 for additional audit costs for

the year to 31 March 2021).

NOTES TO THE ACCOUNTS (continued)

Utilico Emerging Markets Trust plc

6. FINANCE COSTS

Year to 31 March 2023 2022

Revenue

£’000s

Capital

£’000s

Total

£’000s

Revenue

£’000s

Capital

£’000s

Total

£’000s

On loans and bank overdrafts 169 674 843 119 469 588

7. TAXATION

(a) Analysis of charge in the year :

Year to 31 March 2023 2022

Tax on ordinary activities

Revenue

£’000s

Capital

£’000s

Total

£’000s

Revenue

£’000s

Capital

£’000s

Total

£’000s

UK corporation tax at 19.0% (2022: 19.0%) – – – – – –

Overseas tax suffered 1,638 – 1,638 1,500 – 1,500

Capital gains tax – 58 58 – 822 822

Deferred tax (see note 14) – (270) (270) – 366 366

Total tax charge for the year 1,638 (212) 1,426 1,500 1,188 2,688

The Company is liable to Indian capital gains tax and the deferred tax in the capital account is in respect of capital gains tax on

Indian investment holding gains that will be taxed in future years on realisations of the investments.

(b) Factors affecting current tax charge for the year

The tax assessed for the year can be reconciled to the profit per the Statement of Comprehensive Income as follows:

Year to 31 March 2023 2022

Revenue

£’000s

Capital

£’000s

Total

£’000s

Revenue

£’000s

Capital

£’000s

Total

£’000s

Net profit/(loss) before taxation 21,112 (13,914) 7,198 19,433 54,917 74,350

Corporation tax at 19.0% 4,011 (2,644) 1,367 3,692 10,434 14,126

Effects of:

Non taxable dividend income (3,607) – (3,607) (3,476) – (3,476)

Non taxable capital returns – 1,692 1,692 – (11,329) (11,329)

Overseas tax suffered 1,638 – 1,638 1,500 – 1,500

Excess expenses not utilised in the year – – – 694 – 694

Tax attributable to expenses and finance costs charged

to capital – – – (895) 895 –

Double taxation relief (265) 187 (78) (15) – (15)

Movement in tax losses that no deferred tax asset is

recognised on (139) 765 626 – – –

Capital gains tax – (212) (212) – 1,188 1,188

Total tax charge for the year 1,638 (212) 1,426 1,500 1,188 2,688

As at 31 March 2023, the Company had net surplus management expenses of £23,253,000 (2022: £19,957,000) and a non-trade

loan relationship deficit of £299,000 (2022: £299,000), giving total unutilised tax losses of £23,552,000 (2022: £20,256,000). A

deferred tax asset has not been recognised in respect of these tax losses because the Company is not expected to generate

taxable income in the future in excess of the deductible expenses of those future periods and, accordingly, it is unlikely that the

Company will be able to reduce future tax liabilities through the use of the existing management expenses and non-trade loan

relationship deficit. The Company has an unrecognised deferred tax asset of £5.9m as at 31 March 2023 (2022: £5.0m) based on

the corporation tax rate of 25% which took effect from 1 April 2023.

Report and Accounts for the year to 31 March 2023

8. EARNINGS PER SHARE

Year to 31 March

2023

£’000s

2022

£’000s

Revenue return 19,474 17,933

Capital return (13,702) 53,729

Total return 5,772 71,662

Number Number

Weighted average number of shares in issue during the year 207,220,648 219,416,396

Pence Pence

Revenue return per share 9.40 8.17

Capital return per share (6.61) 24.49

Total profit per share 2.79 32.66

9. DIVIDENDS

Year to 31 March Record date Payment date

2023

£’000s

2022

£’000s

2021 Fourth quarterly dividend of 2.00p per share 04-Jun-21 23-Jun-21 – 4,415

2022 First quarterly dividend of 2.00p per share 03-Sep-21 24-Sep-21 – 4,393

2022 Second quarterly dividend of 2.00p per share 03-Dec-21 17-Dec-21 – 4,385

2022 Third quarterly dividend of 2.00p per share 04-Mar-22 25-Mar-22 – 4,351

2022 Fourth quarterly dividend of 2.00p per share 06-Jun-22 24-Jun-22 4,250 –

2023 First quarterly dividend of 2.00p per share 02-Sep-22 23-Sep-22 4,164 –

2023 Second quarterly dividend of 2.15p per share 02-Dec-22 16-Dec-22 4,384 –

2023 Third quarterly dividend of 2.15p per share 03-Mar-23 24-Mar-23 4,357 –

17,155 17,544

The Directors have declared a fourth quarterly dividend in respect of the year ended 31 March 2023 of 2.15p per share payable on

23 June 2023 to shareholders on the register at close of business on 2 June 2023. The total cost of the dividend, which has not been

accrued in the results for the year to 31 March 2023, is £4,334,000 based on 201,579,356 shares in issue at the record date, see note

16 for changes in share capital.

10. INVESTMENTS

Year to 31 March

2023

£’000s

2022

£’000s

Cost of investments brought forward 523,644 576,074

Net unrealised profits/(losses) brought forward 48,042 (10,323)

Valuation brought forward 571,686 565,751

Purchases at cost 108,938 124,508

Sales proceeds (126,638) (176,916)

(Losses)/profits on investments (8,329) 58,343

Valuation as at 31 March 545,657 571,686

Analysed as at 31 March

Cost of investments 491,177 523,644

Net unrealised gains on investments 54,480 48,042

Valuation 545,657 571,686

The Company received £126,638,000 (2022: £176,916,000) from investments sold in the year. The book cost of these investments

when they were purchased was £141,405,000 (2022: £176,938,000). These investments have been revalued over time and until they

were sold any unrealised gains/losses were included in the fair value of the investments.

NOTES TO THE ACCOUNTS (continued)

Utilico Emerging Markets Trust plc

Year to 31 March

Gains/(losses) on investments

2023

£'000

2022

£'000

Net loss on investments sold (14,767) (22)

Other capital charges (60) (50)

Movement in unrealised gains 6,438 58,365

Total (losses)/gains on investments (8,389) 58,293

Subsidiary undertakings

Under IFRS 10 Consolidated Financial Statements and IFRS 12 Disclosure of Interests in Other Entities, the following are

subsidiaries of the Company as at 31 March 2023 and as at 31 March 2022, held as part of the investment portfolio, and are

accounted for as investments at fair value through profit and loss.

Country of

registration and

incorporation

Number and class of

shares held

Holding

and voting

rights

2023

Fair

value

£’000s

2022

Fair

value

£’000s

UEM (HK) Limited

(1)

Hong Kong 1,000 ordinary shares 100 1,498 –

UEM Mauritius Holdings Limited

(2)

Bermuda Loan 100 – –

(1)

Incorporated on 26 January 2017 and commenced trading on 18 July 2017 to carry on business as an investment company (see note 24 for related party

transactions).

(2)

The terms of the loan agreement with UEM Mauritius Holdings Limited, the parent company of Utilico Emerging Markets (Mauritius), provides that UEM

retains effective control of the company since it can only appoint directors with the approval of UEM. Utilico Emerging Markets (Mauritius) is in liquidation

and following completion UEM Mauritius Holdings Limited will then be liquidated.

The subsidiary undertakings carry on business as investment companies and are considered to be investment entities.

