Annual report and accounts

for the year ended 31 August 2023

Schroder Oriental

Income Fund Limited

Introduction

Strategic report

Financial

Other information

Page 4 Page 46

Page 72

Governance

Page 30

Performance summary

Net Asset Value (“NAV”)

per share total return*

-3.5%

(2022: +2.5%)

Share price total return*

-3.1%

(2022: +1.2%)

Dividends per share

11.80p

(2022: 11.40p)

Ongoing charges ratio*

0.88%

(2022: 0.86%)

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Oriental Income Fund Limited

Schroder Oriental Income Fund Limited

Schroder Oriental Income Fund Limited 1

Strategic report

Governance Financial

Introduction

Other information (unaudited)Strategic report Governance Financial Other information (unaudited)Introduction

Share price discount

to NAV per share*

4.5%

(2022: 4.8%)

Revenue earnings

per share

11.81p

(2022: 12.94 pence)

Gearing*

4.4%

(2022: 4.0%)

Share price

244.50p

(2022: 264.00p)

Net revenues after taxation

£30.4m

(2022: £34.1m)

Strategic Report

Chairman’s Statement 4

Investment Manager’s Review 6

Investment Portfolio 12

Ten Year Financial Record 13

Business Review 14

Governance

Board of Directors 30

Directors’ Report 32

Audit and Risk Committee Report 35

Management Engagement

Committee Report 38

Nomination and Remuneration

Committee Report 39

Directors’ Remuneration Report 41

Statement of Directors’

Responsibilities 44

Financial

Independent Auditors’ Report 46

Statement of Comprehensive

Income 52

Statement of Changes in Equity 53

Balance Sheet 54

Cash Flow Statement 55

Notes to the Accounts 56

Other information

(unaudited)

Annual General Meeting –

Recommendations 72

Notice of Annual General Meeting 73

Explanatory Notes to the Notice

of Meeting 74

Denitions of Terms and

Performance Measures 75

Shareholder Information 77

Information about the Company IBC

Some of the financial measures above are classified as Alternative Performance Measures, as defined by the European Securities and Markets Authority

and are indicated with an asterisk (*). Definitions of these performance measures, and other terms used in this report, are given on pages 75 and 76,

together with supporting calculations where appropriate.

Strategic report

Chairman’s statement

Investment Manager’s Review

Investment Portfolio

Ten Year Financial Record

Business Review

Chairman’s statement

Schroder Oriental Income Fund Limited4

Dear Shareholder, I ended my last Chairman’s

Statement in the spring on a note of cautious

optimism that the outlook for Asian equities

was starting to brighten. Sadly, in the last

six months anyway, the sun has not shone

and the second half of our financial year

saw modest declines in total returns. That

brought the Net Asset Value (“NAV”) total

return for the full financial year to -3.5%,

with a similar return from the share price.

The bright spot is that this is, once again, a

notable outperformance of the reference

index, the MSCI AC Pacific ex Japan in

sterling terms, which fell by 8.1% during

the same period. It is also worth noting

that the strength of sterling was a material

contributory factor to the fall. After many

years of decline, sterling strengthened

significantly over the year and this erodes

our total return once the local currency is

translated back into sterling. Indeed, our

underlying return in local currency terms was

positive. We have cautioned in the past about

the potential impact of sterling movements,

which have often been favourable to our total

returns. We do not seek to hedge or mitigate

the influence of the sterling exchange rate;

we see our job as investing in good quality

Asian companies, not trading exchange rates.

Since the summer, sterling has begun to

weaken once again.

Before moving from performance, I need

to commend our Investment Manager for

achieving such consistent and considerable

outperformance over recent years. The

reasons for this year’s outperformance are

explained in the Investment Manager's

Review on page 6. It is clear to me that

Schroders apply considerable knowledge,

experience and skill, as well as keeping a

cool head. This is very valuable. The Board

has recently had the benefit of seeing the

substantial resources and expertise of

Schroders in Asia when, for the first time

since before the pandemic, we accompanied

the Managers this summer to visit Schroders’

offices and some of our investee companies

in Hong Kong and Taiwan.

I hardly need to remind anyone of the

various global macroeconomic and political

headwinds which have troubled financial

markets over the last year. Asia is not

immune to any of these effects, especially

with China now showing signs of economic

strain. However, with the exception of

some geopolitics and private sector debt

issues in China, Asia is not at the epicentre

of the pressures. The region is relatively

well placed in terms of inflation, economic

strength, interest rates, indebtedness and

competitiveness. That Asia is vibrant and an

economic powerhouse is something of a

hackneyed phrase but the truth of this was

brought home to the Board on our visit. It is

too easy to slip into viewing Asia through a

European lens.

Another interesting observation of our visit

was the extent of meaningful implementation

around sustainability amongst many of

our portfolio companies. It was genuinely

impressive. Perhaps it was, again, my

European perspective but my impression

prior to the visit was that Asia was, generally,

lagging Europe and the US in this regard.

This is far from the truth, at least as far as our

portfolio companies are concerned.

In the same vein, shifting political sands in the

US, enhanced regulatory scrutiny in Europe

and a tougher economic environment has

seen less enthusiasm from global investors

for “pure play” Environmental, Social and

Governance (“ESG”) investing. However, as

an integrated input to investment decision

making, ESG factors remain valuable.

Schroders has long had many aspects of

ESG at the heart of their process, indeed

before anyone thought of combining three

I need to commend

our Investment

Manager for achieving

such consistent

and considerable

outperformance over

recent years

Schroder Oriental Income Fund Limited 5

Strategic report

Governance Financial

Introduction

Other information (unaudited)

disparate words into one concept and

giving it an acronym. Today, their approach

remains as valid as ever. The Company seeks

to buy businesses that have an attractive

income proposition as well as offering the

opportunity for capital growth. Schroders’

approach naturally guides us to invest in

businesses that are truly sustainable in the

broadest sense of the word, rather than

ones that merely espouse targets for the

future. Picking these quality companies is

at the heart of what the team at Schroders

seeks to do and is evidenced in our current

portfolio. This integrated approach to ESG

is also, I believe, a meaningful contributor

to our strong long-term performance. More

information around Schroders’ approach to

ESG can be found on pages 17 to 21.

Some of you will have seen our

announcement on 3 August 2023 of the

forthcoming retirement from the Board of

Kate Cornish-Bowden. Schroders are being

appointed as investment manager of the

International Biotechnology Trust (“IBT”) and

her role as chair of IBT means that she has

felt that she should resign from our board to

ensure that perceptions of her independence

are not compromised. We respect this but will

really miss Kate, her experience, knowledge

and good humour. I can also assure

Shareholders of this company and of IBT

that no one should doubt her independence

of mind. The Board has commenced a

succession process and we will make an

announcement in due course.

In line with the broader investment trust

industry, the Company’s shares continue

to trade at a discount to NAV. The Board

believes that the discount is unwarranted

given the Company’s performance and

the liquidity of our underlying portfolio.

Perhaps, though, at a time of sharply

widening discounts across the investment

trust universe, we may have to be patient

before we see ours eliminated once again.

During the course of the year, a total of

8,010,000 shares were repurchased at an

average discount of 5.2% to NAV, with further

purchases of 2,220,000 shares since the

financial year end. Please be assured that we

remain committed to repurchasing shares at

a discount when there is a notable imbalance

in the market and it is in Shareholders’ best

interests.

I have already touched on the impact of

sterling on our total return for the period. It

has the same impact on our dividend receipts

which in sterling terms have fallen a little this

year, though were higher in local currency

terms. We have continued to grow our own

dividend to Shareholders progressively for

17 years and the current dividend yield on

our share price is approximately 5%. As the

global economy begins to slow, we may

consequently see some slowdown in dividend

growth from our portfolio companies.

