Annual Financial Report

Pacific Horizon Investment Tst PLC

30 September 2026

 

Pacific Horizon Investment Trust PLC ('PHI')

Legal Entity Identifier: VLGEI9B8R0REWKB0LN95

Regulated Information Classification: Annual Financial and Audit Reports

Annual Report and Financial Statements

Further to the preliminary statement of audited annual results announced to the Stock Exchange on 22 September 2026, Pacific Horizon Investment Trust PLC ("the Company") announces that the Company's Annual Report and Financial Statements for the year ended 31 July 2026, including the Notice of Annual General Meeting, has today been posted to shareholders and submitted electronically to the National Storage Mechanism where it will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

It is also available on the Company page of the Baillie Gifford website at: pacifichorizon.co.uk (as is the preliminary statement of audited annual results announced by the Company on 22 September 2026).

Statement of Directors' Responsibilities in respect of the Annual Report and the Financial Statements

Each of the Directors, whose names and functions are listed within the Directors and Managers section of the Annual Report and Financial Statements, confirms that, to the best of their knowledge:

¾    the Financial Statements, which have been prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' give a true and fair view of the assets, liabilities, financial position and net return of the Company;

¾    the Annual Report and Financial Statements taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy; and

¾    the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces (as also set out below).

Principal and Emerging Risks relating to the Company

As explained on page 68 of the Annual Report and Financial Statements there is a process for identifying, evaluating and managing the risks faced by the Company on a regular basis. The Directors have carried out a robust assessment of the principal and emerging risks facing the Company, including those that would threaten its business model, future performance, regulatory compliance, solvency or liquidity. There have been no material changes to the principal risks during the year. A description of these risks and how they are being managed or mitigated is set out below.

The Board considers the heightened macroeconomic and geopolitical concerns to be factors which exacerbate existing risks, rather than being new emerging risks, within the context of an investment trust. Their impact is considered within the relevant risks.