Associated undertakings

Under IFRS 10 Consolidated Financial Statements and IFRS 12 Disclosure of Interests in Other Entities, the following associated

undertakings as at 31 March 2023 and 31 March 2022 are held as part of the investment portfolio and consequently are

accounted for as investments at fair value through profit and loss:

East Balkan Properties plc Petalite Limited Pitch Hero Holdings Limited

Country of incorporation Isle of Man United Kingdom United Kingdom

Country of listing Unlisted Unlisted Unlisted

Country of operations Bulgaria & Romania United Kingdom United Kingdom

Number of ordinary shares held 155 10,725 62,874

Percentage of ordinary shares held 25.3% 28.6% 36.7%

Transactions with associated undertaking were as follows:

East Balkan Properties plc ("East Balkan")

During the year the Company received £1,303,000 from East Balkan Properties plc by way of a capital return.

Petalite Limited (“Petalite”)

During the year the Company participated in an equity raise in Petalite, in which it invested £1.25m. At that time, the Company

also converted its £1,000,000 investment of 10% convertible loan note into equity and the Company received loan interest of

£131,000. At the year end the Company held 10,725 equity shares and continued to hold 29.4% of the undiluted shareholding of

Petalite (31 March 2022: 29.4%). Factoring in dilutive options the Company's stake in Petalite is 28.6%.

Pitch Hero Holdings Limited (“Pitch Hero”)

Pursuant to a loan agreement dated 1 March 2021 under which UEM has agreed to loan monies to Pitch Hero, UEM advanced to

Pitch Hero a loan of £300,000. As at 31 March 2023, the balance of the loan and interest outstanding was £470,000 (31 March

2022: £158,000). The loan bears interest at an annual rate of 5.0% and is repayable on 1 March 2024.

Report and Accounts for the year to 31 March 2023

Significant interests

In addition to the above, the Company has a holding of 3% or more of any class of share capital of the following undertakings,

which are material in the context of the accounts:

Country of

registration and incorporation

Class of

shares held

2023

% of class of

instruments

held

2022

% of class of

instruments

held

Korean Internet Neutral Exchange Inc. South Korea Ordinary shares 5.6 4.8

Orizon Valorizacao De Residuos S A. Brazil Ordinary shares 3.9 2.6

Telelink Business Services Group Bulgaria Ordinary shares 13.9 13.9

Umeme Limited Uganda Ordinary shares 8.4 8.4

11. OTHER RECEIVABLES

2023

£’000s

2022

£’000s

Accrued income 796 796

Sales for future settlement 548 607

Overseas tax recoverable 24 29

Other debtors 76 45

1,444 1,477

12. OTHER PAYABLES

2023

£’000s

2022

£’000s

Bank overdraft 1,482 652

Interest payable 221 24

Other creditors and accruals 1,758 1,834

Purchases awaiting settlement – 289

3,461 2,799

13. BANK LOANS

– CURRENT LIABILITIES

2023

£’000s

2022

£’000s

EUR 12.0m repayable March 2024 10,544 –

GBP 10.0m repayable March 2024 10,000 –

USD 18.0m repayable March 2024 14,558 –

35,102 –

– NON-CURRENT LIABILITIES

2023

£’000s

2022

£’000s

EUR 28.0m repayable March 2024 – 23,662

The Company has an unsecured committed senior multicurrency revolving facility of £50,000,000 with the Bank of Nova Scotia,

London Branch expiring on 15 March 2024. Commitment fees are charged on any undrawn amounts at commercial rates. The

terms of the loan facility, including those related to accelerated repayment and costs of repayment, are typical of those normally

found in facilities of this nature. The existing loan rolls over on a periodic basis subject to usual conditions including a covenant

with which the Company is comfortable it can ensure compliance.

NOTES TO THE ACCOUNTS (continued)

Utilico Emerging Markets Trust plc

14. PROVISION FOR CAPITAL GAINS TAX

2023

£’000s

2022

£’000s

Balance brought forward 1,890 1,524

(Decrease)/increase in provision for Indian tax on capital gains (270) 366

Balance as at 31 March 1,620 1,890

Provision is made for deferred tax in respect of capital gains tax on chargeable investment holding gains in India.

15. OPERATING SEGMENTS

The Directors are of the opinion that the Company is engaged in a single segment of business of investing in equity and debt securities,

issued by companies operating and generating revenue in emerging markets and therefore no segmental reporting is provided.

16. ORDINARY SHARE CAPITAL

Number

2023

£'000 Number

2022

£'000

Issued, called up and fully paid

Ordinary shares of 1p each

Balance brought forward 214,744,067 2,148 221,273,374 2,213

Purchased for cancellation by the Company (12,531,811) (125) (6,529,307) (65)

Balance as at 31 March 202,212,256 2,023 214,744,067 2,148

During the year the Company bought back for cancellation 12,531,811 (2022: 6,529,307) ordinary shares at a total cost of

£27,159,000 (2022: £13,898,000). A further 740,789 ordinary shares have been purchased for cancellation at a total cost of

£1,661,000 since the year end.

17. MERGER RESERVE

2023

£’000s

2022

£’000s

Balance brought forward and carried forward 76,706 76,706

18. CAPITAL REDEMPTION RESERVE

2023

£’000s

2022

£’000s

Balance brought forward 197 132

Purchased for cancellation by the Company (see note 16) 125 65

Balance as at 31 March 322 197

19. SPECIAL RESERVE

2023

£’000s

2022

£’000s

Balance brought forward 459,736 473,634

Purchased for cancellation by the Company (see note 16) (27,159) (13,898)

Balance as at 31 March 432,577 459,736

Report and Accounts for the year to 31 March 2023

20. CAPITAL RESERVES

2023 2022

Realised

£’000s

Investment

holding

gains

£’000s

Total

£’000s

Realised

£’000s

Investment

holding

gains

£’000s

Total

£’000s

Realised losses on investments (14,767) – (14,767) (22) – (22)

Unrealised gains on investments – 6,438 6,438 – 58,365 58,365

Foreign exchange (losses)/gains (515) – (515) 1,333 – 1,333

Finance costs charged to capital (674) – (674) (469) – (469)

Expenses charged to capital (4,336) – (4,336) (4,240) – (4,240)

Capital gains tax 212 – 212 (1,188) – (1,188)

Other capital charges (60) – (60) (50) – (50)

(20,140) 6,438 (13,702) (4,636) 58,365 53,729

Balance brought forward (48,181) 48,042 (139) (43,545) (10,323) (53,868)

Balance as at 31 March (68,321) 54,480 (13,841) (48,181) 48,042 (139)

Included within the capital reserve movement for the year is £1,303,000 (2022: £3,975,000) of dividend receipts recognised as

capital in nature, £189,000 (2022: £169,000) of transaction costs on purchases of investments and £251,000 (2022: £436,000) of

transaction costs on sales of investments.

21. REVENUE RESERVE

2023

£’000s

2022

£’000s

Balance brought forward 7,268 6,879

Revenue profit for the year 19,474 17,933

Dividend paid in the year (17,155) (17,544)

Balance as at 31 March 9,587 7,268

22. NET ASSET VALUE PER SHARE

The net asset value per share is based on the net assets attributable to the equity shareholders of £507,374,000

(2022: £545,916,000) and on 202,212,256 (2022: 214,744,067) shares, being the number of shares in issue at the year end.

23. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES

2023 Balance as at

31 March 2022

£’000s

Transactions in

the year

£’000s

Net

cashflow

£’000s

Foreign

exchange loss

£’000s

Balance as at

31 March 2023

£’000s

Bank loans 23,662 – 10,945 495 35,102

Repurchase of shares for cancellation – 27,159 (27,159) – –

Dividends paid – 17,155 (17,155) – –

23,662 44,314 (33,369) 495 35,102

NOTES TO THE ACCOUNTS (continued)

Utilico Emerging Markets Trust plc

2022 Balance as at

31 March 2021

£’000s

Transactions in

the year

£’000s

Net

cashflow

£’000s

Foreign

exchange loss

£’000s

Balance as at

31 March 2022

£’000s

Bank loans 50,373 – (25,475) (1,236) 23,662

Repurchase of shares for cancellation – 13,898 (13,898) – –

Dividends paid – 17,544 (17,544) – –

50,373 31,442 (56,917) (1,236) 23,662

24. RELATED PARTY TRANSACTIONS

The following are considered related parties of the Company: the subsidiary undertakings and the associated undertakings of the

Company set out under note 10, the Board of UEM, ICM and ICMIM (the Company’s joint portfolio managers), Mr Saville, Mr Jillings (a key

management person of ICMIM) and UIL Limited.

As at 31 March 2022 the fair value of the loan held with UEM (HK) Limited was £12,543,000 and loan interest accrued was £52,000. In the

year, UEM(HK) Limited repaid £2,120,000 and £879,000 loan interest was capitalised and added to the balance of the loan. As at 31 March

2023 the fair value of the loan held with UEM (HK) Limited was £10,118,000 and loan interest accrued was £71,000. As at 31 March 2023,

the fair value of the equity holdings held in UEM(HK) Limited was £1,498,000 (2022: £nil). During the year the Company did not receive or

make payments to UEM Mauritius Holdings Limited.

There were no transactions between the associated undertakings and the Company other than transactions in the ordinary course of

UEM’s business and these are set out in note 10. As detailed in the Directors’ Remuneration Report on pages 55 to 57, the Board received

aggregate remuneration of £225,000 (31 March 2022: £210,000) included within “other expenses” for services as Directors. As at the year

end, £nil (31 March 2022: £nil) remained outstanding to the Directors. In addition to their fees, the Directors received dividends totalling

£45,000 (31 March 2022: £80,000) during the year under review in respect of their shareholdings in the Company. There were no further

transactions with the Board during the year.

There were no transactions with ICM or ICMIM other than investment management, secretarial costs, research fees as set out in note 4

and reimbursed expenses included within Other Expenses of £134,000 (31 March 2022: £60,000). As at the year end £1,330,000

(31 March 2022: £1,393,000) remained outstanding in respect of management, company secretarial and research fees.

Mr Jillings received dividends totalling £38,000 (31 March 2022: £27,000) and UIL Limited received dividends totalling £2,051,000

(31 March 2022: £2,831,000). There were no transactions with Mr Saville in the year.

25. GOING CONCERN

Notwithstanding that the Company has reported net current liabilities of £36,663,000 as at 31 March 2023 (31 March 2022:

£218,000), the financial statements have been prepared on a going concern basis which the Directors consider to be appropriate

for the following reasons. The Board’s going concern assessment has focused on the forecast liquidity of the Company for at least

twelve months from the date of approval of the financial statements. This analysis assumes that the Company would, if necessary,

be able to meet its short-term obligations through the sale of listed securities, which represented 89.2% of the Company’s total

portfolio as at 31 March 2023. As part of this assessment the Board has considered a severe but plausible downside that reflects

the impact of the Company’s key risks and an assessment of the Company’s ability to meet its liabilities as they fall due assuming

a significant reduction in asset values and accompanying currency volatility.

The Board also considered reverse stress testing to identify the reduction in the valuation of liquid investments that would cause

the Company to be unable to meet its net liabilities, being primarily the bank loan. The Board is confident that the reduction in

asset values implied by the reverse stress test is not plausible even in the current volatile environment.

As at the year end, the Company had a £50m multicurrency loan facility with Bank of Nova Scotia expiring on 15 March 2024.

Drawdowns under the facility are detailed in note 13. The Company will either extend or replace the facility or repay the

outstanding debt when due from portfolio realisations. Consequently, the Directors believe that the Company will have sufficient

funds to continue to meet its liabilities as they fall due for at least twelve months from the date of approval of the financial

statements.

Accordingly, the Board considers it appropriate to continue to adopt the going concern basis in preparing the accounts.

Report and Accounts for the year to 31 March 2023

26. FINANCIAL RISK MANAGEMENT

The Company’s investment policy is to provide long-term total return by investing predominantly in the infrastructure, utility and

related sectors, mainly in emerging markets. The Company seeks to meet its investment policy by investing principally in a diversified

portfolio of both listed and unlisted companies. Derivative instruments may be used for purposes of hedging the underlying portfolio

of investments. The Company has the power to take out both short and long-term borrowings. In pursuing the investment policy, the

Company is exposed to financial risks which could result in a reduction of either or both of the value of the net assets and the profits

available for distribution by way of dividend. These financial risks are principally related to the market (currency movements, interest

rate changes and security price movements), liquidity and credit and counterparty risk. The Board of Directors, together with the

Investment Managers, is responsible for the Company’s risk management. The Directors’ policies and processes for managing the

financial risks are set out in (a), (b) and (c) below. The accounting policies which govern the reported Statement of Financial Position

carrying values of the underlying financial assets and liabilities, as well as the related income and expenditure, are set out in note 1 to

the accounts. The policies are in compliance with IFRS in conformity with the requirements of Companies Act 2006 and best practice

and include the valuation of financial assets and liabilities at fair value. The Company does not make use of hedge accounting rules.

(a) Market risks

The fair value of equity and other financial securities held in the Company’s portfolio and derivative financial instruments fluctuates

with changes in market prices. Prices are themselves affected by movements in currencies and interest rates and by other financial

issues, including the market perception of future risks. The Board sets policies for managing these risks within the Company’s

investment policy and meets regularly to review full, timely and relevant information on investment performance and financial

results. ICMIM assesses exposure to market risks when making each investment decision and monitors on-going market risk within

the portfolio of investments and derivatives. The Company’s other assets and liabilities may be denominated in currencies other

than Sterling and may also be exposed to interest rate risks. ICMIM and the Board regularly monitor these risks. The Company does

not normally hold significant cash balances. Borrowings are limited to amounts and currencies commensurate with the portfolio’s

exposure to those currencies, thereby limiting the Company’s exposure to future changes in exchange rates. Gearing may be short

or long-term, in Sterling and foreign currencies, and enables the Company to take a long-term view of the countries and markets

in which it is invested without having to be concerned about short-term volatility. The Board regularly monitors the effects on net

revenue of interest earned on deposits and paid on gearing.