However, it is important to remember

that payout ratios in Asia are modest so

our companies are not under financial

pressure. Our Manager is not forecasting

notable falls in receipts. The Company also

has considerable revenue reserves. Any

slowing in our dividend receipts is likely to

be transitory and we are comfortable, as and

when we need to, to dip into our reserves

for a short time to maintain or grow our

own dividend to Shareholders. For this last

financial year we have increased the dividend

by 3.5% to 11.80 pence per share.

Finally, I wanted to touch on the merits of

an income orientation to investment in Asia.

Many managers seek to find the next big

growth winner in the pursuit of returns. Some

will succeed, for some of the time. I believe

that an income orientation brings natural

benefits, that this has contributed to the

Company’s strong long-term performance

and that attractive income from growing

companies need not come at the cost of

reduced total return. The income universe

available to our Managers provides fertile

territory for their true strength – stock

selection – and it is a universe that is less

volatile than many of the low yielding, cyclical

and growth areas of the market. The strong

dividend income available in Asia, its low

payout ratios and the current undemanding

valuations across the region suggest to me

that the attractive long-term performance

achieved for Shareholders to date is

sustainable in the future. Once again, I look

forward with modest optimism. The vagaries

of financial markets may prove me wrong

for another six months, perhaps longer. But,

eventually, the fundamentals of the region, its

companies and their strong dividend growth

will once again attract international capital.

The Company is well placed to benefit from

that trend when it arrives.

Our investment managers, Richard Sennitt

and Abbas Barkhordar will be giving

presentations at an investor webinar on

Wednesday 29 November 2023 at 2.00 pm

(which can be signed up to via the following

link: https://www.schroders.events/SOI23).

The Company’s Annual General Meeting

(“AGM”) will be held at 2pm on Monday 4

December at 1 London Wall Place, London,

EC2Y 5AU.

The Company’s Investment Managers and

the Board will attend to make a presentation

and answer questions from Shareholders.

I encourage all of you to join us, and hope

to meet you then. I also look forward to

reporting to you again in the interim financial

statements next spring.

Paul Meader

Chairman

8 November 2023

Picking these quality

companies is at the

heart of what the

team at Schroders

seeks to do and is

evidenced in our

current portfolio. This

integrated approach to

ESG is also, I believe, a

meaningful contributor

to our strong long‑term

performance.

Investment Manager's Review

Schroder Oriental Income Fund Limited6

The net asset value per share of the Company recorded a total return of -3.5% over the 12 months to end August 2023. Four interim dividends

have been declared totalling 11.80p (11.40p last year).

Performance of the MSCI AC Pacific ex Japan net dividends reinvested Index in GBP and USD

– 31 August 2022 to 31August 2023

Aug 22

Sep 22

Oct 22

Nov 22

Dec 22

Jan 23

Feb 23

Mar 23

Apr 23

May 23

Jun 23

Jul 23

Aug 23

MSCI AC Pacific ex Japan Net USD MSCI AC Pacific ex Japan Net GBP

Source:

Thompson Datastream as at 31 August 2023

Reba

sed to 100

Asian markets experienced huge swings in sentiment over the

12 months to end August, largely driven by gyrations in expectations

for the Chinese domestic economy, the impact of geopolitics,

including over Ukraine, Taiwan and US-China relations, and the

outlook for the global economy, with the path of US interest rates of

particular importance. Despite this litany of concerns, the region’s

markets rose by around 1.9% in local terms, albeit the strength of

sterling meant they finished down some 8.1% over the period in

sterling terms.

However, across the region there were large differences in returns.

China and Hong Kong were very volatile but ended down the most

over the period. We saw large falls in both markets during the fourth

quarter of last year in the run up to, and post, the Communist Party

Congress before seeing a dramatic recovery driven by the Chinese

authorities’ move away from ‘Zero COVID’. However, optimism faded

when economic data, whilst generally showing an improvement,

disappointed expectations. High-end spending and services

consumption did much better when compared to the wider economy,

but even that was lacklustre. Residential property numbers continued

to disappoint and renewed concerns over the state of the Local

Government Financing Vehicles’ (“LGFVs”) finances, and some of the

private residential developers’ liquidity positions, weighed on the

market. During July, the Chinese market recovered on expectations

of a sizeable stimulus, but measures announced thus far have been

modest.

US-China relations continued to be a driver of sentiment over the

period but, on balance, did see some stabilisation during the year.

Positives included the G-20 meeting in Bali, where presidents Xi and

Biden met face-to-face, and progress from the US PCAOB (Public

Company Accounting Oversight Board) inspection of Chinese

accounts. Although “balloon gate”, together with more restrictions on

the export of high-end technologies to China, did sour relations, there

has more recently been increased dialogue between the two, with

meetings between US and Chinese officials at a number of levels.

Furthermore, domestically in China, there was a shift in tone around

regulation towards the internet companies, together with further

announcements of government support for the private sector,

leading to hopes that the worst of the regulatory tightening had been

seen.

The best performing markets over the period were Korea and Taiwan.

These are markets that have high weightings in the information

technology (“IT”) sector, which was the best performing sector

over the period. Post-COVID, the IT sector had seen a slowdown as

demand for goods faded as people switched to consuming more

services. This slowdown had led to an increase in inventories and

acted as an overhang for the sector. However, this then elicited a

supply-side response by these companies to the lower demand,

seeing them cut both production and capital expenditure which

has seen the inventory imbalance start to correct, lifting stock

prices. More recently, some of these have benefitted from the hope

that artificial intelligence (“AI”) would drive a surge in demand for

increased computing power.

Despite the deteriorating outlook for global growth, inflation

pressures remained elevated for much of the year and financial

conditions generally tightened. Of the major markets, Australia and

Singapore proved defensive, with resource companies in Australia

and financials in Singapore performing relatively well. From a

sector perspective, materials were supported by higher-for-longer

commodity prices, with higher interest rates supportive of financials.

Defensive sectors generally underperformed over the period.

Schroder Oriental Income Fund Limited 7

Strategic report

Governance Financial

Introduction

Other information (unaudited)

Country returns of the MSCI AC Pacific ex Japan Net Dividends Reinvested Index in GBP and

local currency – 31August 2022 to 31 August 2023

MSCI AC Pacific ex Japan net returns by country 31 August 2022 to 31 August 2023

Source: Schroders, Factset

-20% -15% -10% -5% 0% 5% 10% 15%

Korea

Taiwan

Singapore

Australia

Indonesia

New Zealand

Thailand

CI AC Pacific ex JP

Malaysia

Philippines

China

Hong Kong

Returns in GBP Returns in local currency

1 Cyclical stocks: a stock whose price is affected by macroeconomic or systematic changes in the overall economy, such as consumer goods.

Turning to dividends - last financial year, there was a broad-based

pick up in dividends, but this year has been more mixed, with

dividends in some areas such as the Australian resource names

(and other more cyclical

areas) coming down as falls in underlying

commodity prices saw profits retreat from high levels. Financials, on

the other hand, saw the banks benefit as interest rates rose, helping

both margins and earnings and enabling higher dividends. However,

from a Company perspective, the main headwind for dividends came

from the appreciation of sterling during the course of the year which

made gains against most of the region’s currencies, thus impacting

the translation from local currencies back into sterling.

Positioning and Performance

Although the Company’s NAV fell over the period, with a NAV total

return of -3.5%, this compared favourably to the fall in the reference

benchmark of -8.1%. Relative performance over the period was

helped by the underweight to, and strong stock selection in, China.

