Annual Financial Report

Date: 13 June 2025

UTILICO EMERGING MARKETS TRUST PLC

ANNUAL FINANCIAL REPORT

FOR THE YEAR TO 31 MARCH 2025

Utilico Emerging Markets Trust plc ("UEM" or the "Company") today announces its audited financial results for the year to 31 March 2025.

UEM is a UK listed fund unique in focusing on infrastructure and utilities in emerging markets, where structural growth drivers are accelerated by global infrastructure megatrends.

Despite significant macroeconomic volatility over the past 12 months, UEM's investment strategy has delivered significant outperformance for shareholders over the medium term. UEM's net asset value total return for the three and five year periods to 31 March 2025 increased by 11.8% and 67.2% respectively, significantly outperforming the MSCI EM Index which was up by 6.3% and 40.8% respectively

Highlights of results

· Net asset value ("NAV") total return per share of -2.9%* (2024: 12.8%*)

· NAV per share of 257.28p, down 6.1%

· Gross assets of £497.4m*, a decrease of 4.9%

· Annual compound NAV total return since inception of 8.8%* (MSCI EM Index 7.2%)

· Dividends per share totalled 9.125p for the year, an increase of 6.1%. Dividends were fully covered by earnings

· The 10th year in a row that UEM has increased its dividend, thereby joining the next generation of "Dividend Heros" published by the Association of Investment Companies, the only Global Emerging Markets fund to do so

· Dividend yield of 4.2%* (2024: 3.9%*)

· Revenue earnings per share ("EPS") increased 12.7% to 9.95p

· Total revenue income of £23.8m, an 3.3% increase

*See Alternate Performance Measures on pages 92 to 94 of the Report and Accounts

The Report & Accounts for the year ended 31 March 2025 will be posted to shareholders in early July 2025. A copy will shortly be available to view and download from the Company's website at www.uemtrust.co.uk and the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. 

Please click on the following link to view the document: http://www.rns-pdf.londonstockexchange.com/rns/8165M_1-2025-6-13.pdf 

Mark Bridgeman, Chairman of UEM said: "For the year ending 31 March 2025, NAV total return for the year was down by 2.9%, underperforming the MSCI EM total return Index which increased by 5.7% in Sterling terms over the same period. However, given the long term nature of UEM's investment portfolio, it is important to look beyond a single year's performance. Over the three and five year periods to 31 March 2025, UEM's NAV total return increased by 11.8% and 67.2%, significantly outperforming the MSCI EM Index which was up by 6.3% and by 40.8% respectively.

"UEM's revenue earnings per share ("EPS") increased by 12.7% to 9.95p as at 31 March 2025 and the Board has consequently increased the dividend to 9.125p for the year, a rise of 6.1%. Once again the dividend is fully covered by earnings. Every year for the last 10 years, UEM has been able to increase the annual dividend per share for shareholders, thereby joining the ranks of the AIC's next generation of "Dividend Heroes". Given the volatility of emerging market currencies and our reporting currency in Sterling, this is a significant accomplishment.

"I am pleased to present my first annual report as Chairman in this, the Company's 20th year since inception. While short term volatility may persist, the Board shares the confidence of the Investment Managers in the proven ability of the portfolio to outperform the MSCI EM Index over the long term, based on disciplined stock selection, focused on infrastructure megatrends in emerging markets".

Charles Jillings & Jacqueline Broers, Investment Managers of UEM added: "During the year UEM continued to focus on well researched, carefully targeted, bottom up investing in emerging market infrastructure and utilities companies which are well placed to benefit from the global infrastructure megatrends. Whilst the year to 31 March 2025 has seen high levels of economic and political uncertainty we have remained resolutely focused on our investment strategy, which we believe will continue to deliver significant value for shareholders.

"This approach has remained consistent since the Company's IPO in 2005 and has delivered recognisable long term performance. As we celebrate our 20th Anniversary this year, we are proud that over 20 years our NAV total return was 427.6% compared to the MSCI EM Index which was 303.5%.

"There remain a number of uncertainties in the current market, both economic as well as geopolitical. Emerging markets are widely expected to benefit from a rotation in investor sentiment away from the US market that is gaining momentum. Whilst there is macro volatility, this volatility often provides investment opportunities to secure attractive long term holdings at compelling valuations. We therefore continue to remain highly confident that the investment strategy is well placed to continue its 20 year track record of long term outperformance".