Currency exposure

The principal currencies to which the Company was exposed during the year are set out below (2022: Brazilian Real, Hong Kong

Dollar, Indian Rupee, South Korean Won, Phillipine Peso and United States Dollar) . The exchange rates applying against Sterling

as at 31 March, and the average rates during the year, were as follows:

2023 Average 2022

BRL Brazilian Real 6.2691 6.2078 6.2567

HKD Hong Kong Dollar 9.7061 9.4513 10.3112

INR Indian Rupee 101.6145 96.7972 99.7692

MXN Mexican Peso 22.3253 23.7016 26.2566

PHP Philippine Peso 67.2196 66.6092 68.1301

USD United States Dollar 1.2364 1.2058 1.3166

The Company’s assets and liabilities as at 31 March (shown at fair value, except derivatives at gross exposure value), by currency

based on the country of primary exposure, are shown below:

2023

BRL

£’000s

HKD

£’000s

INR

£’000s

MXN

£’000s

PHP

£’000s

USD

£’000s

Other

£’000s

Total

£’000s

Current assets 141 – 165 – 21 (1,060) 405 (328)

Creditors – – (1,621) – – (91) (35,168) (36,880)

Foreign currency exposure on net monetary items 141 – (1,456) – 21 (1,151) (34,763) (37,208)

Investments 109,417 59,737 56,669 29,267 26,584 35,623 169,234 486,531

Total net foreign currency exposure 109,558 59,737 55,213 29,267 26,605 34,472 134,471 449,323

Percentage of net exposures (%) 24.4 13.3 12.3 6.5 5.9 7.7 29.9 100.0

NOTES TO THE ACCOUNTS (continued)

Utilico Emerging Markets Trust plc

2022

BRL

£’000s

HKD

£’000s

INR

£’000s

KRW

£’000s

PHP

£’000s

USD

£’000s

Other

£’000s

Total

£’000s

Current assets 179 – 146 445 – 97 1,514 2,381

Creditors – – (9) – – (652) (24,011) (24,672)

Foreign currency exposure on net monetary items 179 – 137 445 – (555) (22,497) (22,291)

Investments 109,839 69,722 64,347 31,022 26,510 28,054 183,708 513,202

Total net foreign currency exposure 110,018 69,722 64,484 31,467 26,510 27,499 161,211 490,911

Percentage of net exposures (%) 22.4 14.2 13.1 6.4 5.4 5.6 32.9 100.0

Based on the financial assets and liabilities held, and exchange rates applying, at the Statement of Financial Position date, a

weakening or strengthening of Sterling against each of these currencies by 10% would have had the following approximate effect

on annualised income after tax and on NAV per share:

2023 2022

Weakening of

Sterling

BRL

£’000s

HKD

£’000s

INR

£’000s

MXN

£’000s

PHP

£’000s

USD

£’000s

BRL

£’000s

HKD

£’000s

INR

£’000s

KRW

£’000s

PHP

£’000s

USD

£’000s

Statement of Comprehensive Income return after tax

Revenue return 518 252 432 116 139 – 266 222 441 64 – –

Capital return 12,157 6,637 6,297 3,252 2,954 3,958 12,204 7,747 7,150 3,447 2,946 3,117

Total return 12,675 6,889 6,729 3,368 3,093 3,958 12,470 7,969 7,591 3,511 2,946 3,117

NAV per share

Basic – pence 6.12 3.32 3.25 1.63 1.49 1.91 5.68 3.63 3.46 1.60 1.40 1.42

Strengthening of

Sterling

BRL

£’000s

HKD

£’000s

INR

£’000s

MXN

£’000s

PHP

£’000s

USD

£’000s

BRL

£’000s

HKD

£’000s

INR

£’000s

KRW

£’000s

PHP

£’000s

USD

£’000s

Statement of Comprehensive Income return after tax

Revenue return (518) (252) (432) (116) (139) – (266) (222) (441) (64) – –

Capital return (12,157) (6,637) (6,297) (3,252) (2,954) (3,958) (12,204) (7,747) (7,150) (3,447) (2,946) (3,117)

Total return (12,675) (6,889) (6,729) (3,368) (3,093) (3,958) (12,470) (7,969) (7,591) (3,511) (2,946) (3,117)

NAV per share

Basic – pence (6.12) (3.32) (3.25) (1.63) (1.49) (1.91) (5.68) (3.63) (3.46) (1.60) (1.40) (1.42)

Interest rate exposure

2023 2022

Within

one year

£’000s

More than

one year

£’000s

Total

£’000s

Within

one year

£’000s

More than

one year

£’000s

Total

£’000s

Exposure to floating rates

Cash 456 – 456 1,104 – 1,104

Bank overdrafts (1,482) – (1,482) (652) – (652)

Loans (35,102) – (35,102) – (23,662) (23,662)

(36,128) – (36,128) 452 (23,662) (23,210)

Exposures vary throughout the year as a consequence of changes in the make-up of the net assets of the Company arising out of

the investment and risk management processes. Interest received on cash balances or paid on overdrafts and loans is at ruling

market rates. The Company’s total returns and net assets are sensitive to changes in interest rates on cash and borrowings.

Report and Accounts for the year to 31 March 2023

Based on the financial assets and liabilities held and the interest rates pertaining at each Statement of Financial Position date,

a relative decrease or increase in market interest rates by 2% would have had the following approximate effects on the income

statement revenue and capital returns after tax and on the NAV per share.

2% increase

in rate

£’000s

2023

2% decrease

in rate

£’000s

2% increase

in rate

£’000s

2022

2% decrease

in rate

£’000s

Revenue return (161) 161 (86) 86

Capital return (562) 562 (379) 379

Net assets (723) 723 (465) 465

Other market risk exposures

The portfolio of investments, valued at £545,657,000 as at 31 March 2023 (2022: £571,686,000) is exposed to market price

changes.

Based on the portfolio of investments at the Statement of Financial Position date and assuming other factors remain constant, a

decrease or increase in the fair values of the portfolio by 20% would have had the following approximate effects on the Statement

of Comprehensive Income capital return after tax and on the basic NAV per share:

Increase

in value

2023

Decrease in

value

Increase

in value

2022

Decrease in

value

Statement of Comprehensive Income capital return £’000s 108,564 (108,564) 113,743 (113,743)

NAV per share

Basic – pence 53.69 (53.69) 52.97 (52.97)

(b) Liquidity risk exposure

The Company is required to raise funds to meet commitments associated with financial instruments. These funds may be raised

either through the realisation of assets or through increased borrowing. The risk of the Company not having sufficient liquidity

at any time is not considered by the Board to be significant given the number and value of quoted liquid investments held in the

Company’s portfolio (73 valued at £486,694,000 as at 31 March 2023); and the existence of the Bank of Nova Scotia, London

Branch loan facility agreement expiring on 15 March 2024.

Cash balances are held with reputable banks with high quality external credit ratings.

The Investment Managers review liquidity at the time of making each investment decision. The Board reviews liquidity exposure

at each meeting. The Company has a loan facility of £50m as set out in note 13. The remaining contractual maturities of the

financial liabilities as at 31 March, based on the earliest date on which payment can be required, were as follows:

2023

Three

months

or less

£’000

More than three

months but less

than one year

£’000

More than

one year

£’000

Total

£’000

Creditors:

Bank overdrafts 1,482 – – 1,482

Bank loans and interest 690 36,458 – 37,148

Other payables 428 – – 428

2,600 36,458 – 39,058

NOTES TO THE ACCOUNTS (continued)

Utilico Emerging Markets Trust plc

2022

Three

months

or less

£’000

More than three

months but less

than one year

£’000

More than

one year

£’000

Total

£’000

Creditors:

Bank overdrafts 652 – – 652

Bank loans and interest 112 267 24,002 24,381

Other payables 730 – – 730

1,494 267 24,002 25,763

The Company is exposed to potential failure by counterparties to deliver securities for which the Company has paid, or to pay for

securities which the Company has delivered. The Board approves all counterparties used by the Company in such transactions, which

must be settled on the basis of delivery against payment (except where local market conditions do not permit). A list of pre-approved

counterparties is maintained and regularly reviewed by ICMIM, by Waverton and by the Board. Broker counterparties are selected

based on a combination of criteria, including credit rating, balance sheet strength and membership of a relevant regulatory body.

The rate of default in the past has been negligible. Cash and deposits are held with reputable banks with high quality external credit

ratings.

The Company has an on-going contract with its custodians for the provision of custody services. The contracts are reviewed regularly.