Stocks in the insurance sector there, such as our holdings in China

Pacific Insurance and Ping An, were perceived to be beneficiaries of

the move away from ‘Zero COVID’, as it would enable sales agents

to conduct more face-to-face meetings which had been constrained

during COVID. Also, although the private sector residential property

developers had been hit hard by the weak property market, our

holding in China Resources Land substantially outperformed, with its

investment properties providing a recurring income stream which,

together with its relatively robust balance sheet, proved defensive.

An absence of the e-commerce names, who pay little or no dividends,

was also a positive, as was not holding any of the healthcare names,

given a large number derated meaningfully over the year.

Our stock picks in Taiwan added value, led by the IT names. These

included semiconductor packaging company ASE, fabless design

house Novatek, and power electronics company Delta Electronics,

whose products have benefitted from the positive trends in AI and

EVs. There was also a positive contribution from stocks in Australia,

driven by the diversified resource names. The biggest drag on

performance came from the overweight to, and stock selection in

Hong Kong, albeit its negative impact was much smaller than the

positive one derived from our positioning in China. The two biggest

detractors in Hong Kong were our positions in Bank of China (Hong

Kong) and telecom company HK Telecom.

From a sector perspective, stock picks in the financials sector did well,

including banks in Singapore (Oversea-Chinese Banking Corporation

and United Overseas Bank (“UOB”)), Bank Mandiri in Indonesia and

our holding in out-of-benchmark SMFG in Japan. Our underweights

to consumer discretionary and some of the more defensive sectors,

such as healthcare, utilities and staples, all added value. Our

overweight to IT names also contributed positively, as described

earlier. Our overweight to real estate was a negative — although

this was almost entirely offset by strong selection including from our

holdings in Singapore, Australia and China. Our overweight to Hong

Kong real estate was a drag, where our exposure is predominantly to

landlords operating in mainland China as well as Hong Kong. Given

their exposure to retail spend via their malls, disappointment in the

consumer recovery weighed on share prices.

The geographic exposure in the Company's portfolio continues

to be mainly spread between Taiwan, Australia, Singapore, Hong

Kong, Korea and China. Over the period, we did add to positions in

China and Hong Kong, including insurance (China Pacific Insurance

Company) and other financial names (Hong Kong Exchange) which

we believe would benefit from the ending of Chinese ‘Zero COVID’

policy, but which were not excessively valued in our view. China

remains a substantial underweight but is, in part, offset by the

overweight to Hong Kong. We believe the Hong Kong market, in

general, looks more attractive from a valuation perspective, with

several names set to benefit from the re-opening of the border

with the mainland. Elsewhere, we reduced Singapore, reducing our

exposure to some of the REIT names there which had performed well

and will see costs rise along with interest rates, as well as cutting our

position in UOB, a bank that had outperformed. However, we remain

overweight the market. We also took some money out of some of the

better performing Taiwanese IT names, as well as selling out of Far

EasTone, a telecom company that had performed strongly.

Investment Manager's Review

continued

Schroder Oriental Income Fund Limited8

Hong Kong likely to benefit from China opening up post Covid

Recovery will support growth

Hong Kong visitor number of arrivals

Source: Refinitiv Datastream,

updated October 2023.

Countries and regions shown are for illustrative purposes only and should not be viewed as a

recommendation to buy or sell.

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Mar 22 Mar 23

Hong Kong visitor arrivals

We continued in aggregate to add to financials, where we are

overweight, with valuations still looking relatively attractive given

higher interest rates and subdued credit costs. Here, we added to

Chinese names, as described earlier in this report. We also reduced

the overweight to real estate, trimming names that had performed

strongly across the region, and in IT as described above. Although

near term earnings have been seeing downward revisions, we

continue to see some strong long-term drivers for growth around

digitisation, AI adoption, and the roll-out of 5G and ‘Internet of

Things’. In IT, our focus remains on the Taiwanese and Korean

companies.

The other area where we have reduced exposure is in the materials

sector. Here, sales have been focussed in the Australian names earlier

in the period after the sector had performed strongly, in part helped

by the surge in commodity prices.

Investment Outlook

The euphoria seen in markets at the beginning of 2023 over China’s

move away from its ‘Zero COVID’ policy feels like a distant memory, as

China’s long awaited post-COVID recovery has proved weaker than

expected. Economic data out of China, and a lack of forceful policy

response, has been disappointing, reigniting concerns over local

government debts and the wider residential property sector. This has

overshadowed more positive global developments stemming from

more favourable US inflation data, its knock-on to the US interest

rate cycle, and potential for a soft landing in the US. There are some

signs that the inventory cycle has started to bottom, potentially

pointing to a more favourable demand outlook. Rising demand for

Asian manufactured product has historically led to a resurgence in

Asian markets. However, as already highlighted, geopolitics remains

an overhang to the region with areas of tension including US-China,

Taiwan, Ukraine and the Middle East. The electoral cycle is a likely

point of focus with both the US and Taiwan having elections next

year. Overall earnings have continued to be revised down following

a reset to China and global growth expectations, leaving aggregate

valuations broadly in line with their longer-term averages. However,

this masks a large variation across individual markets where

Singapore and Hong Kong, amongst others, look relatively cheap

versus history.

Schroder Oriental Income Fund Limited 9

Strategic report

Governance Financial

Introduction

Other information (unaudited)

China — problem is poor confidence holding back consumer spend

High savings rates are able to fund consumption if confidence returns

China consumer confidence

Chinese consumer in a different position to US one

Source: Refinitiv Datastream, as at 30 September

2023. Refinitiv, CEIC, Schroders Economics Group. 17 February 2023. The regions and countries shown are for illustrative purposes only and should not be

viewed as a recommendation to buy or sell.

20132014 2015 2016 2017 2018 2019 20202021 2022

Household saving rate (%)

China US

100

105

110

115

120

125

130

Dec 16 Dec 17Dec 18 Dec 19 Dec 20 Dec 21 Dec 22

China consumer confidence

Index

Although we did not have an optimistic view on the growth outlook

for China, it has still managed to disappoint. This has brought

renewed focus back on to the residential property sector, where

private sector developers have seen a liquidity squeeze, as sales

have continued to disappoint impacting cashflow for the whole

sector. The recent negative headlines around Chinese property

developers such as Country Garden could cause further deterioration

in homebuyers’ sentiment and financing capabilities for other private

sector developers, indirectly raising the risk of more defaults in the

industry going forward. We expect policy easing, both on the demand

and supply sides, to intensify to avoid more defaults and any wider

impact on the financial sector. Our long-term concerns around the

structural headwinds for the residential sector remain - property is

likely to be less of a driver for the economy than in the past, given

the already high levels of residential investment combined with an

ageing demographic. Near term, we believe it is a lack of consumer

confidence that is the problem rather than an inability to spend

due to high borrowings. In fact, household balance sheets have

only strengthened over the last two years, due to high levels of

precautionary savings, and it is measures to address this, such as

progress on reforms, rather than a massive fiscal stimulus which is

needed to give the consumer greater confidence to spend more.

Nevertheless, in our view it is likely we will see further government

stimulus, on top of the piecemeal measures we have seen so far.

More positively, the regulatory backdrop doesn’t appear to be

getting worse and there are even tentative signs of re-engagement

between the US and China. Despite this, we remain very underweight

combined Hong Kong and China, albeit we have been selectively

looking to add to holdings in both markets where valuations have

come back. We are more positive on Hong Kong, where valuations

are lower and the SAR should see a recovery as the border with the

mainland has reopened. Although visitor numbers to Hong Kong and

Macau have picked-up materially, one needs to remain cognisant of

the potential for tighter capital controls by the Chinese government

should external balances become too wide.