Contacts: Joint Portfolio Manager and Company Secretary

ICM Investment Management Limited +44(0)1372 271486

Charles Jillings / Jacqueline Broers / Alastair Moreton

Public Relations

Montfort Communications +44(0)20 3770 7913

Gay Collins / Nita Shah

[email protected]

Joint Brokers

Shore Capital +44(0)20 7408 4090

Gillian Martin / Daphne Zhang

Barclays Bank +44(0)20 7623 2323

Dion Di Miceli / Stuart Muress / James Atkinson

[email protected]

Performance Summary

(1) See Alternative Performance Measures on pages 92 to 94 of the Report and Accounts

(2) All performance data relating to periods prior to 3 April 2018 are in respect of Utilico Emerging Markets Limited ("UEM Limited"), UEM's predecessor

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

Chairman's Statement

I am pleased to present my first annual report as Chairman for the year ended 31 March 2025, UEM's 20th year since its inception in July 2005.

UEM is unique in focusing on infrastructure and utilities in EM, where structural growth drivers are accelerated by global infrastructure megatrends. This strategy is highly differentiated from the MSCI EM Index and is expertly managed by a disciplined, bottom-up approach from the Investment Managers.

Given the long term nature of UEM's investment portfolio, comprising companies delivering essential services and long term growth to EM economies, it is important to look beyond a single year's performance. While UEM's NAV total return for the year was down by 2.9%, underperforming the MSCI EM total return Index which increased by 5.7% in Sterling terms over the same period, over the three and five year periods to 31 March 2025, UEM's NAV total return increased by 11.8% and 67.2%, significantly outperforming the MSCI EM Index which was up by 6.3% and by 40.8% respectively. 

The chart at the bottom of the page illustrates UEM's performance over the last five years compared to the wide range of categories which make up the MSCI EM Index. UEM's portfolio composition will therefore be very different to that of the MSCI EM Index. Whilst in the short term this may lead to periods of underperformance or outperformance, over the longer term the Investment Managers' approach is expected to lead to outperformance against the MSCI EM Index.

The investment backdrop this year has been one of economic uncertainty and volatility due to the continually changing investment landscape. Expectations at the start of the year were that the US Federal Reserve would cut interest rates for the first time in over four years. However, the persistently strong US labour market and inflationary data resulted in interest rate reductions being pushed into the latter part of the year. With the election of President Trump in November 2024, the global economic outlook once again changed, as speculation turned to the magnitude of the proposed trade tariffs and an expansionary fiscal policy. All of which led to higher interest rate and inflation expectations.

In contrast, the largest emerging market, China, witnessed the opposite during the year, suffering from deflationary pressures on the back of weak consumer confidence and a struggling property market. The fiscal and monetary stimulus measures announced in September 2024 fuelled a short-lived market rally as clarity around a stimulus package failed to materialise fully. Whilst the start of Chinese New Year sparked renewed enthusiasm for technology stocks and all things AI related, market concerns around how China will achieve its 5% GDP growth target remain, especially as relations between China and the US continue to worsen and trade tariffs escalate.

Geopolitical conflicts have continued in Ukraine and the Middle East, and these have added additional headwinds. However, despite these challenges at a macro level, most of UEM's portfolio companies continue to perform well operationally.

Two events that have hampered UEM's performance have been the reduction in the valuation of Petalite Limited ("Petalite") and currency. Petalite, an unlisted investment, impacted UEM's NAV total return by -1.5%. In addition, since UEM has 21.8% of its portfolio invested in Brazil, the 14.5% Brazilian Real depreciation against Sterling this year has overshadowed very strong operational performance being reported from a number of the Brazilian investee companies.

Revenue and Dividends

UEM's revenue earnings per share ("EPS") increased by 12.7% to 9.95p in the year to 31 March 2025 and the Board has consequently increased the dividend to 9.125p for the year, a rise of 6.1%. Once again the dividend is fully covered by earnings.

