## HANSA INVESTMENT
## COMPANY LIMITED
## HANSA, investing to create
## long-term growth
Year-End Report
For the Year Ended
## 31March 2022 2022
## WELCOME
I am pleased to present the third Year-End Report for Hansa Investment Company Limited to shareholders.
During our ﬁnancial year, the world has continued to experience heightened economic and political turbulence.
Wehave seen good progress on curbing the Covid-19 pandemic. Vaccination programmes have allowed many
countries to return to a more recognisable economic path, although China continues with it’s zero-Covid policy which
is having a noticeable effect on employment and industrial output.
The recent Russian invasion is having a terrible effect on the suffering people of Ukraine and continues to cast a long
shadow over Europe which has not been seen since the end of the Cold War. As a result, the outlook for energy and
food prices remains bleak until alternative sources can be brought on stream, which will take time.
Unsurprisingly, it has been a very challenging time for the investment management community. Our portfolio has
performed reasonably well with a particularly good contribution from Ocean Wilsons Holdings Ltd, which is gaining
more investor attention after a rather fallow period of price performance.
Portfolio details are set out in in the Portfolio Manager section written by Alec Letchﬁeld of Hansa Capital Partners LLP.
I also draw your attention to my Chairman’s Report to the Shareholders on page 2 as well as the expanded ESG
disclosures on page 12. With regard to the latter, your Board has worked closely with the Portfolio Manager to
ﬁnesse their Responsible Investing Policy. Your Board wholeheartedly endorses the Manager's plans and we disclose
signiﬁcant detail about their initiatives in that section.
Finally, I remind you that details of our upcoming AGM are at the back of this Annual Report. Please do take the time
to read, consider and vote if eligible to do so. We also plan on holding a shareholder update in September. Plans are
at an early stage, but we would like to reach as many interested parties as possible and so it is likely we will retain the
virtual presentation as adopted in previous years.
Yours sincerely
THIS DOCUMENT IS IMPORTANT and if you are a holder of Ordinary shares it requires your immediate attention. If you are in doubt as to the action you should take
or the contents of this document, you should seek advice from an independent ﬁnancial advisor, authorised if in the UK under the Financial Services and Markets Act
2000, or other appropriately authorised ﬁnancial advisor if outside of the UK. If you have sold or transferred your Ordinary shares in the Company, you should send
this document, immediately to the purchaser or transferee; or to the stockbroker, bank or other agent through whom the sale or transfer was effected for onward
transmission as soon as practicable.
COMPANY REGISTRATION AND NUMBER: The Company is registered in Bermuda under company number 54752.
Strategic Report

| 2 Strategic Report | 41 Corporate Governance Reports | 57 Financial Statements |
| --- | --- | --- |
| 2 Chairman’s Report to the Shareholders | 41 Report of the Directors | 57 Income Statement |
| 4 The Board of Directors | 42 Corporate Governance Report | 58 Balance Sheet |
| 6 The Board | 47 Audit Committee Report | 59 Statement of Changes in Equity |
| 8 Long-Term Performance | 49 Directors’ Remuneration Report | 59 Cash Flow Statement |
| 9 Organisation and Objectives |  | 61 Notes to the Financial Statements |

52 Independent Auditor's Report to
24 Portfolio Manager’s Report
the Members of Hansa Investment 74 Notice of the Annual General Meeting
36 Portfolio Statement
Company Limited
77 Investor Information
38 Shareholder Proﬁle and Engagement Reports Financial Statements Corporate Governance
79 Company Information
80 Glossary of Terms
## Long-Term Rolling Five Year NAV Returns to end March (per annum)
2013 – 2022
## Highlights 2022
Graphs represent the combined results
15.4% General Meeting Investor Information Notice of the Annual
of the Company with Hansa Trust. To
that end, prior to August 2019 where
historic information relating to Hansa
8
Trust is quoted on a ‘per share’ basis,
it has been converted to be consistent 8.9%
6
with the number of HICL shares
4
in issue. There is no benchmark to 6.0% 5.9%
5.7%
4.9% 4.7% 1.5%
disclose. 2 4.3%
0.6%
0
2022202120202019201820172016201520142013
It is the goal of the Company to make money for shareholders on a long-term basis (ﬁve years).
The Board monitors the ﬁve year NAV returns as the primary achievement of the Company’s goal.
Dividend payments for year to end March (pence per share)
2013 – 2022
3.6
3.2
0.8 0.8 0.8
2.8
1.6 1.61.6 1.6 1.6
2.4
2.2 0.8 0.8 0.8
2.0
3.2
1.6
0.8 0.8 0.8
1.2
1.6 1.6 1.6 1.6 1.6
0.8
1.0 0.8 0.8 0.8
0.4
0
2021-20222020-20212019-20202018-20192017-20182016-20172015-20162014-20152013-2014
1st Interim Paid 2nd Interim Paid 4th Interim Paid3rd Interim Paid
PredictedPayableFinal Dividend
The Dividend Policy can be found on page 21 of these Financial Statements and on the Company’s website.
Itcan be summarised as the declaration at the beginning of the year of four equal dividends, paid in November,
February, April and May.
Five Year NAV and Share Price Total Return
2017 – 2022
60%
50%
40%
30%
20%
18 10%
0%
16
14
12
10
Mar-17Mar-18Mar-19Mar-20Mar-2 ar-22
Pence per HICL Share
NAV Ordinary Share Price ‘A’ Ordinary Share Price
-10%
-20%
-30%
2022-2023
1M
Hansa Investment Company Limited For the Year Ended 31 March 2022 1
STRATEGIC REPORT

# Chairman’s Report to the Shareholders

JONATHAN DAVIE Chairman

## INTRODUCTION

I am pleased to report that our Portfolio Manager and other service providers to Hansa Investment Company (“HICL”, “the Company”) remain resilient and have not been operationally affected by any Covid-19 problems or the conflict in Ukraine.

## SHAREHOLDER RETURNS

For the year ended 31 March 2022, the Net Asset Value (“NAV”) has increased by 12.5p per share, from 306.6p per share to 319.1p per share. Regrettably, during the past 12 months there has been an increase in the discount from 35.4% to 37.8% for the Ordinary shares and from 35.3% to 39.5% for the IX Ordinary shares. More detail on these and the longer-term performance can be found on page 8, as well as our Portfolio Manager’s detailed review of markets and portfolio performance in his report on page 24.

Our Portfolio Manager, Alec Latchfield and his team at Hansa Capital Partners LLP (“Hansa Capital Partners”, “HCP”) has continued to produce satisfactory risk adjusted returns to shareholders. The portfolio he manages (the Company’s investment portfolio excluding Ocean Wilsons Holdings Ltd (“OWHL”, “Ocean Wilsons”) has seen a gross time-weighted total return of 1.1% in the past year, whilst our investment in OWHL has seen a gross time-weighted return of 24.7%. The latter was driven in part, by Wilson Sons Limited share price increase in Sterling terms by 77.9%, whilst increasing in Brazilian Real terms by 41.0%, the difference being the rally in the price of the Brazilian Real against Sterling. Collectively, the entire HICL portfolio has seen a gross time-weighted return of 6.2% for the twelve months ended 31 March 2022.

## PROSPECTS

Writing about prospects and the future direction of markets is always challenging at the best of times. However, I cannot remember a time when there were so many moving parts in the financial world, particularly interest rates, inflation and monetary tightening, and a war of which the outcome and its timing is impossible to predict at the time of writing. As such we are faced with a highly uncertain geopolitical backdrop and a lack of cohesive leadership which is creating the potential for policy micsups and an environment that many younger market practitioners will not have experienced during their lifetime.

In my Interim Report I mentioned the emergence of noticeable inflationary trends, international tensions and energy shortages which sadly have only increased since then. Of course, much of this increase has been the result of Russia’s invasion of Ukraine.

Many forecasters have different views of when and at what level inflation will peak in this cycle. My sense is that it will probably stay elevated for longer than presently anticipated, because of the labour shortages and production bottlenecks (such as those driven by China’s Zero-Covid policy and the resulting lockdowns) and the ongoing disruptions in Ukraine. The anticipated rises in interest rates and monetary tightening as Quantitative Easing becomes Quantitative Tightening will ultimately achieve the objective of reducing inflation, assuming the Federal Reserve Board and other major Central Banks do not cut short their campaign because of recessionary fears. One has to remember the years of the inflationary build up created by interest rate suppression, Quantitative Easing and lax lending to get a feel for the size of the bubble that is now deflating.

The actions of the Central Banks will probably cause recessions, which means equity markets probably still have some way to fall before the bottoming out process can begin. This will, of course, create great opportunities for the patient investor to buy quality stocks at attractive prices.

On a more positive note, it has been encouraging to note the improvement in the Ocean Wilsons share price and the excellent contribution from Wilson Sons Limited (“Wilson Sons”), partially created by the long-awaited increase in the value of the Brazilian Real.

## STRATEGY

Alec Latchfield and his team, supported by the Board, have taken a slightly more defensive position in the past year which has helped our overall performance. They have managed our portfolio effectively through these challenging times for investors, which includes negligible economic exposure to Russian assets, but there has been some inevitable collateral damage to our portfolio from the market’s reaction to the war in Ukraine. Our portfolio held no exposure to sanctioned equities, either directly or through the fund investments we hold. For the sake of clarity we continue to pass on any cryptocurrency opportunities.

2 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
DIVIDEND POLICY The UNPRI encourages investors to use responsible investment
The Board continues to support our strategy of maintaining the to enhance returns and better manage risks, but does not
dividend at 3.2p until it is fully covered by net revenue income operate for its own proﬁt; it engages with global policymakers,
and then increase it in line with any increase in the net revenue but is not associated with any government; and is supported by,
income of the Company. but not part of, the United Nations.
General Meeting Investor Information Notice of the Annual
It consists of six principles that all signatories must agree with:-
DISCOUNT MANAGEMENT
It is a great frustration to the Board and our shareholders that the 1. Incorporate ESG issues into investment analysis and decision-
discount has not tightened over the past year, much of this can making processes.
probably be put down to a general widening of investment trust 2. Be active owners and incorporate ESG issues into our
spreads, due to market volatility and declining retail participation ownership policies and practices.
in the markets. The Board continues to take the view that share
3. Seek appropriate disclosure on ESG issues by the entities in
buybacks can only offer a short-term solution. It would increase
which we invest.
risk concentration as the proportion of the portfolio invested in
Ocean Wilsons would automatically increase, which the Board 4. Promote acceptance and implementation of the Principles
wishes to avoid in line with the Company’s long-term strategy. within the investment industry.
5. Work together to enhance our effectiveness in implementing
LIQUIDITY & INVESTOR BASE
the Principles.
The Board continue to work with our broker Winterﬂood and
6. Each report on our activities and progress towards
Edison to promulgate the Hansa story and are now working
implementing the Principles.
with Warhorse Partners, a brand and marketing specialist to the
Investment Trust industry, to explore alternate and fresh forms The Board notes all the work that its Portfolio Manager has
of investor outreach and messaging. undertaken in considering the merits of this important initiative
and is pleased to report that HCP plans to become a signatory
INVESTMENT IN OCEAN WILSONS HOLDINGS LTD in the very near future.
As mentioned earlier in this Report, it is encouraging to note
The Board continues to offset the carbon created by ﬂights to
the improvement in the value of Wilson Sons Ltd and the uplift
Bermuda for meetings. The amount offset in the past year has
in the share price of Ocean Wilsons Holdings, after a period of
been 198 tonnes.
underperformance created mainly by the declining Brazilian Real.
COMPANY AUDITOR
Our strategy on the various options relating to OWHL mentioned
As of the Company’s most recent AGM in August 2021,
in my Report last year remain unchanged. Wecontinue to
PricewaterhouseCoopers Ltd of Bermuda (“PwC”) were
consider longer-term options in respect of our holdings in OWHL.
appointed to audit the Company.
SHARE CLASSES On behalf of the Board, I should like to extend our best wishes
The current position remains unchanged, with the majority of to you, our shareholders and your loved ones.
Ordinary shareholders not wishing to change the present structure.
ENVIRONMENTAL, SOCIAL AND CORPORATE
GOVERNANCE (“ESG”) MATTERS
The Board has worked with the Portfolio Manager as the latter
Jonathan Davie, Chairman
has developed its Responsible Investment Policy. In particular,
17 June 2022
the Portfolio Manager has been investigating the merits of
becoming a signatory of the United Nations Principles for
I would draw shareholders’ attention to the Glossary of Terms which can be found
Responsible Investing (“UNPRI”) protocol. at the end of this Year-End Report. I hope it is helpful in understanding a business,
ever more complicated by regulation and jargon.
Hansa Investment Company Limited For the Year Ended 31 March 2022 3
## STRATEGIC REPORT
## The Board
## of Directors
JONATHANDAVIE RICHARD LIGHTOWLER
## The Directors who

|  | (Chairman) | (Audit Committee Chairman) |
| --- | --- | --- |
| served the Company | Jonathan became Chairman of Hansa | Richard became a Director of the |
|  | Investment Company in June 2019. | Company in June 2019. Richard has |

## during the year to

|  | He was a director of Hansa Trust from | 25 years’ experience in public accounting |
| --- | --- | --- |
| 31 March 2022 are: | January 2013 until its liquidation in | being partner of KPMG in Bermuda for |
|  | November 2021. He is also chairman | 19 years. He was head of the KPMG |
|  | of First Avenue Partners, an alternatives | Insurance Group in Bermuda for 15 years, |
|  | advisory boutique. | a member of the ﬁrm’s Global Insurance |

Leadership Team and Global Lead Partner
Jonathan qualiﬁed as a Chartered for a number of large international
Accountant and then joined George insurance groups listed on the New York
M. Hill and Co. and became an and London Stock Exchanges.
authorised dealer on the London Stock

| Exchange. The ﬁrm was acquired by | Richard has signiﬁcant regulatory |
| --- | --- |
| Wedd Durlacher Mordaunt and Co. | experience, advising the Bermuda |
| where Jonathan became a partner in | Monetary Authority and working with |
| 1975. He was the senior dealing partner | clients regulated by the PRA, FRC and |
| of the ﬁrm on its acquisition by Barclays | FCA, as well as other international |
| Bank to form BZW in 1986. | regulators. He also has extensive |

experience in risk and corporate

| Jonathan developed BZW’s Fixed | governance and signiﬁcant transaction |
| --- | --- |
| Income business prior to becoming | experience including redomiciliations. |
| chief executive of the Global Equities | Richard is based in Bermuda. Richard |
| Business in 1991. In 1996 he became | also holds directorships with Geneva |
| deputy chairman of BZW and then vice | Re, Aspen Insurance Holdings and |
| chairman of Credit Suisse First Boston | Oakley Capital. |

in 1998 on their acquisition of most of
BZW’s businesses. He focused on the
development of Credit Suisse’s Middle
Eastern business. He retired from Credit
Suisse in February 2007.

|  | Meetings |  | Total |  | Meetings |  | Total |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  | attended | Meetings |  |  | attended | Meetings |  |
| Board 5 5 |  |  |  | Board 5 5 |  |  |  |
| Audit Committee 2 2 |  |  |  | Audit Committee 2 2 |  |  |  |

4 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance

| SIMONA HEIDEMPERGHER | WILLIAM SALOMON | NADYA WELLS |  |
| --- | --- | --- | --- |
| Simona became a Director of the | William became a Director of the | Nadya became a Director of the |  |
| Company in June 2019. Simona has | Company in June 2019. He was | Company in June 2019. Nadya has |  |
| extensive experience as an executive | a Director of Hansa Trust from 1999 until | 27 years’ experience in emerging and |  |
|  |  |  | General Meeting Investor Information Notice of the Annual |
| and non-executive director in a range of | its liquidation in November 2021. He has | frontier markets as a long-term investor |  |
| companies, including listed companies, | a signiﬁcant, long standing, investment in | and corporate governance specialist. |  |
| investment funds and research | the Company. | Shespent 13 years as portfolio manager |  |
| organisations, across multiple jurisdictions. |  | with the Capital Group investing in Global |  |
|  | William’s experience in investments and | Emerging Markets and prior to that ﬁve |  |
| For the past 19 years, she has been | ﬁnance is important to the Board in | years with INVESCO Asset Management |  |
| a director of Meriﬁn Capital, an established | developing and monitoring investments | Limited, investing in public and private |  |
| European privately owned investment | in special investment themes and in the | equity managing a closed ended fund. |  |
| company. Priorto this she had roles as VP | Company’s strategic investment through | She started her career in management |  |
| Investments at CDB Web tech, a listed | Ocean Wilsons Holdings Limited in | consultancy with Ernst & Young. |  |
| investment vehicle, and as research | Wilson Sons. |  |  |
| associate at Heidrick & Struggles, a leading |  | She holds a non-executive directorship |  |
| executive-level search and leadership | William is the senior partner of Hansa | at Baring Emerging EMEA Opportunities |  |
| consultancy ﬁrm and as project coordinator | Capital Partners LLP, the Portfolio | plc where she is senior independent |  |
| at Ambrosetti Group, an Italian consulting | Manager and Additional Administrative | director. Nadya is also an independent |  |
| company. Currently, Simona is the lead | Services Provider, deputy chairman | non-executive director on the boards of |  |
| independent non-executive director of | of Ocean Wilsons Holdings Limited | various Luxembourg SICAVs managed |  |
| Aquaﬁl SpA where she is chairman of the | and a director of its listed subsidiary | by Aberdeen Standard Investments |  |
| audit and risk committee. Alongside this, | WilsonSons Limited. He is also | Luxembourg, where she chairs the |  |
| Simona is chair of the board of directors | a shareholder representative on the | product committee. She also works |  |
| of the Stramongate Group, a Luxembourg | investment advisory committee for | in academia conducting research and |  |
| public company, director of The European | DV4Ltd (“DV4”) and chairman of | consulting in the public and private sector |  |
| Smaller Companies Trust, a Janus | ScotGems PLC investment trust. William | on ﬁnancing in Global Health. She holds |  |
| Henderson Asset Management Investment | was formerly the vice chairman of Close | an MBA from INSEAD, France. |  |
| Trust listed on the London Stock Exchange | Asset Management Limited and chairman |  |  |
| and director of Industrie Saleri Italo | of the merchant bank Rea Brothers PLC. |  |  |

S.p.A. an Italian private company in the
automotive supplier sector.

|  | Meetings |  | Total |  | Meetings |  | Total |  | Meetings |  | Total |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | attended | Meetings |  |  | attended | Meetings |  |  | attended | Meetings |  |
| Board 5 5 |  |  |  | Board 5 5 |  |  |  | Board 5 5 |  |  |  |
| Audit Committee 2 2 |  |  |  | Audit Committee 2 2 |  |  |  | Audit Committee 2 2 |  |  |  |

Note:
The meetings listed above are the main events held during the year at which all Directors attend. Additionally, there have been numerous meetings and Board calls
to consider and approve operational requirements for the Company, such as quarterly dividends. These meetings are arranged as and when required and require the
meeting to be quorate but not necessarily attended by all Directors. These have not been listed above.
The Board normally holds an annual Strategy session in February. This was delayed to April 2022 due to the outbreak of the Omicron variant of Covid-19 so the Board
could meet face-to-face.
Hansa Investment Company Limited For the Year Ended 31 March 2022 5
## STRATEGIC REPORT
## The Board
The Board
Board members are selected based on their individual and INVESTMENT STRATEGY
complementary skills and experience and their ability to commit The Portfolio Manager, engaged by and acting on behalf of the
sufﬁcient time to drive the Company’s success. All Directors will Company, seeks to build a multi-strategy portfolio by selecting
retire at each AGM and offer themselves for consideration for investments across four key investment categories, in addition
re-election. The Board recommends the re-appointment of each to the strategic investment in OWHL:
of the Directors, based on their continuing contribution to the
• Core – investments, typically through third-party funds,
Company and its shareholders.
that the Company can expect to hold throughout the
economic cycle.
The Board is charged by the shareholders with the responsibility
for looking after the affairs of the Company. It involves the • Thematic – investments, typically through third-party funds,
stewardship of the Company’s assets and liabilities and the that reﬂect key investment themes the Portfolio Manager
pursuit of growth of shareholder value in accordance with the believes will generate excess returns.
investment objective. These responsibilities are discharged in
• Diversifying Assets – investments, typically through
many ways and are explained below.
third-party funds and directly, that create asset diversiﬁcation
within the portfolio.
INVESTMENT OBJECTIVE POLICY
The Company objective is to grow the net assets of the • Global Equities – a diversiﬁed portfolio of global equities
Company over the medium to long-term by investing in identiﬁed by the Portfolio Manager as having long-term
a diversiﬁed and multi-strategy portfolio. growth potential.
The Company seeks to achieve its investment objective by The Company has no set maximum or minimum exposures to
investing in third-party funds, global equities and other any asset class, geography or sector, the Board does, however,
international ﬁnancial securities. The Company may invest in set guidelines which the Portfolio Manager adheres to. These
quoted and unquoted securities. The Company’s portfolio will can be adjusted by the Board. While the proportion of the
typically comprise at least 30 investments. portfolio represented by each of these categories will vary
over time, the Board establishes parameters for the Portfolio
The Company holds a strategic position in the share capital of Manager, based on its view of the global investment markets.
OWHL, which represents the Company’s largest holding. The The Board set the following guidelines for each category as
Company will not make further investments into OWHL. a percentage of the portfolio (including the strategic investment
in OWHL):
The Company has no set maximum or minimum exposures to
• Core: 0-50%
any asset class, geography or sector and will seek to achieve
• Thematic: 0-25%
an appropriate spread of risk by investing in a diversiﬁed global
portfolio of securities and other assets.
• Diversifying Assets: 0-40%
• Global Equities: 0-40%
6 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
The Portfolio Manager has a strong focus on identifying
investments with excellent fundamentals and a similar
investment philosophy to HCP. In particular, taking a long-term
approach to investing, good alignment and not seeking to
replicate a benchmark. These investments range from those
General Meeting Investor Information Notice of the Annual
sectors beneﬁting from structurally higher growth, such as
technology, to assets which the Company believes stand on
unwarranted discounts to their intrinsic value.
INVESTMENT MONITORING AND
KEY PERFORMANCE INDICATORS (“KPIS”)
The Company believes this investment strategy may produce
returns not replicated by movements in any market index.
Furthermore, the Board considers that the use of a single
benchmark will not always offer shareholders the relevance
and the clarity needed with regard to the performance of
the Company.
The Board’s primary goal is for the Company to generate
long-term returns for shareholders and so will compare the
Company’s performance against that of a safe return from
an appropriate Government bond – for this the Board has
elected to follow the FTSE Gilts All Stocks TR Index (Bloomberg:
FTFIBGT). The Board’s second goal is for the Company to
achieve returns that are higher than inﬂation and use the
UK’s CPI (Bloomberg: UKRPCHVJ) as the KPI for comparison.
Finally, the Board compares the Company’s returns with those
of an appropriate index – for which the Board has elected to
follow the performance in GBP of the MSCI All Country World
Index excluding Frontier Markets (Bloomberg: NDUEACWF).
Seepage17 for the further discussion on the KPIs.
POLICY ON BOARD COMPOSITION
Appointments to the Board are made on merit and against
objective criteria, in accordance with the AIC Corporate
Governance Code. The Board considers it is of paramount
importance to shareholders that, after consideration of the skills
and experience needed by the Board, candidates are chosen on
the basis of their contribution to the Company’s needs and that
there should be no discrimination in the choice of Directors for
any reason.
Hansa Investment Company Limited For the Year Ended 31 March 2022 7
STRATEGIC REPORT

# Long-Term Performance

## TEN YEAR COMPANY PERFORMANCE STATISTICS

|  Year ended 31 March | Shareholders' Funds | Net Asset Value per share – Ordinary and 'A' Ordinary | Annual Dividends | Share Price (Mkd) |   | Discount/(Premium)  |   |
| --- | --- | --- | --- | --- | --- | --- | --- |
|   |   |   |   |  Ordinary | 'A' Ordinary | Ordinary | 'A' Ordinary  |
|  2022 | £382.9m | 319.1p | 3.2p | 198.5p | 193.0p | 37.8% | 39.5%  |
|  2021 | £367.9m | 306.6p | 3.2p | 198.0p | 198.5p | 35.4% | 35.3%  |
|  2020 | £276.3m | 230.2p | 3.2p | 130.9p | 135.5p | 43.1% | 41.2%  |
|  2019 | £337.3m | 281.1p | 3.2p | 195.5p | 195.0p | 30.5% | 30.6%  |
|  2018 | £323.1m | 269.3p | 3.2p | 198.5p | 195.5p | 26.3% | 27.4%  |
|  2017 | £307.5m | 256.3p | 3.2p | 173.3p | 169.6p | 32.4% | 33.8%  |
|  2016 | £255.6m | 213.0p | 3.2p | 146.0p | 145.1p | 31.5% | 31.9%  |
|  2015 | £273.3m | 227.8p | 3.2p | 172.0p | 165.5p | 24.5% | 27.3%  |
|  2014 | £287.4m | 239.5p | 3.2p | 175.9p | 175.5p | 26.6% | 26.7%  |
|  2013 | £259.9m | 216.6p | 3.0p | 166.8p | 163.0p | 23.0% | 24.7%  |
|  2012 | £268.2m | 223.5p | 2.8p | 181.0p | 178.3p | 19.0% | 20.2%  |

The table includes information relating to HICL and historic information relating to Hansa Trust. The years ended 2020-2022 notes HICL information. The historic year ends 2011-2019 all relate to Hansa Trust. So that data is consistent and comparable, the historic data in columns "Net Asset Value per Share", "Annual Dividends" and "Share Price (Mkd)" have been restated to reflect that, as part of the redon vcia of the business of Hansa Trust to HICL in August 2019, HICL issued five times as many shares in each share class of HICL as there were in Hansa Trust.

