Half-yearly Report

LONDON STOCK EXCHANGE ANNOUNCEMENT

Pacific Assets Trust plc
Unaudited Half Year Results For The Six Months Ended
31 July 2015

Company Summary

Key Statistics

	As at	As at
	31 July	31 January
	2015	2015	% change
Share price	198.0p	196.3p	+0.9
Net asset value per share	195.8p	207.2p	-5.5
Premium/(discount) of share price to net asset value per share	1.1%	(5.3%)	—
Shareholders’ funds	£231.6m	£242.1m	-4.3
Market capitalisation	£234.3m	£229.3m	+2.2
	Six months to	One year to
	31 July	31 January
	2015	2015
Share price (total return)*	+2.2%	+37.0%
Net asset value per share (total return)*	-3.9%	+32.6%
MSCI All Country Asia ex Japan Index (total return, sterling adjusted)*	-7.1%	+24.1%

*               Source: Morningstar

	Year ended	Year ended
	31 January	31 January
Dividends	2015	2014
Final dividend per share	2.6p	2.6p	—
Half Year’s Highs/Lows	High	Low
Net asset value per share	222.9p	193.5p
Share price	226.0p	193.5p
Premium/(discount) of share price to net asset value per shareâ€	6.7%	(5.3%)

†              Premium high – Widest premium in period

(Discount) low – Widest (discount) in period

Chairman’s Statement

 â€œIt is pleasing to note that the Company was again the best performing member of its peer group during the period under review.”

Performance

I am pleased to present my first statement to you as Chairman of this Company. The first six months of the financial year have been volatile for world stock markets with negative sentiment surrounding China being the principal cause. There is also uncertainty about the end of quantitative easing in some countries and a change in direction of monetary policy. During this period the Company’s net asset value per share total return was -3.9%. This compares to a total return from the sterling adjusted MSCI All Country Asia ex Japan Index of -7.1%. The Company’s share price total return was positive, +2.2%, as the share price moved to a premium of 1.1% to the Company’s net asset value per share at 31 July 2015, compared to a discount of 5.3% at the beginning of the period. It is pleasing to note that the Company was again the best performing member of its peer group during the period under review. Further information on investment performance and the outlook for the Company is given in the Investment Manager’s Review beginning on page 5.

Revenue Account and Dividend

The net revenue generated during the period was broadly in line with the same period last year. The Company’s earnings per share for the period were 1.6p compared to 1.5p in the previous comparable period. It is important to repeat the warning from the Chairman’s statement in the Annual Report, that if the Company’s cash (amounting to 11% of net assets as at 31 July 2015) remains uninvested and the yield from the investment portfolio remains similar during the second half of the year, income will again be insufficient to cover the Company’s dividend. In this event the Directors will give serious consideration to reducing the 2016 dividend. The Board reminds shareholders that it remains the Company’s policy to pursue capital growth for shareholders with income being a secondary consideration.

The Board

As mentioned at the year end, David Nichol retired from the Board in June. David had been a Director since 1985 and Chairman since 2004. His extensive experience and wise counsel were an important part of the Board’s deliberations over this time with his leadership at the time of the change in management arrangements in 2010 being of particular note. On behalf of the Board and all shareholders I thank him and wish him well for the future.

I am pleased to confirm that Sian Hansen was appointed to the Board with effect from 3 August 2015. Sian is currently the Executive Director of the Legatum Institute, a global public policy think tank and educational charity, and also of a number of other public companies. Her knowledge and experience of Asian markets will be of great benefit to the Board.

Charlotta Ginman has assumed the Chairmanship of the Audit Committee from Nigel Rich. Nigel continues to act as the Senior Independent Director. I also thank Nigel for his significant input as Audit Committee Chairman, his listed company experience and corporate governance knowledge have been of particular benefit in an ever changing accounting and regulatory environment.

Capital

The Company’s excellent performance record under First State’s management has made it attractive to potential investors and I am pleased to report that a total of 1,925,000 new shares have been issued during the period and to 23 September 2015, the latest practicable date prior to publishing this report, at an average premium of 1.8% to the prevailing cum income net asset value per share. This represents 1.6% of the Company’s issued capital. The Company made a successful application for a block listing in August which has enabled share issuances to be effected more efficiently.