The increase in the aggregate level of dividends for the year comprised a dividend of 2.15p in the first quarter which was then increased to 2.325p for the next three quarters. Every year for the last ten years, UEM has been able to increase the annual dividend per share for shareholders thereby joining the AIC's next generation of "dividend heroes", the only Global Emerging Markets fund to do so. Given the volatility of emerging market currencies and our reporting currency in Sterling, this is a significant accomplishment.

The Board also understands the importance that shareholders place on dividends as an important part of total shareholder return. Accordingly, in the absence of unforeseen circumstances, the Board will continue its aim to declare a rising dividend each year, utilising reserves if required.

Retained earnings revenue reserves increased by £1.9m in the year to £12.0m, equating to 6.44p per share as at 31 March 2025.

Ongoing Charges

Ongoing charges were unchanged for the year to 31 March 2025 at 1.5%, despite the persistent inflationary pressures being witnessed in the wider market. The Board regularly assesses the Company's service providers and their fees.

Bank Debt

In August 2024 UEM signed a new £50.0m multi-currency loan facility agreement with Barclays Bank, following the maturity of the UEM loan facility with The Bank of Nova Scotia in March 2024.

As at 31 March 2025, £17.6m was drawn under the loan facility, compared to nil as at 31 March 2024 and net gearing stood at 2.8% (31 March 2024: net cash 1.1%).

Portfolio Disclosure

In recent years UEM has disclosed the top thirty holdings representing approximately 70% of the portfolio. Going forward, to further enhance our transparency and reporting, we have decided to move to providing disclosure of all the portfolio holdings.

Unlisted Investments (Level 3 Investments)

Over the years UEM has invested in unlisted businesses with investment size always being modest. As at 31 March 2025, the value of level 3 investments was £13.4m, representing 2.7% of the total portfolio, down from £23.1m as at 31 March 2024. The reduction is primarily due to the decrease in valuation of Petalite of £6.5m, as the electric vehicle sector continues to face valuation weakness. Further details are provided in the Investment Managers' report.

The primary focus for UEM has historically been, and continues to be, on listed investments. In response to investor feedback and in consideration of the fact that investment funds with substantial unlisted holdings often trade at higher discounts to NAV, the Board and the Investment Managers have agreed that no new unlisted investments will be made, except in exceptional circumstances.

Share Buybacks

Over the year to 31 March 2025, UEM's discount has continued, albeit narrowing from 19.3% as at 31 March 2024 to 16.0% as at 31 March 2025. This is above where the Board would like to see the discount. The Company therefore has taken a number of proactive measures including increased marketing and buying back shares for cancellation, benefitting shareholders as it increases the NAV per share of the remaining outstanding shares.

This year, the Company bought back 4.3m shares, equivalent to 2.3% of the share capital as at 31 March 2024 at an average price of 221.36p per share and a total cost of £9.6m. The share buyback has contributed to 0.4% of UEM's total return as at 31 March 2025. Since inception, the Company has bought back 90.5m shares, equating to £173.8m, over 30% of the current fund size. 

2026 Continuation Vote

UEM's Articles of Association provide that a continuation vote is put to shareholders every five years. The continuation vote was passed at the AGM held in 2021 and since that time, UEM's performance has been strong, with NAV total returns in the four years ended 31 March 2025 amounting to 6.5% per annum, compared to a reduction in the MSCI EM Index of -0.3% per annum over that period. Shareholders will therefore have further opportunities to vote on the continuation of the Company at the AGM in 2026 and every fifth AGM thereafter.

Having recently taken over as Chairman, I have met with a number of the largest shareholders during the last six months and I intend to continue engagement. If there are any shareholders who would like to meet with me, please contact the Company's brokers. The Board greatly values the views of all shareholders and will take them into account. Shareholders can contact me through the contact page on UEM's website www.uemtrust.co.uk.

The Company has the authority to operate a potential tender facility available at the Directors' discretion for up to 12.5% of the issued share capital. The Company is reviewing the effectiveness of this facility against other potential options with its advisers, to the extent required as a further tool for proactive discount management. Any changes to this will be announced in due course.

Audit Tender

In February 2025, it was announced that, following a formal tender process, BDO LLP ("BDO") has been appointed as the Company's auditor for the financial year ended 31 March 2025, replacing KPMG LLP. 

BDO's appointment as auditors for the following financial year will be subject to shareholder approval at the forthcoming AGM.