The Company's KPIs can be found on page 17.

|  In 31 March 2022 | 1 year | 3 years | 5 years | 10 years  |
| --- | --- | --- | --- | --- |
|  Total Return (%) |  |  |  |   |
|  Ordinary shares | 1.7 | 7.2 | 25.0 | 32.1  |
|  'A' non-voting Ordinary shares | (1.3) | 4.5 | 24.3 | 30.7  |
|  NAV | 5.1 | 17.7 | 32.2 | 63.0  |

8 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
## Organisation and Objectives
Organisation and Objectives Reports Financial Statements Corporate Governance
This section explains how the Board has organised the Management Engagement Committee
Company and seeks to deliver its objectives. The independent members of the Board fulﬁl the function of
the Management Engagement Committee. The Committee
BOARD COMMITTEES is chaired by Jonathan Davie. The level of management
The Directors consider that, in order to fulﬁl their fees, level of service provided and the performance of
General Meeting Investor Information Notice of the Annual
responsibilities as the Directors of the Company, they should the Portfolio Manager are reviewed on a regular basis to
all be members of every sub-committee where possible. ensure these remain competitive and in the best interests of
shareholders. The Board, after the annual recommendation
Audit Committee of this Committee, considers the engagement of the Portfolio
The Audit Committee, which meets at least twice a year, Manager to be in the best interests of the shareholders.
consists of all independent Directors of the Board. Richard TheCommittee reports its recommendations to the Board for
Lightowler is the Chairman of the Audit Committee. ﬁnal approval.
The AIC Code of Corporate Governance (“the AIC Code”) Remuneration Committee
indicates that all independent Directors can be members The independent members of the Board fulﬁl the function
of the Audit Committee. The Board is of the opinion that, of the Remuneration Committee. The Committee is chaired
particularly as the Company has relatively few Directors, by Simona Heidempergher. The level of Directors’ fees is
shareholders beneﬁt from the views of all Directors. Therefore, monitored against external benchmarks taking speciﬁc note
Jonathan Davie, as Chairman of the Company, is also of each Director's duties and also relative to other comparable
a member of this Committee. The Board further acknowledges companies. The Committee reports its recommendations to
that the AIC Code states all Committee members should be the Board for ﬁnal approval.
independent. Therefore, William Salomon is not a member of
the Committee. The Committee reports its recommendations REQUIREMENTS OF S172 UK COMPANIES ACT
to the Board for ﬁnal approval. As required by the AIC Code, the Board describes below how
it has met the requirements of s172 of the UK Companies Act
Nomination Committee as applicable to the Company. This includes an explanation
The independent members of the Board fulﬁl the function of how the Board has sought to promote the Company for
of the Nomination Committee. The Committee is chaired by the beneﬁt of its members, how it has taken into account the
Nadya Wells. Appointments are made after consideration of likely long-term consequences of decisions and how it fosters
the skills and experience needed by the Board and against relationships with stakeholders. The Company is an investment
objective criteria in accordance with the AIC Code. The Board company with an appointed Portfolio Manager. As a result,
considers it is of paramount importance to shareholders it has no direct employees or customers in the traditional
that, after consideration of the skills and experience needed sense. The Board has identiﬁed the Company’s shareholders,
by the Board, candidates are chosen on the basis of their its Portfolio Manager (as well as the Additional Administrative
contribution to the Company's needs and that there should Services Provider, “AASP”), its other key service providers as its
be no discrimination in the choice of Directors for any reason. key stakeholders.
The Board has determined that all Directors will retire and
offer themselves for re-election each year at the AGM and
this policy includes any Directors appointed during the year.
The Committee reports its recommendations to the Board for
ﬁnal approval.
Hansa Investment Company Limited For the Year Ended 31 March 2022 9
## STRATEGIC REPORT
## Organisation and Objectives
## Continued
SHAREHOLDER INTERACTION & PROMOTING THE COMPANY
Stakeholder Interaction
Shareholders The shareholder base is a mixture of private investors, wealth managers and asset managers
across both classes of the Company’s shares. The Board monitors changes in the shareholder
base at its quarterly Board meetings. The Company communicates through the publication
of Year-End and Half-Year Financial Statements, through detailed quarterly and monthly
factsheets, as well as through the Company’s website. The Company also holds shareholder
presentations incorporating presentations by the Board and key service providers to keep
shareholders informed.
The Board seeks to understand the opinions of a wide variety of shareholders. The
Company maintains a dedicated email address for shareholders to contact the Board
([email protected]) and shareholder correspondence and feedback is a regular item
ofdiscussion at Board meetings.
The Company continues to meet shareholders and other interested parties facilitated by its
brokers, Winterﬂood, and Edison as well as through direct contact.
Investors are also kept informed through paid-for editorial pieces by Edison Research and
discussion with media organisations. During the last two years, to enable shareholders to
meet with the Board and Portfolio Manager during the Covid-19 pandemic, the Board used
online shareholder presentations. Whilst the Board believes there is still a place for face-to-face
shareholder updates, the strong attendance at the online events encourages the Board that
these online events will remain a feature of the Company’s shareholder outreach.
Portfolio Manager & AASP The Board’s main working relationship is with the staff of HCP as the Portfolio Manager and the
AASP. HCP is responsible for the Company’s portfolio management (including asset allocation,
stock and sector selection in accordance with guidelines established by the Board). It is also
responsible for administrative and operational functions including day-to-day oversight of the
other key service providers (Administrators, Custodians, Registrar and Company Secretarial).
Successful management of shareholders’ assets by the Portfolio Manager is crucial to enable the
Company to deliver its investment strategy and meet its objective.
Other key service providers The Company has other key service providers. All service providers are listed at the back of this
Annual Report. Key providers are the Company’s Administrator (Maitland Administration Services
Limited), Custodian (Lombard Odier) and Registrar (Link Market Services (Guernsey) Limited).
Whilst the Board looks to the Portfolio Manager and the AASP to keep a day-to-day oversight of
these providers, they are contracted directly to the Company. As such, the Board retains ultimate
responsibility for their roles. The AASP reports regularly on operational matters. The Board
seeks to visit each provider at least annually for a face-to-face meeting to discuss service levels,
operations and future developments.
10 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
Main areas of engagement
Key Area Issue Engagement & Outcomes
Investment Strategy & The Board has control over the Company’s The Board has engaged with the Portfolio
ESG matters investment in OWHL but, otherwise, Manager and encouraged them to develop
General Meeting Investor Information Notice of the Annual
all investments are managed by HCP as a responsible investment policy. The Board
Portfolio Manager. understands HCP has made signiﬁcant progress
and is expecting to become a signatory to the
The Investment Strategy incorporates UNPRI within the coming ﬁnancial year. The
appropriate ESG considerations. Board wholeheartedly supports this policy.
Discount Management The Board is mindful of and regularly It is a great frustration to the Board that the
discusses the hare price compared to NAV discount has not tightened over the past
and related discount. The Board is of the view year. It is also noted that there has been
that providing transparency and clarity to general widening of investment trust spreads
investors, as well as promoting demand for due to market volatility and declining retail
the Company’s shares, should create a positive participation in the markets.
impact on the discount for the medium to
longer-term. To this end, the Board continues
its discussions with Warhorse Partners,
a brand and marketing specialist focused on
the asset management industry, to review the
Company’s branding and communications
strategy with shareholders and potential
shareholders alike. The aim of the project is to
enhance and broaden the understanding of
the Company, with the ultimate objective of
widening the shareholder base and deepening
the market for shares.

| Dividend Policy & Share | The Board continues to support maintaining | The Board believes that share buybacks can |
| --- | --- | --- |
| Buybacks | the dividend at 3.2p until it is fully covered by | only offer a short-term solution. To buy back |
|  | net income. At that time it plans to increase it | shares would increase risk concentration, |
|  | in line with any increase in the net income of | as the proportion of the portfolio invested |
|  | the Company. | in Ocean Wilsons would increase which the |

Board wishes to avoid.
The Board continues to provide transparency of
dividend and buy back policies to shareholders
in documents and presentations.
Hansa Investment Company Limited For the Year Ended 31 March 2022 11
## STRATEGIC REPORT
## Organisation and Objectives
## Continued
Key Area Issue Engagement & Outcomes
Maintaining levels of The Company does not have direct The independent members of the Board
service from Service employees. Rather, its operations are annually review the performance of the
Providers conducted by several key service providers. Portfolio Manager. Additionally, the day-to-day
The Company enters into service-level performance of other key service providers
agreements with each provider. The Board (Administrator, Custodian and Registrar) are
oversees these services to ensure that best monitored by the AASP on behalf of the
practice is followed and that the Company is Board. In addition, there is an annual review
receiving a comprehensive service and value of service providers' annual Controls Audit
for money. Reports. Members of the Board also visit
each key service provider annually to review
performance and understand any changes in
their businesses.
LONG-TERM IMPACT OF DECISIONS – ESG MATTERS approach begins by communicating its expectations to fund
With ever-growing global concerns and developments and company investments that they should take ESG issues
surrounding matters such has climate change, social seriously, clearly report on them, be responsible owners and
inequalities and ethical corporate strategy and governance, to continuously show positive indicators of aspiring to do the
the Board believes there is a communal duty for meaningful rightthing.
and effective action to be taken and are committed to doing
so. It is the Board's belief that responsible investing and HCP does not operate an exclusionary policy, as it is not
a well-run sustainable business model aids in generating believed that excluding whole sectors or countries is
superior long-term returns. a sustainable, or reasonable approach to its investment
activities. Each fund manager or company is assessed as
The Board is responsible for the Company's ESG policy. In an individual, taking into account the sector and country
2020, the Board adopted the Portfolio Manager’s (“PM”) within which they operate and their direction of travel in ESG
Responsible Investment Policy, which is applied to all Company enhancements. For example, a manager trying to encourage
investments in funds and companies, in both public and companies in a polluting sector to improve their environmental
private markets. In line with the evolving nature of ESG’s performance would not be automatically excluded from
integration within ﬁnancial services, the PM continues to investment simply for operating ina heavily polluted sector.
review and develop their policy of responsible investing within
their investment process. This involves ensuring environmental, HCP seeks to ensure that all investee managers and companies
social and governance factors are more seamlessly integrated are thinking longer term and that they are also thinking
throughout the investment management process, including about their longer-term impacts across the spectrum of
within the due diligence, decision-making and investment their business. This certainly includes the negatives – such
monitoring processes. With such purposeful integration of as understanding how companies are lowering their carbon
ESG considerations within the investment process, it can aid emissions, ensuring they are not using forced or child labour
in fostering an economically efﬁcient and sustainable global in their supply chains, taking care not to deplete natural
ﬁnancial system and enhance investment performance. resources, or be involved in deforestation. But it also includes
the positive impacts, for example, knowing if a company
As long-term investors, HCP has a natural desire to be is taking advantage of the opportunities it may have from
a responsible investor and a good corporate citizen. HCP’s climate change by developing greener energies, recycling
12 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
used clothing, or designing biodegradable fabrics. HCP’s would seek clarity and understanding on how they manage
involvement with the managers and companies is on-going these issues and their responsibilities.
and pushes them to manage the risks and take advantage
of the opportunities in a tailored and considered manner. In the natural positive progression of HCP’s commitment to
A manner that reaps longer-term beneﬁts for the Company, as further integrating ESG and climate relevant considerations
General Meeting Investor Information Notice of the Annual
well as the environment and the greater society. within its investment process, HCP are in the process of
reviewing and making a commitment to become signatories
Fund Investments of the United Nations supported Principles for Responsible
HCP seeks to invest in funds who are responsible owners Investment (“UNPRI”). The Board expects HCP will become
of their investee companies, have speciﬁc consideration UNPRI signatories prior to the next Annual Report.
as to how their investee companies manage their ESG
responsibilities and seek to engage with those company Taskforce on Climate-Related Financial Disclosures
boards, if they are failing in their duties. Where a manager is In line with LR 15.4.29R, as a closed-ended investment
not living up to these standards, HCP will ﬁrst seek to engage company, HICL is exempt from the annual reporting
the management team and encourage improvement. If the requirement to publish statements in line with the Taskforce
managers engagement is weak, or if the communicated on Clime-Related Disclosures’ (“TCFD”) framework
concerns are not sufﬁciently addressed and their positive of recommendations and recommended disclosures.
commitment to do so is not apparent, HCP’s ultimate action However, considering the Board and the PM’s approach to
would be to reduce current investment, exit, or not invest responsible investing and the Company's core investment
in the ﬁrst place. Whilst HCP does not seek to exclude fund objective to generate superior, but sustainable, medium to
managers that invest in sectors such as energy or countries long-term growth in shareholder value, we have elected
such as China, it would also expect such managers to properly to provide relevant information on our approach to the
articulate how they operate in such areas and manage the TCFD recommendations.
potential ESG considerations. HCP’s investment philosophy
favours those fund managers who are typically long-term in Governance
their approach and seeks to invest in high quality companies The Board supports the implementation of good corporate
that are well managed and often higher returning. As a result, governance practises and oversees a long-term and
many of the fund managers will either not invest in, or have sustainable approach to business strategy of the Company.
a high hurdle before they will invest in, those businesses that This in part is done by adopting a Responsible Investment
are focused on energy, resources or certain materials. Hence, Policy, which aims to seamlessly integrate sustainability,
although we do not set limits, there is a natural bias away climate-related risks and opportunities into the Company’s
from those companies and sectors that score less well on investment process and constantly evolves alongside
ESGmetrics. regulation and good stewardship. This is in line with HCP’s
approach to its ESG assessment of fund manager and
Company Investments company investments, which involves enquiring whether
When considering direct equity investments HCP seeks to they are aligned with global sustainability and climate change
ensure that company management teams are responsible focused initiatives, such as being signatories of the UNPRI.
custodians of their businesses, report clearly on ESG metrics The Board continues to have oversight of the Company's
and seek to improve on those areas in which they are lagging. investment in Ocean Wilsons and, as a result, the performance
Again, as with fund selection, HCP does not seek to exclude of that company's investment in Wilson Sons. In 2021, the
speciﬁc sectors and countries, but instead for those companies Board noted that Wilson Sons become members of the
that make signiﬁcant use of energy, resources and materials, Carbon Disclosure Project (“CDP”), which aims to build a truly
orlack in other social or governance related matters, HCP sustainable economy, by measuring and understanding their
environmental impact. Furthermore, Wilson Sons continues to
Hansa Investment Company Limited For the Year Ended 31 March 2022 13
## STRATEGIC REPORT
## Organisation and Objectives
## Continued
state their commitment to the climate agenda and to building Metrics & Targets
solutions that adapt to the new scenarios established by the In relation to the Portfolio Manager's investment process,
challenges imposed by climate change in the world. a more holistic approach is taken by assessing an investment by
their intent and direction of travel, rather than purely by speciﬁc
Risk Management targeted metrics. The ESG assessment of a fund manager or
Climate-related risks within the Company's investments are company will involve HCP developing a view by utilising their
identiﬁed, assessed and managed by HCP as the Portfolio published ESG reporting, the information received through the
Manager, with such to be reported to the Board for our due diligence and engagement processes and other external
oversight. As part of the portfolio risk management and research. The Company has no material information to report
monitoring process, HCP’s approach combines long-term inrelation to metrics and targets.
and purpose-driven engagement with underlying fund
managers and companies, active voting and setting a clear Ocean Wilsons Holdings Ltd
escalation framework. This approach aims to identify and As noted elsewhere within this Report, the Board retains speciﬁc
address climate-related issues and minimise systemic risks that responsibility for the holding in Ocean Wilsons HoldingsLtd
may impact the assets within the portfolio. Engagement can and, with it, the monitoring of its ESG credentials. OWHL is
take several forms, including regular and ad hoc face-to-face made up of two investments – Ocean Wilsons Investments
(or video) meetings with management, formal written Ltd, an investment portfolio and a signiﬁcant holding in
correspondence, or the Portfolio Manager participating in Wilson Sons Ltd, a Brazilian maritime business. From an ESG
relevant shareholder votes for current investments. Within standpoint, our Portfolio Manager is also the investment
the last year, further enhancements to the Company’s voting advisor to the Ocean Wilsons Investments’ portfolio. The
process have been made, albeit all voting decisions are made Board understand that our Portfolio Manager is engaging
and directed by the HCP only. Taking such an active approach with Ocean Wilsons Investments’ board on their Responsible
to investing may involve voting against the management of an Investing Policy. Asa Board we receive periodic updates from
underlying investment if its impact can help manage climate Wilson Sons, an operating business with several thousand
related risks and drive positive change. employees, regarding their business including issues relevant
to ESG considerations. In 2021, Wilsons Sons listed on the
Strategy Novo Mercado ("New Market") B3 listed segment and
The Company’s strategic objective is to grow its net assets over became members of the Carbon Disclosure Project which,
the medium to long-term, by investing in a diversiﬁed and inpartnership with companies and governments, aims to build
multi-strategy portfolio and, in line within this objective, the a truly sustainable economy, by measuring and understanding
Board are responsible for pursuing the growth of shareholder the environmental impact. Wilson Sons continues to be
value. Responsible investment and the integration of ESG risks proud of their focused approach to Health & Safety and staff
and opportunities consideration within the investment process is wellbeing. As in many heavy industries, there is a focus on
believed to be aligned with the Company’s values and heritage. safety, improving working practices to minimise staff injuries.
In line with our future commitment to become signatories of They continue to see a decade-long trend of reduction in
the UNPRI, a key objective we intend to pursue is to encourage Lost-time Injuries – which is a reﬂection of an increasingly safe
our investments to embed ESG risks and opportunities into their working environment. Since2011, there has been a 87%
own strategies, direction and goals. An example of a climate- decrease in Lost-time Injuries. Additionally, Greenhouse Gas
related opportunity could include the increased alignment of emissions remain a focus for Wilson Sons. It continues to adopt
fund managers and companies sustainable investing practises, state-of-the-art technologies to continue to drive reductions in
providing a more diverse pool of responsible investment emissions such as replacing diesel equipment with electrically
opportunities for the Company. An example of climate-related powered alternatives at their container ports. Wilson Sons has
risk could include regulatory, market and reputational risks. also taken decisive steps to protect the safety and wellbeing
of its employees during the Covid-19 pandemic. Their head-
14 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
ofﬁce staff are operating on a hybrid model of ofﬁce and home SERVICE PROVIDERS
working and, for those who can’t, working practises minimise Service Provider Policy
the amount of mixing to reduce the risk of cross infection. The Board consists entirely of non-executive Directors; it
Additionally, the company has maintained Its commitment to delegates the day-to-day implementation of its policies to third
proactively publish its Greenhouse Gas Emissions Inventory party service providers. The Board has contractually delegated
General Meeting Investor Information Notice of the Annual
(GHG) in the public emissions registry. This platform is to external organisations the management of the investment
managed by the Brazilian GHG Protocol Programme. In 2021, portfolio, the custodial services which include safeguarding
Wilson Sons were awarded the gold seal by the programme. of the assets and the day to day accounting and company
Further information can be seen in their published 2021 secretarial requirements. Each of these contracts is only entered
Sustainability Report. into after proper consideration of the quality and cost of
services, which are regularly reviewed and monitored either by
Carbon Offset the Board or its Committees. The Board recognises it is these
Each year, there are a number of ﬂights for individual Directors key service providers and, importantly, their staff who are critical
to attend Board meetings in Bermuda. Therefore, as a matter to the success and smooth running of your Company.
of policy, the Board has elected to offset the carbon impact of
its travel on behalf of the business though a relationship with The Board, in seeking to engage organisations which can
Greenﬂeet Australia (www.greenﬂeet.com.au). provide the relevant levels of experience and expertise at an
acceptable cost, carries out the following activities:
Streamlined Energy & Carbon Reporting (“SECR”) and
• Monitors third party suppliers, performance, costs
Greenhouse Gas Emissions (“GGE”)
and commitment to a successfully implemented
The Company has no direct greenhouse gas emissions to
controls environment
report from the day to day operations of its business. However,
The Board, at its regular meetings, reviews reports prepared
as noted above, the attendance of Directors at Board meetings
by both the Portfolio Manager and the Administrator,
in Bermuda means travel related carbon emissions. The Board
which enable it to monitor the performance and costs of
has assessed the emissions associated with these trips to be
the third-party suppliers to the Company. The Additional
“Scope 3 Indirect Emissions” for the purposes of the SECR.
Administrative Services Provider (“AASP”) has an ongoing
The Board has further estimated the emissions associated with
dialogue with each supplier to monitor their processes and
the ﬂights to be in the region of 198 tonnes of CO2 (inclusive
systems and feedback any concerns that might be arising.
of the radiative effect of high altitude aircraft emissions and
Inaddition, a Director will seek to meet with key suppliers
contrails) in any ‘normal’ year. The Board has assessed that the
once a year (or more frequently as is necessary).
Company does not have other Indirect Emissions to report, as
all other emissions will be associated with the operations of • Monitors Portfolio Manager performance
service providers and be reported by them if appropriate. The Board reviews reports prepared by the Portfolio Manager
at its regular meetings, which enables it to monitor the
Social, Community, Human Rights, Employee investment performance, risks and returns. The Portfolio
Responsibilities Policy Manager attends each Board meeting to provide an update
The Company does not have any employees. The Company on Investment Performance and enable the Directors to
has no direct social, community or human rights impact. actively question the risks and investment performance
Its principal responsibility to shareholders is to ensure the within the portfolio.
investment portfolio is properly invested and managed.
• Determines investment strategy, guidelines and restrictions
The Board determines the investment strategy in conjunction
with the Portfolio Manager. The strategy is monitored
regularly and reﬁnements are made to it as required, with
formal review at the Board’s annual strategy meeting.
Hansa Investment Company Limited For the Year Ended 31 March 2022 15
STRATEGIC REPORT

# Organisation and Objectives
## Continued

The Board issues formal investment guidelines and restrictions, compliance with these is reported by the Portfolio Manager's compliance officer on a regular basis and is also monitored independently by the Administrator.

- Determines gearing levels and capital preservation through the use of hedging instruments
The Board, taking account of advice from the Portfolio Manager, determines the maximum level of borrowings the Company will undertake at the time of borrowing. Details of the borrowing limits can be found on page 18. The Company will not invest in derivatives for speculative gain, but may use derivatives for efficient portfolio management and hedging purposes.

The key service provider relationship to the Company is Hansa Capital Partners as the Portfolio Manager and Additional Administrative Services Provider to the Company.

THE PROVIDERS

Portfolio Manager & Additional Administrative Services Provider

Hansa Capital Partners LLP is the Portfolio Manager for the Company. It is responsible for all assets in the portfolio, other than the Company's investment in OWHL. The Board is in regular contact with the investment management team at HCP which is led by Alec Letchfield. Additionally, Alec Letchfield is invited to quarterly meetings of the board to formally present portfolio updates and discuss market trends. The Portfolio Manager's detailed review of the year can be found on page 24.

HCP charges an investment management fee at an annual rate of 1% of the net assets of the Company (after any borrowings) but, after deducting the value of the investment in OWHL, on which no fair is payable. The Portfolio Manager has charged £3,010,000 for the year ended 31 March 2022 (year ended 31 March 2021: £2,621,000). Inviteate Asset Management LBG, a company connected to Hansa Capital Partners LLP and which is also the AIFM, separately charges an investment management fee to the investment subsidiary of OWHL.

The terms of the Portfolio Management Agreement permit either party to terminate the agreement by giving to the other not less than 12 months' notice, or such shorter period as

is mutually acceptable. There is no agreement between the Company and the Portfolio Manager concerning compensation in respect to the termination of the agreement. In its annual assessment of the Portfolio Manager, the Board concluded that, because of the skills and experience of the management team it is in the best interest of shareholders that the Portfolio Manager remains in place under the present terms. Details of the fees paid to the Portfolio Manager can be found in Note 3 on page 64.

HCP also acts as the Additional Administrative Services Provider ("AASP") to the Company. This role ensures a number of the day-to-day processes for the Company are carried out as well as providing oversight of, and a liaison between, a number of the Company's service providers and the Company itself. HCP is paid £115,000 per annum for this service (year ended 31 March 2021: £115,000). HCP is not the Company Secretary – see below.

Auditor

The Company's Auditor is PricewaterhouseCoopers Ltd, a Bermudan registered firm. The Board have developed a strong working relationship with the Auditor and have been happy with the rigour and challenge offered. The reappointment of PwC as Auditor to the Company will be proposed at the forthcoming AGM.

Auditor independence rules restrict the amount and type of non-audit related work that can be performed by a company's auditor. Any non-audit related work must be pre-approved by the Board. Currently, PwC provides only audit services to the Company (details in Note 4 on page 64).

Company Secretary

The Company has engaged Conyers Corporate Services (Bermuda) Ltd ("Conyers") as its Company Secretary. During the year to 31 March 2022, the Company Secretary has charged £32,713 (year ended 31 March 2021: £5,919).

Alternative Investment Fund Manager

As a Bermudan resident, the Company is defined as a non EU Alternative Investment Fund ("AIF") under the EU's Alternative Investment Fund Manager's Directive ("AIFMD"). As such, the Company and the AIFM are only subject to the AIFMD

16 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
rules in a limited way – speciﬁcally in relation to marketing Additionally, whilst not speciﬁcally KPIs, the cost of managing
the Company’s shares in the EU. The Company appointed the Company is monitored against the NAV (the ratio between
Hanseatic Asset Management LBG, with effect from 29 August costs and NAV is also known as the ‘ongoing charges
2019, to act as its AIFM, with responsibilities for the Portfolio percentage per annum ratio’); and the discount/premium the
Management and Risk Management. The AIFM has sub- shares sell at in relation to the NAV are likewise monitored.
General Meeting Investor Information Notice of the Annual
contracted to Hansa Capital Partners LLP the provision of
Portfolio Management services. The AIFM does not charge The Board of Directors monitors the returns made in
a direct fee for its services, although it does recharge any third- absolute (ﬁrstly) and relative (secondly) terms against the
party fees incurred. KPIs established. The comparisons are made over 1, 3, 5 and
10 year time horizons.
Administrator
The Company has engaged Maitland Administration Services i) Shareholders – Total Returns
Limited as its Administrator. The Administrator has charged
To 31March 2022 1 year 3 years 5 years 10 years
£155,289 for the year ended 31 March 2022 (year ended
Share Price Total Return
31 March 2021: £143,517). On 18 May 2022, it was
Ordinary shares 1.7% 7.2% 25.0% 32.1%
announced that the fund services and third-party management
‘A’ non-voting Ordinary (1.3%) 4.5% 24.3% 30.7%
company businesses of Maitland International Holdings plc,
shares
which includes our Administrator, was to be acquired by
ApexGroup Ltd. TheBoard understands that the transaction
ii) Company – Total Returns
issubject to a number of regulatory approvals.
The Company's Total Returns are used to determine the
effectiveness of the Investment Strategy and of the Portfolio
Custodian
Management. The KPIs overleaf should also be noted.
The Company has engaged Banque Lombard Odier & Cie SA
(“Lombard Odier”) as the Company’s Custodian. During the To 31March 2022 1 year 3 years 5 years 10 years
year to 31 March 2022, Lombard Odier charged £184,868 for NAV 5.1% 17.7% 32.2% 63.0%
the custodial service (year ended 31 March 2021: £163,308).
iii) Discount/Premium
KEY PERFORMANCE INDICATORS AND OTHER MEASURES A comparison is made between the (discount)/premium of the
The Board, regularly and at least quarterly, reviews the returns Company’s two classes of shares and of the AIC average.
and the performance of the Company, including an analysis
1 year 3 years 5 years 10 years
using the KPIs listed below. To 31March 2022 average average average average
Ordinary shares (%) (33.6) (34.3) (31.4) (29.0)

| The Board considers that the use of a single benchmark does | ‘A’ non-voting Ordinary | (34.0) (34.1) (32.3) (30.2) |
| --- | --- | --- |
| not always offer shareholders the relevance and the clarity | shares (%) |  |
| needed with regard to the performance of their Company | AIC (%) (3.4) |  |

against its investment objective. The overall assessment of the
Note: AIC only produces an AIC average for one year.
performance of the Company is given by the Chairman in his
Report on page 2.
Whilst there are Investment Trusts that exhibit one or more
similarities to the Company, the Board does not consider the
In discussions between the Board and the Portfolio Manager,
Company to have any direct peers.
returns are compared with a number of measures, including
the return of a government bond, using the 10 year UK Gilt
iv) Expense ratios
Return (FTSE All Stocks Gilts Total Return Index); to the rate
To 31March 2022 1 year 3 years 5 years 10 years
of inﬂation (real returns are important to shareholders) and
Ongoing annual charges (%) 1.1 1.1 1.1 1.1
with those of appropriate indices for different elements of
the portfolio.
Hansa Investment Company Limited For the Year Ended 31 March 2022 17
STRATEGIC REPORT

# Organisation and Objectives

# Continued

To comply with the Packaged Retail and Insurance-based Investment Products Regulation ("PRIP"), the Company has issued a PRIIPs Key Information Document ("KID") for each of its two share classes. In the PRIIPs, KID regulations are very prescriptive as to how costs are calculated and presented. In particular, in addition to the costs of the Company itself noted above, the PRIIP calculation also incorporates the costs of the directly held fund investment vehicles themselves, but not those for directly held equities. Based upon the financial results for the year to 31 March 2022, the PRIIP KID cost ratio is 1.98% per annum.

v) Key Performance indicators

The following are the KPIs the Board uses to assess the returns of elements of the portfolio and of the Company as a whole.

|  To 31 March 2022 | 1 year | 2 years | 3 years | 10 years  |
| --- | --- | --- | --- | --- |
|  NAV Total Return | 5.1% | 17.7% | 32.2% | 63.0%  |
|  FTSE UK Gilts All Stocks TR Index | (5.1%) | (1.4%) | 2.7% | 32.1%  |
|  UK CPI Inflation | 7.0% | 9.4% | 14.2% | 22.7%  |
|  MSCI ACWI NR (GRP) | 12.7% | 46.4% | 64.6% | 215.5%  |

LIMITS

Investment Guidelines

The Portfolio Manager, on behalf of the Company, seeks to build a multi-strategy portfolio by seeking investments across four key investment categories under its mandate:

- Core – investments, typically through third-party funds, that the Company can expect to hold throughout the cycle;
- Thematic – investments, typically through third-party funds, that reflect key investment themes which the Portfolio Manager believes will generate excess returns;
- Diversifying Assets – investments, typically through third-party funds and directly, that create asset diversification within the portfolio; and
- Global Equities – a diversified portfolio of global equities identified by the Portfolio Manager as having long-term growth potential.