Outlook

Our Investment Manager remains cautious on the short term prospects in Asia and this is reflected in the continuing maintenance of a precautionary cash balance of 11% of net assets. They are, however, optimistic that the diverse Asia Pacific Region will in the longer term provide investment opportunities of quality, and they will look to make investments as suitable opportunities arise. Your Board continues to believe that your Investment Manager’s approach in its efforts to identify well-managed companies which embrace a sustainable approach to their business will provide superior returns over the longer term.

James Williams

Chairman

24 September 2015

Investment Manager’s Review

“We at First State spend our lives looking for companies that we consider to be good.”

Do bad companies know they are bad?

Two seemingly unrelated events took place recently that raised similar questions about the power of context and the dangers of relative comparisons. The first was a visit we made to a listed stock exchange and the second was the killing of a lion in Zimbabwe. In very general terms, the parallels here are that taken within the context of legal frameworks, both the stock exchange and the hunter seem to be perfectly comfortable and capable in justifying their actions. Taken in isolation, however, there are serious questions to be answered about what we should do when legality and morality find themselves in conflict.

We at First State spend our lives looking for companies that we consider to be good, but what do we mean by good? Ostensibly these are companies that pass our strict (albeit loosely defined) criteria of good quality of financials, good quality of management and good quality of franchise: a company matching those requirements ought to be a good company. In addition to these criteria, there must be an understanding that a good company also has to be doing some good too (of course, this should be implicit if it has met our initial requirements) and to a large extent, intention is just as important as outcome here.

It can take us months or even years to agree with each other that a company is “good enough” to enter a portfolio. In fact the ratio of companies that we have owned over the past 30 years compared to companies we have met or considered over the period is small enough that you could be forgiven for losing faith in the broader corporate world. So why is it then that we tend to reach a consensus much faster when we consider a company to be “bad”? Well, the obvious answer is that our quality standards are hard to satisfy and in a world of around 50,000 listed companies we feel that we need not compromise on quality. So whereas a company has to do many things well to pass muster, a few slip-ups here or there will often preclude a company from portfolio selection.

However, most of the time corporate shortcomings aren’t just slip-ups, often they are conscious management decisions to take the “wrong” path and this is a much more sinister issue altogether. Establishing the difference between a strategic mistake and an ethical breach is hugely important in understanding corporate quality: one is an error of judgment and the other is reflective of an unsavory culture. Generally speaking, the companies we encounter fall into four broad categories: good companies that don’t realise they are good (we tend to like these). Good companies that know they are good (often there are angles to be understood here). Bad companies that know they are bad and possibly the most insidious of all: bad companies that don’t know they are bad. It is worth focusing on this last category, as this is often where the context of today’s financial and corporate markets takes precedent over common sense, where legality trumps morality and this is where our stock exchange visit brought to mind the killer of “Cecil the lion”.

“I hired several professional guides and they secured all proper permits. To my knowledge, everything about this trip was legal and properly handled and conducted. I had no idea he (Cecil) was a local favourite. I deeply regret that my pursuit of an activity I love and practice responsibly and legally, resulted in the taking of this lion”.

In the context of shooting lions, the hunter may have a point. As soon as we accept that we are killing lions, then we start to argue over whether or not this instance was legally conducted. But why are we shooting lions in the first place? Why is the moral issue different to the legal one? And so it was with our stock exchange meeting: every answer was designed to defend and justify its own existence. But the one question that wasn’t addressed was the most fundamental of all: how have we reached a point where this discussion is even taking place? Outside of the current context, all answers entirely miss the important point.

“Co-location can’t really lead to HFT front running here because there is only one exchange per market in this part of the world, versus 60 in the US. So really these guys paying for co-location are acting as market makers and “adding liquidity” which we monitor. If they aren’t, then they don’t get rebates from us.”

“We would be happy to pass our regulatory function and responsibilities back to the central bank – it might smooth the relationship.”

“We are trying to add single-stock options and futures to allow investors to short more easily and stock index ETFs will help all investors hedge out risk.”

The representative from the exchange actually handled the meeting quite well, and defended their position as reasonably as possible. In fact there were points where you could be forgiven for seeing the exchange as the good guys and appreciate the lines about trust generation being the only way for an exchange to stay in business, but this is only in the context of comparing against other, even less well intentioned market participants. After all, why is the exchange even in business? And this is why it’s important not to confine ourselves to the current context when debating and considering companies; sure they can get a licence to shoot a lion, but why are they shooting lions? Often with companies who know they are flouting either legality or morality, there is a “fair cop gov” moment where they acknowledge the grey area. But when companies hide exclusively behind legality, debate on morality is nearly always shut down, as it was in this case.