Board Composition

As previously announced, I took on the role of Chairman following the retirement of John Rennocks on 31 December 2024, with Isabel Liu assuming the role of Senior Independent Director. I would like to thank John for all his hard work and dedication to the Company over his nine years as a Director and Chairman.

In September 2024, Nadya Wells was appointed as a non-executive Director bringing a wealth of experience in investment management, EM and investment companies. Nadya has taken on the role of Chair of UEM's Management Engagement Committee.

As usual, all the Directors will stand for reappointment at the forthcoming AGM on 16 September 2025.

All the Directors continue to invest their net fees each quarter in the shares of the Company.

Joint Portfolio Managers

We were pleased to announce in January 2025 that ICM had appointed Jacqueline Broers as joint portfolio manager alongside Charles Jillings. Jacqueline, previously deputy portfolio manager, joined ICM in 2010 and has been involved in the management of UEM since that time. Charles has been portfolio manager since UEM's IPO in 2005.

20th Anniversary

UEM was first listed on 20 July 2005 making this year its 20th anniversary as a public company. Since inception to 31 March 2025, UEM has achieved a NAV total return of 8.8% per annum or 427.6% in aggregate, significantly outperforming the MSCI EM Index which was up by 303.5% over that period. This is testament to the skill and experience of the Portfolio Managers, and the breadth and quality of the support from the ICM research team. Furthermore, the Portfolio Managers are as enthusiastic about the potential for the portfolio as they were in 2005, if not more, given the opportunities they are seeing.

Outlook

Navigating through all the political noise is likely to be the biggest headwind, with market risk premiums remaining high until there is more certainty on the direction of US growth and US interest rates. President Trump's obsession with tariffs will potentially weaken the US Dollar further. While this should be positive for EM, the President's actions will likely be limited by the US bond market acting as a brake, in light of the potentially higher cost of borrowing and US debt to GDP now over 120%. 

Geopolitical pressures will also remain high in both the Russia-Ukraine conflict and the Middle East. Relations between China and the US appear to be marginally thawing post the President's U-turn on tariffs; although they have a long way to go, with the relationship likely to remain highly volatile with neither nation willing to concede.

Emerging markets are expected to be well placed as they should be able to capitalise on this dislocation in the markets. It is already clear that foreign investors are beginning to look for alternatives to the US to invest, which can only be positive for the rest of the world. With EM valuations remaining relatively cheap, these markets are likely to benefit from increasing investor demand playing very well to our core investment thesis. The defensive nature of UEM's infrastructure and utilities portfolio benefitting from global infrastructure megatrends, coupled with the disciplined stock selection of the manager, should ensure UEM continues to deliver long term returns to shareholders with an attractive dividend income.

Mark BridgemanChairman

13 June 2025

Investment Managers' Report

For the year ended 31 March 2025, UEM's NAV total return was down by 2.9% underperforming the MSCI EM total return Index which increased by 5.7%. However, as reported in the Chairman's Statement, over the three and five years UEM's NAV total return increased by 11.8% and 67.2%, significantly outperforming the MSCI EM Index which was up by 6.3% and by 40.8% respectively. Since inception, UEM's NAV total return was 427.6% compared to the MSCI EM Index which was 303.5%.

Investment Environment

In the year to 31 March 2025, the increase in economic and political uncertainty has heightened and dominated the investment landscape. We have seen a year where over half the world's population went to the electoral ballot and inflation in most countries has eased although geopolitical pressures have increased. During the year, UEM has continued to stay focused on its bottom-up investment approach and not become distracted by the top down "noise". 

Over the last twelve months, there were several significant global elections for UEM, such as those in Mexico, India, Indonesia and the US. The inauguration in January 2025 of President Trump into the US White House has further fuelled market uncertainty resulting in gyrating volatile trade policies, raised equity risk premia and elevated geopolitical tensions, making it a challenging investment backdrop.

The election of President Trump with his commitment to tariffs and potential expansionary federal policy has also called into question the direction of US interest rate cuts. The year started with a sense of optimism that US interest rates would be reduced based on expectations that inflationary pressure would weaken (therefore benefitting EM), only to be short lived as stronger than expected US economic data continued to be reported as the year went on. Nevertheless, during the 2024 calendar year, three interest rate cuts were eventually delivered. Now with Trump 2.0 being rolled out, any further rate cuts into 2025 are being called into question given elevated tariff uncertainty and its potential impact on inflation and global GDP.