What is the risk?	How is it managed?		Current assessment of risk
Financial Risk: The Company's assets consist mainly of listed securities (93.6% of total assets) and its principal and emerging financial risks are therefore market related and include market risk (comprising currency risk, interest rate risk, capital controls and other price risk), liquidity risk and credit risk. An explanation of those risks and how they are managed is contained in note 18 to the Financial Statements on pages 102 to 109 of the Annual Report and Financial Statements.	The Board has, in particular, considered the impact of heightened macroeconomic and geopolitical concerns, including trade wars, the ongoing Russia-Ukraine war, and the conflict in the Middle East. The Board also considers the commercial impact of potential changes in regulatory positions, which can affect the local markets in which the portfolio companies operate. To oversee this risk, the Board considers various metrics at each meeting, including regional and industrial sector weightings, top and bottom stock contributors to performance, along with sales and purchases of investments. The Board reviews these risks at regular intervals with the portfolio manager, alongside examining general views on the various investment markets and sectors.		This risk is considered to have increased. The prospect of heightened market volatility remains from deteriorating geopolitical stability such as trade wars, the ongoing Russia-Ukraine war, and continuing hostilities in the Middle East.
What is the risk?	How is it managed?		Current assessment of risk
Investment strategy risk: Pursuit of an investment strategy to fulfil the Company's objective which the market perceives to be unattractive or inappropriate, or the ineffective implementation of an attractive or appropriate strategy, may lead to reduced returns for shareholders and, as a result, a decreased demand for the Company's shares. This may lead to the Company's shares trading at a widening discount to their net asset value.	To mitigate this risk, the Board regularly reviews and monitors the Company's objective and investment policy and strategy, the investment portfolio and its performance, the level of discount/ premium to net asset value at which the shares trade and movements in the share register and raises any matters of concern with the Managers.		This risk is considered to be stable.
What is the risk?	How is it managed?		Current assessment of risk
Political and associated economic financial risk: The Board is of the view that political change in areas in which the Company invests or may invest may have financial consequences for the Company.	Political developments are closely monitored and considered by the Board, particularly regarding trade tensions between the USA and China and between the USA and India over tariffs, continuing unrest in Hong Kong, repercussions from the Russian invasion of Ukraine, and the Israel and Palestine conflict. It monitors portfolio diversification by investee companies' primary location, to mitigate against the negative impact of military action or trade barriers. The Board believes that the Company's portfolio, which predominantly comprises companies listed on the stock markets of the Asia Pacific region (excluding Japan) and the Indian Sub-continent, partially helps to mitigate such political risks.		This risk is seen as increased as deteriorating geopolitical stability increases the prospect of trade conflict and sanctions.
What is the risk?	How is it managed?		Current assessment of risk
Discount risk: The discount/premium at which the Company's shares trade relative to its net asset value can change. The risk of a widening discount is that it may undermine investor confidence in the Company.	To manage this risk, the Board monitors the level of discount/premium at which the shares trade and the Company has authority to buy back its existing shares, when deemed by the Board to be in the best interests of the Company and its shareholders. During the year, £73.6 million of shares were bought back, representing 9.1% of the issued share capital at the start of the period. On 16 April 2025, the Company announced a performance-related Conditional Tender Offer and stated that it is the current Board's ambition to maintain the Company's discount in single digits, in normal market conditions, on a sustained basis.		This risk is seen as increased. The discount started the year at 9.5%, increased to 12.3% during the year, and reduced to 10.5% at the end of the year. The increased risk reflects broader market challenges, including outflows from the UK Investment Trust market. The Board continues to monitor the discount and take action as appropriate.
What is the risk?	How is it managed?		Current assessment of risk
Regulatory risk: Failure to comply with applicable legal and regulatory requirements such as the tax rules for investment trust companies, the UK Listing Rules and the Companies Act 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.	To mitigate this risk, Baillie Gifford's Business Risk, Internal Audit and Compliance Departments provide regular reports to the Audit Committee on Baillie Gifford's monitoring programmes. Major regulatory change could impose disproportionate compliance burdens on the Company. In such circumstances representation is made to ensure that the special circumstances of investment trusts are recognised. Shareholder documents and announcements, including the Company's published Interim and Annual Report and Financial Statements, are subject to stringent review processes and procedures are in place to ensure adherence to the UK Disclosure Guidance and Transparency Rules and the UK Market Abuse Regulation with reference to inside information.		This risk is considered to be stable. All control procedures are working effectively. There have been no material regulatory changes that have impacted the Company during the year.
What is the risk?	How is it managed?		Current assessment of risk
Custody and depositary risk: Safe custody of the Company's assets may be compromised through control failures by the Depositary, including breaches of cyber security.	To mitigate this risk, the Audit Committee receives six-monthly reports from the Depositary confirming safe custody of the Company's assets held by the Custodian. Cash and portfolio holdings are independently reconciled to the Custodian's records by the Managers who also agree uncertificated private portfolio holdings to confirmations from investee companies. The Custodian's assured internal controls reports are reviewed by Baillie Gifford's Business Risk Department and a summary of the key points is reported to the Audit Committee and any concerns investigated.		This risk is considered to be stable. All control procedures are working effectively.