Details of securities held in custody on behalf of the Company are received and reconciled monthly. To the extent that the Investment

Managers and Waverton carry out duties (or cause similar duties to be carried out by third parties) on the Company’s behalf, the

Company is exposed to counterparty risk. The Board assesses this risk continuously through regular meetings with the Investment

Managers.

None of the Company’s financial assets is past due or impaired.

(d) Fair value of financial assets and financial liabilities

The assets and liabilities of the Company are, in the opinion of the Directors, reflected in the Statement of Financial Position at fair

value, or at a reasonable approximation thereof. Borrowings under the loan facility do not have a value materially different from

their capital repayment amounts. Borrowings in foreign currencies are converted into Sterling at exchange rates ruling at each

valuation date.

Unquoted investments are valued based on professional assumptions and advice that is not wholly supported by prices from

current market transactions or by observable market data. The Directors make use of recognised valuation techniques and may

take account of recent arms’ length transactions in the same or similar investments. The Directors regularly review the principles

applied by the Investment Managers to those valuations to ensure they comply with the Company’s accounting policies and with

fair value principles.

Level 3 financial instruments Valuation methodology

The objective of using valuation techniques is to arrive at a fair value measurement that reflects the price that would be received

to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.

The Company uses proprietary valuation models, which are compliant with IPEV guidelines and IFRS 13 and which are usually

developed from recognised valuation techniques. Some or all of the significant inputs into these models may not be observable

in the market and are derived from market prices or rates or are estimated based on assumptions. Valuation models that employ

significant unobservable inputs require a higher degree of management judgement and estimation in the determination of fair

value. Management judgement and estimation are usually required for the selection of the appropriate valuation model to be

used, determination of expected future cash flows of the financial instrument being valued, determination of the probability of

counterparty default and prepayments, peer group multiple and selection of appropriate discount rates.

Fair value estimates obtained from such models are adjusted for any other factors, such as controlling interest, historical and

projected financial data, entity specific strengths and weaknesses, or model uncertainties, to the extent that the Company

believes that a third party market participant would take them into account in pricing a transaction.

The Directors have satisfied themselves as to the methodology used, the discount rates and key assumptions applied, and the

valuations. The level 3 assets comprise of a number of unlisted investments at various stages of development and each has been

Report and Accounts for the year to 31 March 2023

assessed based on its industry, location and business cycle. The valuation methodologies include net assets, discounted cash

flows, cost of recent investment or last funding round, or listed peer comparison or peer group multiple as appropriate. Where

applicable, the Directors have considered observable data and events to underpin the valuations. A discount has been applied,

where appropriate, to reflect both the unlisted nature of the investments and business risks.

Sensitivity of level 3 financial investments measured at fair value to changes in key assumptions.

Level 3 inputs are sensitive to assumptions made when ascertaining fair value. While the Directors believe that the estimates of fair

value are appropriate, the use of different methodologies or assumptions could lead to different measurements of fair value. The

sensitivities shown in the table below give an indication of the effect of applying reasonable and possible alternative assumptions.

In assessing the level of reasonably possible outcomes consideration was also given to the impact on valuations of the increased

level of volatility in equity markets since early 2022, principally reflecting concerns about increasing rates of inflation, tightening

energy supplies, rising interest rates and the Ukraine war. The impact on the valuations has been varied and largely linked to their

relevant sectors and this has been reflected in the level of sensitivities applied.

For each unlisted holding valued over £5.0m, the significant valuation inputs have been sensitised by a percentage deemed to

reflect the relative degree of estimation uncertainty.

The following table shows the sensitivity of the fair value of level 3 financial investments to changes in key assumptions.

As at 31 March 2023

Investment

type

Valuation

methodology

Risk

weighting

Sensitivity

+/-

Carrying

amount

£’000s

Sensitivity

£’000s

Petalite Equity

Last funding

round High 50% 28,607 14,304

UEM (HK) Limited Equity/Loan NAV Low 10% 11,615 1,162

Conversant Pte Ltd Equity

Last funding

round Medium 20% 7,877 1,575

Other investments Equity Various Medium 20% 5,956 1,191

Other investments Equity Various Low 10% 4,187 419

Other investments Loans

Discounted cash

flows Medium 20% 450 90

Total 58,692 18,741

As at 31 March 2022

Investment

type

Valuation

methodology

Risk

weighting

Sensitivity

+/-

Carrying

amount

£’000s

Sensitivity

£’000s

Petalite Equity

Milestone

analysis High 40% 17,621 7,048

UEM (HK) Limited Loan NAV Low 10% 12,543 1,254

Conversant Pte Ltd Equity

Last funding

round Medium 20% 7,267 1,453

Other investments Equity Various Medium 20% 6,547 1,309

Other investments Equity Various Low 10% 3,632 363

Other investments Equity

Last funding

round High 30% 350 105

Other investments Loans Various High 30% 150 45

Total 48,110 11,577

NOTES TO THE ACCOUNTS (continued)

Utilico Emerging Markets Trust plc

Petalite

UEM holds 10,725 ordinary shares in Petalite and, as at 31 March 2023, carried this investment at £28.6m. The cost of this

investment was £2.8m (2022: £1.5m).

Valuation Methodology: Petalite has been valued based on the most recent equity fundraising event that occurred in June

2022. Petalite is an unlisted early stage company based in the UK. Petalite has developed an innovative electric vehicle charging

technology which offers greater reliability and efficiency than is currently available in the market, filing its first patent application

in 2016. Petalite has validated the technology with certification of the Power Core modular unit. In the period since the last

fundraising, Petalite has progressed satisfactorily and has established a go-to-market strategy to commercialise its technology

in the coming year. While the Directors consider that the last fundraise price remains representative of fair value as at 31 March

2023, Petalite’s fair value has been given a sensitivity of 50% (2022: 40%) reflecting the high level of uncertainty due to the length

of time since the last fundraise and the fact that the company remains pre-revenue. As Petalite has yet to commercialise its

technology and is pre-revenue it remains reliant on external funding.

Key valuation inputs: Most recent fundraise price of £2,667 per ordinary share. A triangulation exercise utilising Petalite's peer

multiples has been carried out to support this valuation.

Sensitivities: Should the value of Petalite move by 50% the gain or loss would be £14.3m.

UEM (HK) Limited

Valuation methodology: UEM (HK) Limited holds CGN Capital Partners Infra Fund 3 ( CGN ). The Company has used CGN’s

NAV and carried its investment at £11.6m as at 31 March 2023 (2022: £12.5m). The cost of this investment was £8.7m

(2022: £9.4m). CGN is a Chinese wind and solar farm developer and operator in mainland China and its NAV was valued using

valuation techniques consistent with IFRS and is subject to annual audit. CGN’s financial assets at fair value are all unlisted

equity investments, with fair value estimated by the method of discounted cash flow and these investments have been given a

sensitivity of 10% (2022: 10%) to reflect a degree of uncertainty over the managers valuations.

Key valuation inputs: Market value for portfolio of investments.

Sensitivities: Should the value of UEM (HK) Limited move by 10% the gain or loss would be £1.2m.

Conversant Pte Ltd (“Conversant”)

The Company holds 2,158,246 ordinary shares in Conversant and, as at 31 March 2023, carried this investment at £7.9m. The cost

of this investment was £4.7m (2022: £4.7m).

Valuation Methodology: Conversant has been valued based on the most recent equity fundraising event that occurred in June

2022. Conversant is a Singapore incorporated content delivery network provider primarily for delivery of media as well as security

for both websites and media delivery. Conversant has performed satisfactorily and its revenues have increased in the period

since the last fundraising. While the Directors consider that the last fundraise price remains representative of fair value as at

31 March 2023, Conversant’s fair value has been given a sensitivity of 20% (2022: 20%) to reflect a level of uncertainty due to the

length of time since the last fundraise.