Sector-wise, IT stocks, where we have been overweight, are still

trading at relatively attractive levels from a valuation perspective, in

our view. While the visibility of demand remains low, the supply side

adjustment is starting to take place as announcements on production

and capital expenditure cuts have started to be seen and inventories

appear to be peaking. Otherwise, we remain overweight to financials

– a diverse sector spanning not only banks, but also insurers and

exchange companies. Although we saw concern over banks earlier in

the year following the Silicon Valley Bank and Credit Suisse collapses,

the banks we own are generally well-capitalised with strong deposit

franchises and fall into two camps: those that are benefitting from

increased credit penetration, such as in Indonesia, and the more

domestically-focussed retail names in more mature markets, such as

Singapore, that in general trade at attractive valuations and decent

dividend yields.

We remain overweight real estate with our broad thesis around our

holdings here remaining unchanged, focusing on landlords, rather

than developers, and those names with strong recurring income

growth and thus dividend appeal. We have, however, cut the size

of our overweight during the year and we have roughly half our

exposure coming from Hong Kong and China names, with the rest

from a few other countries including Singapore and Australia. We do

not own any of the Chinese private sector residential developers.

Underweights remain in those areas of the market generally

perceived as more defensive, including consumer staples, healthcare

and utilities, where valuations in our view still remain relatively full.

Near term, it is likely that we will see further downward revisions to

earnings as global growth slows, and an ongoing period of inventory

adjustment amongst companies to reflect this slower growth,

which will hopefully put them in a position to start to grow earnings

once more when demand recovers. Positively, we are starting to

see early indicators of a potential bottoming in the global goods

cycle with purchasing managers’ indices showing tentative signs of

improvement in inventories and new orders which historically, with

a lag, have been a good lead indicator of exports. The distortion in

the goods cycle from COVID was significant, with goods demand

collapsing, post its surge in 2020, as services recovered, meaning

that the goods cycle is much progressed when compared to that of

services. Given overall aggregate valuations for the region are now

trading at or below long-term averages, this does set up a more

constructive backdrop for Asian markets in the coming year, barring a

global hard landing or a more extreme geopolitical risk event.

Investment Manager's Review

continued

Schroder Oriental Income Fund Limited10

Goods cycle starting to bottom

China's nominal exports could return to y/y growth in early

2024

Source: Refinitiv, Schroders Economics Group. 6 October 2023

As we have discussed previously, it is our belief that Asia remains an

attractive source of equity income, potentially providing diversification

for some UK investors seeking income, as we saw through the initial

wave of COVID. The dividend yield for the region looks relatively

attractive at the moment versus a global benchmark. In the medium

to long term, dividends tend to follow earnings and earnings have

recovered materially from the COVID lows. However, earnings growth

this year is likely to face some ongoing pressures, as has been seen

in earnings revisions trends, which may impact dividends. Still, we

believe overall payout ratios in Asia do not look extended versus

some other markets and corporates in Asia remain relatively lowly

geared. The arguably more significant impact on dividends received

comes from the level of sterling, which was quite strong over the

period, and thus a headwind. At the time of writing, we had seen

some reversal in sterling's strength, partly due to an expectation

that UK rates could potentially be peaking. This would reduce these

pressures if the trend were to persist.

To conclude, it is worth remembering that as investors we buy

companies, not countries. We are mindful of the impact political

and macroeconomic factors can have on equities and returns, but

we are bottom-up stock-pickers first and foremost, focusing on the

company’s return prospects and valuation. We do not try to pick

companies which will do well based purely on a particular macro

environment which we have forecast; rather we try to pick well-

managed companies with attractive distribution profiles, which have

structural advantages.

MSCI AC Asia Pacific ex Japan versus MSCI World relative dividend yield

75%

85%

95%

105%

115%

125%

135%

145%

155%

165%

175%

Jan-00 Jan-03 Jan-06 Jan-09 Jan-12 Jan-15 Jan-18 Jan-21

MSCI APxJ/World 12m trailing DY (%)

+1 Standard Deviation

-1 Standard Deviation

Average

Lorem ipsum

Source: Factset, MSCI as at 30 September 2023. The regions and countries shown are for illustrative purposes only and should not be viewed as a recommendation

to buy or sell.

Schroder Oriental Income Fund Limited 11

Strategic report

Governance Financial

Introduction

Other information (unaudited)

Sectoral breakdown of portfolio (gearing*

at 4.4%)

Portfolio

Weight (%)

Information Technology 26.8

Banks 24.1

Real Estate 12.2

Communication Services 10.4

Other Financials 10.3

Materials 8.0

Consumer Discretionary 4.4

Industrials 3.0

Consumer Staples 3.0

Energy 2.2

Utilities -

Healthcare -

*Borrowings used for investment purposes, less cash, expressed as a

percentage of net assets.

Source: Schroders as at 31 August 2023

Regional breakdown of portfolio (gearing*

at 4.4%)

Portfolio

Weight (%)

Australia 19.5

Taiwan 19.2

Singapore 15.3

Korea 13.8

China 13.1

Hong Kong 12.0

Indonesia 4.2

Thailand 2.1

Japan 2.0

Philippines 1.2

New Zealand 0.6

Vietnam 1.3

Malaysia -

Source: Schroders as at 31 August 2023

Schroder Investment

Management Limited

8 November 2023

Past Performance is not a guide to future performance. The

value of investments and the income from them may go down

as well as up and investors may not get back the amounts

originally invested.

Schroder Oriental Income Fund Limited

Investment Portfolio At 31 August 2023

Schroder Oriental Income Fund Limited12

Investments are classified by the Manager in the region or country of their main business operations or listing. Stocks in bold are the 20 largest

investments, which by value account for 57.9% (2022: 59.5%) of total investments and derivative financial instruments.

£’000 %

Australia

BHP Billiton

18,837 2.8

Telstra 17,919 2.6

National Australia Bank 16,782 2.5

Rio Tinto

14,729 2.2

Westpac Banking 9,026 1.3

Mirvac 7,840 1.2

Suncorp 7,809 1.2

Australia & New Zealand Banking 7,697 1.1

ASX 7,178 0.9

Orica 6,231 0.9

Deterra Royalties 4,396 0.6

Woodside Energy 4,015 0.6

Coles Group 3,783 0.6

Total Australia 126,242 18.5

Taiwan

Taiwan Semiconductor Manufacturing 61,645 9.2

Hon Hai Precision Industry 12,583 1.9

ASE Technology 11,831 1.7

Delta Electronics 11,635 1.7

MediaTek 11,129 1.6

Uni-President Enterprises 6,852 1.0

CTBC Financial 5,317 0.8

Novatek Microelectronics 2,762 0.4

Total Taiwan 123,754 18.3

Singapore

Oversea-Chinese Banking 20,388 3.0

Singapore Telecom 18,755 2.8

DBS Group 12,886 1.9

Singapore Exchange 10,254 1.5

CapitaLand Integrated Commercial Trust

(REIT^) 8,700 1.3

Venture 7,686 1.1

Mapletree Logistics Trust (REIT^) 7,120 1.1

United Overseas Bank 6,765 1.0

Mapletree Industrial Trust (REIT^) 6,433 1.0

Total Singapore 98,987 14.7

South Korea

Samsung Electronics (including

preference shares) 54,740 8.1

Samsung Fire and Marine Insurance

(including preference shares) 11,445 1.7

SK Telecom 9,619 1.4

LG Chemical preference shares 7,667 1.1

KB Financial 6,357 0.9

Total South Korea 89,828 13.2

Mainland China

Midea Group warrants 08/07/2024

and A shares 19,944 3.0

Ping An Insurance H shares

11,028 1.6

China Petroleum & Chemical H shares

10,015 1.5

Shenzhou International

8,851 1.3

China Pacic Insurance

8,095 1.2

Sany Heavy Industry A shares 7,880 1.2

China Resources Land

7,573 1.1

China Construction Bank

6,062 0.9

China Merchants Bank

5,439 0.8

Total Mainland China 84,887 12.6

Hong Kong (SAR)