How relations between the two nations of the US and China will be normalised is also difficult to see. China, with its export led economy, has been battling a host of internal challenges since the Covid-19 pandemic. GDP growth is slowing, consumer confidence is at all-time lows, deflationary concerns linger and the real estate market, once the engine room of China's growth story, continues to struggle. The People's Bank of China and the National People's Congress announced half hearted stimulus policies during the year, which led to short term uplifts in the market, but until relations with the US stabilise, the outlook for the Chinese economy will remain uncertain.

One moment during the year that was 'game changing' for China and perhaps puts us into a new era of weakened 'US exceptionalism' was the launch of DeepSeek's reasoning model in January 2025. The Chinese AI startup has been able to demonstrate capabilities that can rival US technology companies at a fraction of the cost and therefore questions the US leadership in this area.

One region that has been able to sit under the radar of President Trump's pronouncements has been Latin America (except Mexico) and in particular Brazil, given it maintains a more balanced trade relationship with the US. However, Brazil this year has faced a number of domestic challenges despite strong GDP growth (approximately 3.0% for the third year in a row) and low unemployment levels. Fiscal concerns continue to weigh heavily on investors' minds with President Lula unable to provide confidence to the market that he will respect fiscal spending limits, resulting in the Brazilian Real depreciating 14.5% this year and Brazilian interest rates surging to nearly 15%. The Bovespa was subsequently down 13.0%. Despite the strong operational performance of a number of the Brazilian companies in UEM's portfolio, this FX exposure has unfortunately impacted overall performance during the year since Brazil constitutes 21.8% of the total portfolio as at 31 March 2025.

There remain a number of uncertainties in the current market, both economically as well as geopolitical, although such conditions are providing UEM with many interesting investment opportunities. At an investee company level, it is encouraging to see that many of the companies continue to navigate the choppy waters well and we believe they will continue to deliver over the long term.

Portfolio Focus

During the year UEM remained focused on bottom-up investing in emerging market infrastructure and utilities companies which are well placed to benefit from the global infrastructure megatrends. Regardless of the macro volatility and geopolitical noise, such megatrends remain fundamental in light of the infrastructure investment required for both today's needs and tomorrow's innovation.

Social Infrastructure - has increased in UEM's portfolio this year contributing 32.2% (31 March 2024: 24.9%), as it is very apparent that many EM still lack adequate essential basic social infrastructure such as water sanitation and waste treatment that are a necessity for everyday life. Many of the investment opportunities in this area address these fundamental issues.

In the year to 31 March 2025, UEM increased its position in two water sanitation companies, Sabesp (Brazil) and Manila Water (The Philippines), whose share prices were up over the year by 20.4% and 40.8% respectively. Both companies are benefitting from improved regulatory environments, providing an attractive level of return. This encourages continued investment and efficient operations, which translates to stable and predictable cash flows for UEM as investors. In addition, both companies still have significant capital investment plans as they strive to meet their targets for universal access to water and sanitation, as well as ambitions to consolidate the fragmented domestic markets in which they operate, providing a sustainable growth opportunity. Since these types of investments are fundamental to the foundations of an emerging market economy and typically are domestically focused, they are operationally sheltered from the macro and geopolitical turbulence that is currently being witnessed globally.

Further, we see continued development of many EM countries, both in terms of GDP per capita growth and positive demographics, resulting in increasing levels of urbanisation and the growth of the middle class. Both of these factors require support from social infrastructure as populations demand better quality services and infrastructure. TAV Havalimanları Holding, the Turkish listed airport operator, benefitted from this trend during the year, with passenger growth up 11.5% and leading to its local share price increasing by 36.0%. 

Energy Growth and Transition - continues to be an important segment within the portfolio at 25.6% (31 March 2024: 31.8%) as investment into energy infrastructure remains fundamental for EM countries to support and sustain stronger GDP growth over the long term. It also enables EM countries to work towards achieving net zero and a decarbonisation of their energy matrix. Sadly in today's world another dimension is now also coming into play, namely energy security and independence. Energy security has become even more important with the heightened geopolitical tensions in the Middle East and the ongoing Russia/Ukraine War. This has resulted in countries looking to enhance their own energy security and energy independence to safeguard supply as well as mitigate pricing volatility from fossil fuels.