Key valuation inputs: Most recent fundraise price of SGD 6.00 per ordinary share.

Sensitivities: Should the value of Conversant move by 20% the gain or loss would be £1.6m.

(e) Capital risk management

The investment policy of the Company is stated as being to provide long-term total return through a flexible investment policy

that permits it to make investments predominantly in infrastructure, utility and related sectors, mainly in emerging markets. The

capital of the Company comprises ordinary share capital and reserves equivalent to the net assets of the Company. In pursuing

the long-term investment policy, the Board has a responsibility for ensuring the Company’s ability to continue as a going concern.

It must therefore maintain an optimal capital structure through varying market conditions. This involves the ability to: issue and

buyback share capital within limits set by the shareholders in general meeting; borrow monies in the short and long term (up to a

limit of 25% of gross assets); and pay dividends to shareholders out of reserves. Changes to ordinary share capital are set out in

note 16. Dividend payments are set out in note 9. Loans are set out in note 13.

Report and Accounts for the year to 31 March 2023

27. FAIR VALUE HIERARCHY

IFRS 13 ‘Financial Instruments: Disclosures’ require an entity to classify fair value measurements using a fair value hierarchy that

reflects the significance of the inputs used in making the measurements. The fair value hierarchy shall have the following levels:

Level 1 reflects financial instruments quoted in an active market.

Level 2 reflects financial instruments whose fair value is evidenced by comparison with other observable current market

transactions in the same instrument or based on a valuation technique whose variables include only data from observable

markets.

Level 3 reflects financial instruments whose fair value is determined in whole or in part using a valuation technique based on

assumptions that are not supported by prices from observable market transactions in the same instrument and not based on

available observable market data.

The financial assets measured at fair value in the Statement of Financial Position are grouped into the fair value hierarchy as

follows:

As at 31 March 2023

Level 1

£’000

Level 2

£’000

Level 3

£’000

Total

£’000

Investments 483,146 3,818 58,693 545,657

As at 31 March 2022

Level 1

£’000

Level 2

£’000

Level 3

£’000

Total

£’000

Investments 519,853 3,723 48,110 571,686

2022: During the year one stock with value of £1.7m was transferred from level 1 to level 2 due to the investee company shares

trading irregularly, three stocks with value of £8.0m were transferred from level 2 to level 1 due to the investee companies shares

resuming regular trading in the year, one stock with value of £0.8m was transferred from level 3 to level 1 due to the investee

company shares becoming listed and one stock transferred from level 1 to level 3 at nil value due to the investee company shares

being suspended from trading. The book costs and fair values were transferred using the 31 March 2021 balances except for the

stock that was suspended, the book cost and fair value transferred at the time of suspension.

A reconciliation of fair value measurements in level 3 is set out in the following table:

2023

£’000

2022

£’000

Balance brought forward 48,110 20,869

Transfer to level 1 – (828)

Purchases 3,691 7,205

Sales (4,423) (255)

Gains/(losses) on investments sold in the year 1,760 (1,764)

Gains on investments held at end of year 9,555 22,883

Balance as at 31 March 58,693 48,110

Analysed as at 31 March

Cost of investments 29,484 28,456

Gains on investments 29,209 19,654

Valuation 58,693 48,110

Utilico Emerging Markets Trust plc

ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE (“AIFMD”)

In accordance with the AIFMD, information in relation to the Company’s leverage and the remuneration of the Company’s AIFM,

ICMIM, is required to be made available to investors. Detailed regulatory disclosures including those on the AIFM’s remuneration

policy are available on ICM’s website at https://www.icm.limited/icm-investment-management.

The Company’s maximum and actual leverage as at 31 March are shown below

2023

Leverage

exposure

Gross

method

Commitment

method

Maximum permitted limit 300% 300%

Actual 107% 107%

2022

Leverage

exposure

Gross

method

Commitment

method

Maximum permitted limit 300% 300%

Actual 105% 105%

The leverage limits are set by the AIFM and approved by the Board. The AIFM is also required to comply with the gearing

parameters set by the Board in relation to borrowings.

SECURITIES FINANCING TRANSACTIONS (“SFT”)

The Company has not, in the years to 31 March 2023 and 31 March 2022, participated in any: repurchase transactions; securities

lending or borrowing; buy-sell back transactions; margin lending transactions; or total return swap transactions (collectively

called SFT). As such, it has no disclosure to make in satisfaction of the UK version of the EU regulation 2015/2365 on transparency

of SFT which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended.

OTHER FINANCIAL INFORMATION (UNAUDITED)

Report and Accounts for the year to 31 March 2023

Notice is hereby given that the Annual General Meeting of Utilico Emerging Markets Trust plc will be held at The Royal

Society of Chemistry, Burlington House, Piccadilly, London W1J 0BA on Tuesday, 19 September 2023 at 10.00 a.m. for

the purpose of considering and, if thought fit, passing the following resolutions (which will be proposed in the case of

resolutions 1 to 10, as ordinary resolutions and, in the case of resolutions 11 and 12, as special resolutions).

ORDINARY BUSINESS

1. To receive and adopt the report of the Directors of the Company and the financial statements for the year ended

31 March 2023, together with the report of the auditor thereon.

2. To approve the Directors’ Remuneration Report for the year ended 31 March 2023.

3. To approve the Company’s dividend policy to pay four interim dividends per year.

4. To re-elect Mr John Rennocks as a Director.

5. To re-elect Mr Mark Bridgeman as a Director.

6. To re-elect Ms Isabel Liu as a Director.

7. To re-elect Mr Eric Stobart as a Director.

8. To re-appoint KPMG LLP as auditor to the Company to hold office until the conclusion of the next Annual General

Meeting of the Company.

9. To authorise the Directors to determine the auditor’s remuneration.

SPECIAL BUSINESS

Ordinary resolution

10. That, in substitution for all existing authorities, the Directors of the Company be and they are hereby generally and

unconditionally authorised pursuant to section 551 of the Companies Act 2006 (the “Act”), to exercise all the powers

of the Company to allot shares in the Company and to grant rights to subscribe for or to convert any security into

shares in the Company (“Securities”) up to an aggregate nominal amount of £201,470 (being 10% of the aggregate

nominal amount of the issued share capital excluding treasury shares of the Company as at the date of this Notice)

provided that this authority shall expire at the conclusion of the next Annual General Meeting of the Company to

be held in 2024 but so that the Company may, at any time before such expiry, make any offer or agreement which

would or might require Securities to be allotted after such expiry pursuant to any such offer or agreement as if the

authority hereby conferred had not expired.

Special Resolutions

11. That, in substitution for all existing authorities and subject to the passing of resolution 10, the Directors of the

Company be and are hereby empowered pursuant to sections 570 and 573 of the Companies Act 2006 (the “Act”) to

allot equity securities (as defined in section 560 of the Act) pursuant to the authority granted by resolution 10, and

to sell equity securities held by the Company as treasury shares (as defined in section 724 of the Act) for cash, as if

section 561(1) of the Act did not apply to any such allotments or sales of equity securities, provided that this power:

(a) shall expire at the conclusion of the next Annual General Meeting of the Company to be held in 2024, except

that the Company may at any time before such expiry make offers or agreements which would or might require

equity securities to be allotted or sold after such expiry and notwithstanding such expiry the Directors may allot

or sell equity securities in pursuance of such offers or agreements;

NOTICE OF ANNUAL GENERAL MEETING

Utilico Emerging Markets Trust plc

(b) shall be limited to the allotment of equity securities and/or sale of equity securities held in treasury for cash up

to an aggregate nominal amount of £201,470 (representing 10% of the aggregate nominal amount of the issued

share capital, excluding treasury shares of the Company, as at the date of this Notice); and

(c) shall be limited to the allotment of equity securities and/or the sale of equity securities held in treasury at a price

of not less than the net asset value per share as close as practicable to the relevant allotment or sale.