BOC Hong Kong 19,420 2.9

HKT Trust and HKT 13,092 1.9

HK Exchanges & Clearing 10,851 1.6

Kerry Properties 7,388 1.1

Link REIT^ 6,347 0.9

Swire Properties 5,821 0.9

Hang Lung Properties 4,741 0.7

Hang Lung Group 4,094 0.6

Fortune REIT^ 3,228 0.5

Swire Pacic B 3,170 0.5

Total Hong Kong (SAR) 78,152 11.6

Indonesia

Bank Mandiri 19,393 2.9

Telekomunikasi Indonesia 8,040 1.2

Total Indonesia 27,433 4.1

Thailand

Kasikornbank NVDR* 7,298 1.1

Land and Houses NVDR* 6,590 1.0

Total Thailand 13,888 2.1

Japan

Sumitomo Mitsui Financial Group 13,065 1.9

Total Japan 13,065 1.9

Vietnam

Vietnam Dairy Products 8,586 1.3

Total Vietnam 8,586 1.3

Philippines

International Container Terminal Services 7,910 1.2

Total Philippines 7,910 1.2

New Zealand

Fletcher Building 3,591 0.5

Total New Zealand 3,591 0.5

Total Investments

676,323 100.0

1 Listed in UK

2 Listed in Luxembourg

3 Listed in Hong Kong

4 Total investments comprises:

£’000 %

Equities and NVDR 600,695 88.7

Preference shares 55,684 8.2

Warrants 19,944 3.0

Total investments 676,323 100.0

*NVDR means non-voting depositary receipts

^REIT means real estate investment trust

Ten-Year Financial Record

Schroder Oriental Income Fund Limited 13

Strategic report

Governance Financial Other information (unaudited)

Introduction

At 31 August 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Shareholders' funds (£'000) 428,456 410,090 528,662 635,466 642,711 661,804 646,699 751,419 724,147 648,208

NAV per share (pence) 193.44 175.95 222.56 258.63 252.94 251.94 239.28 280.94 277.24 256.01

Share price (pence) 195.50 176.50 224.50 261.00 250.00 253.00 233.00 271.50 264.00 244.50

Share price (discount)/premium to

NAV per share (%) 1.1 0.3 0.9 0.9 (1.2) 0.4 (2.6) (3.4) (4.8) (4.5)

Gearing (%)

5.1 5.5 0.4 2.0 4.5 5.3 4.0 2.7 4.0 4.4

For the year ended 31 August 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Net revenue after taxation (£'000) 17,802 19,660 21,296 23,939 26,421 27,376 26,537 27,682 34,105 30,399

Revenue earnings per share (pence) 8.12 8.73 9.03 9.94 10.52 10.60 9.86 10.36 12.94 11.81

Dividends per share (pence) 7.65 8.00 8.50 9.20 9.70 10.10 10.30 10.50 11.40 11.80

Ongoing Charges (%)

0.88 0.87 0.89 0.85 0.83 0.86 0.87 0.85 0.86 0.88

Performance

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

NAV total return 100.0 127.8 120.9 159.7 192.5 195.5 202.8 200.9 245.0 250.6 241.8

Share price total return 100.0 130.1 122.2 162.3 195.8 194.6 205.0 197.0 238.7 241.6 234.1

1 Borrowings used for investment purposes, less cash, expressed as a percentage of net assets.

2 Ongoing Charges represents the management fee and all other operating expenses excluding finance costs, transaction costs and any performance fee

payable, expressed as a percentage of the average daily net asset values during the year.

3 Source: Morningstar. Rebased to 100 at 31 August 2013.

NAV and share price total returns, and dividends per share over ten years to 31August 2023

Dividends per share (pence)

Total return (rebased to 100)

Pence

NAV total return

100

150

200

250

300

31-Aug-202331-Aug-202231-Aug-202131-Aug-202031-Aug-201931-Aug-201831-Aug-201731-Aug-201631-Aug-201531-Aug-201431-Aug-2013

Share price total return

*Source: Morningstar. Rebased to 100 at 31 August 2013.

Business Review

Schroder Oriental Income Fund Limited14

Business model

Investor

value

Strategy

Board

Appoint Manager and

other service providers

to achieve objectives

Responsible for

overall strategy and

oversight including

risk management

Activities centred

on the creation of

shareholder value

–

Set objectives, strategy and key

performance indicators (“KPIs”)

–

Oversight

Oversee portfolio

management

Monitor achievement

of KPIs

Oversee the use of gearing

Oversee discount/premium

management and the

provision of liquidity

through share issuance

and repurchase

–

Investment

Manager implements

the investment strategy

by following an

investment process

Supported by strong

research and

risk environment

Regular reporting and

interaction with the Board

–

Promotion

Marketing and sales

capability of the Manager

Support from the corporate

broker with secondary

market intervention to

support discount/

premium management

–

Competitiveness

Board is focused on ensuring:

– that the vehicle remains

attractive to investors

– that the fees and ongoing

charges remain competitive

The Company is a listed investment trust that has outsourced its

operations to third party service providers.

The Board has appointed the Manager, Schroder Unit Trusts Limited,

to implement the investment strategy and to manage the Company’s

assets in line with the appropriate restrictions placed on it by the

Board, including limits on the type and relative size of holdings

which may be held in the portfolio and on the use of gearing, cash,

derivatives and other financial instruments as appropriate.

The terms of the appointment are described more completely in the

Directors’ Report including delegation to the portfolio manager and

their team. The Manager also promotes the Company using its sales

and marketing teams. The Board and Manager work together to

deliver the Company’s investment objective, as demonstrated in the

diagram above.

Investment objective

The investment objective of the Company is to provide a total return

for investors primarily through investments in equities and equity-

related investments, of companies which are based in, or which

derive a significant proportion of their revenues from, the Asia Pacific

region and which offer attractive yields.

Investment policy

The investment policy of the Company is to invest in a diversified

portfolio of investments, primarily equities and equity-related

investments, of companies which are based in, or derive a significant

proportion of their revenues from, the Asia Pacific region. The

portfolio is diversified across a number of industries and a number of

countries in that region. The portfolio may include government, quasi-

government, corporate and high yield bonds and preferred shares.

Equity-related investments which the Company may hold include

investments in other collective investment undertakings (including

real estate investment trusts and related stapled securities),

warrants, depository receipts, participation certificates, guaranteed

performance bonds, convertible bonds, other debt securities, equity-

linked notes and similar instruments (whether or not investment

grade) which give the Company access to the performance of

underlying equity securities, particularly where the Company may

be restricted from directly investing in such underlying equity

securities or where the Investment Manager considers that there

are benefits to the Company in holding such investments instead

of directly holding the relevant underlying equity securities. Such

investments may be listed or traded outside the Asia Pacific region.

Such investments may subject the Company to credit risk against

the issuing entity. The Company may also participate, subject

to regulatory and tax implications, in debt-to-equity conversion

programmes.

The Investment Manager may consider writing calls over some of the

Company’s holdings, as a low risk way of enhancing the returns from

the portfolio. The Board has set a limit such that covered calls cannot

be written over portfolio holdings representing in excess of 15%, of

gross assets. However, the Company may only invest in derivatives

for the purposes of efficient portfolio management. Investors

should note that the types of equity-related investments listed in

this paragraph are not exhaustive of all of the types of securities

and financial instruments in which the Company may invest, and the

Company will retain the flexibility to make any investments unless

these are prohibited by the investment restrictions applicable to the

Company.

Although the Company has the flexibility to invest in bonds and

preferred shares as described above, the intention of the directors

is that the assets of the Company which are invested (that is to say,

which are not held in cash, money funds, debt securities, interest

bearing gilts or treasuries) will predominantly comprise Asia Pacific

equities and equity-related investments. The Company is required

to obtain the prior approval of the Ordinary Shareholders to any

material change to its published investment policy.