UEM therefore continues to favour those assets that support energy transition, security and independence. Investment into electricity transmission companies such as Alupar Investimento, a transmission and generation company in Brazil; IndiGrid, a transmission investment trust in India; and Interconexión Eléctrica, a Colombian energy transmission company, support this approach. All these companies have certainty over future cash generation given the structure of their transmission concessions, as well as offering growth opportunities since they continue to look for new transmission projects which are critical to support the rapid growth of renewable energy.

UEM's exposure to this segment has reduced during the year by 6.2% primarily due to the exit of Power Grid Corporation of India. This position was exited as the valuation became elevated. Powergrid Infrastructure Investment Trust was also reduced during the year and Petalite's valuation was written down (see further details in the level 3 investments section below).

Digital Infrastructure - investors' attention over the past year has been increasingly focused towards AI and its potential to disrupt and reshape the practises of many businesses. The announcement by DeepSeek in January 2025 of its latest model, DeepSeek R1, to rival existing AI Large Language model providers at a fraction of the cost has been a catalyst in changing the AI balance of power away from the US which has historically dominated this space, as well causing the market to reevaluate the hardware requirements for these tasks. China's technology companies and political leadership have swiftly embraced new AI ambitions. Digital infrastructure supports such rapid growth, providing infrastructure to help deliver this transformation.

One such investment within the portfolio is SUNeVision. It is a Hong Kong leading data centre operator, with eight data centres and two cable landing stations, well located as the major regional hub for data hosting and being the leading interconnection point in Asia. The stock continues to be well placed as Hong Kong has data centre capacity constraints and its share price has increased by 169.7% during the year.

Within UEM, digital infrastructure has increased to 25.0% of the total portfolio (31 March 2024: 21.8%). Part of this increase has come from the ongoing strong performance of FPT Corporation, the Vietnamese technology and telecommunications company, whose share price increased by 18.8% over the year, and Sonatel, a West African telecoms operator, up by 39.9%.

Global Trade - despite all the recent tariff turmoil we believe that global trade will continue to have relative winners and losers. The increasingly multipolar, deglobalised world that we are currently witnessing and the reshaping of the competitive trading environment are presenting opportunities as well as challenges.

Global trade represents 17.2% of UEM's portfolio as at 31 March 2025, a reduction of 4.3% on the prior year. One of the drivers of this reduction was the exit from Santos Brasil, the Brazilian listed container port operator near Sao Paulo. In August 2024, the port operator's controlling shareholder received an offer from CMA CGM to sell its interest which UEM took the opportunity to sell into.

International Container Terminal Services, the Philippines listed container port operator and UEM's largest holding, is one company that has been able to capitalise on the changing global trade landscape and continues to be able to navigate through the headwinds. With its 32 container port terminals in 19 countries, predominately located in EM, it has been able to deliver both operationally and financially, primarily as it has a diversified portfolio of origin and destination port assets that are benefitting from being located in burgeoning markets. Over the year, its share price increased by 11.6%.

Portfolio Stock Positioning and Contribution

As at 31 March 2025, UEM gross assets decreased to £497.4m (31 March 2024: £522.9m). This reflects the portfolio losses of £29.0m, share buy backs during the year of £9.6m and offset in part by an increase in loans of £17.5m.

At the year end, the top ten investments accounted for 37.7% (31 March 2024: 35.4%) with the top thirty holdings accounting for 73.7% of the total portfolio (31 March 2024: 70.9%).

During the year, UEM invested £11.6m in Sabesp, the Brazilian water sanitation company, more than doubling its position. Sabesp is now a turnaround story after the Sao Paulo state government reduced its holding and a well-known respected operator Equatorial became a significant shareholder. Within the social infrastructure sector, a further £4.4m was invested in Manila Water with the position growing further as a result of its share price increasing by 40.5% over the year. An additional investment of £4.3m was also made into Athens International Airport based on attractive valuation and a positive outlook, whilst TAV Havalimanlari Holding also saw net investment of £2.4m. Within the energy growth and transition sector, IndiGrid Infrastructure Trust saw a further £3.7m investment and an additional investment of £3.4m was made in Serena Energia, a renewable energy company listed in Brazil.