12. That, in substitution for the Company’s existing authority to make market purchases of ordinary shares of 1p in the

Company (“Shares”), the Company be and is hereby authorised in accordance with section 701 of the Companies Act

2006 (the “Act”) to make market purchases of Shares (within the meaning of section 693 of the Act), provided that:

(a) the maximum number of Shares hereby authorised to be purchased is 30,200,000 (being 14.99% of the

Company’s issued ordinary share capital, excluding treasury shares of the Company, as at the date of this Notice);

(b) the minimum price (exclusive of expenses) which may be paid for a Share shall be 1p being the nominal value per

share;

average of the market value of a Share for the five business days immediately preceding the date of purchase

as derived from the Daily Official List of the London Stock Exchange; and (ii) that stipulated by article 5(6) of the

UK version of the EU Market Abuse Regulation (2014/596) which is part of UK law by virtue of the European

Union (Withdrawal) Act 2018, as amended and supplemented from time to time including by the Market Abuse

(Amendment) (EU Exit) Regulations 2019; and

(d) unless renewed, the authority hereby conferred shall expire at the conclusion of the next Annual General

Meeting of the Company to be held in 2024 save that the Company may, at any time prior to such expiry, enter

into a contract to purchase Shares which will or may be completed or executed wholly or partly after such expiry

and the Company may purchase Shares pursuant to any such contract or contracts as if the authority conferred

hereby had not expired.

All Shares purchased pursuant to the above authority shall be either: (i) held, sold, transferred or otherwise dealt

with as treasury shares in accordance with the provisions of the Act; or (ii) cancelled immediately upon completion of

the purchase.

By order of the Board

ICM Investment Management Limited

Company Secretary

16 June 2023

Registered Office:

The Cottage, Ridge Court

The Ridge

Epsom, Surrey KT18 7EP

NOTICE OF ANNUAL GENERAL MEETING (continued)

Report and Accounts for the year to 31 March 2023

NOTES:

1. A member entitled to attend and vote at the meeting

convened by the above Notice is entitled to appoint one

or more proxies to exercise all or any of the rights of the

member to attend, speak and vote in his/her place. A

proxy need not be a member of the Company. If a member

appoints more than one proxy to attend the meeting, each

proxy must be appointed to exercise the rights attached to

a different share or shares held by the member.

2. To appoint a proxy, you may use the form of proxy enclosed

with this annual report. To be valid, the form of proxy,

together with the power of attorney or other authority (if

any) under which it is signed or a notarial certified or office

copy of the same, must be completed and returned to the

office of the Company’s registrar in accordance with the

instructions printed thereon as soon as possible and in

any event by not later than 10:00 a.m. on 15 September

2023. Amended instructions must also be received by the

Company’s registrar by the deadline for receipt of forms

of proxy. Alternatively, you can vote or appoint a proxy

electronically by visiting www.eproxyappointment.com/

Shareholder Reference Number and PIN which are printed

on the form of proxy. The latest time for the submission of

proxy votes electronically is 10:00 a.m. on 15 September

2023. To appoint more than one proxy, an additional proxy

form(s) may be obtained by contacting the Registrar’s

helpline on +44 (0370) 707 1375 or you may photocopy

the form of proxy. Please indicate in the box next to the

proxy holder’s name the number of shares in relation to

which they are authorised to act as your proxy. Please

also indicate by marking the box provided if the proxy

instruction is one of multiple instructions being given. All

forms of proxy must be signed and should be returned

together in the same envelope.

3. Completion and return of the form of proxy will not prevent

you from attending the meeting and voting in person. If you

have appointed a proxy and attend the meeting in person,

your proxy appointment will be automatically terminated.

4. Any person receiving a copy of this Notice as a person

nominated by a member to enjoy information rights under

section 146 of the Companies Act 2006 (a “Nominated

Person”) should note that the provisions in Notes 1 and 2

above concerning the appointment of a proxy or proxies to

attend the meeting in place of a member, do not apply to a

Nominated Person as only ordinary shareholders have the

right to appoint a proxy. However, a Nominated Person may

have a right under an agreement between the Nominated

Person and the member by whom he or she was nominated

to be appointed, or to have someone else appointed, as

proxy for the meeting. If a Nominated Person has no such

proxy appointment right or does not wish to exercise it,

he/she may have a right under such agreement to give

instructions to the member as to the exercise of voting

rights at the meeting.

5. Nominated Persons should also remember that their

main point of contact in terms of their investment in

the Company remains the member who nominated the

Nominated Person to enjoy the information rights (or

perhaps the custodian or broker who administers the

investment on their behalf). Nominated Persons should

continue to contact that member, custodian or broker (and

not the Company) regarding any changes or queries relating

to the Nominated Person’s personal details and interest in

the Company (including any administrative matter). The only

exception to this is where the Company expressly requests

a response from the Nominated Person.

6. Pursuant to Regulation 41 (1) of The Uncertificated

Securities Regulations 2001 and for the purposes of

section 360B of the Companies Act 2006, the Company has

specified that only shareholders registered on the register

of members of the Company by not later than 6.00 p.m.

two days prior to the time fixed for the meeting shall be

entitled to attend and vote at the meeting in respect of the

number of the ordinary shares registered in their name at

such time. If the meeting is adjourned, the time by which a

person must be entered on the register of members of the

Company in order to have the right to attend and vote at the

adjourned meeting is 6.00 p.m. two days prior to the time

of adjournment. Changes to the register of members after

the relevant times shall be disregarded in determining the

rights of any person to attend and vote at the meeting.

7. In the case of joint holders, the vote of the senior holder

who tenders a vote, whether in person or by proxy, shall

be accepted to the exclusion of the votes of the other joint

holders and, for this purpose, seniority will be determined

by the order in which the names stand in the register of

members of the Company in respect of the relevant joint

holding.

8. Shareholders who hold their shares electronically may

submit their votes through CREST, by submitting the

appropriate and authenticated CREST message so as to

be received by the Company’s registrar not later than

10:00 a.m. on 15 September 2023. Instructions on how to

vote through CREST can be found by accessing the CREST

manual via www.euroclear.com. Shareholders are advised

that CREST and the internet are the only methods by which

completed proxies can be submitted electronically.

9. If you are a CREST system user (including a CREST personal

member) you can appoint one or more proxies or give

an instruction to a proxy by having an appropriate CREST

message transmitted. To appoint one or more proxies

or to give an instruction to a proxy (whether previously

appointed or otherwise) via the CREST system, CREST

messages must be received by Computershare (ID number

3RA50) not later than 10:00 a.m. on 15 September 2023.

For this purpose, the time of receipt will be taken to be

the time (as determined by the timestamp generated by

the CREST system) from which Computershare is able to

retrieve the message. CREST personal members or other

CREST sponsored members should contact their CREST

sponsor for assistance with appointing proxies via CREST.

For further information on CREST procedures, limitations

and system timings please refer to the CREST manual. The

Company may treat as invalid a proxy appointment sent by

CREST in the circumstances set out in Regulation 35(5)(a) of

The Uncertificated Securities Regulations 2001.