Status

The Company carries on business as a Guernsey incorporated,

Guernsey Financial Services Commission authorised, closed-ended

investment company. Its shares are listed and admitted to trading

on the premium segment of the main market of the London Stock

Exchange. The Company was added to the FTSE 250 index on

17 September 2019.

On 1 September 2020, following approval by the Company’s

Shareholders at a general meeting, the Company became tax

resident in the United Kingdom and since then it has been approved

by HM Revenue & Customs, by way of a one-off application, as an

investment trust in accordance with section 1158 of the Corporation

Tax Act 2010. It is intended that the Company will continue to conduct

its affairs in a manner which will enable it to retain this status. The

Company is not a “close” company for taxation purposes.

Schroder Oriental Income Fund Limited 15

Strategic report

Governance Financial

Introduction

Other information (unaudited)

It is not intended that the Company should have a limited life, and the

articles of incorporation do not contain any provisions for review of

the future of the Company at specified intervals.

Purpose, values and culture

The Company’s purpose is to create long-term shareholder value, in

line with the investment objective.

The Company’s culture is driven by its values: transparency,

engagement and rigour, with collegial behaviour and constructive,

robust challenge. The values are all centred on achieving returns for

Shareholders in line with the Company’s investment objective. The

Board also promotes the effective management or mitigation of the

risks faced by the Company and aims to structure the Company’s

operations with regard to all its stakeholders and take account of

the impact of the Company’s operations on the environment and

community.

Acting with high standards of integrity and transparency, the Board is

committed to encouraging a culture that is responsive to the views of

Shareholders and its wider stakeholders.

As the Company has no employees and acts through its service

providers, its culture is represented by the values and behaviour of

the Board and third parties to which it delegates. The Board aims to

fulfil the Company’s investment objective by encouraging a culture of

constructive challenge with the key suppliers and openness with all

stakeholders. The Board is responsible for embedding the Company’s

culture in the Company‘s operations. The Board recognises the

Company’s responsibilities with respect to corporate and social

responsibility and engages with its outsourced service providers

to safeguard the Company’s interests. As part of this ongoing

monitoring, the Board receives reporting from its service providers

with respect to their anti-bribery and corruption policies; Modern

Slavery Act 2015 statements; diversity policies; and greenhouse gas

and energy usage reporting.

Key performance indicators (“KPIs”)

The investment objective

The Board measures the development and success of the Company’s

business through achievement of the Company’s investment

objective, to provide a total return for investors primarily through

investments in equities in the Asia Pacific region, which is considered

to be the most significant key performance indicator for the

Company.

Commentary on performance against the investment objective can

be found in the Chairman’s Statement.

At each meeting, the Board considers a number of performance

indicators to assess the Company’s success in achieving its

investment objective. These are as follows: NAV total return; share

price total return; share price discount/premium to NAV per share

and ongoing charges. These are classed as Alternative Performance

Measures (“APMs”) and their calculations are explained in more detail

on pages 75 and 76.

The performance against these indicators is reported on page 13.

Net asset value and share price total return

At each meeting, the Board reviews the performance of the portfolio

in detail and discusses the views of the portfolio managers with them.

Share price discount/premium to net asset value per share

The Board reviews the level of discount/premium to net asset

value per share at every board meeting and is alert to the value

Shareholders place on maintaining as low a level of discount/

premium volatility as possible.

The Board actively used its buyback authorities during the year under

review and agreed to request renewal of the authorities to issue and

buyback shares as described on page 72.

Ongoing charges

The Board reviews the Company’s ongoing charges to ensure that the

total costs incurred by Shareholders in the running of the Company

remain competitive when measured against peer group funds.

An analysis of the Company’s costs, including management and

performance fees, directors’ fees and general expenses, is submitted

to each board meeting. Management and any performance fees

payable are reviewed at least annually.

Dividends payable

It is the Board’s policy that, except for unforeseen circumstances,

interim dividends on the Company’s ordinary shares will be declared

in respect of the quarters ended 30 November, 28 February, 31 May

and 31 August in January, April/May, July and October/November each

year.

Having already paid interim dividends amounting to 6.00 pence

per share, the Board has declared a fourth interim dividend of

5.80 pence per share for the year ended 31 August 2023, which

is payable on 1 December 2023 to shareholders on the register

on 17 November 2023. Thus, dividends for the year amount to

11.80 pence (2022: 11.40 pence) per share. This represents an

increase of 3.5% over the rate of dividends payable in respect of the

previous year.

Total dividends declared in respect of the year amount to

£30,059,448, which is 99% of the £30,398,792 revenue profit after

taxation available for distribution. Accordingly, the Company will be

able to add £339,344 to brought forward revenue reserves. However

in accordance with accounting standards, the fourth interim dividend

amounting to £14,685,195 will not be accounted for until it is has

been paid.

Risk factors

In addition to the performance indicators set out above, the Board

also monitors risk factors relating to investment performance on a

quarterly basis.

Business Review

continued

Schroder Oriental Income Fund Limited16

Investment process

The chart below details the Manager’s investment process.

Knowledge

Wide source of investment ideas

Insight

Non-consensus investment appraisal

Discipline

Portfolio construction

Conviction

Valuation driven

Opportunity set

Income rationale

Risk aware

60–80 stock best ideas

Fundamentals

Long term

Change

Management

Non-financial factors

Valuation

Global and Emerging Market

analysts (London)

Sell-side research

Quantitative screens

Schroders’ locally-based analysts

Portfolio construction

Stock selection is at the heart of the investment approach for the

Company. A key strength of the Manager is its network of analysts

in Asia whose focus is on identifying companies able to grow

shareholder value in the long term. Although the in-house analysts

are the primary source of stock ideas, the portfolio managers also

generate stock ideas through their own research and draw on a

number of other sources including other investment professionals

within Schroders, a proprietary quantitative screen and sell-side

analysts.

The investment approach is primarily bottom-up, driven by an

assessment of the financial and non-financial (including ESG) factors

which influence company returns. In addition, there is a top-down

regional allocation review process, carried out on a monthly basis,

combining the output of an in-house quantitative model and the

qualitative views of the Manager.

Stock research

The Manager believes that the best way to generate alpha over

the long term is to focus on fundamental bottom-up stock analysis.

In particular, the Manager’s analytical focus is on the future trend

in a company’s return on invested capital (“ROIC”) relative to its

cost of capital, in the belief that this reflects the attractiveness and

sustainability of the business model and serves as a predictor of long-

term shareholder returns.

Given this focus on fundamental research, it forms a key input

into the Manager’s stock selection decisions. The Manager has 40

dedicated equity analysts across the Asia Pacific ex Japan region,

who have an average of over 16 years’ investment experience, 8 of

which have been gained at Schroders (as at 30 September 2023). As a

result of their level of experience, these analysts have an exceptional

knowledge of Asian markets and the companies within them. The

foundation of the Manager’s internal research is a programme of

regional company contacts each year (over 2,300 for calendar year

2022), with the majority of Schroders’ analysis being done using

internal research and company valuation models.

This is supplemented by other resources across the Schroders group

including the ESG and Investment Insight Unit teams as well as other

equity teams focussed on Global and Emerging markets.

Stock selection/portfolio construction

When constructing the portfolio for the Company, the Manager

focuses on the following factors:

• conviction on investment thesis;

• upside to the internal estimate of fair value;

• any grade awarded by Schroders’ analysts;

• ability to increase or sustain dividend payout;

• relative attractiveness of other available opportunities;

• the risks to the investment case;

• the ESG credentials of that company; and

• the sustainability of that company’s profits.