Whilst the Company has no set maximum or minimum exposures to any asset class, geography or sector, the Board nonetheless sets guidelines which the Portfolio Manager adheres to. These can be adjusted by the Board. While the

proportion of the portfolio represented by each of these categories will vary over time, the Board may set parameters for the Portfolio Manager based on its view of the global investment markets. At the current time, the Board has set the following guidelines for each category as a percentage of the portfolio value (including the strategic investment in OWHL):

- Core: 0-50%
- Thematic: 0-25%
- Diversifying Assets: 0-40%
- Global Equities: 0-40%

Borrowing Limits

The Board considers whether returns may be enhanced if the Company borrows money at appropriate times for the purpose of investment. The Company has an unsecured lending facility through its Custodian, Lombard Odier. The Board has agreed to a nominal maximum loan of £30m, subject to there being sufficient value and diversity within the portfolio to meet the lender's borrowing requirements. The Portfolio Manager is able to utilise this facility as required up to the upper limit available.

PRINCIPAL RISKS

The Company has risk management processes in place which enables the Board to identify, assess and manage the principal risks faced by the Company. Consistent with the AIC Code and UK Corporate Governance Code, these risks are considered to have the potential to threaten the Company's business model, future performance/returns, solvency, liquidity, reputation, or regulatory status. An integral part of this process is the maintenance and ongoing evaluation of the Company's Risk Assessment & Controls ("RAC") Matrix, which identifies both the risks and associated controls operating within the Company and relevant third-party service providers. To ensure emerging risks are assessed on an ongoing basis, the Board reviews the RAC Matrix at each Board meeting, considering HICL's current and future anticipated risk environment. The Board receives updates at each meeting from the PM and the AASP, to discuss any operational issues that may have arisen. Additionally, as part of the risk management processes, the Company also requests the Custodian, Administrator and Registrar to annually provide a relevant assurance report of their internal controls (e.g. AAF 01/06, AAF 01/20, ISAE 3402), from which the exceptions they've identified are reported to the Company's Board.

18 Hansa Investment Company Limited for the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
When considering the Company’s principal risks and is also considered to be in alignment with its stated objective,
uncertainties, the Board assesses this in line with the especially within extremely volatile market conditions. This is
Company’s stated objective of generating superior, but due to the portfolio not having to be managed and maintained
sustainable, long-term growth in shareholder value. The main to manage potential signiﬁcant redemptions or short-term
risk being that over the long-term (determined as greater than liquidity needs as open-ended funds would. The closed-ended
General Meeting Investor Information Notice of the Annual
ﬁve years), shareholders do not make a return from investing structure can take advantage of less liquid market opportunities
in the Company. The Company's closed-ended fund structure as part of Its portfolio holdings.
The principal risks and uncertainties identiﬁed and associated controls in place to manage these risks are described below:
PRINCIPAL RISKS – EXTERNAL CONTROLS TO MITIGATE RISKS
Market Risk – Long-Term Company The Board:
Share Performance
• has appointed an appropriate PM whose performance for the Company is
Types of market risk considered include
reviewed and challenged on a quarterly basis;
interest rate, currency, equity, credit,
concentration, liquidity and macro • has set investment guidelines and restrictions, which are reported against by the
geo-political risks. PM on a monthly basis;
• operates an asset allocation model, which is regularly reviewed and discussed
with the PM; and
• monitors and discusses portfolio construct and performance quarterly.
Company Shares – Performance, The Board:
Price, Liquidity and Discount
• regularly reviews the share price, discount level and portfolio performance;
Monitoring
Low market trading volumes of • maintains periodic oversight on shareholder-base;
Company shares and the discount to • actively seeks feedback both directly from shareholders and indirectly through the
the NAV becoming inherent in the share Company’s Broker (Winterﬂood) or speciﬁc outreach programmes (Edison); and
price.
• has the ability to buy-back non-voting shares of the Company.
Hansa Investment Company Limited For the Year Ended 31 March 2022 19
## STRATEGIC REPORT
## Organisation and Objectives
## Continued
PRINCIPAL RISKS – EXTERNAL CONTROLS TO MITIGATE RISKS
Tax, Accounting, Legal & The Board:
Regulatory risks
• obtains regular updates and advice from relevant professional advisers;
Adverse outcomes resulting from
legislative changes to tax, legal and • maintains oversight and receives regular reporting on the legislative and
regulatory requirements. Adverse regulatory changes, which impact HICL, as monitored by the PM;
outcomes from not meeting ESG • maintains the Company’s membership with the Association of Investment
expectations. Companies;
• has adopted the PM's responsible investing policy;
• has set explicit expectations on the integration of ESG considerations within
the investment process and continues to look to emerging guidance to further
develop the Company’s level of ESG disclosures; and
• receives documented conﬁrmation of the PM’s adherence to relevant regulatory
requirements and emerging sanction risks.
Reputational risk The Company:
Negative behaviours, publications
• requires the annual selection of Board members, all of whom must have
or market sentiment impacting the
a commitment to governance;
reputation of the Company.
• communicates with investors and the public in a clear and transparent
manner; and
• has set pre-approval procedures for accuracy and reliability of such information.
PRINCIPAL RISKS – INTERNAL CONTROLS TO MITIGATE RISKS
Operational risk • Investment guidelines require investments to be in generally liquid assets with an
Risks associated with process, system asset allocation to avoid concentrations.
and control failures in all operational
• An overdraft facility provides a contingency for any short-term liquidity
areas, associated with the Company’s
shortfall. A pre-approval payment process is in place as part of an overall cash
reliance on third-party service providers,
management process.
due to having no employees.
• Due diligence is undertaken prior to appointing all service providers. Periodic
Operational areas considered includes
performance reviews of these providers are made and, where relevant, the
Liquidity, Safeguarding of Assets and
Company annually requests independent service provider assurance reports on
Reliability of Financial Reporting.
the operating effectiveness of their internal controls.
• An independent Custodian is appointed to safeguard the Company’s assets.
ThisCustodian is bound by regulatory and legal contractual obligations and
liabilities. Regular reconciliations are undertaken to ensure accuracy of records.
• Pre-approval processes are in place prior to the publication of any ﬁnancial
information.
20 Hansa Investment Company Limited For the Year Ended 31 March 2022
**PRINCIPAL RISKS – INTERNAL**

**Gearing/Balance Sheet risk**
*Risk of over-gearing the balance sheet and creating financial stress on the Company.*

**Compliance & Regulatory risks**
*A lack of compliance with legislative requirements leading to regulatory breaches and the Company no longer maintaining its premium listing.*

**CONTROLS TO MITIGATE RISKS**

- A maximum limit on the overdraft facility is in place.
- Any increase in overdraft or credit facility requires Board pre- approval.

The Board:
- seeks advice from relevant professional advisers.

**DIVIDEND POLICY AND DIVIDEND PAYMENTS**

**Dividend Policy**

The Board's dividend policy is to pay four similar interim dividends each year. The Board will declare the rate of the four dividends at the beginning of the financial year in question. The Board anticipates dividends to be paid in August, during the financial year, followed by November and February, with the fourth being paid in the May following the end of the financial year. The Board continues to support our strategy of maintaining the dividend at 3.2p until it is fully covered by net revenue income and then increase it in line with any increase in the net revenue income of the Company. If circumstances are such that the level of cash income generated by the portfolio is insufficient to meet the dividend commitment, the shortfall may be made up from the Company's reserves. Under certain one-off circumstances an extra and final dividend may be proposed at the Company's Annual General Meeting.

**Dividend Payments**

The dividends paid are as follows:

|   | 2021-2022 £000  |
| --- | --- |
|  Ordinary and 'A' non-voting Ordinary shares |   |
|  First interim paid 0.8p (August 2021) per share | 960  |
|  Second interim paid 0.8p (November 2021) per share | 960  |
|  Third interim paid 0.8p (February 2022) per share | 960  |
|  Fourth interim paid 0.8p (May 2022) per share | 960  |
|  Total dividends | 3,840  |

The Board is not proposing a final dividend per Ordinary and 'A' non-voting Ordinary share class.

Hansa Investment Company Limited For the Year Ended 31 March 2022 21
## STRATEGIC REPORT
## Organisation and Objectives
## Continued
Dividend History The Board does not believe it can manage the discount in the
Being only three years old, the Company does not have short-term through a share buyback policy. Furthermore, the
a sufﬁciently long dividend history itself. However, combining Board does not believe buying in its own shares is in the best
its dividends paid during the year with dividends paid out long-term interest of shareholders because:
to shareholders of Hansa Trust in prior periods (years ended
• it reduces the number of shares outstanding and therefore
31 March 2019 and before) over the previous ten years is
the liquidity of the shares in the market place; less liquidity
as follows:
may cause a rise in the discount;

| DIVIDEND PAYMENTS FOR YEAR TO END MARCH |  |  |  |  |  |  | • it means a liquid portfolio needs to be maintained, |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (PENCE PER SHARE) |  |  |  |  |  |  |  | compromising the ability to have a portfolio of special |
| 3.6 |  |  |  |  |  |  |  | situations; the maintenance of the long-term investment |
| 3.2 |  |  |  |  |  |  |  | policy and its portfolio takes precedence over the short-term |
|  |  |  |  | 0.8 | 0.8 | 0.8 |  |  |
| 2.8 |  |  |  |  |  |  |  | discount policy; |
|  | 1.6 | 1.6 1.6 1.6 | 1.6 |  |  |  |  |  |

2.4
• the holding in OWHL would represent an even greater
2.2 0.8 0.8 0.8
2.0
percentage of the portfolio and buying back shares would
3.2
1.6
raise the relative exposure to Brazil, which the Board does not
0.8 0.8 0.8
1.2
wish to do; and
1.6 1.6 1.6 1.6 1.6
0.8
1.0 0.8 0.8 0.8 • buying back shares treats the symptoms of the problem of
0.4
lack of demand, not the cause.
0

|  |  | 2013-14 | 2014-15 | 2015-16 | 2016-17 | 2017-18 | 2018-19 | 2019-20 | 2020-21 | 2021-22 | 2022-23 | Insurance |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | 1st Interim Paid |  |  | 2nd Interim Paid |  |  |  |  | 4th Interim Paid3rd Interim Paid |  |  | The Company through its Bye-Laws has indemniﬁed its |
|  |  |  |  |  |  |  |  | PredictedPayableFinal Dividend |  |  |  | Directors and Ofﬁcers to the fullest extent permissible by law. |
| Note: The dividend history represents the combined results of the Company |  |  |  |  |  |  |  |  |  |  |  | During the year the Company also purchased and maintained |

with Hansa Trust including, where relevant, the dividend rate converted into the
liability insurance for its Directors and Ofﬁcers.
number of shares in issue by HICL. It also reects the expected level of dividend
for the year ending 31 March 2023 as advised by the Company.
Going Concern
Discount Policy The Company’s business activities, together with the factors
The objective of HICL is to encourage the demand for the shares, likely to affect its future development, performance and
by ensuring it has an investment policy that is attractive to investors position, including its ﬁnancial position, are set out in the
and which is likely to produce above average returns over the long- Chairman’s Report to the Shareholders, the Portfolio Manager’s
term. Further, we aim to promote the Company and its prospects, Report and other elements of the Strategic Report.
through clear and transparent reporting, so as to encourage the
demand for its shares. The Board continues its discussions with After due consideration of the Balance Sheet, estimated
Warhorse Partners, a brand and marketing specialist focused on liabilities for the 12 months following the signing of this
the asset management industry, to review the Company’s branding Report and having made appropriate enquiries, the Directors
and communications strategy with shareholders and potential have concluded the Company has adequate resources
shareholders alike. The aim of the project continues to be to to continue in operational existence for the foreseeable
enhance and broaden the understanding of the Company, with the future. Assets of the Company consist of securities, the
ultimate objective of widening the shareholder base and deepening majority of which are traded on recognised stock exchanges,
the market for shares. oropen-ended funds run by established managers. For this
reason, theycontinue to adopt the going concern basis in
Pence per HICL Share
preparing the Financial Statements.
22 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
Longer-Term Viability Statement
In addition to the Statement of Going Concern, the Directors
are also required to make a statement concerning the
longer-term viability of the Company. As stated previously in
the wider Strategic Report, the Directors consider 12 months
General Meeting Investor Information Notice of the Annual
to be a relatively short time frame when considering
performance and look to the longer-term for both the
performance and risks associated with the Company.
The Directors consider a period of ﬁve years to be a more
representative period which aligns to the Portfolio Manager’s
longer-term horizon. This period is sufﬁciently long to
manage short-term market volatility and allow longer-term
performance to work through. The Board continually monitors
the Investment Strategy and Investment Guidelines issued
to the Portfolio Manager and directs the Portfolio Manager
to target long-term capital preservation. Further, whilst the
Board has sanctioned the use of gearing, the facility available
to the Portfolio Manager is relatively small compared to the
NAV of the Company. Finally, a number of the more signiﬁcant
costs in each ﬁnancial year are contracted to be calculated,
on the basis of the underlying NAV of the Company. As such,
in a period of negative portfolio performance, the cost base
should also fall.
Barring unforeseen circumstances and taking account of the
Company’s current position including the lingering global
effects of the Covid-19 pandemic, the principal risks, the
longer-term strategy for the portfolio including a diversiﬁed
and liquid asset base and the lack of gearing, the Directors
conﬁrm they have a reasonable expectation that the Company
will continue to operate and meet its liabilities as they fall due
for the next ﬁve years.
Hansa Investment Company Limited For the Year Ended 31 March 2022 23
## STRATEGIC REPORT
## Portfolio Manager’s Report
Portfolio Manager’s Report
MARKETS IN 2022 – THREADING THROUGH THE EYE OF THE NEEDLE
Market backdrop
As the adage goes “There are decades where nothing happens; however, central banks began to acknowledge that this was not
and there are weeks where decades happen” and the ﬁrst necessarily a temporary, post-Covid, phenomena, but instead
quarter of 2022 felt very much like this both from a stock that there were more worrying structural elements to the
market and a geo-political perspective. price hikes. Hence the quarter saw central banks increasingly
shift from viewing their role as one of preventing a COVID-
The year started in a similar vein to how 2021 ended. Inﬂation
induced economic depression to one of preventing the current
continued to spike higher, buoyed by a blend of rising
high inﬂation from becoming ingrained in the system and
commodity prices, labour markets regaining some of their
consequently much harder to eliminate over the longer-term.
pricing power and structural supply side issues. Unlike last year
Chart 1: Inﬂation moving higher
8
6
4
2
YoY %
0
-2
-4

|  |  | Jan-10 |  |  |  |  |  | Jul-12 |  |  |  |  |  | Jan-15 |  |  |  |  |  | Jul-17 |  |  |  |  |  | Jan-20 |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Mar-09 |  |  | Jun-10 | Nov-10 | Apr-11 | Sep-11 | Feb-12 |  | Dec-12 |  | Oct-13 | Mar-14 |  |  | Jun-15 | Nov-15 | Apr-16 | Sep-16 | Feb-17 |  | Dec-17 |  | Oct-18 | Mar-19 |  |  | Jun-20 | Nov-20 | Apr-21 | Sep-21 |
|  | Aug-09 |  |  |  |  |  |  |  |  | May-13 |  |  | Aug-14 |  |  |  |  |  |  |  |  | May-18 |  |  | Aug-19 |  |  |  |  |  |

10
US Core CPI US CPI
Source: Bloomberg
Our view, which broadly matched the consensus, was that there inﬂationary forces were more structural and ultimately would
Country GDP Company MV Index MV
were good reasons to believe the extremes in inﬂation would likely require more aggressive actions by central banks in terms
start to ease somewhat as the year progressed. Partly this was of their longer-term rate setting if they were to hit their inﬂation
a function of economic growth slowing from the post-Covid targets. Potentially this would be the catalyst for the next
economic rebound, combined with supply chains normalising recession and accompanying bear market, albeit we saw this as
as companies adapted as they exited the lockdowns, but also a problem to be managed down the road.
we expected some of the major inﬂationary forces, such as
Hence whilst the prospect of higher rates was not initially
oil prices, to start annualising out with 2022 unlikely to see
taken well by markets, the blend of declining inﬂation as the
the same degree of prices rises as 2021. Where we differed
year progressed, together with economic growth being lower
from the market however was that, whilst we saw inﬂation
but still above trend potentially created a backdrop that we
edging back this year, we were of the view that some of the
Feb-22
24 Hansa Investment Company Limited For the Year Ended 31 March 2022
viewed as broadly favourable for equities. To be clear though we were very much of the view that markets were unlikely to repeat the double digit returns of the previous two years and increasingly we saw longer-term market returns as being much more modest, with the high returns of recent years probably

'borrowed' from future stock market returns. We also felt the chances of a policy mistake were much higher for the year ahead resulting in more volatility in markets with the potential for market losses if there was a policy misstep.

**Chart 2: Historic LT returns versus our future forecasts**

![img-0.jpeg](img-0.jpeg)

Source: Internal Bloomberg

Then, in late February, we saw the invasion of Ukraine by Russia. Whilst there had been speculation that Russia was preparing for an invasion for some time, the view of most informed commentators was that this was the normal posturing by Putin demonstrating to the world that Russia was not to be underestimated and to improve its bargaining position. Rationally, there seemed little upside to such a move with many Russians having family in Ukraine (and therefore a bloody war being deeply unpopular with many Russians), the inevitable sanctions that would result from such actions and ultimately the prospect of Ukraine joining NATO seemed unlikely, with most countries recognising this would be a step too far for Russia.

Clearly this view was misplaced. Whilst impossible to read the mind of Putin, it seems likely that he is seeking to recreate

some form of iron curtain between Russia and the West and sees Ukraine as intrinsically part of Russia and a buffer between Russia and NATO countries, at a time when Russia is becoming increasingly aligned with China and the East. Perhaps what he didn't fully appreciate, however, was the strength of the reaction by the West and the subsequent sanctions. In an attempt to isolate Russia from the rest of the world, and to push the country further into economic hardship, the West introduced measures, such as excluding Russia from the international payments system ("SWIFT"), ceasing trading with Russian companies, seizing the assets of oligarchs linked to Putin and stopping important elements of the supply chain, such as semi-conductors being sold to Russia. Effectively there is an 'iron-ification' of Russia taking place, that in all likelihood will last for many years or at least until there is regime change.

Hansa Investment Company Limited For the Year Ended 31 March 2022 25
## STRATEGIC REPORT
## Portfolio Manager’s Report
## Continued
Unfortunately Putin’s actions have placed further stress on come under pressure but there are important implications for
a system already under immense pressure. Whilst largely economic growth especially in Europe. Consumers face yet
irrelevant from an economic perspective, Russia is the second more pressure as utility and fuel bills rise to a point where it is
largest producer of commodities globally in terms of energy, likely to place real pressure on their ability to spend on goods
metals and soft commodities. With commodities a key and services. Similarly, many industries face potentially much
component of inﬂation the last thing needed is further pressure higher energy costs, squeezing margins and even the risk of
on prices through rising costs of energy, key metals such as energy outages if Putin decides to double down and limit the
palladium and nickel and important food stuffs such as corn supply of oil and gas into Europe.
and wheat and fertilisers. Furthermore, not only does inﬂation
Chart 3: The importance of Russia in commodity markets
EU27 Imports of Crude Oil, 2021 EU27 Imports of Gas, 2021
Others 9.5% Others 8.2% Russian Federation 31.6%
Russian Federation 26.3%
Algeria 3.2% Nigeria 4.1%
Azerbaijan 5.3% UK 5.1%
Saudi Arabia 5.3%
Qatar 7.1%
Iraq 7.4%
Norway 9.5%
Norway 12.2%
Nigeria 7.4%
USA 9.5%
Kazakhstan 8.4% Algeria 17.3%
USA 14.3%
Libya 8.4%
Source: Food and Agricultural Organization of the United Nations
As a result the ﬁrst quarter has been something of a roller some form of peace agreement will be reached between Russia
coaster for global stock markets. January saw markets sell- and Ukraine and with it recession in Europe is avoided, and
off sharply, as investors came to terms with higher inﬂation perhaps that the worst of the risks on the energy front will not
and a realisation that rates would need to move much higher come to fruition. Our view is that saying anything on these
if inﬂation was to return to target levels. Intra-market the points is fraught with uncertainty.
moves were even more extreme, reﬂecting the fact that higher
discount rates imply lower valuations for longer duration In summary, world equity markets fell by 5.4% in Q1, albeit
companies, resulting in a signiﬁcant rotation out of growth with wide variations across countries and sectors. The US,
areas such as technology into the more cyclical areas of the being a relatively closed economy and largely self-sufﬁcient
markets, particularly commodities. These moves were ampliﬁed for energy, fell by 4.9% whereas Europe, being more directly
towards the end of February when Russia invaded Ukraine. impacted by events in Ukraine and highly dependent on Russian
Markets took a further lurch downwards as they came to terms oil and gas, fell by 7.9%. Amongst the other world markets,
with the ramiﬁcation of these events and many commodity Japan fell by 6.8%, India by 1.8% and the UK, given its large
prices spiked up in a disorderly fashion. commodity component, rose by 1.7%. Interestingly, China fell
by 14.2% reﬂecting the challenges of continuing with its zero
Interestingly, markets rallied as we neared the end of March. Covid policy and possibly a backlash against those countries
Whilst perhaps hard to rationalise given the very uncertain with lower governance standards in the light of Russia’s actions.
world in which we currently live, it likely reﬂects a belief that At the sector level unsurprisingly energy has been strong, rising
26 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
by 21.2% over the quarter, whereas technology, being a long underperformed. The important global Treasury market has
duration sector, fell by 10.3% as the fear of rising interest rates fallen by some 5.5% in the year-to-date, US investment
weighed on it. grade by 8.3% and the UK government bond market by just
under 10%.
Perhaps the most notable performance for the quarter however
General Meeting Investor Information Notice of the Annual
occurred in the bond markets. Having been in a multi-year Finally, commodity prices have again jumped higher with
bull market, as persistently low inﬂation drove interest rates the Russia/Ukraine situation placing further pressure on an
ever lower, many bond prices have been falling sharply by already tight market. Gold and copper rose by 5.9% and 6.7%
bond market standards. With inﬂation rates spiking higher respectively, but the standout performer was energy, with
and central banks beginning to react by both withdrawing European brent crude rising by 37.6% to $106.60/barrel, a level
liquidity and increasing interest rates, bonds have unsurprisingly not seen since 2014.
Chart 4: Performance of countries, sectors and asset classes (GBP)
CurrenciesCommoditiesFixed IncomeEquities
120%
100%
80%
60%
40%
20%
% Return (GBP)
0%
-20%
-40%
UK
Japan Brazil India China Gold
Europe Copper
USD/EUR USD/GBP USD/BRL
EMBI Global WTI Cushing
North America Global Treasury
Frontier Markets Global High Yield
Developed Markets Emerging Markets
EM Global Diversied
Global Markets (DM/EM/FM) Bloomberg Commodity Index
Global Aggregate Corporate Bond
Dark bars represent Q1 2022 returns
Light bars represent returns from January 2021 to March 2022
Market Outlook Scenario 1…..the bear case
Positioning portfolios in the current environment is fraught with As discussed above, whereas markets had previously expected
difﬁculty and unfortunately the range of potential outcomes is there to be a signiﬁcant transitory element to the current high
very wide and, to a degree, binary in nature. Betting on ‘black’ inﬂation, it is very possible that there are much deeper, more
and being wrong could have disastrous implications in terms structural factors behind the current price rises. Commodities,
of performance! for example, may continue to remain high for some time to
come. Having been through many years of underinvestment as
Whilst there are many different permutations for how markets investors shied away from the sector having been burnt in the
pan out, the two core scenarios that we see for the year ahead prior cycle, commodities have effectively been starved of capital
are as follows: for the past few years. Exacerbating this problem has been the
Hansa Investment Company Limited For the Year Ended 31 March 2022 27
Source: Bloomberg
## STRATEGIC REPORT
## Portfolio Manager’s Report
## Continued
impact of ESG. The desire to move to a more environmentally to do. Energy security as well as how it is sourced are equally
friendly world (quite rightly, in our opinion) has meant many important for meeting a country’s energy requirements.
investors and banks have limited their investment into the
sector. Unfortunately, whilst this move is a laudable one, the Compounding the issue has been labour costs. For many
timeframe has perhaps been overly ambitious. Whilst ultimately years now corporates have dominated at the expense of the
a zero-carbon world is undoubtedly achievable, in the short to labour market. Due to the strength of their negotiating power,
medium-term a combination of both fossil fuels and renewables companies have been able to minimise labour costs in pursuit
is required if we are to meet our energy needs. As has been of higher margins and in the process the share of corporate
illustrated all too painfully by recent events, outsourcing your proﬁtability has increased sharply as a percentage of global GDP,
energy production to regions such as Russia and claiming your whereas that of labour has fallen precipitously.
carbon footprint has improved, is not always a desirable thing
Chart 5: Corporates have beneﬁted at the expense of labour markets in recent years
60
55 10
Corporate Proﬁts % of US GDP
50 8
45 6
40 4

| 35 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | Jun-73 |  | Jun-78 |  | Jun-83 |  | Jun-88 |  | Jun-93 |  | Jun-98 |  | Jun-03 |  | Jun-08 |  | Jun-13 | 12 | Jun-18 |  |
|  | Dec-70 |  | Dec-75 |  | Dec-80 |  | Dec-85 |  | Dec-90 |  | Dec-95 |  | Dec-00 |  | Dec-05 |  | Dec-10 |  | Dec-15 |  | Dec-20 |
|  |  |  |  | Wages % of US Gross Domestic Income |  |  |  |  |  |  |  |  |  | Corporate Proﬁts % of US GDP (RHS) |  |  |  |  |  |  |  |

Source: Bloomberg
Country GDP Company MV Index MV
Covid however appears to have shifted the balance of power. Unfortunately, this backdrop of rising inﬂation has come at a time
A combination of people viewing their quality of life as more when economic growth is likely to slow. Partly this is a natural
important than simple remuneration has meant many industries, phenomenon as economies slow following a year of supernormal
such as hospitality, have seen a sharp reduction in labour supply growth as we exited the pandemic, but also it reﬂects our current
and a corresponding uptick in wage inﬂation. With the pandemic late cycle position when growth would naturally be expected to
also encouraging companies to focus more on supply chain fall. The risk now is that the situation in Ukraine may be the straw
security and shift less of their supply chains to cheaper labour that breaks the camel’s back, forcing economies into recession as
markets such as China, the greater use of domestic labour in conﬁdence levels fall, especially in Europe and with rising energy
Wages % of US Gross Domestic Income
developed markets has only served to exacerbate this problem. costs placing pressure on corporate proﬁtability.
28 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
Chart 6: Rising inﬂation and falling growth – stagﬂation?
IMF Forecast
8%
General Meeting Investor Information Notice of the Annual
6%
Risk of growth declining
4%
faster than expected while
inﬂation remains elevated?
2%
0%
-2%
-4%
2023202220212020201920182017
US GDP Growth US CPI Inﬂation
Source: Bloomberg; IMF
As a result Central Banks are facing what may be an of the government and Central Bank Covid stimulus packages
unwinnable battle as they attempt to head off signiﬁcantly were not needed and in practice added fuel to an already hot
higher inﬂation at a time when global economies are slowing. ﬁre. With many of these packages now running off and with
On the one hand they may accept inﬂation needs to stay high interest rates now rising, this should remove an important driver
if they are to avoid pushing economies into recession. Equally of inﬂation.
they may be of the view that bringing inﬂation back to target
is a necessary evil if we are to avoid baking inﬂation into the Equally comparisons between now and the 1970s seem to be
system and making the problem much harder to resolve in particularly wide of the mark, as economies then were very
the longer term. Threading economies through the eye of the different from those existing currently. Whereas in the seventies
needle may well be possible, but it does look as though the trade unions held economies to ransom and commodities were
hole is becoming an increasingly small one! a much larger proportion of the global economy, now markets
10% are highly interconnected and technology focused. Many would
Scenario 2……the alternative scenario
also highlight that for the majority of recent years it has been
There is, however, an alternative to this doomsday scenario for
deﬂation that has been the main problem impacting economies,
stock markets. Country GDP Company MV Index MV
not inﬂation, and question whether economies are really that
12.6%
different now from those pre-Covid.
On the inﬂationary front, many commentators believe that
10.9%
whilst there are undoubtedly structural elements to the current
inﬂationary picture, the core underlying drivers are the result of 9.7%
9.5%
9.1%
the pandemic. As economies reopened there was a mismatch 8.5% 8.6% 8.5%
8.1%
between demand and the ability for supply chains to meet this
6.9%
demand, especially with the ongoing zero Covid policy in China. 6.4% 6.6% 6.5%
Annualised return (USD)
Naturally over time you would expect these imbalances to
resolve themselves. Also, in hindsight, it appears many elements 4.5%
3.8%
2.4%
2.4% 2.4%
1.3%
Hansa Investment Company Limited For the Year Ended 31 March 2022 29
0.6% 0.5%
Semis Auto
Banks Div Fin Media
Energy Utilities Pharma
Cosn Svs Retailing Telecom HH & PP
Materials Cons Dur Transport Insurance S/w & Svs
Real Estate
FD, Bev & Tob
FD & Drg Retail HC Equip & Svs
Tech H/w & Equip
Comm Svs & Supp
European sectors 20-year correlation with inﬂation expectations
## STRATEGIC REPORT
## Portfolio Manager’s Report
## Continued
Chart 7: Energy intensity of the global economy has Similarly, it is very possible that the full extent of the growth
declined since the late 1970s pressures is being overplayed. No-one is in any doubt growth
12 rates will be lower this year than they were last, but what is up
for debate is whether global economies are necessarily heading
10
for recession (and a corresponding bear market). Whilstnot
wishing to underplay the scale of the human tragedy that is
8
unfolding in Ukraine, neither Ukraine nor Russia is relevant
6
in terms of the size of their economies. Conﬁdence levels in
Europe will obviously be affected in the near-term and higher
4
energy prices will dampen corporate sentiment, but it is
2 very possible that the resilience of the European economy is
Quadrillion Btu per trilion dollars GDP being underestimated and a recession is ultimately avoided.
0
Furthermore, Europe has been a stagnant economy for many
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019
years and the US, which remains the pre-eminent driver of global
Energy consumption per GDP, World
stock markets, looks to be in relatively good shape, with decent
Source: US Energy Information Administration
growth forecasts for the coming year and is largely energy self-
sufﬁcient (albeit it is also struggling to combat the challenges of
higher inﬂation and rates setting).
Chart 8: Growth forecasts (IMF)
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
5.0% 1.5%
1.0%
Auto

| 0.5% |  | Banks |  | Semis |  |  |  |  |  |  |  |  | Media |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  | Div Fin |  |  |  | Energy |  |  |  |  |  |  | Utilities |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Telecom |  | Pharma |
|  |  |  |  |  |  |  |  | Cosn Svs |  |  |  | Retailing |  |  |  | HH & PP |  |
|  | Materials |  |  |  | Cons Dur | Transport |  |  | Insurance |  | S/w & Svs |  |  |  |  |  |  |
| 0.0% |  |  |  |  |  |  |  |  |  | Real Estate |  |  |  |  |  |  |  |