Outside the top thirty, capitalising on the digital infrastructure megatrend, £4.9m was invested in MyEG Services, the Malaysian e-government services provider, alongside UEM increasing its position by £4.6m in Helios Towers, the African and Middle East towers operator. UEM also invested £4.9m into Medikaloka Hermina, an Indonesian hospital operator, a social infrastructure megatrend investment.

As noted previously, UEM exited Santos Brasil and Power Grid Corporation of India during the year realising £21.3m and £8.5m respectively. UEM also exited its position in China Datang receiving £7.8m whilst reducing its position in another Chinese company, Citic Telecom by £7.2m. UEM exited its position in Engie Energia Chile, in light of its relatively high valuation, realising £6.9m.

On a total contribution to NAV basis, the top five contributors were SUNeVision (1.7%), Manila Water (1.1%), Aguas Andinas (0.6%), Sonatel (0.6%) and International Container Terminal Services (0.6%) amounting to 4.6% of UEM's performance for the year.

SUNeVision benefitted from its exposure to the digital infrastructure megatrend and AI exposure with its share price up 169.7%, whilst Manila Water's share price increased by 40.5% over the period and continues to be well placed to capitalise on the additional infrastructure spend required to improve the Philippines water sector. Aguas Andinas, the Chilean listed water company, gained from a long overdue tariff increase and an improvement in Chilean market sentiment in the run up to the election due to be held in November 2025. Sonatel's share price appreciated by 39.9% due to strong growth in 4G mobile data, fibre broadband and mobile money customers. Finally, International Container Terminal Services, while being the top contributor to UEM's performance in March 2024, was once again in the top five as it continues to deliver strong operational performance and remains relatively attractively valued.

The bottom five contributors which reduced UEM's NAV performance by 5.4% were Petalite (1.5%), JSL (1.3%), KINX (0.9%), Grupo Traxion (0.9%) and Serena Energia (0.8%). Petalite was the biggest detractor as UEM reduced down the carrying value based on the latest external fund raising price. JSL and Serena Energia, both Brazilian listed companies, saw their share prices fall during the period by 59.4% and 18.2% respectively. Their weak share price performance was exacerbated further by the depreciation of the Brazilian Real to Sterling, as noted earlier, of 14.5%. Both these companies, despite reasonable operational performance over the period, were affected by low levels of investor demand for Brazilian small cap companies. Grupo Traxion's share price was down by 48.9% over the period affected by concerns around nearshoring. The Mexican Peso also depreciated against Sterling 20.5%. KINX's share price decline of 24.5% for the year was disappointing, reflecting the delay in completion of its new data centre capacity.

Unlisted Investments (Level 3 Investments)

As at 31 March 2025, UEM ended the year with level 3 investments totalling £13.4m (31 March 2024: £23.1m), representing 2.7% of total investments (31 March 2024: 4.5%). UEM's level 3 investments reduced mainly as a result of the reduction in valuation of Petalite by £6.5m and a further realisation of £1.0m from CGN Capital Partners Infra Fund 3, held through UEM (HK) Limited.

Petalite continues to make steady progress, with the company raising £10.0m in a Series A fund raise at the end of the year. However, the market remains tough, with comparable listed entities in the electric vehicle sector continuing to see falling valuations (around 50% over the year) which was reflected in the Series A fund raising price. UEM did not invest any new money and it has therefore reduced its investment valuation in line with this price, leading to an equity value of £3.6m as at 31 March 2025.

As noted in the Chairman's Statement, UEM's focus is primarily on listed investments and new unlisted investments will only be made in exceptional circumstances.

Revenue Return

Revenue income increased marginally to £23.8m in the year to 31 March 2025, from £23.1m in the prior year, with the revenue yield on the closing portfolio increasing to 4.8% from 4.5% as at 31 March 2024.

Management fees and other expenses decreased 7.9% to £3.1m in the year to 31 March 2025 (31 March 2024: £3.4m). This reflects decreases in audit fees, and management and administration fees. Loans were drawn from September 2024 under the new Barclays loan facility and therefore finance costs decreased to £0.2m (31 March 2024: £0.3m). Taxation reduced 6.3% to £1.8m during the year ended 31 March 2025 (31 March 2024: £2.0m) reflecting dividends received from countries with lower withholding tax rates.