Utilico Emerging Markets Trust plc

10. If the Chairman, as a result of proxy appointments, is

given discretion as to how the votes the subject of those

proxies are cast and the voting rights in respect of those

discretionary proxies, when added to the interests in the

Company’s securities already held by the Chairman, result in

the Chairman holding such number of voting rights that he

has a notifiable obligation under the Disclosure Guidance

and Transparency Rules, the Chairman will make the

necessary notifications to the Company and the Financial

Conduct Authority. As a result, any member holding 3%

or more of the voting rights in the Company, who grants

the Chairman a discretionary proxy in respect of some or

all of those voting rights and so would otherwise have a

notification obligation under the Disclosure Guidance and

Transparency Rules, need not make a separate notification

to the Company and Financial Conduct Authority. Any

such person holding 3% or more of the voting rights in the

Company who appoints a person other than the Chairman

as his proxy will need to ensure that both he and such

person complies with their respective disclosure obligations

under the Disclosure Guidance and Transparency Rules.

11. Any questions relevant to the business of the meeting may

be asked at the meeting by anyone permitted to speak

at the meeting. A shareholder may alternatively submit a

question in advance by a letter addressed to the Company

Secretary at the Company’s registered office. Under

section 319A of the Companies Act 2006, the Company

must answer any question a shareholder asks relating to

the business being dealt with at the meeting, unless (i)

answering the question would interfere unduly with the

preparation for the meeting or involve the disclosure of

confidential information; (ii) the answer has already been

given on a website in the form of an answer to a question;

or (iii) it is undesirable in the interests of the Company

or the good order of the meeting that the question be

answered.

12. Any corporation which is a member can appoint one or

more corporate representatives who may exercise on its

behalf all of its powers as a member provided that, if it is

appointing more than one corporate representative, it does

not do so in relation to the same shares.

13. Under section 527 of the Companies Act 2006, members

meeting the threshold requirements set out in that section

have the right to require the Company to publish on a

website a statement setting out any matter relating to: (i)

the audit of the Company’s accounts (including the auditor’s

report and the conduct of the audit) that are to be laid

before the meeting; or (ii) any circumstance connected with

an auditor of the Company ceasing to hold office since the

previous meeting at which annual accounts and reports

were laid in accordance with section 437 of the Companies

Act 2006.

The Company may not require the members requesting any

such website publication to pay its expenses in complying

with sections 527 or 528 of the Companies Act 2006. Where

the Company is required to place a statement on a website

under section 527 of the Companies Act 2006, it must

forward the statement to the Company’s auditors not later

than the time when it makes the statement available on

the website. The business which may be dealt with at the

meeting includes any statement that the Company has been

required under section 527 of the Companies Act 2006 to

publish on a website.

14. As at 16 June 2023 (being the last practicable date prior

to the publication of this Notice of Annual General

Meeting), the Company’s issued share capital consisted of

201,471,467 ordinary shares of 1p each, excluding shares

held in treasury. Each ordinary share carries the right to one

vote and therefore the total voting rights in the Company as

at the date of this Notice are 201,471,467.

15. Further information regarding the meeting which the

Company is required by section 311A of the Companies Act

2006 to publish on a website in advance of the meeting, can

be accessed at www.uemtrust.co.uk.

16. No service contracts exist between the Company and any

of the Directors, who hold office in accordance with letters

of appointment and the Articles of Association.

17. Copies of the letters of the appointment and deeds of

indemnity between the Company and the Directors, a

copy of the Articles of Association of the Company and

the register of the Directors’ holdings will be available for

inspection at the registered office of the Company during

usual business hours on any weekday (Saturdays, Sundays

and Bank Holidays excluded) until the date of the meeting

and also on the date of the meeting from 15 minutes prior

to commencement of the meeting until the conclusion

thereof.

18. Under sections 338 and 338A of the Companies Act 2006,

members meeting with the threshold requirements in

those sections have the right to require the Company: (i) to

give, to members of the Company entitled to receive notice

of the meeting, notice of a resolution which may properly be

moved and is intended to be moved at the meeting; and/or

(ii) to include in the business to be dealt with at the meeting

any matter (other than a proposed resolution) which may

be properly included in the business. A resolution may

properly be moved or a matter may properly be included in

the business unless:

(a) (in the case of a resolution only), it would, if passed,

be ineffective (whether by reason of inconsistency

with any enactment or the Company’s constitution or

otherwise);

(b) it is defamatory of any person; or

Such a request may be in hard copy form or in electronic

form, and must identify the resolution of which notice is

to be given or the matter to be included in the business,

must be authorised by the person or persons making it,

must be received by the Company not later than 7 August

2023 (being the date six clear weeks before the meeting)

and, in the case of a matter to be included in the business

only, must be accompanied by a statement setting out the

grounds for the request.

19. Any electronic address provided either in this Notice or in

any related documents (including the form of proxy) may

not be used to communicate with the Company for any

purpose other than those expressly stated.

NOTICE OF ANNUAL GENERAL MEETING (continued)

Report and Accounts for the year to 31 March 2023

DIRECTORS

John Rennocks (Chairman)

Mark Bridgeman

Susan Hansen

Isabel Liu

Eric Stobart, FCA

REGISTERED OFFICE

The Cottage

Ridge Court

The Ridge

Epsom

Surrey KT18 7EP

Company Registration Number: 11102129

Legal Entity Identifier: 2138005TJMCWR2394O39

AIFM, JOINT PORTFOLIO MANAGER AND

COMPANY SECRETARY

ICM Investment Management Limited

PO Box 208

Epsom

Surrey KT18 7YF

Telephone +44 (0)1372 271486

Authorised and regulated in the UK by the Financial Conduct Authority

JOINT PORTFOLIO MANAGER

ICM Limited

34 Bermudiana Road

Hamilton HM 11

Bermuda

ADMINISTRATOR AND CUSTODIAN

JPMorgan Chase Bank N.A. – London Branch

25 Bank Street

Canary Wharf

London E14 5JP

Authorised and regulated in the UK by the Financial Conduct Authority

BROKERS

Shore Capital and Corporate Limited

Cassini House, 57 St James’s Street

London SW1A 1LD

Authorised and regulated in the UK by the Financial Conduct Authority

Barclays Bank PLC

1 Churchill Place

London E14 5HP

Authorised by the Prudential Regulation Authority and regulated by the

Financial Conduct Authority and the Prudential Regulation Authority

LEGAL ADVISER TO THE COMPANY

Norton Rose Fulbright LLP

3 More London Riverside

London SE1 2AQ

AUDITOR

KPMG LLP

15 Canada Square

London E14 5GL

Member of the Institute of Chartered Accountants in England and Wales

DEPOSITARY SERVICES PROVIDER

JP Morgan Europe Limited

25 Bank Street

Canary Wharf

London E14 5JP

Authorised by the Prudential Regulation Authority and regulated by the

Financial Conduct Authority and the Prudential Regulation Authority

REGISTRAR

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol BS13 8AE

Telephone +44 (0370) 707 1375

COMPANY BANKER

The Bank of Nova Scotia, London Branch

201 Bishopsgate, 6th Floor

London EC2M 3NS

Authorised in the UK by the Prudential Regulation Authority and

regulated by the Financial Conduct Authority and the Prudential

Regulation Authority

PUBLIC RELATIONS

Montford Communications Limited

2nd Floor, Berkeley Square House

Berkeley Square

Mayfair

London W1J 6BD

Telephone + 44 (0)20 7887 6287