In terms of the exchange meeting, it is worth noting that their representative had initially worked for an investment bank before the Global Financial Crisis catalysed their move into the exchange. This is where the analogy is complete: as is often the case, the gamekeeper wanted to be a poacher!

Performance – Six months ended 31 July 2015

What helped – contribution returns (top ten)

Company	Contribution Returns %
Standard Foods	1.21
Marico	0.68
Dr Reddy’s Laboratories	0.60
Globe Telecom	0.52
Sheng Siong	0.22
Marico Bangladesh	0.21
E. Sun Financial Holdings	0.16
Dabur India	0.13
Cholamandalam Investment & Finance	0.11
Idea Cellular	0.10

What hurt – contribution returns (bottom ten)

Company	Contribution Returns %
Tech Mahindra	-2.08
XL Axiata	-1.28
Manila Water	-1.01
AirTac International	-0.60
Chroma ATE	-0.48
Kasikornbank	-0.44
Linde India	-0.40
Axiata Group	-0.32
Shinhan Financial*	-0.30
Bank of the Philippine Islands	-0.25

*               Stock not held at the half year-end

Source: First State

Significant Portfolio Changes

New positions:

·       Infrastructure Development Finance: Secured a banking licence earlier this year and has a historic opportunity to build a bank from the ground up based on the principles of trust and integrity; the opportunity for which is huge in India.

·       City Union Bank: c.110 year old, family-owned deposit-funded lender in southern India.

·       Tata Chemicals: transforming itself from highly regulated and unpredictable businesses and moving towards a more sustainable asset-light consumer focus.

·       ASM Pacific Technology: Acceptable valuations for a high quality technology company.

·       BRAC Bank: Unique culture focusing on inclusive banking in Bangladesh.

Additions:

·       Vitasoy International Holdings: Good opportunity to buy more of one of our favourite companies at a reasonable valuation.

·       Infosys: Change in management bolsters conviction in a high quality, cash generative, net cash business.

·       XL Axiata & Dialog Axiata: Long-term prospects remain intact despite near-term industry concerns.

·       AirTac International: Bought too early, got it wrong. Conviction on quality remains strong, so adding on the way down.

·       Manila Water & Bank of the Philippine Islands: two high-quality companies under the Ayala umbrella.

Disposals:

·           Shinhan: Somewhat accident-prone. It is increasingly moving away from plain vanilla banking.

·           UniPresident: Sustainability headwinds are emerging.

·           Singapore Telecoms: Disappointing outlook, better opportunities to own individual companies in specific markets.

·           Sembcorp: Better opportunities exist elsewhere in the market.

Reductions:

·       Globe Telecom: Valuations became too expensive pushing us to reduce.

·       Kotak Mahindra Bank: Valuation forcing us to reduce.

·       Delta Electronics (Thailand): Fully valued.

·       Marico: Fully valued.

·       Weifu High-Technology Group: Fully valued.

·       Taiwan Semiconductor Manufacturing: Fully valued.

Outlook

Your Company remains defensively positioned for potential further market corrections in Asia. The reverberations of a more slowly growing Chinese economy and a cheaper Chinese renminbi have not finished making their way around the region.

Largely as a result of our bottom-up stock-picking process and focus on quality, your Company has had little direct exposure to China. We have historically struggled to identify companies with aligned managers, adequate standards of corporate governance, conservative financials, and franchises that are positioned to contribute to and benefit from sustainable development in China. Where we have had exposure, this has largely, though not exclusively, been through well-managed private consumer staples companies, including some headquartered and listed in Hong Kong and Taiwan.

Whilst valuations have come off across the region, many of our favourite companies are still not reasonably valued. We will continue to opportunistically make purchases of shares in companies the valuations of which have become compelling. However, we intend to retain a high cash position as the implications of recent volatility continue to make themselves known. Things could get worse before they get better.

We remain very cautious on short-term prospects in Asia but very optimistic about the long-term opportunities available to the patient investor.

Stewart Investors

Stewart Investors formerly operated as First State Stewart. On 1 July 2015, the First State Stewart team split to form two new teams, one primarily based in Edinburgh (Stewart Investors) and the other based in Hong Kong (First State Stewart Asia). The management of the Company’s portfolio is now part of the Stewart Investors business. Branding will change subject to regulatory approval. There is no change to the investment philosophy or primary fund management of your Company’s portfolio.