FD, Bev & Tob
Emerging EconomiesAdvanced EconomiesJapanEuro AreaUS FD & Drg Retail HC Equip & Svs
Tech H/w & Equip
2022 2023 Comm Svs & Supp
Source: IMF
Stock markets are likely to perform acceptably in such stock markets, the backdrop is not nearly so bad as the gloom
a backdrop, especially given the lack of alternatives and, whilst mongers would have you believe.
no one is arguing we are entering a goldilocks period for global
European sectors 20-year correlation with inﬂation expectations
30 Hansa Investment Company Limited For the Year Ended 31 March 2022
Annualised return (USD)
Strategic Report
Reports Financial Statements Corporate Governance
Portfolio positioning Hence at this point we have largely maintained our equity
The million-dollar question of course is how do you position positions. Undoubtedly this is the closest we have been to
portfolios given these potentially very different, very revisiting this pro-equity position within the current cycle and
distinct outcomes? if events do start to veer in the wrong direction and scenario1
looks more likely than that of scenario 2, we will look to act
General Meeting Investor Information Notice of the Annual
Scenario 1 is bad for stock markets on many levels. Recessions quickly and de-risk portfolios. Clearly equities are vulnerable
and bear markets in equities go hand in hand and the to a recession and a corresponding bear market, but they do
combination of high inﬂation and rising rates will almost have the advantage that great companies typically possess
certainly be the death knell of the multi-year bull market in pricing power and can help offset the worst effects of inﬂation.
bonds. Hence not only do risk assets come under pressure, but Ultimately most companies are normally owners of real assets
also defensive assets, a scenario where the 60:40 balanced which should provide an element of protection in a higher
portfolio between equities and bonds will not bail out investors inﬂation world.
and may in fact perform very poorly.
At the sector level we would advocate more balance within
At the sector level Scenario 1 also has major implications. portfolios. Whilst still of the view that commodities are in
Whereas previously a low inﬂation, low interest rate a longer-term structural decline, there can be sub-cycles where
environment favoured high growth companies and made value these assets produce periods of signiﬁcant outperformance,
and commodity investing less attractive, Scenario1 would as was demonstrated by the tobacco sector in the noughties.
tend to be bad for growth companies and long-term assets in Similarly, our conviction that we are very much in the midst of
general, due to higher discount rates and favour commodities a structural change as the world is digitised and AI becomes
and real assets which can offer protection in a more a feature of almost all that we do remains unchanged. Thekey
inﬂationary world. question in the short-term is how one values this growth with
discount rates in ﬂux, but we take comfort from the fact that
In contrast Scenario 2 would likely provide a very different ultimately these companies will be able to grow into their
backdrop for global markets. If recession is avoided and with valuations, whereas getting it wrong in those sectors which are
many sectors increasingly discounting a severe growth shock, in structural decline is much more damaging to one’s wealth.
equities may offer the best possible home for investors,
especially in view of the lack of alternatives. Bonds may see Geographically we would also advocate a more balanced
some form of a relief rally in view of the extent of the sell-off stance. Whereas previously we had begun to think that more
experienced over recent months and, if the terminal interest rate cyclical economies, such as Europe and the emerging markets,
is lower due to less inﬂationary pressure, investors may seek to would do better than the US in an environment where growth
revisit growth sectors such as technology in view of the lower was acceptable and higher inﬂation made long duration
discount rates. sectors such as technology less attractive, the events in Ukraine
have yet again swung the pendulum back in favour of the
So, the big question is where do we stand and how are we US. The combination of being in robust economic health,
positioning portfolios in the current environment? relatively unaffected economically by the war in Europe and
largely energy self-sufﬁcient, has made the US a safe haven.
Well, without sounding trite, very carefully. Given the very Undoubtedly its valuation is higher than the rest of the world,
different outcomes for how the environment may pan-out there but many would argue this is justiﬁed given the structurally
is a real danger of taking an extreme position in one direction higher returns in the US. We have said it many times before and
or the other and being proved to be very wrong. Typically when we will say it again now, you bet against the US stock market at
this happens and you are on the back foot, you tend be whip- your peril!
sawed and compound the original mistakes.
Hansa Investment Company Limited For the Year Ended 31 March 2022 31
STRATEGIC REPORT

# Portfolio Manager's Report

## Continued

In contrast, whilst bonds may well be oversold in the short-term and their relative valuation to equities has improved significantly, we continue to see few attractions for longer-term investors. Typically, when multi-year bull markets break they fall for longer than you anticipate (just as bull markets typically go on for longer) and one should not forget just how powerful the downward pressures have been on rates for many years, combined with the impact of Central Banks buying a large proportion of their national debt. Typically, where we are present in bonds we prefer those managers who either have the ability to short, are highly active or who play in the more complex areas of the market.

### Summary

Current market conditions are extraordinarily complex, with very different potential outcomes which unfortunately may lead to wide variances in asset class performance. Positioning portfolios in such a backdrop is challenging to say the least.

At Hansa we are fortunate to possess a number of structural advantages that work in our favour. Typically, we manage highly

diversified portfolios both by asset class but also by geography. Our managers are highly experienced and have almost invariably managed portfolios through multiple cycles and different market conditions. Whilst there will be periods where they 'get it wrong' we rest assured in the longevity and strength of their investment processes and, ultimately, by their focus on good quality companies which become stronger during periods of turmoil.

Perhaps most important however is our genuine long-term investment horizon. It is this that enables us to focus on identifying great quality investments rather than seeking to time markets. As noted many times in the past trying to time markets is incredibly difficult. Even if you are successful (read lucky!) in calling a market sell-off you then need to time when it is right to re-enter markets. So often we have seen investors get the first part of this right only to miss the next cycle completely by staying cautious for too long. Through the application of this long-term philosophy this should enable us to continue to deliver robust, repeatable investment performance.

**Chart 9: Long-term market chart highlighting how periods of sell-off diminish in importance over time**

![img-1.jpeg](img-1.jpeg)

### Portfolio Review and Activity

During what has been a volatile period for markets, your Company produced a return of 5.1% for the full financial year. Ocean Wilsons Holdings has been a strong contributor over that time, with a return of 24.7%. The key performance indicators for the past 12 months were varied, with the MSCI ACWI NR Index (GBP) being up 12.7% and the UK CPI being up 7.0%

as inflation has come through strongly, while the FTSE UK Gilts All Stocks TR Index declined 5.1%. The UK equity market, as measured by the FTSE All Share TR Index, rose 13.0%. The Company's NAV per share has increased from 306.6p at the end of March 2021 to 319.1p at the end of March 2022, with 3.2p per share having been paid out in dividends during the financial year.

32 Hansa Investment Company Limited For the Year Ended 31 March 2022
### Core and Thematic Funds

For the financial year the Core Regional silo has gained 1.5%, while the Thematic silo is down 2.2%.

The North American holdings were among the strongest contributors to performance over the last year. Despite declining in the final quarter of the year, **Findlay Park American**, **Select Equity** and **Vulcan Value Equity** are all up quite strongly over the year with returns of 12.7%, 8.8% and 2.6%, respectively. These funds tend to have a lower exposure to the more cyclical parts of the market, such as energy and financials, which have been stronger in recent months. Findlay Park's exposure to stocks such as TopBuild, Ferguson and Home Depot detracted later in the year on concerns that rising rates will slow down the housing market in the US, although the manager remains positive about the long-term outlook for residential housing activity. **Pershing Square Holdings** avoided the market falls of the last quarter, making a gain of 0.2% and it is up an impressive 17.9% over the year. These gains have partly been the result of interest rate swaptions that the manager realised in January, generating $1.45bn on $188m invested by the fund. Some of these proceeds were then invested into Netflix, which the manager had been looking at for some time, as a dip in its share price driven by worries about subscriber growth created an entry opportunity. Given concerns about rising interest rates the manager decided to take out new interest rate swaptions during the quarter that had strike prices somewhat out of the money and with a longer-term expiration. These have already tripled in value, although they have not yet been realised.

The portfolio's Japanese holdings fell over the last quarter of the year, with **Goodhart Partners: Hanjo** and **Indus Japan** now being down 12.2% and 4.2%, respectively, over the last year. Detractors within the Indus fund included positions in Fujitsu (IT services) and JSR (rubber for car tyres), while the fund's largest position in the media conglomerate Kadokawa contributed as the stock performed well after the company announced it would be adding its anime content to a major platform.

Within the emerging and frontier market holdings there were strong gains by **NITAsian Discovery**, which continued its period of good performance and has returned 28.0% over the year. The fund is currently heavily concentrated in Vietnam and Indonesia where the manager sees the best opportunities

within the south-east Asia region. FPT, a Vietnamese technology company, reported impressive performance with revenue growing 27% and profit 30%. This was mainly driven by its technology and software segments and the margin was lifted by the increased contribution from digital transformation services. An Indonesian hospital provider, Medikaloka Hermina, was another strong contributor with its performance mainly driven by market talk of a potential strategic investor. The company has continued to grow revenue and profit due to Covid-19 patients coupled with improved operational efficiencies. **BlackRock Frontiers Investment Trust** is up 9.2% over the year while **KLS Corinium Emerging Markets Equity** is down 3.5% since it was added to the portfolio in December 2021. The manager exited the fund's Russian positions during January, as speculation grew regarding Russia's invasion of Ukraine, which ultimately proved to be the correct decision and limited the losses incurred by the fund.

Within the portfolio's Thematic bucket there were divergent performances this year, as some sectors benefited from the backdrop of higher inflation and interest rates, while others suffered. The beneficiaries included the energy and mining exposures we added in the last few months of the year, with the **iShares MSCI World Energy Sector ETF** and **iShares Global Metals and Mining Producers ETF** both returning 14% since their purchase dates. The exposure to the financials' sector through **SPDR MSCI World Financials ETF** also gained, being up 2.6% over the final quarter and 17.2% over the year. Healthcare and technology sector exposures, however, detracted over the year. **GAM Star Disruptive Growth** had a more challenging final quarter as it declined by 12.9% and is down 3.4% over the year. The three healthcare positions, **Worldwide Healthcare Trust**, **BB Biotech** and **RA Capital International Healthcare Fund** all declined during the final quarter. The first two of these are down 11.3% and 12.3%, respectively, for the year, while RA Capital has fallen by 27.6%.

### Diversifying Funds

The diversifying holdings are intended to dampen volatility and show lower correlation to the equity market. It is pleasing to see they have performed this function well in a period when both equities and bonds have delivered negative returns. The Diversifying silo produced a return of 0.7% over the final quarter, taking its return over the financial year to 6.5%.

Hansa Investment Company Limited For the Year Ended 31 March 2022 33
STRATEGIC REPORT

# Portfolio Manager's Report

## Continued

Some of the strongest returns in the Diversifying silo came from the two trend-following CTA funds, which did especially well in the final quarter, with **Schroder GAIA BlueTrend** and **GAM Systematic Core Macro** rising 18.0% and 7.5%, respectively, over the year. Performance has come from a range of sources for these funds, but positions in commodities have been notable contributors for both. **BioPharma Credit** has also been particularly strong, registering a 10.8% gain for the final quarter to bring it to be up 18.8% over the year. Performance was particularly strong in February when the company announced it was providing Collegium Pharmaceutical with a new senior secured term loan for $650m to fund its proposed acquisition of BioDelivery Sciences International.

Both macro funds continue to produce steady returns, with **MKP Opportunity** being up 4.6% over the year and **Hudson Bay** being up 4.5%. **Global Event Partners** and **Keynes Systematic Absolute Return Fund** are up just over 3% for the year.

There were some losses in the diversifying holdings within the fixed income space during the last quarter of the year, although these still broadly outperformed wider fixed income indices. The **Apollo Total Return Fund** declined 1.0%, leaving it up 2.1% over the year, while the **Lazard Convertible Global Fund** fell 5.2% and is down 6.3% since its purchase date in July 2021. The passive position in US Treasuries has detracted this year, as the **Vanguard US Government Bond Index Fund** is down 4.1% over 12 months.

The portfolio returned 1.3% over the past year, with the biggest contributors being **CVS Health, Alphabet and Arch Capital**. The biggest distractors were **Grupo Catalana Occidente**, **TripAdvisor** and **Nexon**.

The war in Ukraine caused the oil price to move sharply higher, but it had been gradually moving upwards prior to that over concerns about a lack of new supply in a rebounding global economy. In recent years oil companies have been under pressure from ESG and activist investors to reduce their capital spending, this combined with an oil price that had been fluctuating around $50 a barrel for the five years up to the pandemic meant capital expenditures (uppeo) had been declining. As an example, the Brazilian champion Petrobras cuts

its capex every year from a record $45bn in 2013, falling to $6.3bn in 2021. Similarly, BP has seen its capex fall from $25bn in 2013 to $10.8bn last year.

It appears that the pressure from investors and low oil prices has led to severe underinvestment in upstream production, but this cycle may well have ended as higher prices and concerns over energy security foster new investment and both Petrobras and BP's spending is set to increase in 2022.

Our holding in **Subsea 7** should be a beneficiary of this trend and has won contracts from both BP and Petrobras in the past six months. Subsea 7 is an engineering and construction company focused on offshore energy, essentially providing the plumbing to rigs and windfarms. They operate on long lead times meaning the business has a certain visibility on its revenue stream, but this also means the cycles are long and do not turn quickly. Their order backlog value peaked in 2013 and declined until 2018, but it has been gradually increasing since then and they recently noted they expect another strong order intake in 2022. They are also cycling through some lower margin business which was tendered when times were tougher, so we also expect to see margin improvement next year. They are in a strong position as several competitors did not survive the bear market in oil spending and many of those that did have perilous balance sheets, unlike Subsea 7 which has very little debt.

One of the key reasons they have survived and thrived over the past few years is because of the excellent stewardship of the chairman and 23% owner Kristian Siem. An aligned management is particularly important in long cycle businesses as there is no incentive to chase unprofitable contracts to boost revenues and backlogs to meet short-term management targets. This fundamental principal-agent problem has led to the downfall of a number of Subsea 7's peers over the years.

The unknowable question is whether this is just a short-term pickup in oil company capex or the beginning of a new cycle. We view risk as a permanent impairment of capital and the risk of that with Subsea 7 is low, even if oil company spending resumes its decline. Not only does Subsea 7 possess a strong balance sheet and has 18% of its backlog exposed to a fast-growing renewables business, but it also trades at a valuation that implies a resumption of spending declines. It is priced at 0.7x the value of its tangible net assets and 11x 2023 free cash

34 Hansa Investment Company Limited For the Year Ended 31 March 2022
flow despite an enviable track record of compounding tangible book value per share at 9% for 15 years. If oil capex does improve, we think the upside is significant but if it does not our downside should be protected.

During the year we initiated a position in **Glencore** and sold our positions in **Alphabet**, **Berkshire Hathaway**, **C&C**, **Hilton Food**, **Iridium**, **Marel**, **Nexon**, **Samsung** and **TripAdvisor**.

#### **Ocean Wilsons Holdings**

Operating activity through 2021 has been solid and the company has reported strong growth in both revenues and profits, despite the business being impacted by the limited availability of empty containers and worldwide logistics bottlenecks. The business achieved record cargo handling figures at its Salvador container terminal through the course of the year, where the new berth infrastructure has supported increased efficiency. Other achievements during 2021 included the listing of the Wilson Sons' subsidiary on the Novo Mercado segment of the stock market, which required the company to adopt corporate governance practices over and above those required by Brazilian law. A six-for-one stock split has been approved by shareholders for Wilson Sons, which took place on 16 May. The investment portfolio continues to show strong performance, with the most recent December 2021 valuation being 13.4% larger than the December 2020 valuation. The Ocean Wilsons Holdings share price gained 7.5% in the quarter on a total return basis and it is up 24.7% over the last 12 months. The share price represents a discount to the look-through NAV of 47.8%, based on the market value of the Wilson Sons shares together with the latest valuation of the investment portfolio.

The investment portfolio shares many characteristics with the portfolio held directly within Hansa Investment Company, with a preference for funds with clearly defined strategies run by long-term, conviction managers. It has a significant private equity programme invested in Limited Partnerships, and recently many of these funds have been making significant distributions and delivering strong returns. While paying out $2.5m for dividend payments in each of May and August 2021, the portfolio increased in value to $351.8m at the end of December 2021, up from $332.7m at the end of April 2021 and $310.3m at the end of December 2020.

The fourth quarter (calendar year) results for Wilson Sons (released in March) were significantly ahead of the prior year, with earnings of $34.0m, 6.8% higher than the same quarter in 2020. Performance for the full year was strong with earnings of $159.4m, 16.3% ahead of 2020. Container terminals were able to deliver growing revenues despite the challenges affecting global trade, thanks to robust first half results in 2021 and an improved revenue mix. Volumes increased at the Salvador terminal, mainly driven by higher trans-shipment and imports of empty containers, while renewable energy stood out during the year in terms of imports.

The towage division reported good results as operating volumes were driven by strong commodity exports and LNG imports. The division's EBITDA margin increased due to better average revenue per manoeuvre and more special operations, which were up over 50% for the year. While there remains some uncertainty around global trade during 2022, the company expects trade flow to support strong towage results while maritime services to the oil and gas industry are expected to recover.

**Alec Letchfield** May 2022

Hansa Investment Company Limited For the Year Ended 31 March 2022 35
STRATEGIC REPORT

# Portfolio Statement

As at 31 March 2022

|  Investments | Fair value £000 | Percentage of Net Assets  |
| --- | --- | --- |
|  **Core Regional Funds**  |   |   |
|  Findlay Park American Fund | 28,712 | 7.5  |
|  Vulcan Value Equity Fund | 24,076 | 6.3  |
|  Select Equity Offshore Ltd | 20,282 | 5.3  |
|  BlackRock Strategic Hedge Fund | 13,923 | 3.6  |
|  Schroder ISF Asian Total Return | 11,819 | 3.1  |
|  Goodhart Partners: Hanjo Fund | 10,278 | 2.7  |
|  Pershing Square Holdings Ltd | 9,908 | 2.6  |
|  Adelphi European Select Equity Fund | 8,114 | 2.1  |
|  Indus Japan Long-Only Fund | 7,020 | 1.8  |
|  Egerton Long-Short Fund Ltd | 6,521 | 1.7  |
|  Prince Street Institutional Offshore Ltd | 5,838 | 1.5  |
|  iShares Core MSCI Europe UCITS ETF | 5,608 | 1.5  |
|  iShares Core EM IMI UCITS ETF | 4,309 | 1.1  |
|  NTAsian Discovery Fund | 4,003 | 1.1  |
|  BlackRock Frontiers Investment Trust PLC | 3,445 | 0.9  |
|  KLS Centrum Emerging Markets Equity Fund | 2,703 | 0.7  |
|  **Total Core Regional Funds** | **166,559** | **43.5**  |
|  **Strategic**  |   |   |
|  Wilson Sons (through the holding in Ocean Wilsons Holdings) * | 56,771 | 14.8  |
|  Ocean Wilsons Investments Limited (through the holding in Ocean Wilsons Holdings) * | 36,757 | 9.6  |
|  **Total Strategic** | **93,528** | **24.4**  |
|  **Global Equities**  |   |   |
|  Interactive Brokers Group Inc | 3,607 | 0.9  |
|  Exor NV | 3,230 | 0.8  |
|  CK Hutchison | 2,980 | 0.8  |
|  Sutleia 7 | 2,613 | 0.7  |
|  Orion Engineered Carbons SA | 2,545 | 0.7  |
|  Arch Capital Group Ltd | 2,437 | 0.6  |
|  CVS Health Corp | 2,383 | 0.6  |
|  Grupo Catalana Occidente SA | 2,232 | 0.6  |
|  Coats Group PLC | 1,858 | 0.5  |
|  Glencore PLC | 1,800 | 0.5  |
|  Dollar General | 1,699 | 0.4  |
|  Valset Inc | 1,612 | 0.4  |
|  CTT-Corrects de Portugal | 952 | 0.2  |
|  **Total Global Equities** | **29,948** | **7.7**  |

36 Hansa Investment Company Limited For the Year Ended 31 March 2022
|  Investments | Fair value £000 | Percentage of Net Assets  |
| --- | --- | --- |
|  **Diversifying**  |   |   |
|  Global Event Partners Ltd | 10,571 | 2.8  |
|  DV4 Ltd ** | 8,917 | 2.3  |
|  Hudson Bay International Fund Ltd | 4,944 | 1.3  |
|  MKP Opportunity Offshore Ltd | 3,192 | 0.8  |
|  Keynes Systematic Absolute Return Fund | 2,521 | 0.7  |
|  Apollo Total Return Fund | 2,436 | 0.6  |
|  Selwood AM – Liquid Credit Strategy | 2,302 | 0.6  |
|  Lazard Convertible Global | 1,995 | 0.5  |
|  BH Absolute Return Government Bond | 1,749 | 0.5  |
|  Vanguard US Govt Bond Index Fund | 1,595 | 0.4  |
|  GAM Systematic Core Macro (Cayman) Fund | 1,444 | 0.4  |
|  BioPharma Credit PLC | 1,423 | 0.4  |
|  Schroder GAIA BlueTrend | 1,361 | 0.4  |
|  **Total Diversifying** | **44,450** | **11.7**  |
|  **Thematic Assets**  |   |   |
|  GAM Star Fund PLC – Disruptive Growth | 22,377 | 5.8  |
|  SPDR MSCI World Financials UCITS ETF | 8,338 | 2.2  |
|  Impax Environment Markets Fund | 4,868 | 1.3  |
|  BB Biotech AG | 3,388 | 0.9  |
|  RA Capital International Healthcare Fund | 2,325 | 0.6  |
|  Worldwide Healthcare Trust PLC | 2,076 | 0.5  |
|  iShares MSCI Global Markets & Mining Prods ETF | 1,068 | 0.3  |
|  iShares MSCI World Energy Sector UCITS ETF | 1,061 | 0.3  |
|  **Total Thematic** | **45,501** | **11.9**  |
|  **Total Investments** | **379,986** | **99.2**  |
|  **Net Current Liabilities** | **(368)** | **(0.1)**  |
|  **Non-Current Assets** | **3,244** | **0.9**  |
|  **Net Assets** | **382,862** | **100.0**  |

Note:
* Hansa Investment Company Ltd owns 9,252,770 shares in Ocean Wilsons Holdings Limited. In order to better reflect Hansa Investment Company's exposure to different market sites, the two subsidiaries of OWHL, Wilson Sons and Ocean Wilsons (Investments) Ltd ("OVIL"), are shown separately above. The fair value of Hansa Investment Company's holding in OWHL has been apportioned across the two subsidiaries in the ratio of the latest reported NAV of OWHL that being the NAV of OWHL shown per the 31 December 2021 OWHL Financial Statements, to the market value of OWHL's holding in Wilson Sons, that being the bid share price of Wilson Sons multiplied by the number of shares held by OWHL at 31 March 2022.
** OVI Ltd is an unlisted Private Equity holding. As such, its value is estimated as a Level 3 Asset in Note 20. All other valuations are either derived from information supplied by listed sources or from pricing information supplied by third party fund managers.

Hansa Investment Company Limited For the Year Ended 31 March 2022 37
STRATEGIC REPORT

# Shareholder Profile and Engagement

## Capital Structure

The Company has 40,000,000 Ordinary shares of 1p (1/3 of the total capital) and 80,000,000 'A' non-voting Ordinary shares of 1p (2/3 of the total capital) each in issue. The Ordinary shareholders are entitled to one vote per Ordinary share held. The 'A' non-voting Ordinary shares do not entitle the holders to vote or receive notice of meetings, but in all other respects they have the same rights as the Company's Ordinary shares.

## Shareholder Profile

The Company's shares owned at 31 March 2022 are as follows:

|   | Ordinary shares |  | 'A' non-voting Ordinary shares |   |
| --- | --- | --- | --- | --- |
|  Institutional & Wealth Managers | 16,237,782 | 40.60% | 72,347,254 | 90.43%  |
|  Directors | 11,220,745 | 28.05% | 3,738,723 | 4.67%  |
|  Private Individuals | 12,492,197 | 31.23% | 3,677,670 | 4.60%  |
|  Other | 49,276 | 0.12% | 236,353 | 0.30%  |
|   | 40,000,000 |  | 80,000,000 |   |

## Substantial Shareholders

As at 31 March 2022, the Directors were aware of the interests (opposite) in the Ordinary shares of the Company, which exceeded 3% of the voting issued share capital of that class.

The following information is disclosed in accordance with the DTR 7.2.6 of the FCA Disclosure Guidance and Transparency Rules.

The Company's capital structure and voting rights are summarised above and in Note 14 on page 87.

- The giving of powers to issue or buy back the Company's shares requires an appropriate resolution to be passed by shareholders. Proposals for the renewal of the Board's powers to buy back shares are set out in the Notice of the Annual General Meeting on pages 74 to 76.

- There are: no restrictions concerning the transfer of securities in the Company; no special rights with regard to control attached to securities; no agreements between holders of securities regarding their transfer known to the Company; no agreements which the Company is party to that affect its control following a takeover bid; and no agreements between the Company and its Directors concerning compensation for loss of office. Notwithstanding the foregoing, the Company may require any holder of shares to transfer some or all of its shares (or otherwise refuse to register any transfer of shares) to avoid the Company, if the Company were a company which was resident for tax purposes in the UK, being regarded as a "close company" as defined in s.414 of the UK Income and Corporation Taxes Act 1988, to another person whose holding of such shares, in the sole and conclusive determination of the Board, would not cause the Company to be a close company. Additionally, the Company's Bye-Laws provide for the voting rights of Ordinary shares to be automatically reallocated to other shareholders to prevent the Company becoming a close company. The reallocation mechanism operates where a transfer of shares or other change in the interests of holders of shares occurs and would cause the Company to become a close company. In these circumstances, the voting rights attaching to the affected shares are reallocated by enhancing the voting rights of the smallest registered shareholders on a temporary basis pending the operation of the compulsory transfer provisions referred to above.

|   | No. of voting shares | % of voting shares  |
| --- | --- | --- |
|  Nomolas Ltd | 10,347,125 | 25.9%  |
|  Victualia Limited Partnership | 10,347,125 | 25.9%  |

These holdings are correct as of 31 March 2022 and have not changed as at the signing date of these Financial Statements.