Many of the stocks will already have attractive yields, but the Manager

also looks to exploit opportunities in stocks which are set to benefit

from improving capital efficiency, rising returns and increasing

shareholder distributions. There is no minimum yield requirement

applied to every stock, but portfolio construction is carried out with

reference to the overall portfolio yield as a key part of the Company’s

total return investment objective.

Integration of ESG into the investment

process

ESG is integrated into the investment process through three levels:

The activities undertaken more widely by the Manager (Schroders),

those undertaken by the Manager in the Asia region, and those

undertaken by the Manager on behalf of the Company.

Schroder Oriental Income Fund Limited 17

Strategic report

Governance Financial

Introduction

Other information (unaudited)

How are ESG factors incorporated into the investment process?

Schroders has been considering Environmental, Social and Governance (“ESG”) issues, and sustainability generally, for over 20 years, as detailed in

the timeline below

1 The above ESG research framework covers investments in companies covered by our team of locally based Asia ex Japan analysts. The detail of ESG coverage

in other regions where analysts report locally (e.g. Australia, India) may differ, but is underpinned by the same broad approach

For a long time, the Manager has incorporated into its decision-

making a thorough assessment of management quality,

environmental, social and governance factors, whether implicitly

or explicitly. The Manager recognises the importance of appraising

both financial and non-financial factors when analysing a company

and its security. The Manager believes that integrating an analysis

and evaluation of ESG factors in the security valuation and selection

process is key to enhancing and protecting long-term shareholder

value. The appraisal of non-financial factors, including ESG

considerations, contributes to a better understanding of a company’s

risk characteristics and return potential.

Schroders has a team of more than 50 dedicated ESG professionals

(as at 30 September 2023) who develop proprietary ESG tools and

oversee ESG analysis across Schroders. The ESG specialists will also

engage directly with companies, prioritising those with exposure to

higher ESG risk and low ESG ratings. They attend company meetings

with portfolio managers and analysts to discuss specific sustainability

issues directly with company management, in addition to financial

performance, as well as engaging with company sustainability experts

directly.

Corporate Governance Analysts in the team will also work alongside

investors, and our internal compliance and legal teams to ensure our

voting activities comply with our ESG policy.

Asia ex Japan ESG analysis in practice

As long-term, bottom-up investors, assessing the sustainability of a

company’s returns and financial position has always been at the core

of research and investment decisions the Manager makes in Asia.

Consistent with this approach, Schroders engages with company

management teams (Schroders conducted over 2,300 meetings

with regional companies in 2022) as well as voting all proxies where

practically possible. Analysts are directly responsible for assessing

ESG risks and opportunities as we believe they are best placed to

understand their companies and determine the impact of ESG issues

on the sustainability of the business.

ESG analysis is an integrated and important part of the investment

process, from initial screening through to final portfolio construction.

ESG analysis impacts the investment process in four direct ways:

1. Initial screening – ESG helps determine which companies are

considered to be investable as part of an initial screening.

2. Sustainability of earnings – ESG analysis helps assess the impact

ESG externalities may have on the future earnings power of the

business and with it the Manager’s assessment of the return on

invested capital (“ROIC”) and shareholder return classification

(“SRC”) of the company.

3. Fair Value and recommendation – ESG is an indirect and direct

input into our fair value estimate of a company. Indirect, to the

extent that a company’s SRC may influence the assumptions used

in establishing the fair value estimate of a company; and direct, to

the extent that analysts may apply an additional explicit discount/

premium to that fair value estimate.

4. Portfolio construction – ESG helps shape portfolio construction

and may influence position sizes. For example, poor ESG

performance or heightened ESG risks may result in a decision

to underweight a security, hold a smaller position size or avoid

an investment completely. There is no automatic rule – each

investment opportunity is assessed on a case-by-case basis,

with the focus on the materiality of ESG factors on a company’s

valuation and risk profile.

Sustainability at Schroders

A continuously evolving approach

Business Review

continued

Schroder Oriental Income Fund Limited18

In summary, ESG analysis helps determine which companies the

Manager looks at, how their sustainability is assessed and hence

how the Manager values them. While company valuations ultimately

drive portfolio construction, ESG insights play a crucial role in the

investment process and influence how we size position sizes within a

portfolio. Furthermore, ESG analysis is broad-reaching: the Manager is

not only interested in the potential downside risks but also the upside

return implications.

Asian equity analysts are expected to provide written ESG analysis for all

companies under coverage. This identifies and assesses the potential

effect of ESG issues on the investment case.

Schroders uses its proprietary tools such as Context and Sustainex

Asia Context. The latter of these, which is the principal tool

employed, captures the Manager’s ESG analysis in one template

using a stakeholder-based framework and is a key step in the overall

assessment of a company. In addition to separate rankings for ‘E’, ‘S’ &

‘G’, Asia Context generates an overall score for each company’s ESG

attributes.

Schroders has always engaged with investee companies, and

direct company contact is an important component of the initial

due diligence and ongoing monitoring process. The Asia Context

template provides a clearer, and broader, roadmap on the issues

requiring engagement. It also helps refresh the team’s focus on ROIC

and enhances appreciation of the downside and upside risks to a

company’s business model. The analysts have the option to apply an

explicit discount or premium to their fair value estimate as a result of

their ESG analysis.

One of the Asian Equities team’s greatest strengths is experienced

analysts working hand-in-hand with experienced fund managers

– often involving discussions from the beginning to the end of the

research on a company. Many of Schroders’ fund managers are ex-

analysts and they are heavily involved in the discussions that underpin

ESG conclusions – especially given the inherent subjectivity of how

certain ESG considerations will impact a company. Analysts are not

expected to score our Asia Context templates in isolation – in many

instances the team builds a consensus on which issues to address

and how to score them.

The Context Framework:

Understanding how a company manages it relationships with stakeholders

Employees

Suppliers

Communities

community? Have you committed to

protect human rights?

Regulators

How competitive is your market?

Are

you paying a fair rate of tax?

Customers

How is your brand perceived? What’s

in your produce pipeline?

transition plan? Are you managing

Company

Environment

Have you put in place an energy

operating impacts?

How exposed is your supply chain to

disruption risks? How strong are your

supplier relationships?

How do your empl

oyees perform? How

motivated is your team?

What support do you offer your loca

Source: Schroders

To enhance the Asian team’s ESG expertise, two members of the Sustainable Investment team are based in Asia, supporting the investment

team and ensuring they are kept fully informed of the relevant output of the Sustainable Investment team in London. A Sustainable Equity

Analyst on the team brings additional insight and perspective to ESG analysis and engagement.

In addition the Asian investment team collaborates with the Sustainable Investment team, both formally and informally participating, for

instance, in a monthly ESG conference call together with other investors globally to discuss topical issues as well as ESG best practice.

Schroder Oriental Income Fund Limited 19

Strategic report

Governance Financial

Introduction

Other information (unaudited)

So what is the outcome for the Company?

In the Manager’s view, the Schroders approach to ESG described above results in a portfolio that is less likely to be exposed to areas that could

be deemed ‘sensitive' from an ESG perspective. Where there is ’sensitivity’, it is more likely to be in markets that are generally well regulated

and focused on the better practitioners. It should be noted that the Manager does not screen out all companies in sensitive sectors

, rather the

process results in a much higher hurdle for stocks to get into the portfolio than might otherwise be the case. Below is a table that covers some

of the more ‘sensitive’ sectors and our exposure to them. Exposure to the more sensitive areas is limited.

Sector Reasons for Caution Our Approach Approx. Fund Exposure

Agribusinesses/

Aquaculture

Environmental, Social, Governance

(low barriers of entry, widespread

questionable practices)

Avoid; small 1.2% (one stock – branded milk

company with some upstream

supply)

Tobacco Social Avoid 0%

Gambling Social, Governance. Licence to

operate/ promotional practices

Limited exposure to best-in-class

players in well-regulated markets (e.g.