What is the risk?	How is it managed?		Current assessment of risk
Operational risk: Failure of Baillie Gifford's systems or those of other third party service providers could lead to an inability to provide accurate reporting and monitoring or a misappropriation of assets.	To mitigate this risk, Baillie Gifford has a comprehensive business continuity plan which facilitates continued operation of the business in the event of a service disruption. The Audit Committee reviews Baillie Gifford's Report on Internal Controls and reports by other key third party providers are reviewed by Baillie Gifford on behalf of the Board and a summary of the key points is reported to the Audit Committee and any concerns investigated. The other key third party service providers have not experienced significant operational difficulties affecting their respective services to the Company.		This risk is considered to be stable. All control procedures are working effectively.
What is the risk?	How is it managed?		Current assessment of risk
Leverage risk: The Company may borrow money for investment purposes. If the investments fall in value, any borrowings will magnify the impact of this loss. If borrowing facilities are not renewed, the Company may have to sell investments to repay borrowings. The Company can also make use of derivative contracts.	To mitigate this risk, all borrowings require the prior approval of the Board and leverage levels are discussed by the Board and Managers at every meeting. Covenant levels are monitored regularly. The majority of the Company's investments are in quoted securities that are readily realisable. Further information on leverage can be found on page 45 and the Glossary of terms and Alternative Performance Measures on pages 122 and 123 of the Annual Report and Financial Statements.		This risk has decreased as during the year to 31 July 2026 net gearing has decreased from 5% to 4%. The risk level is low, as current borrowings are well below the levels where loan covenants may be breached. The Company has a multi-currency revolving credit facility with The Bank of New York Mellon for up to £90 million. The facility is available, subject to the Bank's discretion and unless cancelled earlier, until its review date of 31 March 2028. Initial conversations with the loan provider have taken place, and the Board does not anticipate any problems with the renewal of the facility.
What is the risk?	How is it managed?		Current assessment of risk
Climate and governance risk: Perceived problems on environmental, social and governance ('ESG') matters in an investee company could lead to that company's shares being less attractive to investors, adversely affecting its share price, in addition to potential valuation issues arising from any direct impact of the failure to address the ESG weakness on the operations or management of the investee company (for example in the event of an industrial accident or spillage). Repeated failure by the Managers to identify ESG weaknesses in investee companies could lead to the Company's own shares being less attractive to investors, adversely affecting its own share price.	This is mitigated by the Managers' strong ESG stewardship and engagement policies which are available to view on the Managers' website, bailliegifford.com, and which have been reviewed and endorsed by the Company, and which have been fully integrated into the investment process. Due diligence includes assessment of the risks inherent in climate change (see page 53 of the Annual Report and Financial Statements).		This risk is considered to be stable. The Investment Manager continues to employ strong ESG stewardship and engagement policies.
What is the risk?	How is it managed?		Current assessment of risk
Cyber security risk: A cyber attack on Baillie Gifford's network or that of a third party service provider could impact the confidentiality, integrity or availability of data and systems. Emerging technologies, including AI and quantum computing capabilities, may introduce new and increase existing information security risks that impact operations.	To mitigate this risk, the Audit Committee reviews Reports on Internal Controls published by Baillie Gifford and other third party service providers. Cyber security due diligence is performed by Baillie Gifford on third party service providers which includes a review of crisis management and business continuity frameworks.		This risk is considered to be stable. All control procedures are working effectively.
What is the risk?
Emerging risk: As explained on pages 68 and 69 of the Annual Report and Financial Statements, the Board has an ongoing process for identifying, evaluating and monitoring principal and emerging risks, including risks which are not an immediate threat but could affect the Company over the longer term. The Board considers that the key emerging risks currently arise from the interconnectedness of global economies and financial markets, including geopolitical tensions, protectionism and trade disruption, cyber security threats, including those arising from developments in AI and quantum computing, public health threats, and the possibility that high levels of government borrowing contribute to elevated interest rates or increased market volatility. The Board cannot prevent many of these external events, but seeks to reduce their potential adverse impact on the Company through its oversight of the portfolio, borrowings, liquidity and key service providers. At each Board meeting, the Board reviews economic and geopolitical developments with the Investment Managers, including their potential impact on the Company's portfolio, gearing, liquidity and shareholder demand. The Board also challenges the Investment Managers on portfolio positioning and the resilience of investee companies. The Audit Committee receives regular reporting on Baillie Gifford and other key service providers, including cyber security, business continuity and disaster recovery arrangements. Baillie Gifford's risk functions monitor relevant emerging risks and maintain arrangements for responding to periods of heightened market volatility or operational disruption, including periodic scenario testing and crisis response exercises. Any material issues identified are reported to the Board.

Increasing risk      Decreasing risk    Stable risk

Baillie Gifford & Co Limited

Company Secretaries

30 September 2026

 

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