William Salomon is interested in 10,347,125 of the shares held by Victualia Limited Partnership, representing 25.9% of the voting share capital. In addition, William Salomon has further interests in the Company's shares; the total interest is detailed in the Directors' interests section below.

As at 17 June 2022, the date of signing of the Year-End Financial Statements, there have been no disclosures to the Company of changes of interests under DTR 5.

38 Hansa Investment Company Limited for the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
BOARD AND MANAGEMENT SHAREHOLDINGS
Directors and Directors’ Interests
The present members of the Board are shown on pages 4 and 5.
The Board’s policy is that all Directors retire annually. All the Board’s policy. The contracts of employment between
General Meeting Investor Information Notice of the Annual
Directors being eligible, at the forthcoming Annual General the Company and each of the Directors do not allow for any
Meeting, will retire and seek re-election in accordance with compensation payment in the event of loss of ofﬁce.
The interests of Directors and their connected parties in the Company at 31 March 2022 are shown below:
‘A’ non-voting
Ordinary shares Ordinary shares Nature of
of 1p each of 1p each interest
2022 % 2022 %

| W Salomon 11,169,345 27.92% 3,508,723 4.39% | Beneﬁcial |
| --- | --- |
| J Davie 45,000 0.11% 230,000 0.29% | Beneﬁcial |
| S Heidempergher 6,400 0.02% – – | Beneﬁcial |

Total 11,220,745 28.05% 3,738,723 4.68%
As at 17 June 2022, the date of signing the Year-End NOTICE PERIOD FOR GENERAL MEETINGS
Financial Statements, there were no changes to report to the The Company’s Bye-Laws permit the Company’s general
Directors’ holdings. meetings (other than AGMs) may be held on 14 days’ notice.
William Salomon is the senior partner of Hansa Capital Partners ANNUAL GENERAL MEETING
LLP. Fees payable to Hansa Capital Partners LLP amounted The Company’s Notice of Annual General Meeting is included in
to £3,010,000 (including Portfolio Management and AASP this Report on page74.
functions). The fees outstanding at the year end amounted to
£255,719. During the year, no rights to subscribe for the shares Authority to repurchase ‘A’ non-voting Ordinary shares
of the Company were granted to, or exercised by Directors, A resolution will be proposed at the forthcoming AGM, seeking
their spouses or infant children. shareholder approval for the renewal of the authority for the
Company to repurchase its own ‘A’ non-voting Ordinary shares.
PORTFOLIO MANAGER’S INTERESTS The Board believes the ability of the Company to repurchase
As at 17 June 2022, the date of signing of this Year-End Report, its own ‘A’ non-voting Ordinary shares in the market could
the management and staff of the Portfolio Manager’s group, potentially beneﬁt all equity shareholders of the Company in
excluding the holding of William Salomon, shown above, were the long-term. The repurchase of ‘A’ non-voting Ordinary shares
interested in approximately 10.3m shares in the Company – a at a discount to the underlying NAV would enhance the NAV
mixture of Ordinary and ‘A’ non-voting Ordinary shares. per share of the remaining equity shares.
Hansa Investment Company Limited For the Year Ended 31 March 2022 39
## STRATEGIC REPORT
## Shareholder Prole and Engagement
## Continued
The Company’s Bye-Laws are drafted in such a way that the The Directors consider that all the resolutions to be proposed
Company may from time to time purchase and cancel its own at the forthcoming AGM as set out in the Notice of AGM on
shares. However, the Company requires that shareholders’ page 74, are in the best interests of shareholders as a whole
approval to repurchase shares be sought. At the AGM the and unanimously recommend all shareholders to vote in favour.
Company will therefore seek the authority to purchase up Guidance on how to vote at the AGM can be found in the
to 11,992,000 ‘A’ non-voting Ordinary shares (representing notes to the Notice of AGM on pages 75 and 76.
14.99% of the Company’s issued ‘A’ non-voting Ordinary share
capital, the maximum permitted under the FCA Listing Rules), If the Board considers a signiﬁcant proportion of votes have
at a price not less than 1p per share (the nominal value of been cast against a resolution at the AGM, the Company will
each share) and not more than 5% above the average of the explain, when announcing the results of voting, what action it
middle-market quotations for the ﬁve business days preceding intends to take to understand the reasons behind the results of
the day of purchase or, where a series of transactions have the vote.
taken place the higher of the last independent trade and
current highest independent bid on the trading venue where APPROVAL OF THE DIRECTORS
the purchase(s) will be carried out. The authority being sought, The Directors consider the Year-End Report and Financial
the full text of which can be found in the Notice of Meeting, Statements, taken as a whole, is fair, balanced and
will last until the date of the next AGM. understandable and provides the information necessary
for shareholders to assess the Company’s position and
The Company is seeking authority to use its realised capital performance, business model and strategy.
reserve to allow repurchase of shares in the market. The
decision as to whether the Company repurchases any shares For and on behalf of the Board
will be at the absolute discretion of the Board. Any shares
purchased will be cancelled.
Jonathan Davie
Chairman
17 June 2022
40 Hansa Investment Company Limited For the Year Ended 31 March 2022
## CORPORATE GOVERNANCE REPORTS
Strategic Report
## Report of the Directors
Corporate Governance Reports
Report of the Directors
Reports Financial Statements Corporate Governance

| The Directors have chosen to report on some of those items | Capital Structure |  |
| --- | --- | --- |
| within the body of the Strategic Report, while others remain | The Company’s Capital Structure is described in the “Investor |  |
| within the Report of the Directors. | Information Section” on page 77. |  |
| ITEMS INCLUDED WITHIN THE STRATEGIC REPORT | Corporate Governance Report |  |
|  |  | General Meeting Investor Information Notice of the Annual |
| The following items are listed within the Strategic Report: | The Corporate Governance Report, including the Financial |  |

Risk Management Review of the Company, is included in this
• Statement of the existence of qualifying indemnity provisions document starting on page 42.
for Directors – see page 22.
Future Developments and Post Balance Sheet Events
• Dividend policy and payments made during the year, As disclosed on page17, it was announced on 18May 2022
summarised in the Organisation & Objectives section that the Company's Administrator, Maitland Administrator
– seepage 21. Services Limited, is to be acquired by Apex Group Ltd subject
to a number of regulatory approvals. Other than this, the
• Names of Directors, at any time in the year – seepages4 Company does not have any imminent events or post-balance
to5 for the Directors’ details and attendance at sheet items to report.
Company meetings.
APPROVAL OF THE DIRECTORS
• Greenhouse Gas Emissions – see page 15 The Directors consider the Year-End Report and Financial
Statements, taken as a whole, is fair, balanced and
• Policy on Board Composition – see page 7 within understandable and provides the information necessary
“The Board”. for shareholders to assess the Company’s position and
performance, business model and strategy. Further details
• Stakeholder Engagement – While the Company has no demonstrating the Company’s performance, business model
employees, suppliers or customers, the Directors give and strategy have been included within the Strategic Report
regular consideration to the need to foster the Company’s onpages 2 to 40.
business relationships with its stakeholders, in particular
with shareholders and service providers. The effect of this For and on behalf of the Board
consideration upon the principal decisions taken by the
Company during the ﬁnancial year is set out in further detail
in the Strategic Report on pages 9 to 15.
ITEMS REPORTED WITHIN THE DIRECTORS’ REPORT
Jonathan Davie
Disclosure to the Auditor of Relevant Audit Information
Chairman
The Directors conﬁrm that, so far as they are aware, having
17 June 2022
made such enquiries and having taken such steps as they
consider they reasonably ought, they have provided the Auditor
with all the information necessary for it to be able to prepare its
Report. In doing so each Director has made themself aware of
any information relevant to the audit and established that the
Company’s Auditor is aware of that information. The Directors
are not aware of any information relevant to the audit of which
the Company’s Auditor is unaware.
Hansa Investment Company Limited For the Year Ended 31 March 2022 41
## CORPORATE GOVERNANCE REPORTS
## Corporate Governance Report
Corporate Governance Report
CORPORATE GOVERNANCE CODE The Board conﬁrms there have been no speciﬁc events since
Internal Controls 31 March 2022, of which the Board is aware, which would
The UK Corporate Governance Code (“UK Code”) (issued have a material impact on the Company.
July 2018 Code for accounting periods beginning on or after
1 January 2019), which can be found on the website of COMPLIANCE WITH THE PROVISIONS OF THE UK
the Financial Reporting Council (“FRC”) (www.frc.org.uk), CORPORATE GOVERNANCE CODE
requires the directors of UK listed companies to review The Board of Hansa Investment Company has considered
the effectiveness of the company’s risk management and the Principles and Provisions of the AIC Code. The AIC Code
system of internal controls on an annual basis. The Directors addresses the Principles and Provisions set out in the UK Code,
recognise the importance of sound corporate governance, as well as setting out additional Provisions on issues that are of
robust risk management processes and effective systems of speciﬁc relevance to the Company.
internal controls. They review the effectiveness of these on at
least an annual basis. The Directors, through the procedures The Board considers that reporting against the Principles
outlined below, keep the system of risk management and and Provisions of the AIC Code, which has been endorsed
internal controls under review. The Board has identiﬁed risk by the FRC in the UK, provides more relevant information
management controls in the key areas of business objectives, to shareholders.
accounting, compliance, operations and secretarial as areas to
be included in the extended review. The Company has complied with the Principles and Provisions of
the AIC Code.
The Board recognises its ultimate responsibility for the
Company’s system of risk management and internal controls The AIC Code is available on the AIC website (www.theaic.
and for monitoring their effectiveness. In order to perform this co.uk). It includes an explanation of how the AIC Code adapts
responsibility the Board receives regular reports on all aspects the Principles and Provisions set out in the UK Code to make
of risk management and internal control from the Company’s them relevant for investment companies.
service providers (including ﬁnancial, operational and
compliance controls, risk management and relationships with ASSOCIATION OF INVESTMENT COMPANIES CODE
other service providers); the Board will instigate necessary action The AIC Code has 17 principles. The principles are listed below
in response to any signiﬁcant failings or weaknesses identiﬁed together with the Board’s response as to how it seeks to meet
by these reports. However, it must be noted this system is the principle’s recommendation:
designed to manage rather than eliminate the risk of failure to
achieve business objectives and can only provide reasonable and Board Leadership and Purpose
not absolute assurance against material misstatement or loss. A. A successful company is led by an effective board, whose
role is to promote the long-term sustainable success of the
Financial Reporting company, generating value for shareholders and contributing
The Board has a responsibility to present a fair, balanced and to wider society.
understandable assessment of annual, half-year and other price The Board is formed of ﬁve Directors with a complementary
sensitive public reports and reports to regulators, as well as mix of skills and experience to lead the Company.
to provide information required to be presented by statutory TwoDirectors served on the board of the Company’s
requirements. To ensure this responsibility is fulﬁlled, all such predecessor, Hansa Trust, whilst three Directors were
reports are reviewed and approved by the Board prior to newly appointed to HICL. All have signiﬁcant and relevant
their issue. experience. All Directors are focused on generating
long-term value for shareholders and there is signiﬁcant
share ownership in the Company’s shares amongst
the Directors.
42 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
B. The board should establish the company’s purpose, values Division of Responsibilities
and strategy, and satisfy itself that these and its culture are F. The chair leads the board and is responsible for its overall
aligned. All directors must act with integrity, lead by example effectiveness in directing the company. They should
and promote the desired culture. demonstrate objective judgement throughout their tenure
The Board believes that the Company’s purpose, values and and promote a culture of openness and debate. In addition,
General Meeting Investor Information Notice of the Annual
strategy are clear: to create long-term growth of shareholder the chair facilitates constructive board relations and the
value. The Board sets the standard for openness and effective contribution of all non-executive directors, and
professionalism that the Company’s key service providers ensures that directors receive accurate, timely and clear
follow. In particular, there is regular interaction between the information.
Board and the Company’s Portfolio Manager and also the The Chairman is Jonathan Davie. The Chairman promotes
AASP for day to day liaison with other service providers. and encourages active participation from all Directors at
Board meetings. Further, whilst adhering to membership
C. The board should ensure that the necessary resources are in
guidelines, sub-committees also seek to include as many
place for the company to meet its objectives and measure
Directors as possible to ensure a broad range of views. All
performance against them. The board should also establish
Directors receive regular monthly and quarterly information
a framework of prudent and effective controls, which enable
prepared by the Portfolio Manager and Administrator,
risk to be assessed and managed.
as well as portfolio performance presentations from the
The Board receives regular and detailed reports from the
Portfolio Manager.
Portfolio Manager regarding investment performance as
well as market trends and views on risks. The Board has G. The board should consist of an appropriate combination
set a number of KPIs (see page 17) against which the of directors (and, in particular, independent non-executive
performance of elements of the portfolio can be considered. directors) such that no one individual or small group of
The Board receives regular risk and compliance reporting individuals dominates the board’s decision making.
including from key service providers. The Board consists of ﬁve Directors. All have a ﬁnancial
background but each also brings individual specialisms
D. In order for the company to meet its responsibilities to
and experience that are complimentary. Their biographies
shareholders and stakeholders, the board should ensure
are noted on pages 4 and 5. Four Directors are deemed
effective engagement with, and encourage participation
independent. The ﬁfth, William Salomon, is the Senior
from, these parties.
Partner of the Company’s Portfolio Manager and, therefore,
The Board considers its stakeholders to be its shareholders
is deemed non-independent. All Directors are non-
and its key service providers. It actively engages with
executive. All Directors are actively involved in decisions
shareholders via an annual general meeting, shareholder
and committees unless conﬂicts exist which preclude this.
presentations, quarterly factsheets, website communication
Therefore, Mr Salomon does not participate in the evaluation
and with feedback also received through outreach
of the performance of the Portfolio Manager due to his role
programmes such as Edison, as well as direct one-to-one
as senior partner of that ﬁrm. Nor does he participate in
correspondence. The Board engages with other key service
decisions regarding the Company’s largest asset (by value)
providers through the operations of its AASP on a day to day
OWHL, due to him being a director of that company. Finally,
basis, as well as via an annual meeting with each or more
Mr Salomon is not a member of the Audit Committee due
frequently if an issue arises.
to his non-independent status, although he does attend
E. Principle E is omitted by the AIC Code. meetings of that Committee.
Hansa Investment Company Limited For the Year Ended 31 March 2022 43
## CORPORATE GOVERNANCE REPORTS
## Corporate Governance Report
## Continued
H. Non-executive directors should have sufﬁcient time to meet K. The board and its committees should have a combination of
their board responsibilities. They should provide constructive skills, experience and knowledge. Consideration should be
challenge, strategic guidance, offer specialist advice and hold given to the length of service of the board as a whole and
third party service providers to account. membership regularly refreshed.
The Directors consider they have sufﬁcient time to meet The Directors have a broad range of backgrounds including
their responsibilities. Directors consult with the Company investment management, ﬁnance and banking as well
before accepting other appointments to conﬁrm capacity to as operational experience. Biographies of all Directors
do so and that no conﬂict exists. A formal timetable exists are shown on pages 4 and 5. As noted in J above, the
for the Board meetings and sub-committees. In considering Nominations Committee is tasked with maintaining a broad
appointments and potential conﬂicts of interests the Board range of skills and experiences at times of succession.
considers the available time each Director has to commit
L. Annual evaluation of the board should consider its
to the Company. The Portfolio Manager and AASP report
composition, diversity and how effectively members work
to scheduled Board meetings, giving the Directors the
together to achieve objectives. Individual evaluation should
opportunity to challenge performance, raise issues and
demonstrate whether each director continues to contribute
offer guidance.
effectively.
I. The board, supported by the company secretary, should ensure The Nominations Committee is responsible for the ongoing
that it has the policies, processes, information, time and consideration of Board composition and to identify any skills
resources it needs in order to function effectively and efﬁciently. gap – now or in the future. The Nomination Committee
The Company Secretary and AASP support the Board considers Board effectiveness annually.
in identifying and monitoring all governance matters.
Audit, risk and internal control
Additionally, Directors are able to consult external
M. The board should establish formal and transparent
professional advisors to assist them in the performance of
policies and procedures to ensure the independence and
their duties as and when required. Board reporting and
effectiveness of external audit functions and satisfy itself on
materials are reﬁned on an ongoing basis.
the integrity of ﬁnancial and narrative statements.
Composition, succession and evaluation The Board has speciﬁcally delegated the appointment and
J. Appointments to the board should be subject to a formal, monitoring of the Company’s external Auditor to its Audit
rigorous and transparent procedure, and an effective Committee. The Company’s Auditor was formally appointed
succession plan should be maintained. Both appointments in November 2019. The tender process was led by the
and succession plans should be based on merit and objective Chairman of the Audit Committee. To ensure independence,
criteria and, within this context, should promote diversity the Company’s Auditor does not provide other services to
of gender, social and ethnic backgrounds, cognitive and the Company. The Company rigorously follows policy and
personal strengths. procedure to ensure effectiveness of the external audit and
The Board has appointed a Nominations Committee chaired integrity of ﬁnancial reporting.
by Nadya Wells. The Committee seeks to meet annually to
N. The board should present a fair, balanced and understandable
give full and ongoing consideration to succession planning
assessment of the company’s position and prospects.
after consideration of the skills and experience needed by
The Board considers and approves all relevant shareholder
the Board. Ahead of any appointment, the Committee is
communications. The Year-End Report is reviewed by
tasked with evaluating the skills required of a candidate to
the Board to ensure it presents a fair and balanced view
ensure the Board retains the range of skills required. The
including commentary on going concern and long-term
Company believes a diverse Board brings many beneﬁts and,
viability. The Audit Committee considers the fairness of the
as such, there is no restriction placed on Board membership.
Financial Statements before recommending them to the
Board for approval.
44 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
O. The board should establish procedures to manage risk, COMPLIANCE WITH THE FINANCIAL CONDUCT
oversee the internal control framework, and determine the AUTHORITY UKLA LISTING RULES
nature and extent of the principal risks the company is willing The Directors are responsible for ensuring that:
to take in order to achieve its long-term strategic objectives.
• Adequate accounting records are kept, that are sufﬁcient to
Principal risks are identiﬁed by the Board and risk appetite
show and explain the Company’s transactions and disclose General Meeting Investor Information Notice of the Annual
established against these risks. Day to day risk management
with reasonable accuracy at any time the ﬁnancial position of
is undertaken by the Portfolio Manager and AASP within
the Company and enable them to ensure that the Financial
the parameters established by the Board. The Board meets
Statements are consistent with the relevant requirements
with the Portfolio Manager at each scheduled Board
under the UK Companies Act 2006.
meeting where there is opportunity to discuss particular
aspects of the portfolio and associated risks. Operational • The assets of the Company are safeguarded; and for taking
risk and compliance reporting are also regularly discussed by reasonable steps for the prevention and detection of fraud
the Board. and other irregularities.
Remuneration • The Report of the Directors and other information included
P. Remuneration policies and practices should be designed to in the Year-End Report is prepared in accordance with
support strategy and promote long-term sustainable success. Company Law in the UK. The Directors are also responsible
The remuneration of Directors is overseen by the for ensuring the Year-End Report includes information
Remuneration Committee, chaired by Simona required by the Listing Rules of the FCA.
Heidempergher. The Directors each receive a ﬁxed annual
• The Company has effective internal control systems,
fee and do not receive any additional element based on
designed to ensure that adequate accounting records are
performance of the Company. Additionally, Directors offer
maintained; and that ﬁnancial information on which the
themselves annually for re-election at the Company’s AGM.
business decisions are made, which is issued for publication,
Q. A formal and transparent procedure for developing policy on is reliable. Such a system of internal control can provide only
remuneration should be established. No director should be reasonable, but not absolute, assurance against material
involved in deciding their own remuneration outcome. misstatement or loss.
The Directors’ Remuneration Report (pages 49 to 51) notes
• The Company Financial Statements for each ﬁnancial year
that each Director is paid a ﬁxed fee representative of their
are prepared in accordance with International Financial
roles and additional responsibilities on the Board. This fee
Reporting Standards (“IFRS”) adopted pursuant to
level is reviewed by the Remuneration Committee making
Regulation (EC) No 1606/2002 as it applies in the European
use of external evidence before being recommended to the
Union. The Directors must not approve the Financial
wider Board.
Statements unless they are satisﬁed they give a true and fair
R. Directors should exercise independent judgement and view of the state of affairs and proﬁt or loss of the Company
discretion when authorising remuneration outcomes, taking for that period.
account of company and individual performance, and wider
circumstances.
The Directors’ Remuneration Report (pages 49 to 51) notes
that each Director is paid a ﬁxed fee representative of their
roles and additional responsibilities on the Board. There
are no additional performance-related elements to any
Director’s remuneration.
Hansa Investment Company Limited For the Year Ended 31 March 2022 45
## CORPORATE GOVERNANCE REPORTS
## Corporate Governance Report
## Continued
In preparing these Financial Statements, the Directors are RESPONSIBILITY STATEMENT
required to: The Directors conﬁrm that to the best of their knowledge:
• select suitable accounting policies and apply • The Financial Statements are prepared in accordance with
them consistently; applicable international accounting standards and present
fairly, in all material respects, the ﬁnancial position of Hansa
• make judgements and estimates that are reasonable
Investment Company.
and prudent;
• The Strategic Report, including the Chairman’s Report to the
• state whether they have been prepared in accordance with
Shareholders and the Report of the Directors includes a fair
International Financial Reporting Standards (“IFRS”) adopted
review of the development and performance of the business
pursuant to Regulation (EC) No 1606/2002 as it applies in the
and the position of the Company, together with a description
European Union; and
of the principal risks and uncertainties it faces.
• prepare the Financial Statements on the going concern
basis, unless it is inappropriate to presume the Company will The Directors consider the Year-End Report and Financial
continue in business. Statements, taken as a whole, are fair, balanced and
understandable. Further detail demonstrating the Company’s
Under the FCA UKLA Listing Rules and the UK Code, the Board performance, business model and strategy has been included
is responsible for: within the Strategic Report on pages 2 to 40.
• Disclosing how it has applied the principles and complied
For and on behalf of the Board
with the provisions of the AIC Code and, thereby, the UK
Code, or where not, to explain the reasons for divergence.
• Reviewing the effectiveness of the Company’s systems of risk
management and internal controls.
Jonathan Davie
The Directors are responsible for the maintenance and integrity
17 June 2022
of the corporate and ﬁnancial information included on the
Company’s website: www.HansaICL.com. Visitors to the website
need to be aware that legislation governing the preparation
and dissemination of the Financial Statements may differ from
legislation in their own jurisdictions.
46 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
## Audit Committee Report
Audit Committee Report
Reports Financial Statements Corporate Governance
The Audit Committee comprises solely independent Directors, • To review and monitor the effectiveness of the Company’s
as required by the AIC Code and endorsed by the FRC. It is Internal Control and Risk framework prior to endorsement
chaired by Richard Lightowler. Given the size of the Board and by the Board.
the range of experience they bring, all non-committee Directors
• To review service providers’ AAF 01/06 or ISAE 3402 reports.
are invited to attend the Audit Committee meetings. However,
General Meeting Investor Information Notice of the Annual
only the independent member Directors are able to vote.
As conﬁrmed at the Company’s AGM in August 2021,
Recommendations of the Audit Committee are brought before
PricewaterhouseCoopers Ltd remains as the Company’s
the whole Board for discussion and ratiﬁcation.
Independent Auditor.
The terms of reference of the Committee are determined by the
In discharging its duties and, in particular, matters relating to
Committee and approved by the Board and include, but are not
the approval of the Year-End Report, Half-Year Report and
restricted to, the following:
the review of the Company’s internal controls, the Committee
• To consider and make a recommendation to the Board as considers reports and presentations made by the Company’s
to the appointment of the external Auditor, tendering of Auditor, Administrator, Company Secretary, Additional
the external audit, approval of the annual audit fee and Administrative Services Provider (including those of its
any questions relating to the resignation or dismissal of Compliance Ofﬁcer) and Legal Advisers.
the Auditor.
In its review of the Financial Statements, the Committee pays
• To determine with the external Auditor the nature and scope
particular attention to the ownership of assets, the valuations
of the audit.
of the portfolio, recognition of income and areas of signiﬁcant
• To review and monitor the independence of the external judgement. In this regard we receive regular reporting from
Auditor including pre-approval, of any, non-audit services to the Portfolio Manager including reports on the effectiveness
the Company. of internal controls in these areas. In addition, the Committee
discusses the Auditor’s scope of work in these areas.
• To consider the performance of the Auditor.
• To review the Half-Year and Year-End Financial Reports With regard to the ownership of assets, the Company’s
before submission to the Board, focusing particularly on: Custodian and Administrator have conﬁrmed the ownership
of all assets to the Audit Committee’s satisfaction. With regard
• any changes in accounting policies and practices;
to the valuations, the Audit Committee notes that 70% of
• major judgemental areas;
the Investment portfolio by value is held in assets that are
• signiﬁcant adjustments resulting from the audit;
either traded or listed on an exchange or are cash. Further, of
• the going concern assumption;
the remaining 30% unquoted fund investments, the majority
• compliance with Accounting Standards and
primarily hold traded securities. Valuations for these funds
Governance Codes;
are supplied by third party managers. The Audit Committee
• compliance with FCA Listing Rules and legal
recognises that the 44% of the total portfolio are Level 1 and
requirements; and
54% are Level 2 securities. The Committee is satisﬁed with
• valuation of unquoted investments.
the valuation process. With regard to revenue recognition, the
• To discuss issues and matters arising from the annual audit Audit Committee reviewed the external Auditor’s approach
with the Auditor. to the audit prior to the commencement of the audit. The
results of the audit in this area were discussed with the external
• To review the Auditor’s audit ﬁndings and responses to it,
Auditor and there were no signiﬁcant issues arising in relation
including holding an executive session with the Auditor.
to the recognition of revenue.
Hansa Investment Company Limited For the Year Ended 31 March 2022 47
## CORPORATE GOVERNANCE REPORTS
## Audit Committee Report
## Continued
The Audit Committee considers the potential need for an The Audit Committee considers the external Auditor’s
internal audit function on an annual basis, recognising the FRC independence, objectivity, scope of work and overall quality
guidance on proportionality. The Audit Committee considers as well as cost effectiveness through a process of feedback
internal compliance testing at the Administrator and Portfolio from the Company advisors, including the Company Secretary,
Manager to be sufﬁciently independent and robust to negate the AASP, the Portfolio Manager and discussion with the
the need for a standalone internal audit function. Auditors. The Committee also meets with the Auditor in
executive session at least annually. The current audit partner
The Committee is authorised by the Board to investigate any is Scott Watson-Brown who has led the audit since the
activity within its terms of reference, to seek any information it Company's inception in June 2019 and the appointment of
requires from any ofﬁcer or service provider to the Company, to PricewaterhouseCoopers Ltd as its auditor.
obtain outside legal or other independent professional advice
and to secure the attendance of third parties with relevant The level of non-audit services provided to the Company by
experience and expertise if it considers this necessary. the Auditor is monitored, as is the Auditor’s objectivity in
providing such services, to ensure that the independence of
The Chairman of the Audit Committee formally reports to the the audit team from the Company is not compromised. No
Board following each Audit Committee meeting and on other non-audit services are provided by PricewaterhouseCoopers
occasions as requested by the Board. Ltd to the Company. Further information on fees paid to the
Auditor is contained in “Other Expenses” within Note 4 of the
A separate evaluation of Committee members is not conducted. Financial Statements.
Rather, their suitability and effectiveness is considered as part of
the annual Board evaluation process which is described within For and on behalf of the Audit Committee.
the Corporate Governance Report on page 42.
The Audit Committee, having considered its responsibilities and
its reporting to the Board, conﬁrms it is not aware of any matter
which it should bring to the attention of either the Board or the
Richard Lightowler
Auditor and considers the Year-End Report, taken as a whole, is
Audit Committee Chairman
fair, balanced and understandable and provides the information
17 June 2022
necessary for shareholders to assess the Company’s position and
performance, business model and strategy.
48 Hansa Investment Company Limited For the Year Ended 31 March 2022
# Directors' Remuneration Report

The Board produces a separate report on the Directors' Remuneration and, by approving it, confirms its accuracy. There are elements of the Directors' Remuneration Report that are subject to audit as disclosures in accordance with "IAS 24 – Related Party Disclosures" which have been presented here. These are labelled as "audited", with the Auditor's report included on page 52.