First State Investment Management (UK) Limited

24 September 2015

Portfolio

as at 31 July 2015

		Market	% of total assets less
		valuation	current	Country of
Company	MSCI sector	£’000	liabilities	incorporation
Vitasoy International Holdings	Consumer Staples	12,997	5.6	Hong Kong
Tech Mahindra	Information Technology	12,663	5.5	India
Marico	Consumer Staples	12,454	5.4	India
Standard Foods	Consumer Staples	9,909	4.3	Taiwan
Delta Electronics (Thailand)	Information Technology	8,426	3.6	Thailand
Dr. Reddy's Laboratories	Health Care	7,887	3.4	India
Idea Cellular	Telecommunication Services	7,741	3.3	India
E.Sun Financial Holdings	Financials	7,740	3.3	Taiwan
Manila Water	Utilities	7,130	3.1	Philippines
Taiwan Semiconductor Manufacturing	Information Technology	7,110	3.1	Taiwan
Ten largest investments		94,057	40.6
Kotak Mahindra Bank	Financials	6,684	2.9	India
Ayala Corporation	Financials	6,424	2.8	Philippines
Infosys	Information Technology	5,750	2.5	India
Towngas China	Utilities	5,446	2.3	Cayman Islands1
Housing Development Finance	Financials	4,998	2.2	India
Bank of the Philippine Islands	Financials	4,908	2.1	Philippines
Chroma ATE	Information Technology	4,717	2.0	Taiwan
Dabur India	Consumer Staples	4,381	1.9	India
XL Axiata	Telecommunication Services	4,229	1.8	Indonesia
Public Bank	Financials	3,663	1.6	Malaysia
Twenty largest investments		145,257	62.7
Singapore Post	Industrials	3,649	1.6	Singapore
Linde India	Materials	3,280	1.4	India
Axiata Group	Telecommunication Services	3,113	1.3	Malaysia
Sheng Siong	Consumer Staples	2,996	1.3	Singapore
MTR	Industrials	2,859	1.2	Hong Kong
China Mengniu Dairy	Consumer Staples	2,834	1.2	Cayman Islands1
DGB Financial Group	Financials	2,759	1.2	South Korea
Globe Telecom	Telecommunication Services	2,751	1.2	Philippines
Marico Bangladesh	Consumer Staples	2,535	1.1	Bangladesh
Kasikornbank	Financials	2,457	1.1	Thailand
Thirty largest investments		174,490	75.3
Tube Investments of India	Consumer Discretionary	2,061	0.9	India
Weifu High-Technology Group	Consumer Discretionary	2,037	0.9	China
Delta Electronics (Taiwan)	Information Technology	2,036	0.9	Taiwan
Giant Manufacturing	Consumer Discretionary	2,008	0.9	Taiwan
Asustek Computers	Information Technology	2,007	0.9	Taiwan
AirTac International	Industrials	1,990	0.8	Cayman Islands2
Hemas Holdings	Industrials	1,833	0.8	Sri Lanka
Infrastructure Development Finance	Financials	1,760	0.8	India
Selamat Sempurna	Consumer Discretionary	1,661	0.7	Indonesia
Cholamandalam Investment & Finance	Financials	1,451	0.6	India
Forty largest investments		193,334	83.5

1              Economic activity takes place principally in China

2              Economic activity takes place principally in Taiwan

		Market	% of total assets less
		valuation	current	Country of
Company	MSCI sector	£’000	liabilities	incorporation
Dialog Axiata	Telecommunication Services	1,441	0.6	Sri Lanka
Info Edge	Information Technology	1,262	0.6	India
Expeditors International of Washington	Industrials	1,255	0.5	United States3
City Union Bank	Financials	1,197	0.5	India
Commercial Bank of Ceylon	Financials	1,125	0.5	Sri Lanka
Elgi Equipments	Industrials	1,105	0.5	India
Container Corp of India	Industrials	1,098	0.5	India
PChome Online	Information Technology	1,076	0.5	Taiwan
Bata Shoe	Consumer Discretionary	976	0.4	Bangladesh
Bank OCBC NISP	Financials	688	0.3	Indonesia
Fifty largest investments		204,557	88.4
Mahindra Lifespace Developers	Financials	685	0.2	India
Swire Properties	Financials	563	0.2	Hong Kong
Tata Chemicals	Materials	506	0.2	India
ASM Pacific Technology	Information Technology	403	0.2	Hong Kong
BRAC Bank	Financials	233	0.1	Bangladesh
Total Portfolio		206,947	89.3
Cash		25,763	11.1
Net current liabilities		(1,079)	(0.4)
Total assets less current liabilities		231,631	100.0

