Utilico Emerging Markets Trust : Report and Accounts for the year to 31 March 2023

International Container Terminal Services, Inc. (The Philippines)

Utilico Emerging Markets Trust plc's investment objective is to provide long-term total return through a flexible investment policy that permits UEM to make investments predominantly in

Utilico Emerging Markets Trust plc is a unique UK listed fund focused on global infrastructure megatrends in emerging markets.

infrastructure, utility and related sectors, mainly in emerging markets.

UNIQUE EXPOSURE

UEM offers a diverse portfolio of high conviction, bottom- up investments in utilities and infrastructure, providing unique exposure to emerging markets megatrends.

REAL ASSETS DRIVING COMPELLING RETURNS

The portfolio of operational infrastructure assets benefitting from megatrends typically offers attractive growth and yields. As a result of long term cash flows, which are often underpinned by established regulatory frameworks, the portfolio provides predictable, sustainable and growing income.

EXPERIENCED MANAGEMENT

Since UEM's inception in 2005, the portfolio has been managed by a dedicated, active investment team with a long track record of investing successfully in this highly specialised asset class.

STRONG PERFORMANCE

As at 31 March 2023, UEM has delivered a 9.3% annualised NAV total return over 17 years with a 3.8% dividend yield and has outperformed the MSCI Emerging Markets Index over the last one, three, and five years and since inception.

CONTENTS

PERFORMANCE

1. Current Year Performance
   5 Performance Summary

1. Chairman's Statement

1. Geographical Investment Exposure
2. Top Thirty Companies

1. Performance Since Inception (20 July 2005)
2. Ten Year Performance

STRATEGIC REPORT AND INVESTMENTS

15 Investment Managers' Report

1. Megatrends Driving Upside in Emerging Markets

1. Our Investment Approach

1. ESG Spotlight
2. Largest Holdings Overview

1. Strategic Report

1. Investment Managers and Team

GOVERNANCE

1. Directors
2. Directors' Report

1. Corporate Governance Statement

1. Directors' Remuneration Report

1. Audit & Risk Committee Report

1. Directors' Statement of Responsibilities

FINANCIAL STATEMENTS

1. Independent Auditor's Report

1. Accounts

1. Notes to the Accounts

ADDITIONAL INFORMATION

1. Notice of Annual General Meeting

1. Company Information
2. Alternative Performance Measures

1. Historical Performance

China Gas Holdings Limited (China)

FINANCIAL CALENDAR

Year End

31 March

Annual General Meeting

19 September 2023

Half Year

30 September

Dividends Payable

March, June, September and December

The business of Utilico Emerging Markets Trust plc ("UEM" or the "Company") consists of investing the pooled funds of its shareholders in accordance with its investment objective and policy, with the aim of spreading investment risk and generating a return for shareholders. The joint portfolio managers of the Company are ICM Investment Management Limited ("ICMIM") and ICM Limited ("ICM"), together referred to as the "Investment Managers".

Front cover image - Alupar Investimento S.A. (Brazil) - Andre S Prietsch

FINANCIAL HIGHLIGHTS

Petalite Limited (UK)

* See Alternative Performance Measures on pages 96 and 97

UEM turned in a strong performance in the second half of the year and delivered a positive NAV total return of 2.1% for the year to 31 March 2023.

The year to 31 March 2023 has continued to be truly challenging for all, including investors. From the war in Ukraine through to inflation and sharply higher central bank interest rates; to rising geopolitical friction; and to the challenges on climate change and significant natural disasters. Understandably, volatility in most markets has

been elevated as uncertainty has dominated.

UEM turned in a strong performance in the second half of the year and importantly delivered a positive NAV total return of 2.1% for the year to 31 March 2023. This was once again significantly ahead of the MSCI EM total return Index which was down 5.0% over the same period.