Ordinary resolutions for the approval of this Report will be put to shareholders at the forthcoming AGM.

## ANNUAL STATEMENT

The Company has five non-executive Directors. The Board has appointed a Remuneration Committee. The Chairman of this Committee is Simona Heidemergher who has signed this Statement on behalf of the Board.

This is the third year of the Company's operation. Each Director was appointed during June 2019 following the creation of the Company. Each Director presents themselves for annual re-election at the Company's AGM.

## POLICY ON DIRECTORS' REMUNERATION

The Board's policy is that the remuneration of non-executive Directors should include a basic pay level and should reflect the experience of the Board as a whole, be appropriate for the work carried out and the responsibilities, financial and reputational risks undertaken, including additional remuneration for any roles in addition to the responsibilities of the non-executive director role – for example, the chairman. The remuneration does not include a performance related element and Directors do not receive bonuses, share options, pensions or long-term incentive schemes. The total remuneration of the Board will be kept within the limits set out in the Company's Bye-Laws, as amended from time to time.

In assessing current and future levels of director compensation, the Remuneration Committee seeks external comparative information when assessing the remuneration of existing Directors. This includes the fees paid by other similar companies (both industry and jurisdiction) as well as seeking input from recruitment specialists familiar with the external market.

The fees for the non-executive Directors are within the limits (maximum total fee of $350,000) as set out in the Company's

Bye-Laws. The maximum is set as a USD amount. The equivalent is £266,383 if translated at the applicable rate on 31 March 2022. The Board has reviewed the current maximum annual fee for director remuneration and will seek shareholder approval to increase this to $400,000 per annum (£304,437 if translated at the applicable rate on 31 March 2022) at the upcoming AGM. The increase is to allow sufficient headroom over the fees payable to existing directors to appoint another director if required or as part of board succession planning.

## DIRECTORS' SERVICE CONTRACTS

It is the Board's policy that every Director has a service contract. None of the service contracts is for a fixed term. The terms of appointment provide that a Director shall retire and be subject to re-election at the first AGM after appointment. The Board has decided each Director will retire annually at the AGM and seek re-election as appropriate. The terms also provide that either party may give three months' notice. In certain circumstances a Director may be removed without notice and compensation will not be due on leaving office. There are no agreements between the Company and its Directors concerning compensation for loss of office.

## FUTURE POLICY TABLE

All of the Directors are non-executive, whose only remuneration is a fee. The implementation of the above current policy could give rise to the following increase in fees:

|   | Current total fee £000 | Potential future total fee £000  |
| --- | --- | --- |
|  Non-executive Director fees | 194* | 266**  |

### Note:

* This fee represents the current Directors' fees translated from USD to Sterling for the year ended 31 March 2022. For information, annual current Director fees are noted in the table below.

** This amount is the current upper limit of remuneration of $350,000, converted at the exchange rate to GBP on 31 March 2022. The Board will seek permission at the upcoming AGM via a resolution put to shareholder vote to increase this upper limit to $400,000 per annum.

## POLICY FOR NOTICE PERIODS

The current Directors' service contracts stipulate three months' written notice to be given by either the Director or the Company to terminate the services of a Director. The Board consider this is sufficient notice to ensure an orderly hand over between the parties.

Hansa Investment Company Limited For the Year Ended 31 March 2022 40
## CORPORATE GOVERNANCE REPORTS
## Directors’ Remuneration Report
## Continued
SHAREHOLDERS’ VIEWS ON REMUNERATION POLICY STATEMENT OF SHAREHOLDER VOTING
The formal views of unconnected shareholders have not been
Votes in respect of the resolution to approve the Directors’
sought in the preparation of this policy.
Remuneration Report at the Company’s AGM in August 2021
EMPLOYEES were cast as follows:
The Company does not have any employees, only

|  |  |  | No. of |  | % of |
| --- | --- | --- | --- | --- | --- |
| non-executive Directors. |  | shares voted |  | votes cast |  |
|  | Votes cast in favour 21,370,153 |  |  |  | 100.00 |

ANNUAL REPORT ON REMUNERATION

| Directors’ Emoluments (Audited) | Votes cast against 0 0.00 |  |
| --- | --- | --- |
| The Company does not have any employees, only non-executive | Total votes cast 21,370,153 | 100.00 |
| Directors who receive only a basic fee, plus repayment of | Votes withheld 0 |  |

expenses incurred in the course of performing their duties.
Therefore, the use of the detailed remuneration table, DIRECTORS’ INTERESTS (AUDITED)
as prescribed in the legislation, is not appropriate here. Directors must seek permission from the Chairman before
A condensed table showing the information relevant to the trading in shares, taking note of any Closed Periods. Other than
Directors’ remuneration is shown in its place. that, there are no speciﬁc rules on Directors’ shareholdings.
The Directors who received fees during the year received the The interests of Directors and their connected parties in the
following emoluments in the form of fees. For clarity, these Company at 31 March 2022 are shown below:
amounts are quoted in the currency as per their service contract.

|  |  | ‘A’ non-voting | Nature |  |
| --- | --- | --- | --- | --- |
| The Director’s remuneration is set in USD, as is common for | Ordinary shares | Ordinary |  | of |
|  | of 1p each | shares of 1p each | interest |  |

many Bermudan companies. Therefore, additionally, their
2022 2021 2022 2021
current annual fee is also quoted in Sterling. This conversion has
Jonathan Davie 45,000 45,000 230,000 230,000 Beneﬁcial
been made at the relevant exchange rate on 31 March 2022:
William Salomon 11,169,345 11,169,345 3,508,723 3,463,223 Beneﬁcial
Annual 2022 2022 2021 2021 6,400 6,400 – – Beneﬁcial
Simona
Fee Fee Total Fee Total
Heidempergher
$000 £000 £000 £000 £000
Jonathan Davie (Chairman) 70 53 53 51 51
As at 17 June 2022, the date of signing of these Year-End
Richard Lightowler 60 46 46 43 43
Financial Statements, there were no changes to report to the
Simona Heidempergher 50 38 38 36 36
Directors’ holdings.
William Salomon 25 19 19 18 18
William Salomon is the senior partner of Hansa Capital Partners
Nadya Wells 50 38 38 36 36
LLP. Fees payable to Hansa Capital Partners LLP as Portfolio
255 194 194 184 184
Manager amounted to £3,010,000. The fees outstanding at
The annual fee paid to each Director, in USD, remains unchanged
the year-end amounted to £255,719. During the year, no rights
from the date of their appointments in June 2019. Changes in
to subscribe to the shares of the Company were granted to,
the above table between the prior period and the current year are
orexercised by Directors, their spouses or infant children.
due to movement in exchange rates (USD to Sterling).
The Company also pays the expenses of the Directors to attend
the Board meetings, fees incurred during the year was £48,170
(2021: nil – due to Covid-19 travel restrictions).
50 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance

| YOUR COMPANY’S PERFORMANCE | On behalf of the Board, I conﬁrm that the above Report on |  |
| --- | --- | --- |
| The graph below shows the ten-year cumulative total return | Directors’ Remuneration summarises, as applicable, for the year |  |
| to shareholders: | ended 31 March 2022: |  |
| TEN YEAR NET ASSET VALUE AND | (a) the major decisions on Directors’ remuneration; |  |
| SHARE PRICE TOTAL RETURN |  | General Meeting Investor Information Notice of the Annual |

(b) any substantial changes relating to Directors’ remuneration
70% made during the year; and
60%
50% (c) the context in which those changes occurred and decisions
40% have been taken.
30%
20%
10% For and on behalf of the Board
0%
-10%
-20%
-30%
Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
NAV Cum Income TR Ord Share TR ‘A’ Ord Share TR
Simona Heidempergher
DIRECTORS’ ATTENDANCE
Chairman of the Remuneration Committee
The Directors meet as a Board on a quarterly basis and at other
times as necessary and the table below sets out the number of 17 June 2022
operational meetings and the attendance at them by each Director.
Audit
Board Committee
Number of meetings held 5 2
Number of meetings attended:
Jonathan Davie (Chairman) 5 2
Richard Lightowler 5 2
Simona Heidempergher 5 2
William Salomon 5 2
Nadya Wells 5 2
Notes:
1) The meetings listed above are the main events held during the year
at which all Directors attend. Additionally, there have been numerous
meetings and board calls to consider and approve operational
requirements for the Company, such as quarterly dividends. These
meetings are arranged as and when required and require the meeting to
be quorate but not necessarily attended by all Directors. These have not
been listed above.
80%
2) The Board has amalgamated its annual Strategy meeting into
its Board meeting schedule. As such, it will no longer be listed as
a separatemeeting.
Hansa Investment Company Limited For the Year Ended 31 March 2022 51
## Independent Auditor’s Report to the
## Board of Directors and Shareholders of
## HansaInvestment Company Limited
Our opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Hansa Investment
Company Ltd. (the Company) as at 31 March 2022, and its ﬁnancial performance and its cash ﬂows for the year then ended in
accordance with International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in
the European Union.
What we have audited
The Company’s ﬁnancial statements, included on pages 57 and 73, comprise:
• the balance sheet as at 31 March 2022;
• the income statement for the year then ended;
• the statement of changes in equity for the year then ended;
• the cash ﬂow statement for the year then ended; and
• the notes to the ﬁnancial statements, which include signiﬁcant accounting policies and other explanatory information.
Certain required disclosures have been presented elsewhere in the Year-End Report, rather than in the notes to the ﬁnancial
statements. These are cross-referenced from the ﬁnancial statements and are identiﬁed as audited.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards
are further described in the Auditor’s responsibilities for the audit of the nancial statements section of our report.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Company in accordance with the International Code of Ethics for Professional Accountants (including
International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code) and the
ethical requirements of the Chartered Professional Accountants of Bermuda Rules of Professional Conduct (CPA Bermuda Rules) that
are relevant to our audit of the ﬁnancial statements in Bermuda. We have fulﬁlled our other ethical responsibilities in accordance
with the IESBA Code and the ethical requirements of the CPA Bermuda Rules.
Our audit approach
Overview
Materiality • Overall materiality: £3,828,000, based on 1% of net assets.
• In addition to determining materiality, we also assessed, amongst other factors, the following
in designing our audit:
– the risk of material misstatement in the ﬁnancial statements
Audit scope
– signiﬁcant accounting estimates
– the risk of management override of internal controls
• Valuation and existence of investments; and
Key audit matters
• Accuracy, occurrence and completeness of investment income
52 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
Audit scope
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the ﬁnancial
statements. In particular, we considered where management made subjective judgements; for example, in respect of signiﬁcant
accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in
all of our audits, we also addressed the risk of management override of internal controls, including, among other matters,
consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufﬁcient work to enable us to provide an opinion on the ﬁnancial
statements as a whole, taking into account the structure of the Company, the accounting processes and controls, and the
industry in which the Company operates.
Materiality
The scope of our audit was inﬂuenced by our application of materiality. An audit is designed to obtain reasonable assurance
General Meeting Investor Information Notice of the Annual
whether the ﬁnancial statements are free from material misstatement. Misstatements may arise due to fraud or error.
Theyareconsidered material if, individually or in aggregate, they could reasonably be expected to inﬂuence the economic
decisions of users taken on the basis of the ﬁnancial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality
for the ﬁnancial statements as a whole as set out in the table below. These, together with qualitative considerations, helped
us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements, both individually and in aggregate, on the ﬁnancial statements as a whole.
Overall materiality £3,828,000
How we determined it 1% of net assets.
Rationale for the materiality benchmark applied We applied this benchmark as a generally accepted audit practice
for investment company audits.
We agreed with the Audit Committee that we would report to them misstatements identiﬁed during our audit above
£191,000, as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Hansa Investment Company Limited For the Year Ended 31 March 2022 53
## Independent Auditor’s Report to the Independent Auditor’s Report to the
## Board of Directors and Shareholders of Board of Directors and Shareholders of
## HansaInvestment Company Limited, continued HansaInvestment Company Limited, continued
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most signiﬁcance in our audit of the ﬁnancial
statements of the current period. These matters were addressed in the context of our audit of the ﬁnancial statements as
a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
KEY AUDIT MATTER HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER
Valuation and existence of Listed investments: We tested the existence of the listed investment portfolio by
investments agreeing the holdings for investments to an independent custodian conﬁrmation.
Refer to notes 1(d) and 9 to the We tested the valuation of the listed investments by agreeing the prices used
ﬁnancial statements for disclosures inthe valuation to independent third-party sources.
of related accounting policies and
Unlisted investments: We understood and evaluated the controls around the
balances.
pricing of unlisted investments including the ﬁnal approval of the valuation by the
The investment portfolio at the period
Manager and the Board.
end comprised listed equity investments
valued at £290 million (76%) and • We obtained direct conﬁrmation of the existence of investments held
unlisted fund investments valued at andthe price from each fund administrator. We used these two key inputs
£90 million (24%). We focused on the to recalculate the valuation applied by management. This recalculation
existence of both listed and unlisted wasperformed for 100% of the unlisted investments.
investments, as listed investments
• We obtained an understanding of the underlying methodology applied to each
comprise the majority of the investments
unlisted investment through review of their most recently available audited
balance and unlisted investments are,
ﬁnancial statements to evaluate whether it was based on fair value.
individually and in aggregate, material
to the ﬁnancial statements. We focused • We assessed the impact of uncertain market wide events, such as Russia's war
on the valuation of listed investments on Ukraine, on the valuation of the investments. For unlisted investments,
because listed investments represent the we have done this by obtaining conﬁrmations of any impact directly from
principal element of the net asset value fund managers.
as disclosed on the Balance Sheet in the
Based on the procedures detailed above, no misstatements were identiﬁed which
ﬁnancial statements. We also focused on
required reporting to those charged with governance.
the valuation of the unlisted investments
as the valuation of these investments is
material to the Company.
Accuracy, occurrence We assessed the accounting policy for investment income recognition for
and completeness of compliance with accounting standards and the AIC SORP and performed testing
investmentincome to evaluate whether income had been accounted for in accordance with this
stated accounting policy. We found that the accounting policies implemented
Refer to notes 1(f) and 2 to the
were in accordance with accounting standards and the AIC SORP, and that
ﬁnancial statements for disclosures
income has been accounted for in accordance with the stated accounting policy.
of related accounting policies
andbalances. We tested the accuracy of dividend receipts by agreeing the dividend rates from
Investment income consists of dividend investments to independent market data.
income of £5.9 million. As part of our
To test for completeness, we tested, for a sample of investment holdings in the
procedures, we focused on the accuracy,
portfolio, that all dividends declared in the market by investment holdings had
occurrence and completeness of investment
been recorded. We tested occurrence by conﬁrming that all dividends recorded in
income recognition as incomplete or
the period had been declared in the market by investment holdings, and we traced
inaccurate income could have a material
a sample of dividends received to bank statements.
impact on the Company’s net asset value
and dividend cover. We also focused on the We also tested the allocation and presentation of investment income between
accounting policy for income recognition the revenue and capital return columns of the Income Statement in line with the
along with its allocation and presentation requirements set out in the AIC SORP by determining reasons behind dividend
in the Income Statement as set out in distributions.
the requirements of The Association of
Based on the procedures detailed above we did not identify any misstatements
Investment Companies Statement of
which required reporting to those charged with governance.
Recommended Practice (the “AIC SORP”)
as incorrect application could indicate
a misstatement inincomerecognition.
54 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
Other information
Management is responsible for the other information. The other information comprises the Year-End Report (but does not
include the ﬁnancial statements and our auditor’s report thereon).
Our opinion on the ﬁnancial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the ﬁnancial statements, our responsibility is to read the other information identiﬁed above and,
in doing so, consider whether the other information is materially inconsistent with the ﬁnancial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in
this regard.
UK Corporate Governance Code
General Meeting Investor Information Notice of the Annual
We have nothing to report in respect of our responsibility to report when the Directors’ statement relating to the Company’s
compliance with the Code does not properly disclose a departure from a relevant provision of the Code speciﬁed, under the
Listing Rules of the FCA, for review by the auditors.
Responsibilities of management and those charged with governance for the ﬁnancial statements
Management is responsible for the preparation and fair presentation of the ﬁnancial statements in accordance with International
Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union and for
such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the ﬁnancial statements, management is responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s ﬁnancial reporting process.
Auditor’s responsibilities for the audit of the ﬁnancial statements
Our objectives are to obtain reasonable assurance about whether the ﬁnancial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to inﬂuence the economic decisions of users taken on the basis of these
ﬁnancial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout
the audit. We also:
• Identify and assess the risks of material misstatement of the ﬁnancial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufﬁcient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signiﬁcant doubt on the
Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the ﬁnancial statements or, if such disclosures are inadequate,
tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Company to cease to continue as a going concern.
Hansa Investment Company Limited For the Year Ended 31 March 2022 55
## Independent Auditor’s Report to the
## Board of Directors and Shareholders of
## HansaInvestment Company Limited, continued
• Evaluate the overall presentation, structure and content of the ﬁnancial statements, including the disclosures, and whether the
ﬁnancial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and signiﬁcant audit ﬁndings, including any signiﬁcant deﬁciencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of most
signiﬁcance in the audit of the ﬁnancial statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest beneﬁts of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Scott Watson-Brown.
PricewaterhouseCoopers Ltd
Chartered Professional Accountants
Hamilton, Bermuda
17 June 2022
56 Hansa Investment Company Limited For the Year Ended 31 March 2022
## FINANCIAL STATEMENTS
Strategic Report
## Income Statement
For the year ended 31 March 2022

|  |  |  |  |  |  |  |  |  |  |  |  | Reports Financial Statements Corporate Governance |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  | Year ended |  |  |  | Year ended |  |  |  |
|  |  |  |  |  | 31 March 2022 |  |  |  | 31 March 2021 |  |  |  |
|  |  |  | Revenue |  |  | Capital | Total | Revenue |  | Capital | Total |  |
|  | Notes |  |  | £000 |  | £000 | £000 | £000 |  | £000 | £000 |  |
| Gains on investments held at fair value |  | 9 – 17,065 17,065 – 93,032 93,032 |  |  |  |  |  |  |  |  |  |  |

through proﬁt or loss
Foreign Exchange gains/(losses) – 80 80 – (181) (181)
Investment income 2 5,904 – 5,904 6,350 – 6,350
5,904 17,145 23,049 6,350 92,851 99,201
Portfolio management fees 3 (3,010) – (3,010) (2,621) – (2,621)
Other expenses 4 (1,227) – (1,227) (1,149) – (1,149)
(4,237) – (4,237) (3,770) – (3,770)
Income for the year 1,667 17,145 18,812 2,580 92,851 95,431
Return per Ordinary and ‘A’ non-voting 7 1.4p 14.3p 15.7p 2.2p 77.4p 79.6p
Ordinary share
General Meeting Investor Information Notice of the Annual
The Company does not have any income or expense not included in the above Statement. Accordingly, the “Income for the Year”
is also the “Total Comprehensive Income for the Year”, as deﬁned in IAS 1 (revised) and no separate Statement of Comprehensive
Income has been presented.
The total column of this statement represents the Company’s Income Statement, prepared in accordance with International
Financial Reporting Standards (“IFRS”) adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
Thesupplementary revenue and capital return columns are both prepared under guidance published by the AIC.
All revenue and capital items in the above Statement derive from continuing operations.
The accompanying notes on pages 61 to 73 are an integral part of this Statement.
Hansa Investment Company Limited For the Year Ended 31 March 2022 57
# FINANCIAL STATEMENTS

## Balance Sheet

As at 31 March 2022

|   | Notes | 2022 £000 | 2021 £000  |
| --- | --- | --- | --- |
|  **Non-current assets** |  |  |   |
|  Investments in subsidiary at fair value through profit or loss | 8 | – | 3,179  |
|  Investments held at fair value through profit or loss | 9 | 379,986 | 365,268  |
|   |  | **379,986** | **368,447**  |
|  **Current assets** |  |  |   |
|  Trade and other receivables | 11 | 201 | 177  |
|  Cash and cash equivalents | 12 | 3,043 | 2,833  |
|   |  | **3,244** | **3,010**  |
|  **Current liabilities** |  |  |   |
|  Trade and other payables | 13 | (368) | (3,567)  |
|  **Net current assets/(liabilities)** |  | **2,876** | **(557)**  |
|  **Net assets** |  | **382,862** | **367,890**  |
|  **Capital and reserves** |  |  |   |
|  Called up share capital | 14 | 1,200 | 1,200  |
|  Contributed surplus | 15 | 324,759 | 326,019  |
|  Retained earnings | 16 | 56,903 | 40,671  |
|  **Total equity shareholders' funds** |  | **382,862** | **367,890**  |
|  **Net asset value per Ordinary and 'A' non-voting Ordinary share** | 17 | **319.1p** | **306.6p**  |

The Financial Statements of Hansa Investment Company Limited, registered in Bermuda under company number 54752, set out on pages 57 to 60 were approved by the Board of Directors on 17 June 2022 and were signed on its behalf by

Jonathan Davie
Chairman

The accompanying notes on pages 61 to 73 are an integral part of this Statement.

58 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
## Statement of Changes in Equity
For the year ended 31 March 2022
Reports Financial Statements Corporate Governance
Contributed

|  | Share | surplus | Retained |  |  |
| --- | --- | --- | --- | --- | --- |
|  | capital | reserve | earnings |  | Total |
|  | 2022 | 2022 |  | 2022 | 2022 |
| Notes | £000 | £000 |  | £000 | £000 |

Net assets at 1 April 2021 1,200 326,019 40,671 367,890
Proﬁt for the year – – 18,812 18,812
Dividends 6 – (1,260) (2,580) (3,840)
Net assets at 31 March 2022 1,200 324,759 56,903 382,862
## Statement of Changes in Equity
For the year ended 31 March 2021
General Meeting Investor Information Notice of the Annual
(Accumu-

|  |  |  | Contributed |  | lated losses)/ |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | surplus |  | retained |  |  |
|  | Share capital |  |  | reserve |  | earnings |  | Total |
|  |  | 2021 |  | 2021 |  |  | 2021 | 2021 |
| Notes |  | £000 |  | £000 |  |  | £000 | £000 |

Net assets at 1 April 2020 1,200 327,939 (52,840) 276,299
Proﬁt for the year – – 95,431 95,431
Dividends 6 – (1,920) (1,920) (3,840)
Net assets at 31 March 2021 1,200 326,019 40,671 367,890
The accompanying notes on pages 61 to 73 are an integral part of this Statement.
Hansa Investment Company Limited For the Year Ended 31 March 2022 59
## FINANCIAL STATEMENTS
## Cash Flow Statement
For the year ended 31 March 2022

|  |  | Year ended |  |  | Year ended |  |
| --- | --- | --- | --- | --- | --- | --- |
|  | 31 March 2022 |  |  | 31 March 2021 |  |  |
| Notes |  |  | £000 |  |  | £000 |

Cash ﬂows from operating activities
Income for the year* 18,812 95,431
Adjustments for:
Realised (gains)/losses on investments 9 (5,440) 2,011
Unrealised gains on investments 9 (11,625) (95,043)
Foreign exchange (80) 181
(Increase)/decrease in trade and other receivables 11 (24) 2,326
Decrease in trade and other payables 13 (20) (146)
Purchase of non-current investments (30,840) (27,416)
Sale of non-current investments 33,187 28,444
Net cash inﬂow from operating activities 3,970 5,788
Cash ﬂows from ﬁnancing activities
Dividends paid 6 (3,840) (3,840)
Net cash outﬂow from ﬁnancing activities (3,840) (3,840)
Increase in cash and cash equivalents 130 1,948
Cash and cash equivalents at beginning of ﬁnancial year 2,833 1,066
Effect of foreign exchange rate changes 80 (181)
Cash and cash equivalents at end of year 12 3,043 2,833
*Includes dividends received of £5,918,000 (2021: £6,172,000) and interest received of £nil (2021: nil).
The accompanying notes on pages 61 to 73 are an integral part of this Statement.
60 Hansa Investment Company Limited For the Year Ended 31 March 2022
# Notes to the Financial Statements

## 1 ACCOUNTING POLICIES

Hansa Investment Company Limited is a company limited by shares, registered and domiciled in Bermuda with its registered office shown on page 78. The principal activity of the company is set out in the strategic report on pages 2 to 40.

### (a) Basis of preparation

The Financial Statements of the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS") adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. IFRS means standards and interpretations issued (or adopted) by the International Accounting Standards Board (IASB) (they comprise: International Financial Reporting Standards, International Accounting Standards (IAS) and Interpretations developed by the IFRS Interpretations Committee or the former Standing Interpretations Committee (SIC)) or IFRS that have been adopted in the relevant jurisdiction.

These Financial Statements are presented in Sterling because that is the currency of the primary economic environment in which the Company operates.

The Financial Statements have been prepared on an historical cost and going concern basis in line with the assertion of the Board on page 22. The Financial Statements have also been prepared in accordance with the AIC Statement of Recommended Practice ("SORP") for investment trusts, issued by the AIC in October 2019, to the extent that the SORP does not conflict with IFRS. The principal accounting policies adopted are set out below.

### (b) Basis of non-consolidation

IFRS 10 stipulates that subsidiaries and associates of Investment Entities are not consolidated but, rather stated at fair value unless the conditions for certain exemptions from this treatment are met. Hansa Investment Company Ltd meets all three characteristics of an Investment Entity as described by IFRS 10. Last financial year the Company had one, 100% owned, subsidiary Hansa Trust Limited. The Company became the 100% owner of Hansa Trust's shares as part of the Scheme of Arrangement on 29 August 2019. Hansa Trust Limited was dissolved during the year to 31 March 2022.

### (c) Presentation of Income Statement

In order to better reflect the activities of an investment company and in accordance with guidance issued by the AIC, supplementary information which analyses the Income Statement between items of a revenue and capital nature, has been presented alongside the Income Statement.

### (d) Non-current investments

As the Company's business is investing in financial assets, with a view to profiting from their total return in the form of income received and increases in fair value, investments are classified at fair value through profit or loss on initial recognition in accordance with IFRS 9. The Company manages and evaluates the performance of these investments on a fair value basis, in accordance with its investment strategy and information about the investments is provided on this basis to the Board of Directors.

Investments are recognised and derecognised on the trade date. For listed investments fair value is deemed to be bid market prices, or closing prices for SETS stocks sourced from the London Stock Exchange. SETS is the London Stock Exchange's electronic trading service, covering most of the market including all FTSE 100 constituents and most liquid FTSE 250 constituents, along with some other securities.

Fund investments are stated at fair value through profit or loss as determined by using the most recent available valuation. In some cases, this will be by reference to the most recent valuation statement supplied by the fund's manager. In other cases, values may be available through the fund being listed on an exchange or via pricing sources such as Bloomberg.

Private equity investments are stated at fair value through profit or loss as determined by using various valuation techniques, in accordance with the International Private Equity and Venture Capital Valuation Guidelines. In the absence of a valuation at the balance sheet date, additional procedures to determine the reasonableness of the fair value estimate for inclusion in the financial statements may be used. These could include direct enquiries of the manager of the investment to understand, amongst others, valuation process and techniques used, external experts used in the valuation process and updated details of underlying portfolio. In addition, the Company can obtain external independent valuation data and compare this to historic valuation movements of the asset. Further, recent arms-length market transactions between knowledgeable and willing parties where available might also be considered. The investment in the Company's subsidiary undertaking is stated at fair value for the prior year.

Unrealised gains and losses, arising from changes in fair value, are included in net profit or loss for the period as a capital item in the Income Statement and are ultimately recognised in the Capital Reserves.