3              Economic activity takes place principally in the Asia Pacific Region

Income Statement

for the six months ended 31 July 2015

	(Unaudited)			(Unaudited)
	Six months ended			Six months ended
	31 July 2015			31 July 2014
	Revenue	Capital	Total	Revenue	Capital	Total
	£’000	£’000	£’000	£’000	£’000	£’000
(Losses)/gains on investments held at fair value through profit or loss	—	(10,684)	(10,684)	—	26,434	26,434
Exchange differences on currency balances	—	(596)	(596)	—	(125)	(125)
Income (note 2)	2,656	—	2,656	2,416	—	2,416
Investment management, management and performance fees (note 3)	(314)	(943)	(1,257)	(233)	(1,941)	(2,174)
Other expenses	(262)	-	(262)	(233)	—	(233)
Return/(loss) on ordinary activities before taxation	2,080	(12,223)	(10,143)	1,950	24,368	26,318
Taxation on ordinary activities	(187)	(3)	(190)	(164)	—	(164)
Return/(loss) after taxation attributable to equity shareholders	1,893	(12,226)	(10,333)	1,786	24,368	26,154
Return/(loss) per ordinary share (p) (note 4)	1.6	(10.4)	(8.8)	1.5	20.9	22.4

The Total column of this statement represents the Company’s Income Statement.

The Revenue and Capital columns are supplementary to this and are both prepared under guidance published by the Association of Investment Companies (AIC).

All revenue and capital items in the Income Statement derive from continuing operations.

The Company had no recognised gains or losses other than those declared in the Income Statement.

All of the profit and total comprehensive income for the period is attributable to the owners of the Company.

Statement of Changes in Equity

for the six months ended 31 July 2015

	(Unaudited)	(Unaudited)
	Six months	Six months
	ended	ended
	31 July 2015	31 July 2014
	£’000	£’000
Opening shareholders’ funds	242,063	186,287
Shares issued in period	2,939	—
(Loss)/return for the period	(10,333)	26,154
Dividends paid	(3,038)	(3,038)
Closing shareholders’ funds	231,631	209,403

Statement of Financial Position

as at 31 July 2015

	(Unaudited)	(Audited)
	As at	As at
	31 July	31 January
	2015	2015
	£’000	£’000
Fixed assets
Investments held at fair value through profit or loss	206,947	221,094
Current assets
Debtors	1,155	977
Cash at bank	25,763	26,494
	26,918	27,471
Creditors (amounts falling due within one year)	(2,234)	(6,502)
Net current assets	24,684	20,969
Net assets	231,631	242,063
Capital and reserves
Share capital	14,790	14,606
Share premium account	2,759	4
Capital redemption reserve	1,648	1,648
Special reserve	14,572	14,572
Capital reserve	193,397	205,623
Revenue reserve	4,465	5,610
Equity shareholders’ funds	231,631	242,063
Net asset value per ordinary share (p) (note 5)	195.8	207.2

Notes to the Accounts

1. Basis of preparation

The condensed Financial Statements for the six months to 31 July 2015 comprise the statements set out on pages 12 and 13 together with the related notes below. They have been prepared in accordance with FRS 104 ‘Interim Financial Reporting’ and the AIC’s Statement of Recommended Practice issued in November 2014 (‘New SORP’).

The Company has adopted FRS 102 ‘The Financial Reporting Standard applicable in the UK and the Republic of Ireland’ for its financial year ending 31 January 2016. Following the adoption of FRS 102 and the New SORP, there have been no changes to the Company’s accounting policies and no restatement of the Company’s Income Statement, the Statement of Changes in Equity (previously called the Reconciliation of Movements in Shareholders’ Funds) or the Statement of Financial Position (previously called the Balance Sheet) for periods previously reported. The Company has taken advantage of the exemption from preparing a Cash Flow Statement under FRS 102.

The condensed Financial Statements for the six months to 31 July 2015 have been prepared under UK Generally Accepted Accounting Principles (‘UK GAAP’) and using the same accounting policies as set out in the Company’s Annual Report and Financial Statements at 31 January 2015.

Fair value

Under FRS 102 and FRS 104 investments have been classified using the following fair value hierarchy:

Level A – Quoted market prices in active markets

Level B – Prices of a recent transaction for identical instruments

Level C – Valuation techniques that use:

(i) observable market data; or

(ii) non-observable data

All of the Company’s investments fall into Level A for the periods reported.