GLOBAL ECONOMY

As referred to earlier, there are numerous headwinds currently faced by the markets, each of which is challenging in its own right. We have historically discussed a number of these and they largely remain unresolved. We continue to witness a significant rise in nationalism, wealth inequality and global immigration. All of these issues and challenges no doubt tear at the fabric of our societies and institutions.

One positive is that Covid looks to be behind us. The World Health Organisation finally declared the Covid emergency over in May 2023. At the time of publishing UEM's half yearly report in November 2022, we were deeply concerned about the challenges faced by China given their zero Covid policy. The about-turn by China on Covid was a surprise in both its timing and approach. We had expected China to vaccinate its population and slowly lift restrictions in the summer this year. Faced with the highly infectious Omicron

INDICES MOVEMENTS

from 31 March 2022 to 31 March 2023

UEM measures its performance on a total return basis over the long term and the Investment Managers are seeking long term performance to be above 10.0% per annum including a rising dividend. Over one, three and five years and since inception, UEM has outperformed the MSCI EM Index. It is pleasing to highlight the

long term annual compound NAV total return since inception to 31 March 2023 of 9.3% exceeding the MSCI EM total return Index of 7.6%.

variant already penetrating the wider Chinese population and the heavy burden of ineffective lockdowns, the decision to go from zero Covid tolerance to total tolerance was bold. Certainly, at an investee level, it has had very limited impact on the ability of corporates to run their businesses today.

Unfortunately the same cannot be said of the war in Ukraine. It remains devastating on a number of levels. The harshness of the Russian army will be a wound on

liberal societies for decades to come. The need to have resilient and diversified supply chains, energy security, green energy and increased defence capabilities will see resources diverted and reinvested with an urgency and scale not witnessed in our lifetime. This shift will give rise to new opportunities for investors, including UEM.

The legacy of Covid and the West's response to it has undoubtedly led to higher debt and higher inflation, and the Russian war in Ukraine has seen sharply higher commodity prices and accelerating inflation. The

in Latam and Eastern Europe and weakening property markets in Asia. Of note is the volatility - at its low the Hang Seng Index was down over 30.0% and the Philippine PSEI was down over 20.0%.

In comparison most currencies were up against UK Sterling although for UEM notably the Brazilian Real, Chinese Renminbi and Indian Rupee were all down 0.2%, 1.7% and 1.8% respectively. Again, volatility was high. The Hong Kong Dollar was at one point during the year up over 20.0% and the Indian Rupee was up by 15.0% against Sterling.

MSCI EMERGING MARKETS SECTOR INDEX TOTAL RETURNS (GBP ADJUSTED)

from 31 March 2022 to 31 March 2023

5.8%

Source: Bloomberg

response by the Central Banks to higher inflation has been to rapidly raise interest rates to bring inflation under control. The surprising part has been the resilience in the labour market where in most Western countries, unemployment levels are at record lows. This is good for workers but ultimately negative for the inflation outlook if it persists, as wage demands will keep inflation high.

EMERGING MARKETS

Most EM markets were down over the year reflecting local headwinds, higher interest rates and lower valuations. Brazil's Bovespa Index was down 15.1%, the Philippine PSEI Index was down 9.8% and the Hong Kong Hang Seng Index was down 7.3%. Some markets have held up, most notably India's Sensex which was up by 0.7%. A common theme has been rising inflation

Most commodities have moved lower during the period under review as supply chains have adjusted, with oil down by 26.1%, wheat down by 31.2% and soybean down by 12.6%. Although copper moved higher, up by 16.0%. But most remain elevated compared to historic levels which is feeding through into inflation.

UNLISTED INVESTMENTS (LEVEL 3 INVESTMENTS)

UEM has over the years invested in unlisted businesses at a modest level. This remains true today. As at

31 March 2023 the value of the unlisted portfolio has risen to 10.8% which has been driven primarily by the revaluation of Petalite Limited ("Petalite"). UEM is unable to invest further in unlisted investments while the valuation of its unlisted portfolio is over 10.0% of gross assets. Petalite is a disruptive technology start