Hansa Investment Company Limited For the Year Ended 31 March 2022 61
## FINANCIAL STATEMENTS
## Notes to the Financial Statements
1 ACCOUNTING POLICIES (CONTINUED)
(e) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank, short-term deposits and cash funds with an original maturity of three months
orless and are subject to an insigniﬁcant risk of changes in capital value.
(f) Investment Income and return of capital
Dividends receivable on equity shares are recognised on the ex-dividend date. Where no ex-dividend date is quoted, dividends
are recognised when the Company’s right to receive payment is established. Dividends and Real Estate Investment Trusts’ (“REIT”)
income are all stated net of withholding tax. In many cases, Bermudan companies cannot recover foreign incurred taxes withheld on
dividends and capital transactions. As a result, any such taxes incurred will be charged as an expense and included here. When an
investee company returns capital to the Company, the amount received is treated as a reduction in the book cost of that investment
and is classiﬁed as sale proceeds.
(g) Expenses
All expenses are accounted for on an accruals basis. Expenses are charged through the revenue column of the Income Statement
except as follows:
(i) expenses which are incidental to the acquisition or disposal of an investment are charged to the capital column of the
Income Statement.
(h) Taxation
Under current Bermuda law, the Company is not required to pay taxes in Bermuda on either income or capital gains. The Company
has received an undertaking from the Bermuda government exempting it from all local income, withholding and capital gains taxes
being imposed and will be exempted from such taxes until 31 March 2035.
(i) Foreign Currencies
Transactions denominated in foreign currencies are recorded in the local currency, at the actual exchange rates as at the date of the
transaction. Assets and liabilities denominated in foreign currencies at the balance sheet date are reported at the rate of exchange
prevailing at the balance sheet date. Any gain or losses arising from a change in exchange rates, subsequent to the date of the
transaction, is included as an exchange gain or losses in the capital or revenue column of the Income Statement, depending on
whether the gain or losses is of a capital or revenue nature respectively.
(j) Retained Earnings
Contributed Surplus
The following are credited or charged to this reserve via the capital column of the Income Statement:
• gains and losses on the disposal of investments;
• exchange differences of a capital nature;
• expenses charged to the capital column of the Income Statement in accordance with the above accounting policies; and
• increases and decreases in the valuation of investments held at the balance sheet date.
Revenue Reserves
The following are credited or charged to this reserve via the revenue column of the Income Statement:
• net revenue recognised in the revenue column of the Income Statement.
62 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
## Notes to the Financial Statements
Reports Financial Statements Corporate Governance
1 ACCOUNTING POLICIES (CONTINUED)
(k) Signiﬁcant Judgements and Estimates
The key signiﬁcant estimate to report, concerns the Company’s valuation of its holding in DV4 Ltd. DV4 is valued using the most
recent estimated NAV as advised to the Company by DV4, adjusted for any further drawdowns, distributions or redemptions
between the valuation date and 31 March 2022. The most recent valuation statement was received on 4 March 2022 stating
the value of the Company’s holding as at 31 December 2021. In the absence of a valuation for 31March2022 from DV4, the
Company performed additional procedures to determine the reasonableness of the fair value estimate for inclusion in the Financial
Statements. Direct enquiries of the manager of DV4 were made in July 2020 to understand, amongst others, valuation process
and techniques used, external experts used in the valuation process and updated details of underlying property portfolio. It has
been conﬁrmed with DV4's manager that the valuation procedures discussed in July 2020 are still the same used now. In addition,
the Company has compared the historic valuation movements of DV4 to the FTSE350 Real Estate Index. Based on the information
obtained and additional analysis performed the Company is satisﬁed that DV4 is carried in these Financial Statements at an
amount that represents its best estimate of fair value at 31 March 2022. It is believed the value of DV4 asat 31 March 2022 will
not be materially different, but this valuation is based on historic valuations by DV4, does not have a readily available third party
comparator and, as such, is an estimate. There are no signiﬁcant judgements. General Meeting Investor Information Notice of the Annual
(l) Adoption of new and revised standards
At the date of authorisation of these Financial Statements the following standards and amendments to standards, which have not
been applied in these Financial Statements, were in issue, but not yet effective:
• Amendments to IAS1 ‘Classiﬁcation of liabilities as current or non-current’ (effective for accounting periods beginning on or after
1 January 2023).
• IFRS 17, ‘Insurance contracts’ (effective for accounting periods beginning on or after 1 January 2023).
• Amendments to IAS 8 ‘Deﬁnition of Accounting Estimates’ (effective for accounting periods on or after 1 January 2023).
• Amendments to IAS 1 and IFRS Practice Statement 2 ‘Disclosure of Accounting Policies’ (effective for accounting periods on or
after 1 January 2023).
• Amendments to IAS 12 ‘Deferred Tax related to Assets and Liabilities arising from a Single Transaction’ (effective for accounting
periods on or after 1 January 2023).
The Company does not believe there will be a material impact on the Financial Statements or the amounts reported from the
adoption of these standards.
In the current ﬁnancial period the Company has applied to the following amendments to standards:
• IFRS 9, IAS 39, IFRS 7, IFRS 16 and IFRS 4: Interest Rate Benchmark Reform – phase 2 (amended) (effective for accounting periods
beginning on or after 1 January 2021).
There is no material impact on the Financial Statements or the amounts reported from the adoption of these amendments to
the standards.
(m) Intercompany loan
At the year ended 31 March 2022 there is no longer an intercompany loan as Hansa Trust Limited was dissolved on 9 November
2021. In the year to 31 March 2021 the intercompany loan was recognised at cost, being the fair value of the consideration
receivable. The amounts falling due for repayment within one year were included under current liabilities in the Balance Sheet for
the year ended 31 March 2021.
(n) Operating Segments
The Company considers it has one operating segment for the purposes of IFRS8.
Hansa Investment Company Limited For the Year Ended 31 March 2022 63
## FINANCIAL STATEMENTS
## Notes to the Financial Statements
2 INVESTMENT INCOME

|  | Revenue |  |  | Revenue |  |
| --- | --- | --- | --- | --- | --- |
|  | Year ended |  |  | Year ended |  |
| 31 March 2022 |  |  | 31 March 2021 |  |  |
|  |  | £000 |  |  | £000 |

Income from quoted investments
Dividends 5,904 6,350
Total income 5,904 6,350
3 PORTFOLIO MANAGEMENT FEE

|  | Revenue |  |  | Revenue |  |
| --- | --- | --- | --- | --- | --- |
|  | Year ended |  |  | Year ended |  |
| 31 March 2022 |  |  | 31 March 2021 |  |  |
|  |  | £000 |  |  | £000 |

Portfolio management fee 3,010 2,621
Total management fee 3,010 2,621
4 OTHER EXPENSES

|  | Revenue |  |  | Revenue |  |
| --- | --- | --- | --- | --- | --- |
|  | Year ended |  |  | Year ended |  |
| 31 March 2022 |  |  | 31 March 2021 |  |  |
|  |  | £000 |  |  | £000 |

Administration fees 155 143
Directors’ remuneration 188 195
Auditor’s remuneration for:
– audit of the Company’s Annual accounts 76 80
Printing fees 30 36
Director’s liability insurance 69 74
Marketing 127 79
Registrar's fees 82 83
Banking charges 15 1
Secretarial services 167 121
Travel expenses 80 (4)
Legal fees – redomicile project – 17
Broker fees 26 21
Stock Exchange listing fees 46 52
Safe custody fees 185 165
Management fee rebate from GAM (138) –
Other 119 86
Total Other Expenses 1,227 1,149
5 FINANCE COSTS

|  | Revenue |  |  | Revenue |  |
| --- | --- | --- | --- | --- | --- |
|  | Year ended |  |  | Year ended |  |
| 31 March 2022 |  |  | 31March 2021 |  |  |
|  |  | £000 |  |  | £000 |

Interest payable – –
Total Finance Costs – –
This note refers to an ongoing ﬁnance facility with Lombard Odier which has not been utilised in the current or prior year.
64 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
## Notes to the Financial Statements
Reports Financial Statements Corporate Governance
6 DIVIDENDS PAID

|  | Year ended |  |  | Year ended |  |
| --- | --- | --- | --- | --- | --- |
| 31 March 2022 |  |  | 31March 2021 |  |  |
|  |  | £000 |  |  | £000 |

Amounts recognised as distributed to shareholders in the year are as follows:
Fourth interim dividend for 2021 (paid 28 May 2021): 0.8p (2020:0.8p) 960 960
First interim dividend for 2022 (paid 31 August 2021): 0.8p (2021:0.8p) 960 960
Second interim dividend for 2022 (paid 26 November 2021): 0.8p (2021:0.8p) 960 960
Third interim dividend for 2022 (paid 28 February 2022): 0.8p (2021: 0.8p) 960 960
Total Dividends Paid 3,840 3,840
Set out below are the total dividends paid and proposed in respect of the current ﬁnancial year. Where there has been no revenue
available for distribution by way of dividend for the year, dividends have been paid from contributed surplus which is permitted by
Bermudan company law.

|  |  |  |  |  |  | General Meeting Investor Information Notice of the Annual |
| --- | --- | --- | --- | --- | --- | --- |
|  | Year ended |  |  | Year ended |  |  |
| 31 March 2022 |  |  | 31March 2021 |  |  |  |
|  |  | £000 |  |  | £000 |  |

First interim dividend for 2022 (paid 31 August 2021): 0.8p (2021: 0.8p) 960 960
Second interim dividend for 2022 (paid 26 November 2021): 0.8p (2021: 0.8p) 960 960
Third interim dividend for 2022 (paid 28 February 2022): 0.8p (2021: 0.8p) 960 960
Fourth interim dividend for 2022 (payable 27 May 2022): 0.8p (2021:0.8p) 960 960
Total Dividends Paid & Proposed 3,840 3,840
The Board has announced four interim dividends, each of 0.8p per Ordinary and ‘A’ non-voting Ordinary share, relating to the year
ended 31 March 2022. No ﬁnal dividend is proposed for the year ended 31 March 2022.
7 RETURN ON ORDINARY SHARES (EQUITY)

|  | Revenue |  |  | Capital |  | Total |  | Revenue |  |  | Capital |  | Total |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Year ended |  |  | Year ended |  | Year ended |  | Year ended |  |  | Year ended |  | Year ended |  |
|  | 31 March |  |  | 31 March | 31 March |  | to 31March |  |  | to 31March |  | to 31March |  |
|  |  | 2022 |  | 2022 |  | 2022 |  |  | 2021 |  | 2021 |  | 2021 |

Returns per share 1.4p 14.3p 15.7p 2.2p 77.4p 79.6p
Returns
Revenue return per share is based on the revenue attributable to equity shareholders of £1,667,000 (2021: £2,580,000).
Capital return per share is based on the capital proﬁt attributable to equity shareholders of £17,145,000 (2021: £92,851,000).
Total return per share is based on the combination of revenue and capital returns attributable to equity shareholders, amounting to
net proﬁt of £18,812,000 (2021: £95,431,000).
Both revenue and capital return are based on 40,000,000 Ordinary shares and 80,000,000 ‘A’ non-voting Ordinary shares, in issue
throughout the year.
Hansa Investment Company Limited For the Year Ended 31 March 2022 65
## FINANCIAL STATEMENTS
## Notes to the Financial Statements
8 INVESTMENTS IN SUBSIDIARY AT FAIR VALUE THROUGH PROFIT OR LOSS
During the year Hansa Trust Ltd was dissolved. Therefore, the remaining intercompany balance, along with the share capital and
other reserves of Hansa Trust Ltd were reduced and then cancelled. As a result, there is no investment in subsidiary as at 31 March
2022. As at 31 March 2021, the Company owned 100% of the ordinary share capital and voting rights of Hansa Trust PLC formerly
an investment trust, registered and operating in England. The fair value at 31 March 2021 was £3,179,000. As at 31 March 2021,
Hansa Trust PLC was no longer trading and was not beneﬁcially entitled to any investments except for an intercompany loan.
The intercompany loan was originally created as part of the Scheme of Domiciliation in August 2019 to reﬂect the transfer of
the beneﬁcial title of the portfolio from Hansa Trust PLC to the Company. As at 31 March 2021 there remained a relatively small
intercompany balance between the two entities which fully settled with Hansa Investment Company Limited on the dissolution of
Hansa Trust Limited on 9 November 2021 giving a nil balance as at 31 March 2022. As part of the process of dissolution, Hansa
Trust PLC had re-registered as Hansa Trust Limited.
9 INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS

|  |  |  | 2022 | 2021 |
| --- | --- | --- | --- | --- |
| Listed | Unquoted |  | Total | Total |
| £000 |  | £000 | £000 | £000 |

Cost as at 1 April 246,951 74,883 321,834 324,873
Investment holding gains/(losses) at 1 April 30,333 13,101 43,434 (51,609)
Valuation as at 1 April 277,284 87,984 365,268 273,264
Movements in the year:
Purchases at cost 30,530 310 30,840 27,416
Sales – proceeds (32,223) (964) (33,187) (28,444)
Movement in investment holding gains 14,680 2,385 17,065 93,032
Valuation as at 31 March 290,271 89,715 379,986 365,268
Cost as at 31 March 250,660 74,267 324,927 321,834
Investment holding gains as at 31 March 39,611 15,448 55,059 43,434
Valuation as at 31 March 290,271 89,715 379,986 365,268
2022 2021
£000 £000
Gains/(losses) on sales 5,440 (2,011)
Movement in investment holding gains 11,625 95,043
Gains on investments held at fair value through proﬁt or loss 17,065 93,032
Transaction costs
During the year expenses were incurred in acquiring and disposing of investments classiﬁed as fair value through proﬁt or loss.
Thesehave been expensed through capital and are included within gains on investments in the Income Statement. The total costs
were as follows:
2022 2021
£000 £000
Purchases 14 22
Sales 23 23
37 45
66 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
## Notes to the Financial Statements
Reports Financial Statements Corporate Governance
10 SIGNIFICANT HOLDING
The Company’s holdings of 10% or more of any class of shares in investment companies and 20% or more of any class of shares in
non-investment companies as at 31 March 2022 are detailed below:
Exc. Minority Interest
Proﬁt
Country of % of Latest Total after
incorporation Class of class available capital and tax for
or registration capital held accounts reserves the year
Ocean Wilsons Holdings Limited Bermuda Ordinary 26.5 31.12.21 $593,657,000 $63,687,000
Ocean Wilsons Holdings Limited is included as part of the investment portfolio in accordance with IAS 28 – Investment in Associates.
11 TRADE AND OTHER RECEIVABLES
The Company applies the IFRS 9 simpliﬁed approach to measuring expected credit losses, which uses a lifetime expected loss
allowance for all trade receivables and contract assets.

|  |  | General Meeting Investor Information Notice of the Annual |
| --- | --- | --- |
| 2022 | 2021 |  |
| £000 | £000 |  |

Prepayments and accrued income 201 177
201 177
12 CASH AND CASH EQUIVALENTS
2022 2021
£000 £000
Cash at bank 3,043 2,833
3,043 2,833
13 TRADE AND OTHER PAYABLES
2022 2021
£000 £000
Intercompany Loan – 3,179
Other creditors and accruals 368 388
368 3,567
Note: Hansa Trust Limited was dissolved on 9 November 2021. As a result, the remaining Intercompany loan balance was cancelled at this time as well as the equity
investment in the subsidiary of the same value. See Note 20 for information on the equity Investment. See Note 8 for a more detailed explanation of the dissolution process.
14 CALLED UP SHARE CAPITAL
2022 2021
£000 £000
40,000,000 Ordinary shares of 1p 400 400
80,000,000 ‘A’ non-voting Ordinary shares of 1p 800 800
1,200 1,200
The ‘A’ non-voting Ordinary shares do not entitle the holders to receive notices or to vote, either in person or by proxy, at any
general meeting of the Company, but in all other respects rank pari passu with the Ordinary shares of the Company.
Hansa Investment Company Limited For the Year Ended 31 March 2022 67
## FINANCIAL STATEMENTS
## Notes to the Financial Statements
15 CONTRIBUTED SURPLUS
2022 2021
£000 £000
Opening balance at 1 April 326,019 327,939
Dividend paid (1,260) (1,920)
Closing balance at 31 March 324,759 326,019
16 RETAINED EARNINGS
Reserves Reserves
Total

| Revenue |  | Capital – |  |  | Capital – |  |  | Total | Revenue |  | Capital – |  | Capital – |  | (accumulated |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  | Other | Investment |  |  | retained |  |  |  |  | Other | Investment |  |  | losses)/ |
|  |  |  |  |  | holding |  | earnings |  |  |  |  |  | holding |  |  | retained |
|  |  |  |  |  | proﬁts |  |  |  |  |  |  |  |  | proﬁts |  | earnings |
|  | 2022 |  | 2022 |  |  | 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2021 |  | 2021 |
|  | £000 |  | £000 |  |  | £000 |  | £000 |  | £000 |  | £000 |  | £000 |  | £000 |

Opening balance at 1 April (1,111) (1,652) 43,434 40,671 (1,771) 540 (51,609) (52,840)
Proﬁt/(loss) for the year 1,667 5,520 11,625 18,812 2,580 (2,192) 95,043 95,431
Dividend paid (2,580) – – (2,580) (1,920) – – (1,920)
Closing balance at 31 March (2,024) 3,868 55,059 56,903 (1,111) (1,652) 43,434 40,671
17 NET ASSET VALUE
2022 2021
NAV per Ordinary and ‘A’ non-voting Ordinary share 319.1p 306.6p
The NAV per Ordinary and ‘A’ non-voting Ordinary share is based on the net assets attributable to equity shareholders of
£382,862,000 (2021: £367,890,000) and on 40,000,000 Ordinary shares (2021: 40,000,000) and 80,000,000 ‘A’ non-voting
Ordinary shares (2021: 80,000,000) in issue at 31 March 2022.
18 COMMITMENTS AND CONTINGENCIES
The Company has no outstanding commitments as at 31 March 2022.
19 FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS
The Company’s ﬁnancial instruments comprise securities, cash balances, debtors and creditors. These assets are classiﬁed in the
following measurement categories:
• those to be measured subsequently at fair value through proﬁt or loss; and
• those to be measured at amortised cost.
The ﬁnancial assets held at amortised cost include trade and other receivables, cash and cash equivalents.
Risk Objectives and Policies
The objective of the Company is to achieve growth of shareholder value commensurate with the risks taken, bearing in mind that
the protection of long-term shareholder value is paramount. The policy of the Board is to provide a framework within which the
Portfolio Manager can operate and deliver the objectives of the Company. In pursuing its investment objective, the Company is
exposed to a variety of risks that could result in either a reduction in the Company’s net assets and/or a reduction of the proﬁts
available for dividends.
These risks include those identiﬁed by the accounting standard IFRS 7, being market risk (comprising currency risk, interest rate risk
and other price risk), liquidity risk and credit risk. The Directors’ approach to the management of these is set out below. The Board,
in conjunction with the Portfolio Manager and Company Secretary, oversees the Company’s risk management.
68 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
## Notes to the Financial Statements
Reports Financial Statements Corporate Governance
19 FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (CONTINUED)
Risks Associated with Financial Instruments
Foreign currency risk
Foreign currency risks arise in two distinct areas which affect the valuation of the investment portfolio. 1) the direct exposure where
an investment is denominated and paid for in a currency other than Sterling; and 2) the indirect exposure where an investment has
substantial non-Sterling underlying investment and/or cash ﬂows. The Company does not normally hedge against foreign currency
movements affecting the value of the investment portfolio, but takes account of this risk when making investment decisions. Some
of the fund investments into which the Company invests will, in part or in whole, hedge some of their underlying currency risk,
but this will be known at the time of investment and will form part of the investment decision. In those cases, the hedging will not
remove the exposure to the underlying country or market sector. The Portfolio Manager monitors the effect of foreign currency
ﬂuctuations through the pricing of the investments by the various markets.

| Direct | No direct |  |  | Direct | No direct |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| foreign | foreign |  |  | foreign | foreign |  |  |  |
| currency | currency |  |  | currency | currency |  |  |  |
| risk |  | risk | Total | risk |  | risk | Total |  |
|  |  |  |  |  |  |  |  | General Meeting Investor Information Notice of the Annual |
| 2022 |  | 2022 | 2022 | 2021 |  | 2021 | 2021 |  |
| £000 |  | £000 | £000 | £000 |  | £000 | £000 |  |

Investments 115,858 264,128 379,986 127,772 237,496 365,268
Other receivables including prepayments 29 172 201 126 51 177
Cash at bank 24 3,019 3,043 – 2,833 2,833
Current liabilities – (368) (368) – (388) (388)
115,911 266,951 382,862 127,898 239,992 367,890
Note: Direct foreign currency risk includes direct exposure to USD and Euro currencies.
Foreign currency sensitivity
The following table illustrates the sensitivity of the proﬁt/loss for the year and the shareholders’ funds in regard to the Company’s
ﬁnancial assets and ﬁnancial liabilities. It assumes a 10% depreciation of Sterling against foreign currencies at 31 March 2022 and
31 March 2021. These percentages have been determined based on the average market volatility in exchange rates in the previous
12 months. The sensitivity analysis is based on the Company’s monetary foreign currency ﬁnancial instruments held at each balance
sheet date.

| US$ | Euro | Other | US$ | Euro | Other |
| --- | --- | --- | --- | --- | --- |
| 2022 | 2022 | 2022 | 2021 | 2021 | 2021 |
| £000 | £000 | £000 | £000 | £000 | £000 |

If Sterling had weakened by 10% against the currencies shown, this would have had the following effect on the Company:
Income statement – proﬁt/(loss) 785 (331) (191) 3,029 509 851
Equity shareholder funds 8,536 1,453 1,600 8,291 2,201 2,297
9,321 1,122 1,409 11,320 2,710 3,148
Note: Other includes exposure to foreign currencies excluding US dollar and Euro.
A 10% strengthening of Sterling against the above currencies would result in an equal and opposite effect on the above amounts.
Hansa Investment Company Limited For the Year Ended 31 March 2022 69
## FINANCIAL STATEMENTS
## Notes to the Financial Statements
19 FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (CONTINUED)
Interest rate risk
Interest rate movements may affect the level of income receivable on cash deposits and the interest payable on the Company’s
variable rate borrowings.
The Company has banking facilities amounting to £30m (2021: £30m) which are available for the Portfolio Manager to use in
purchasing investments; the costs of which are based on the prevailing LIBOR rate, plus an agreed margin. The Company does not
normally hedge against interest rate movements affecting the value of the investment portfolio, but takes account of this risk when
an investment is made utilising the facility. The level of banking facilities used is monitored by both the Board and the Portfolio
Manager on a regular basis. The impact on the returns and net assets of the Company for every 1% change in interest rates, based
on the amount drawn down at the Year-End under the facility, would be £nil (2021: £nil). The level of banking facilities utilised at
31 March 2022 was £nil (2021: £nil).
Interest rate changes usually impact equity prices. The level and direction of change in equity prices is subject to prevailing local and
world economic conditions as well as market sentiment, all of which are very difﬁcult to predict with any certainty. The Company
has ﬂoating rate ﬁnancial assets, consisting of bank balances and cash funds that have received average rates of interest during the
year of 0.0% on bank balances.

| Cash ﬂow |  |  | No |  | Cash ﬂow |  |  | No |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| interest |  | interest |  |  |  | interest | interest |  |  |
| rate risk |  | rate risk |  | Total | rate risk |  | rate risk |  | Total |
|  | 2022 |  | 2022 | 2022 |  | 2021 | 2021 |  | 2021 |
|  | £000 |  | £000 | £000 |  | £000 | £000 |  | £000 |

Investments – 379,986 379,986 – 365,268 365,268
Other receivables including prepayments – 201 201 – 177 177
Cash at bank 3,043 – 3,043 2,833 – 2,833
Current liabilities – (368) (368) – (388) (388)
3,043 379,819 382,862 2,833 365,057 367,890
Other price risk
By the nature of its activities, the Company’s investments are exposed to market price ﬂuctuations. NAV is calculated and reported
daily to the London Stock Exchange. The Portfolio Manager and the Board monitor the portfolio valuation on a regular basis and
consideration is given to hedging the portfolio against large market movements.
The Company’s investment in Ocean Wilsons is large both in absolute terms, £93.5m as valued at 31 March 2022 (2021:
£78.6m) and as a proportion of the NAV, 24.4% (2021: 21.4%). Shareholders should be aware that if anything of a severe and
untoward nature were to happen to this company, it could result in a signiﬁcant impact on the NAV and share price. However,
it should also be noted that the exposure of Hansa Investment Company Limited to the currency, country and market based risk
exposure of OceanWilsons is, to an extent, mitigated by the diverse nature of the two investments within Ocean Wilsons. Wilson
Sons, corresponding to 60.7% of Ocean Wilsons’ NAV, has a direct exposure to the Brazilian economy, whereas OceanWilsons
Investments has a diverse Investment portfolio and corresponds to the other 39.3%. It is an investment the Board pays close
attention to and it should be pointed out that the risks associated with it are very different from those of the other companies
represented in the portfolio. The Board itself regularly undertakes a thorough review of its business and prospects and has
determined that its future holds a lot of promise. As a consequence the Board believes the risk involved in the investment
is worthwhile.
The performance of the portfolio as a whole is not designed to correlate with that of any market index. Should the portfolio of the
Company, as detailed on pages 36 and 37, rise or fall in value by 10% from the year end valuation, the effect on the Company’s
proﬁt and equity would be an equal rise or fall of £38.0m (2021: £36.8m).
70 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
## Notes to the Financial Statements
Reports Financial Statements Corporate Governance
19 FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (CONTINUED)
Credit Risk
The Company only transacts with regulated institutions on normal market terms, which are trade date plus one to three days in
the case of equities. Fund investment settlement periods will vary from fund to fund and are deﬁned by the individual managers.
Thelevels of amounts outstanding from brokers and fund managers are regularly reviewed by the Portfolio Manager. The duration
of credit risk associated with the investment transactions is the period between the date the transaction took place, the trade date,
the date the stock and cash were transferred and the settlement date. The level of risk during the period is the difference between
the value of the original transaction and its replacement with a new transaction. The amounts due to/(from) brokers at 31 March
2022 are shown in Note 11 and Note 13 on page 67.
The Company’s maximum exposure to credit risk on cash is £3.0m (2021: £2.8m) and on cash funds is £nil (2021: £nil). Surplus cash
is on deposit with the Depositary/Custodian.
Liquidity Risk
The liquidity risk to the Company is that it is unable to meet its obligations as they fall due, as a result of a lack of available cash and
General Meeting Investor Information Notice of the Annual
an inability to dispose of investments in a timely manner. A substantial proportion of the Company’s portfolio is held in liquid quoted
investments; however, there is a large, Strategic, holding in Ocean Wilsons of 24.4% (2021: 21.4%), unquoted equity investments
of 2.3% (2021: 2.2%) and investments into open-ended investment funds with varying liquidity terms of 61.7% (2021: 59.9%).
The Portfolio Manager takes into consideration the liquidity of each investment when purchasing and selling, in order to maximise
the returns to shareholders, by placing suitable transaction levels into the market. Special consideration is given to investments
representing more than 5% of the investee company. A detailed list of the investments, split by silo, held at 31 March 2022 is
shown on pages 36 and 37. This can be used broadly to ascertain the levels of liquidity within the portfolio, although liquidity will
vary with each investment – particularly the funds.
Capital Management
The Company considers its capital to be its issued share capital and reserves and whilst the Company has access to loan facilities it
is not considered or used as core capital, but primarily to meet the cash timing requirements of opportunistic investment strategies
and thereby enhance shareholder returns. The Board regularly monitors its share discount policy and the level of discounts and
whilst it has the option to repurchase shares, it considers the best means of attaining a good rating for the shares is to concentrate
on good shareholder returns.
However, the Board believes the ability of the Company to repurchase its own ‘A’ non-voting Ordinary shares in the market may
potentially enable it to beneﬁt all equity shareholders of the Company. The repurchase of ‘A’ non-voting Ordinary shares, at a discount
to the underlying NAV, would enhance the NAV per share of the remaining equity shares and might also enable the Company to
address more effectively any imbalance between supply and demand for the Company’s ‘A’ non-voting Ordinary shares.
20 FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Fair Value Hierarchy
IFRS 13 ‘Fair Value Measurement’ requires an entity to classify fair value measurements, using a fair value hierarchy that reﬂects the
signiﬁcance of the inputs used in making the measurements. The fair value hierarchy has the following levels:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability not based on observable market data (unobservable inputs).
Hansa Investment Company Limited For the Year Ended 31 March 2022 71
## FINANCIAL STATEMENTS
## Notes to the Financial Statements
20 FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (CONTINUED)
The ﬁnancial assets and liabilities, measured at fair value, in the Statement of Financial Position, grouped into the fair value hierarchy
and valued in accordance with the accounting policies in Note 1, are detailed below:
Level 1 Level 2 Level 3 Total
31March 2022 £000 £000 £000 £000
Financial assets at fair value through proﬁt or loss
Quoted equities 136,771 – – 136,771
Unquoted equities – – 8,917 8,917
Fund investments 27,328 206,970 – 234,298
Net fair value 164,099 206,970 8,917 379,986
Level 1 Level 2 Level 3 Total
31March 2021 £000 £000 £000 £000
Financial assets at fair value through proﬁt or loss
Quoted equities 136,680 – – 136,680
Unquoted equities – – 8,055 8,055
Fund investments 14,188 206,345 – 220,533
Investment In subsidiary – – 3,179 3,179
Net fair value 150,868 206,345 11,234 368,447
The Company’s policy is to recognise transfers into and out of the different fair value hierarchy levels at the date the event or change
in circumstances that caused the transfer occurred.
A reconciliation of fair value measurements in Level 3 is set out in the following table:

|  | 2022 |  | 2021 |
| --- | --- | --- | --- |
|  | Equity |  | Equity |
| investments |  | investments |  |
|  | £000 |  | £000 |

Opening Balance 11,234 12,455
Dissolution of Hansa Trust (3,179) –
Capital Distribution (648) –
Total gains or losses included in gains on investments in the Income Statement:
– on assets held at year end 1,510 (1,221)
Closing Balance 8,917 11,234
Note: Hansa Trust Limited was dissolved on 9 November 2021. As a result, the remaining equity investment was cancelled at this time as well as the Intercompany
loan balance with the subsidiary of the same value. See Note 13 for information on the Intercompany loan balance. See Note 8 for a more detailed explanation of the
dissolution process.
72 Hansa Investment Company Limited For the Year Ended 31 March 2022
# Notes to the Financial Statements

## 20 FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (CONTINUED)

As at 31 March 2022, the investment in DV4 has been classified as Level 3. This is because the investment has been valued using the most recent estimated NAV as advised to the Company by DV4, adjusted for any further drawdowns, distributions or redemptions between the valuation date and 31 March 2022. The most recent valuation statement was received on 4 March 2022 and relates to the DV4 portfolio at 31 December 2021. Additionally, the underlying assets of DV4 are all Real Estate in nature and, as such, there is not a readily comparable market of identical assets for valuation purposes. In the absence of a valuation for 31 March 2022 from DV4, the Company performed additional procedures to determine the reasonableness of the fair value estimate for inclusion in the Financial Statements. Direct enquiries of the manager of DV4 were made in July 2020 to understand, amongst others, valuation process and techniques used, external experts used in the valuation process and updated details of underlying property portfolio. In addition, the Company has obtained external independent valuation data and compared the historic valuation movements of DV4 to that date. It has been confirmed with DV4's manager that the valuation procedures discussed in July 2020 are still the same used now. In addition, the Company has compared the historic valuation movements of DV4 to the FTSE350 Real Estate Index. Based on the information obtained and additional analysis performed the Company is satisfied that DV4 is carried in these Financial Statements at an amount that represents its best estimate of fair value at 31 March 2022. It is believed the value of DV4 as at 31 March 2022 will not be materially different, but this valuation is based on historic valuations by DV4, does not have a readily available third party comparator and, as such, is an estimate. If the value of the investment was to increase or decrease by 10%, while all other variables remained constant, the return and net assets attributable to shareholders for the year ended 31 March 2022 would have increased or decreased by £892,000 (2021: £806,000). The Board considers 10% to be a potential movement between valuation periods borne out by historic valuation trends. However, this does not preclude the valuation moving a greater amount than 10% in the future. The subsidiary has been valued taking into account the latest assets and liabilities remaining in Hansa Trust.