As a result of the above, profit for the year increased by 7.3% to £18.7m from £17.4m for 31 March 2024. Revenue earnings per share increased by 12.7% to 9.95p compared to the prior year of 8.83p, reflecting the improvement in profit and the reduced average number of shares in issue following share buybacks. Dividends per share ("DPS") of 9.125p were fully covered by earnings.

Retained revenue reserves rose to £12.0m as at 31 March 2025, equal to 6.44p per share.

Capital Return

The portfolio losses were £29.0m during the year to 31 March 2025 (31 March 2024: gains of £46.8m). Losses on foreign exchange were £0.6m and the resultant total loss was £29.6m against prior year gains of £47.4m.

Management and administration fees were almost flat at £4.3m (31 March 2024: £4.4m).

Finance costs decreased to £0.8m from £1.3m as a result of the lower loans drawn in the year. There was a taxation charge of £0.8m (31 March 2024: £1.4m) which arose from Indian capital gains tax. The net effect of the above was a loss on capital return of £35.4m compared to a gain of £40.4m for 31 March 2024.

Investment Outlook

Global uncertainties and volatility are likely to continue but within this we see significant opportunities for value creation with our careful bottom-up approach to investments in EM that benefit from infrastructure and utilities megatrends. We therefore continue to remain highly confident that the investment strategy is well placed to continue its 20 year track record of long term outperformance.

Charles Jillings & Jacqueline BroersICM Investment Management Limited and ICM Limited

13 June 2025

Principal and Emerging Risks

During the year ended 31 March 2025, 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 and emerging 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 discussed and monitored a number of emerging risks that could potentially impact the Company, the principal ones being geopolitical risk and climate change risk and these are considered within investment risk and market risk below.

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, although geopolitical risk remains elevated.

Investment Risk: The risk that the investment strategy does not achieve long-term positive total returns for the Company's shareholders. Insufficient consideration of ESG factors could lead to poor performance and/or a reduction in demand for the Company's shares.

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, geopolitical 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. ICM also has a large team with strength and depth. 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.

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 is focussed on reducing the 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 91. 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 system and organisation controls 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 key 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 2025, UEM had net gearing on net assets of 2.8%. ICMIM monitors compliance with the banking covenants on a daily basis. 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.

Directors' Statement Of Responsibilities

in respect of the Annual Report and the Financial Statements

The Directors are responsible for preparing the annual report and the financial statements in accordance with UK adopted International Accounting Standards and applicable 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.

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 and reliable;

· state whether they have been prepared in accordance with UK adopted International Accounting Standards subject to any material departures disclosed and explained in the financial statements;

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

· prepare a Directors' Report, a Strategic Report and Directors' Remuneration Report which comply with the requirements of the Companies Act 2006.

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 also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for ensuring that 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 performance, business model and strategy.

The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein..

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 Chairman's Statement, 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 13 June 2025 and signed on its behalf by:

Mark Bridgeman

Chairman

Statement Of Comprehensive Income

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.

STATEMENT OF CHANGES IN EQUITY

STATEMENT OF FINANCIAL POSITION

STATEMENT OF CASH FLOWS

NOTES

The Directors have declared a fourth quarterly dividend in respect of the year ended 31 March 2025 of 2.325p per share payable on 27 June 2025 to shareholders on the register at close of business on 6 June 2025. The total cost of the dividend, which has not been accrued in the results for the year to 31 March 2025, is £4,309,000 based on 185,319,391 shares in issue at the record date.

This statement was approved by the Board on 13 June 2025. The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2025 or 2024 but is derived from those accounts. Statutory accounts for 2024 have been delivered to the Registrar of Companies and those for 2025 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

Annual General Meeting Arrangements

The Annual General Meeting of the Company will be held at The Royal Society of Chemistry, Burlington House, Piccadilly, London W1J 0BA on Tuesday, 16 September 2025 at 10.30 a.m. and notice is set out at the end of the Report & Accounts.

Legal Entity Identifier: 2138005TJMCWR2394O39