2. Income

	(Unaudited)	(Unaudited)
	Six months	Six months
	ended	ended
	31 July	31 July
	2015	2014
	£’000	£’000
Investment income	2,656	2,416
Total income	2,656	2,416

3. Investment Management, Management and Performance fees

	(Unaudited)			(Unaudited)
	Six months ended			Six months ended
	31 July 2015			31 July 2014
	Revenue	Capital	Total	Revenue	Capital	Total
	£’000	£’000	£’000	£’000	£’000	£’000
Investment management fee – First State	270	810	1,080	185	555	740
Investment management Performance fee accrual* – First State	—	—	—	—	1,243	1,243
Management fee – Frostrow	44	133	177	48	143	191
	314	943	1,257	233	1,941	2,174

*          Details of the performance fee basis, and changes made to fee arrangements that became effective from 1 February 2015, can be found in the Report of the Directors on page 48 of the Company’s Annual Report for the year ended 31 January 2015.

4. Return/(loss) per ordinary share

The total loss per ordinary share price is based on the loss attributable to shareholders of £10,333,000 (six months ended 31 July 2014: return of £26,154,000) and on 117,666,262 shares (six months ended 31 July 2014: 116,848,386), being the weighted average number of shares in issue.

The revenue return per ordinary share price is calculated by dividing the net revenue return attributable to shareholders of £1,893,000 (six months ended 31 July 2014: £1,786,000) by the weighted average number of shares in issue as above.

The capital (loss)/return per ordinary share price is calculated by dividing the net capital loss attributable to shareholders of £12,226,000 (six months ended 31 July 2014: gain of £24,368,000) by the weighted average number of shares in issue as above.

5. Net asset value per ordinary share

The net asset value per ordinary share is based on the net assets attributable to shareholders of £231,631,000 (31 January 2015: £242,063,000) and on 118,323,386 shares in issue (as at 31 January 2015: 116,848,386).

6. 2015 accounts

These are not statutory accounts in terms of Section 434 of the Companies Act 2006 and are unaudited. Statutory accounts for the year to 31 January 2015, which received an unqualified audit report, have been lodged with the Registrar of Companies. No statutory accounts in respect of any period after 31 January 2015 have been reported on by the Company’s auditor or delivered to the Registrar of Companies.

Earnings for the first six months should not be taken as a guide to the results for the full year.

Interim Management Report

Principal Risks and Uncertainties

The Company’s principal area of risk relates to its investment activity and also its strategy. The Company is also exposed to currency risk in respect of the markets in which it invests. Other risks faced by the Company include financial, operational, accounting, legal and regulatory and also risks related to shareholder relations and corporate governance. These risks, and the way in which they are managed, are described in more detail under the heading Risk Management within the Strategic Report in the Company's Annual Report for the year ended 31 January 2015. The Company's principal risks and uncertainties have not changed materially since the date of that report and are not expected to change materially for the remaining six months of the Company's financial year.

Related Party Transactions

During the first six months of the current financial year no material transactions with related parties have taken place which have affected the financial position or the performance of the Company during the period.

Going Concern

The Directors believe, having considered the Company’s investment objectives, risk management policies, capital management policies and procedures, and the nature of the portfolio and its expenditure projections, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future. For these reasons, they consider there is reasonable evidence to continue to adopt the going concern basis in preparing the accounts.

Directors’ Responsibilities

The Board of Directors confirms that, to the best of its knowledge:

(i)      the condensed set of financial statements contained within the Half Year Report has been prepared in accordance with Financial Reporting Standard 104 (Interim Financial Reporting); and

(ii)     the interim management report includes a fair review of the information required by 4.2.7R and 4.2.8R of the UK Listing Authority Disclosure and Transparency Rules.

In order to provide these confirmations, and in preparing these financial statements, the Directors are required to:

·       select suitable accounting policies and then apply them consistently;

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

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

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

and the Directors confirm that they have done so.

The Half Year Report has not been reviewed or audited by the Company’s auditor.

James Williams

Chairman

24 September 2015

Frostrow Capital LLP

Company Secretary

24 September 2015

0203 008 4913

www.frostrow.com

A copy of the Half Year Report has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.hemscott.com/nsm.do

The Half Year Report will also shortly be available on the Company’s website at www.pacific-assets.co.uk where up to date information on the Company, including daily NAV, share prices and fact sheets, can also be found.

END