## 21 RELATED PARTIES & TRANSACTIONS WITH THE PORTFOLIO MANAGER

William Salomon is a Director of the Company and Senior Partner of the Company's Portfolio Manager. Details of the relationship between the Company and Hansa Capital Partners LLP, including amounts paid during the year and owing at 31 March 2022, are disclosed in the Strategic Report – Shareholder Profile and Engagement on pages 38 to 40 and in Note 3 on page 64. Details of the relationship between the Company and the Directors, including amounts paid during the period to 31 March 2022, are disclosed in the Strategic Report – The Board on page 6 and also in the Directors' Remuneration Report on pages 49 to 51.

## 22 CONTROLLING PARTIES

At 31 March 2022 Victualia Limited Partnership and Nomolas Ltd each held 25.9% of the issued Ordinary shares. Additional information is disclosed in the Strategic Report – Substantial Shareholders on page 38.

## 23 POST BALANCE SHEET EVENTS

There are no significant events that have occurred after the end of the reporting year to the date of this report which require disclosure.

Hansa Investment Company Limited For the Year Ended 31 March 2022 73
## NOTICE OF THE ANNUAL GENERAL MEETING
## Notice of the Annual General Meeting
NOTICE IS HEREBY GIVEN that the Annual General Meeting 9 To approve the Company’s Dividend Policy as can be found
of the Members of the Company will be held at Clarendon on page 21 of the Annual Report.
House, 2 Church Street, Hamilton, HM 11, Bermuda on
10 To appoint PricewaterhouseCoopers Ltd as Auditor of the
Thursday 11 August at 10:00 a.m. (Bermuda time) for the
Company and to authorise the Directors to determine the
following purposes:
remuneration of the Auditor.
Agenda 11 Approval to repurchase up to 14.99% of the
• To appoint a chairperson of the meeting. ‘A’ non-voting Ordinary shares of 1p each in the issued
shares capital of the Company (the “Shares”).
• To conﬁrm notice.
THAT the Company be and hereby is unconditionally
Resolutions
authorised to make market purchases up to an aggregate
1 To receive and consider the audited Financial Statements
of 11,992,000 shares at a price (exclusive of expenses)
and the Reports of the Directors and Auditor for the year
which is:
ended 31 March 2022.
a) not less than 1p per share; and
2 To re-elect Jonathan Davie (a biography and Board
b) not more than the higher of: i) 5% above the average
endorsement can be found on page 4) as a Director of
of the middle-market quotations (as derived from
the Company.
and calculated by reference to the Daily Ofﬁcial List
3 To re-elect Richard Lightowler (a biography and Board
of the London Stock Exchange) for ‘A’ non-voting
endorsement can be found on page 4) as a Director of
Ordinary shares of 1p each in the ﬁve business days
the Company.
immediately preceding the day on which the share is
purchased; and ii) the higher of the last independent
4 To re-elect Nadya Wells (a biography and Board
trade and the then current highest independent bid.
endorsement can be found on page 5) as a Director of
the Company.
AND
5 To re-elect William Salomon (a biography and Board
THAT the approval conferred by this resolution shall expire
endorsement can be found on page 5) as a Director of
on the date of the next AGM (except in relation to the
the Company.
purchase of shares, the contract for which was concluded
6 To re-elect Simona Heidempergher (a biography and Board before such date and which might be executed wholly or
endorsement can be found on page 5) as a Director of partly after such date) unless the authority is renewed or
the Company. revoked at any other general meeting prior to such time.
7 To approve the Directors’ Remuneration Report. Dated: 17 June 2022
8 To approve the Directors’ Remuneration Policy and
Shane Reynolds
authorise the Board to determine the remuneration of
For and on behalf of
the Directors. Further, as per the Policy as presented on
Conyers Corporate Services (Bermuda) Limited
page49, to increase the current upper annual limit of
Secretary
Directors’ remuneration to $400,000. Thus, also approve
the amendment to the Company’s bye-law 44.1(a) to
replace the text “not exceed US$350,000 per annum”
with “not exceed US$400,000 per annum”.
74 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
Notes for Shareholders a) via www.signalshares.com by logging on and
1 Pursuant to Regulation 41 of the Uncertiﬁcated Securities selecting the ‘Proxy Voting’ link. If you have not
Regulations 2001 (as amended), only those members previously registered for electronic communications,
registered in the register of members of the Company you will ﬁrst be asked to register as a new user, for
48hours before the Annual General Meeting (i.e. by close which you will require your investor code (“IVC”),
General Meeting Investor Information Notice of the Annual
of business UK time on 9 August 2022) (or if the Meeting (which can be found on your share certiﬁcate), family
is adjourned, in the register of members of the Company name and postcode (if resident in the UK); or
48hours before the date and time of the adjourned
b) in hard copy form by post, by courier or by hand to
meeting) (the “Meeting”) shall be entitled to attend or
the Company’s Registrars, Link Group, PXS 1, Central
vote at the Meeting in respect of the number of shares
Square, 29 Wellington Street, Leeds, LS1 4DL.
registered in their respective names at that time. Changes
to entries on the register of members after that time will If you need help with voting online or need to request
be disregarded in determining the rights of any person to a proxy form, please contact our Registrars, Link
attend or vote at the Meeting. Group, on 0371 664 0300. Calls are charged at the
standard geographic rate and will vary by provider.
2 Registered members of the Company may vote at the
Calls outside the UK will be charged at the applicable
Meeting (whether by show of hands or poll) in person
international rate. They are open between 09:00 – 17:30,
or by proxy or corporate representative. A member may
Monday to Friday excluding public holidays in England
appoint one or more persons as his proxy to attend and
and Wales. Alternatively, you can email Link at
vote at the Meeting on his behalf. A proxy need not be
shareholder[email protected].
a member. Where more than one proxy is appointed the
instrument of proxy must specify the number of shares Notes for Depositary Interest Holders
each proxy is entitled to vote. 1 You will not receive a form of direction for the Annual
General Meeting in the post. Depositary Interests may
3 The appointment of a proxy will not affect the right of
be voted through the CREST Proxy Voting Service
a member to attend and vote in person at the Meeting or
in accordance with the procedures set out in the
adjourned meeting. A member that is a corporation may
CREST manual.
appoint a representative to attend and vote on its behalf at
the Meeting by delivering evidence of such appointment In order for a proxy appointment or instruction made
to the Company’s registrar no later than 48 hours before using the CREST service to be valid, the appropriate
the time ﬁxed for the Meeting (i.e. by 2:00pm UK time on CREST message (a “CREST Proxy Instruction”) must be
9 August 2022) or any adjourned meeting. properly authenticated in accordance with Euroclear UK
& Ireland Limited’s speciﬁcations and must contain the
4 In order to be valid, the proxy appointment (together
information required for such instruction, as described
with any power of attorney or other authority (if any)
in the CREST Manual (available via www.euroclear.com/
under which it is signed, or a notarised certiﬁed copy of
CREST). The message, regardless of whether it constitutes
that authority) must be returned by one of the following
the appointment of a proxy or is an amendment to the
methods, in each case so as to arrive no later than 2:00pm
instruction given to a previously appointed proxy must,
UK time on 9 August 2022 or, in the case of an adjourned
in order to be valid, be transmitted so as to be received
meeting, not less than 48 hours before the time appointed
by the issuer’s agent ID RA10 by 2:00pm UK time on
for holding such adjourned meeting (ignoring for these
8 August 2022. For this purpose, the time of receipt
purposes non-working days) or (in the case of a poll taken
will be taken to be the time (as determined by the time
otherwise than at or on the same day as the Meeting or
stamp applied to the message by the CREST Application
adjourned meeting) for the taking of the poll at which it is
Host) from which the issuer’s agent is able to retrieve the
to be used:
message by enquiry to CREST, in the manner prescribed by
Hansa Investment Company Limited For the Year Ended 31 March 2022 75
# Notice of the Annual General Meeting

## Continued

CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. CREST members and, where applicable, their CREST sponsors, or voting service providers should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider, to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

2 In the case of Depositary Interest Holders, a form of direction may be requested and completed in order to instruct Link Market Services Trustees Limited, the Depositary, to vote on the holder's behalf at the Meeting by proxy (or, if the Meeting is adjourned, at the adjourned meeting). Requests for a hard copy should be sent Link Group, PXS 1, Central Square, 29 Wellington Street, Leeds, LS1 4DL (telephone number 0371 664 0 380).
3 To be effective, a valid form of direction (and any power of attorney or other authority under which it is signed) must be received electronically or delivered to Link Group, PXS 1, Central Square, 29 Wellington Street, Leeds, LS1 4DL by no later by 2:00pm UK time on 8 August 2022) or 72 hours before any adjourned Meeting.

4 The Depositary will appoint the Chairman of the meeting as its proxy to cast your votes. The Chairman may also vote or abstain from voting as he or she thinks fit on any other business (including amendments to resolutions) which may properly come before the meeting.
5 The 'Vote Withheld' option is provided to enable you to abstain from voting on the resolutions. However, it should be noted that a 'Vote Withheld' is not a vote in law and will not be counted in the calculation of the proportion of the votes 'For' and 'Against' a resolution.
6 Depositary Interest holders wishing to attend the meeting should contact the Depositary at Link Group, PXS 1, Central Square, 29 Wellington Street, Leeds, LS1 4DL or by email by using [email protected] by no later than by 2:00pm UK time on 8 August 2022.

### All Holders

1 The quorum for the Annual General Meeting shall be two or more shareholders present in person or by proxy. If within two hours from the time appointed for the meeting a quorum is not present, the meeting shall be adjourned to the next business day at the same time and place or to such other time and place as the Directors may determine, and if a quorum is not present at any such adjourned meeting, the meeting shall be dissolved.
2 As of 17 June 2022 the Company's total number of shares in issue is 40,000,000 Ordinary shares of 1p each and 80,000,000 'A' non-voting Ordinary shares of 1p each in issue. The Ordinary shareholders are entitled to one vote per Ordinary share held. The 'A' non-voting Ordinary shares do not entitle the holders to vote or receive notice of meetings, but in all other respects they have the same rights as the Company's Ordinary shares.
3 A copy of this notice and other information can be found at https://www.hansaici.com/shareholder-information/financial-and-investment-reporting/year-2022#2022

76 Hansa Investment Company Limited For the Year Ended 31 March 2022
## INVESTOR INFORMATION
Strategic Report
## Investor Information
Investor Information
Reports Financial Statements Corporate Governance
The Company currently manages its affairs so as to be CAPITAL STRUCTURE
a qualifying investment company for ISA purposes, for both The Company has 40,000,000 Ordinary shares of 1p each
the Ordinary and ‘A’ non-voting Ordinary shares. It is the and 80,000,000 ‘A’ non-voting Ordinary shares of 1p each in
present intention that the Company will conduct its affairs issue. The Ordinary shareholders are entitled to one vote per
so as to continue to qualify for ISA products. In addition, the Ordinary share held. The ‘A’ non-voting Ordinary shares do not
General Meeting Investor Information Notice of the Annual
Company currently conducts its affairs so shares issued by entitle the holders to vote or receive notice of meetings, but in
Hansa Investment Company Limited can be recommended by all other respects they have the same rights as the Company’s
independent ﬁnancial advisers to ordinary retail investors, in Ordinary shares.
accordance with the Financial Conduct Authority’s (“FCA”)
rules in relation to non-mainstream investment products and
intends to continue to do so for the foreseeable future. The
shares are excluded from the FCA’s restrictions which apply
to non-mainstream investment products, because they are
excluded securities deﬁned in the FCA Handbook Glossary.
Finally, Hansa Investment Company is registered as a Reporting
Financial Institution with the US IRS for FATCA purposes.
INVESTOR DISCLOSURE
AIFMD
Hansa Investment Company’s AIFMD Investor Disclosure
document can be found on its website. The document is
a regulatory requirement and summarises key features of the
Company for investors. It can be viewed at: www.hansaicl.com/
shareholder-information/regulatory-information.aspx
Packaged Retail and Insurance-based Investment Products
(“PRIIPs”)
The Company’s AIFM, Hanseatic Asset Management LBG,
isresponsible for applying the product governance rules deﬁned
under the MiFID II legislation on behalf of Hansa Investment
Company Limited. Therefore, the AIFM is deemed to be the
‘Manufacturer’ of Hansa Investment Company’s two share
classes. Under MiFID II, the Manufacturer must make available
Key Information Documents (“KIDs”) for investors to review
ifthey so wish ahead of any purchase of the Company’s shares.
Links to these documents can also be found on the Company’s
website for good measure: www.hansaicl.com/shareholder-
information/regulatory-information.aspx
Hansa Investment Company Limited For the Year Ended 31 March 2022 77
INVESTOR INFORMATION

# Investor Information

# Continued

CONTACT DETAILS

Email: [email protected]
Website: www.hansaid.com

Company Secretary (and Company's Registered Office)

Conyers Corporate Services (Bermuda) Limited
Clarendon House, 2 Church Street
PO Box HM666, Hamilton HM CX
Bermuda
Phone: +1 441 279 5373
Website: www.conyers.com

Please contact the Portfolio Manager, as below, if you have any queries concerning the Company's investments or performance.

Portfolio Manager

Hansa Capital Partners LLP
50 Curzon Street
London W1J 7UW
Telephone: +44 (0) 207 647 5750
Email: [email protected]
Website: www.hansagrp.com

The Company's website includes the following:

- Monthly Fact Sheets
- Stock Exchange Announcements
- Details of the Board Statements
- Annual and Interim Reports
- Share Price Data Reports

Please contact the Registrars, as below, if you have a query about a certificated holding in the Company's shares.

Link Group
10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL

If you do not have internet access you can call the Shareholder Support Centre on 0371 864 0300. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the UK will be charged at the applicable international rate.

They are open between 09:00 – 17:30, Monday to Friday excluding public holidays in England and Wales.

Email: shareholderonquiries@linkgroup.co.uk
www.linkgroup.eu

SHARE PRICE LISTINGS

The price of your shares can be found on our website and in the Financial Times under the heading 'Investment Companies'.

In addition, share price information can be found under the following:

|  ISW | Code  |
| --- | --- |
|  Ordinary shares | BMG428941162  |
|  'A' non-voting Ordinary shares | BMG428941089  |

|  SEDOL |   |
| --- | --- |
|  Ordinary shares | BKLFC18  |
|  'A' non-voting Ordinary shares | BKLFC07  |

|  Reuters |   |
| --- | --- |
|  Ordinary shares | HAN.L  |
|  'A' non-voting Ordinary shares | HANA.L  |

|  Bloomberg |   |
| --- | --- |
|  Ordinary shares | HAN.LN  |
|  'A' non-voting Ordinary shares | HANA.LN  |

|  TIDM |   |
| --- | --- |
|  Ordinary shares | HAN  |
|  'A' non-voting Ordinary shares | HANA  |

Legal Entity Identifier: 213800RS2PWJX5ZQOF66

USEFUL INTERNET ADDRESSES

|  Association of Investment Companies | www.theaic.co.uk  |
| --- | --- |
|  London Stock Exchange | www.londonstockexchange.com  |
|  TruchNet | www.trustnet.com  |
|  Interactive Investor | www.iil.co.uk  |
|  Morningstar | www.morningstar.com  |
|  Edison | www.edisongroup.com  |

FINANCIAL CALENDAR

|  Company year end | 31 March  |
| --- | --- |
|  Annual Report sent to shareholders | 30 June  |
|  Annual General Meeting | 9 August  |
|  Announcement of Half Year results | November  |
|  Interim Report sent to shareholders | December  |
|  Interim dividend payments | August, November, February & May  |

78 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
## Company Information
Company Information
Reports Financial Statements Corporate Governance
Registered in Bermuda company number: 54752
BOARD OF DIRECTORS REGISTRAR
Jonathan Davie (Chairman) Link Market Services (Guernsey) Limited
Simona Heidempergher Mont Crevelt House
General Meeting Investor Information Notice of the Annual
Richard Lightowler Bulwer Avenue
William Salomon St. Sampson
Nadya Wells Guernsey
GY2 4LH
SECRETARY AND REGISTERED OFFICE

| Conyers Corporate Services (Bermuda) Limited | CUSTODIAN |
| --- | --- |
| Clarendon House | Banque Lombard Odier & Cie SA |
| 2 Church Street | 11 Rue de la Corraterie |
| PO Box HM666 | 1204 Geneva |
| Hamilton HM CX | Switzerland |

Bermuda
STOCKBROKER

| PORTFOLIO MANAGER AND ADDITIONAL | Winterﬂood Investment Trusts |
| --- | --- |
| ADMINISTRATIVE SERVICES PROVIDER | The Atrium Building |
| Hansa Capital Partners LLP | Cannon Bridge |
| 50 Curzon Street | 25 Dowgate Hill |
| London W1J 7UW | London EC4R 2GA |
| INDEPENDENT AUDITOR | ADMINISTRATOR |
| PricewaterhouseCoopers Ltd | Maitland Administration Services Limited |
| Washington House | Hamilton Centre |
| 4th Floor, 16 Church Street | Rodney Way |
| Hamilton HM11 | Chelmsford |
| Bermuda | Essex |

CM1 3BY
SOLICITORS – BERMUDA

| Conyers Dill & Pearman Limited | ALTERNATIVE INVESTMENT FUND MANAGER |
| --- | --- |
| Clarendon House | Hanseatic Asset Management LBG |
| 2 Church Street | Tudor House |
| Hamilton HM11 | Le Bordage |
| Bermuda | St Peter Port |

Guernsey
SOLICITORS – UK GY1 1WD
Dentons
1 Fleet Place
London EC4M 7WS
Hansa Investment Company Limited For the Year Ended 31 March 2022 79
## INVESTOR INFORMATION
## Glossary of Terms
Glossary of Terms
Association of Investment Companies (“AIC”) Depositary/Custodian
The Association of Investment Companies is the UK trade A ﬁnancial institution acting as a holder of securities
association for closed-ended investment companies. It represented for safekeeping.
Hansa Trust prior to the redomiciliation of the business. Despite
the Company not being UK domiciled, the Company is UK listed Discount
and operates in most ways in a similar manner to a UK Investment When the share price is lower than the NAV, it is referred to as
Trust. Therefore, the Company follows the AIC Code of Corporate trading at a discount. The discount is expressed as a percentage
Governance and the Board considers that the AIC’s guidance on ofthe NAV.
issues facing the industry remains very relevant to the operations
of the Company. Expense Ratio
An expense ratio is determined through an annual calculation,
Alternative Investment Fund Managers Directive where the operating expenses are divided by the average NAV.
(“AIFMD”) Note there is also a description of an additional PRIIPs KIDs.
The AIFMD is a regulatory framework for alternative investment
fund managers (“AIFMs”), including managers of hedge funds, Five Year Rolling NAV Return (per annum)
private equity ﬁrms and investment trusts. Its scope is broad and, The rate at which, compounded for ﬁve years, will equal the
with a few exceptions, covers the management, administration ﬁve year NAV total return to end March, assuming dividends are
and marketing of alternative investment funds (“AIFs”). Its focus is always reinvested at pay date.
on regulating the AIFM rather than the AIF.
Five Year NAV and Share Price Total Return
Annual Dividend/Dividend Rebased from 0% at the start of the ﬁve year period, this is
The amount paid by the Company to shareholders in dividends the rate at which the Company’s NAV and share prices would
(cash or otherwise) relating to a speciﬁc ﬁnancial year of the have returned at any period from that starting point, assuming
Company. The Company’s dividend policy is to announce its dividends are always reinvested at pay date. The Company will
expected level of dividend payment at the start of each ﬁnancial continue to quote results from its predecessor, Hansa Trust Limited,
year. Barring unforeseen circumstances, the Company then as part of that reporting so shareholders can see the longer-term
expects to make four interim dividend payments each year – at the performance of the portfolio.
end of August, November and February during that ﬁnancial year
and at the end of May following the end of the ﬁnancial year. Gearing
Gearing refers to the level of borrowing related to equity capital.
Bid Price
The price at which you can sell shares determined by supply Hedging
and demand. Strategy used to reduce risk of loss from movements in interest
rates, equity markets, share prices or currency rates.
Capital Structure
The stocks and shares that make up a company’s capital i.e. Issued Share Capital
the amount of ordinary and preference shares, debentures and Issued share capital is the total number of shares subscribed to by
unsecured loan stock etc. which are in issue. the shareholders.
Closed-ended Key Information Document (“KID”)
A company with a ﬁxed number of shares in issue. This is a document of a form stipulated under the PRIIPs
Regulations. It provides basic, pre-contractual, information about
the Company and its share classes in a simple and accessible
manner. It is not marketing material.
80 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
Reports Financial Statements Corporate Governance
Key Performance Indicators (“KPIs”) Stock Exchange, nominally giving rise to different share prices at
A set of quantiﬁable measures that a company uses to gauge any given time.
its performance over time. These metrics are used to determine
a company’s progress in achieving its strategic and operational Premium
goals and also to compare a company’s ﬁnances and performance When the share price is higher than the NAV it is referred to as
General Meeting Investor Information Notice of the Annual
against other businesses within its industry. In the case of historic trading at a premium. The premium is expressed as a percentage
information, the KPIs will be compared against data of both the of the NAV.
Company and, prior to the Company’s formation, from Hansa
Trust Limited. Packaged Retail and Insurance-based Investment Product
(“PRIIP”)
Market Capitalisation Packaged retail investment and insurance-based products
The market value of a company’s shares in issue. This ﬁgure is (“PRIIPs”) make up a broad category of ﬁnancial assets that are
found by taking the stock price and multiplying it by the total regularly provided to consumers in the European Union. Theterm
number of shares outstanding. PRIIPs, created by the European Commission to regulate the
underlying market, is deﬁned as any product manufactured by
Mid Price the ﬁnancial services industry, to provide investment opportunities
The average of the Bid and Offer Prices of a particular to retail investors, where the amount repayable is subject to
traded share. ﬂuctuation because of exposure to reference values, or the
performance of underlying assets not directly purchased by the
Net Asset Value/NAV retail investor.
The value of the total assets minus liabilities of the company.
Shareholders’ Funds/Equity Shareholders’ Funds
Net Asset Value Total Return This value equates to the NAV of the Company. See NAV.
See Total Return.
Spread
Offer Price The difference between the Bid and Ask price.
The price at which you can buy shares determined by supply
and demand. Tradable Instrument Display Mnemonics (“TIDM”)
A short, unique code used to identify UK-listed shares. The TIDM
Ordinary Shares code is unique to each class of share and to each company.
Shares representing equity ownership in a company allowing Itallows the user to ensure they are referring to the right share.
investors to receive dividends. Ordinary shareholders have the Previously known as EPIC.
pro-rata right to a company’s residual proﬁts. In other words, they
are entitled to receive dividends if any are available after payments Total Return
to ﬁnancial lenders and dividends on any preferred shares are paid. When measuring performance, the actual rate of return of an
They are also entitled to their share of the residual economic value investment or a pool of investments over a given evaluation
of the company should the business unwind. period. Total return includes interest, capital gains, dividends and
distributions realised over a given period of time.
Hansa Investment Company Limited has two classes of Ordinary
share. The Ordinary (40m shares) and the ‘A’ non-voting Ordinary
shares (80m shares). Both have the same ﬁnancial interest in the
underlying assets of the Company and receive the same dividend,
but differ only in that only the former shares have voting rights,
whereas the latter do not. They trade separately on the London
Hansa Investment Company Limited For the Year Ended 31 March 2022 81
## INVESTOR INFORMATION
## Glossary of Terms
## Continued
Total Return – Shareholder
The Total Return to a shareholder is a measure of the performance
of the Company’s share price over time. It combines share price
appreciation/depreciation and dividends paid to show the total
return to the shareholder expressed as an annualised percentage.
In the case of historic information, the Total Return will include
data against data of both the Company and, prior to the
Company’s formation, from Hansa Trust Limited.
VIX Index
The VIX, or the CBOE Volatility Index, is a widely used measure
of the implied volatility of the stock market, based on S&P 500
index options. It is calculated and published by the Chicago Board
Options Exchange.
82 Hansa Investment Company Limited For the Year Ended 31 March 2022
Strategic Report
## Notes
Reports Financial Statements Corporate Governance
General Meeting Investor Information Notice of the Annual
Hansa Investment Company Limited For the Year Ended 31 March 2022 83
## Notes
84 Hansa Investment Company Limited For the Year Ended 31 March 2022
## HANSA INVESTMENT
## COMPANY LIMITED
Hansa Investment Company Limited
Clarendon House
2 Church Street
PO Box HM666
Hamilton HM CX
Bermuda
T: +44 (0) 207 647 5750
E: [email protected]
Visit us at
www.hansaicl.com