Australia, Macau)

Utilities (traditional) Environmental, Governance (national

service obligations, uncertain

regulations/risks of backlash against

coal plants, mostly state-owned

enterprises)

Avoid carbon heavy energy providers,

focus on hydro and sustainable

energy providers in well-regulated

markets

Resources Environmental, Social, Governance

(questionable practices such as

bribery and poor environmental and

safety controls concerns in Asia ex

Australia)

Avoid except for Australian blue chip

names, with minimal thermal coal

mining exposure

6.4% (four stocks)*

Oil and Gas Environmental, Governance

(regulations, unfavourable taxes, price

takers, big carbon producers)

Limited exposure to sector ideally

with an LNG/gas focus or self-help

story

2.0% (two stocks)

Property Environmental, Social, Governance

(bribery issues, flooding, land

clearance compensation, labour

practices)

Exposure mainly to developed

markets (Hong Kong, Australia and

Singapore) where we view risks to be

better managed.

11.5% (thirteen stocks)

Defence Monopsony structure, corruption Avoid 0 %

Several of these industries are traditionally prominent in income

funds, as they typically contain many companies with high dividend

yields. The portfolio managers’ approach, however, has been to take a

cautious approach to exposure in those companies which, while they

may be paying attractive dividends currently, are not always operating

in a sustainable way which could potentially impact future earnings

and by extension dividend payments.

The Manager has tended, therefore, to take exposure to these

industries through the higher quality names, operating in well

regulated markets. For example, while they believe commodity

resources will continue to be necessary in future (and indeed crucial

for a transition to a lower carbon world), the exposure to this sector is

through blue-chip Australian companies, rather than more marginal

miners in emerging countries. Similarly, for the real estate sector, the

exposure is largely through companies which have a focus on strong

governance, operating in the most well-regulated markets in the

region. For some sectors (e.g. tobacco or thermal coal), the Manager’s

requirement for operations to be sustainable in the long term is

a high hurdle to clear, regardless of the governance or regulatory

frameworks a company is operating under, so exposure has tended

to be very limited there.

1 Schroders applies group-level exclusions to all Schroders funds that are directly managed. These group-level exclusions relate to controversial weapons and

companies that generate more than 20% of their revenues from thermal coal mining. Details can be found at the following link Group exclusions | Schroders

global

Business Review

continued

Schroder Oriental Income Fund Limited20

Active Ownership

Schroders has a long history of engagement and active ownership, engaging with companies on ESG related matters for the past two decades.

Active ownership is a key channel of influence on management teams and a mechanism that allows for more sustainable practices to be

properly considered in managing the investee companies. Schroders aims to drive change to better protect and enhance the value of clients’

investments. Schroders is committed to leveraging its influence as an investor to change how a company operates for the better. These regular

engagements form an important aspect of Schroders’ role as stewards of clients’ capital and allows deployment of capital in businesses with

long-term sustainability of returns and shareholder value creation.

Influencing corporate behaviour and outcomes

We work with companies to help them to recognise the potential impact of

these challenges and help them take action in the areas where change may

be required

We use our voice and rights as

shareholders to make sure

these changes are effected

We speak with companies to

understand if an how they are

preparing for the long-term

sustainability challenges

VotingDialogue

Engagement

Source: Schroders

Engagement in practice

It should be remembered that the Manager is not an ‘activist’ investor, and in general is looking to buy into companies that are already

well-managed with decent governance and attractive distribution profiles. However, this does not mean that there is not still room for

engagement, particularly when thinking about sustainability issues and the evolution of a longer-term investment thesis. Where appropriate

engagements can focus on a number of different areas, including Climate Change, Diversity and Inclusion, Natural Capital and Biodiversity,

Human Rights, Human Capital Management and Corporate Governance.

As an illustration, although financial companies don’t necessarily spring to mind when it comes to engagement on areas such as climate

change, it is a relevant topic and Schroders engages with banks, for instance on their approach to lending to climate sensitive areas. For

example, Schroders started engaging with United Overseas Bank (“UOB”) in Singapore on this topic back in 2019 and the chart on the next

page highlights those and other engagements with the company since then.

Schroder Oriental Income Fund Limited 21

Strategic report

Governance Financial

Introduction

Other information (unaudited)

Engaging across our priority engagement themes

UOB

Source:

Schroders, as at October 2023.

Securities

shown are for illustrative purposes only and should not be viewed as a recommendation to buy or sell.

recognise that success factors may be subjective, and that Schroders’ influence may not have been the sole

driving fo

rce for this change. However, we believe it is important to track companies’ progress and measure the

outcomes

of our engagement.

Themes Objective

utcomes

Climate Change

Disclose coal exposure in loan book

Company subsequently provided the coal exposure

Sep 2022

Mar 2023

Oct 2019

Dec 2020

Disclose alignment of financing

activities to Paris Agreement

Develop fossil fuel financing policies

and set carbon neutral targets

Company completed our survey for deeper analysis

Communicated objectives based on prior assessment on

strengths and weaknesses of the firm

Mar 2021

Set up board level committee to

oversee cybersecurity and data privacy

risks

Communicated the need for increased cybersecurity

oversight given growing risks. Directors regularly review

cybersecurity measures and initiatives.

Corporate

Governance

Clarify and address media

controversies on climate commitment

UOB has engaged Adaro and will also clarify with the media

to correct misunderstanding. The company does not engage

in financing of new/expansion of coal mining.

Governance &

Management

Regulators &

Governments

Environment

Employees

Customers &

Suppliers

Local

communities

Stakeholders

addressed in

engagements

Format

post

1x1 meeting

1x1 call

ESG Team

1x1 call

ESG Team

Climate Change

Further disclosures

Investment restrictions and spread of investment risk

Risk in relation to the Company’s investments is spread as a result

of the Manager monitoring the Company’s portfolio with a view

to ensuring that it retains an appropriate balance to meet the

Company’s investment objective. In order to comply with the Listing

Rules, the Company will not invest more than 10%, in aggregate, of

the value of its total assets (calculated at the time of any relevant

investment) in other investment companies or investment trusts

which are listed on the Official List of the Financial Conduct Authority

(the “Official List”) (save to the extent that those investment

companies or investment trusts have stated investment policies to

invest no more than 15% of their gross assets in other investment

companies or investment trusts which are listed on the Official List).

Additionally, the Company will not:

(i) invest more than 15% of its gross assets in other investment

companies or investment trusts which are listed on the Official

List;

(ii) invest, either directly or indirectly, or lend more than 20%

(calculated at the time of any relevant investment or loan) of

its gross assets to any single underlying issuer (including the

underlying issuer’s subsidiaries or affiliates);

(iii) invest more than 20% (calculated at the time of any relevant

investment) of its gross assets in one or more collective

investment undertakings which may invest more than 20% of its

gross assets in other collective investment undertakings;

(iv) invest more than 40% (calculated at the time of any relevant

investment) of its gross assets in another collective investment

undertaking;

(v) expose more than 20% of its gross assets to the

creditworthiness or solvency of any one counterparty;

(vi) invest in physical commodities; or

(vii) invest in derivatives except for the purposes of efficient portfolio

management.

In the event of any breach of the investment restrictions applicable

to the Company, shareholders will be informed of the actions to be

taken by the Manager by notice sent to the registered addresses

of the shareholders in accordance with the Company’s articles of

incorporation or by an announcement issued through a regulatory

information service approved by the Financial Conduct Authority

(“FCA”). No breaches of these investment restrictions occurred during

the year ended 31 August 2023. The investment portfolio on page 12

and the Investment Manager’s Review on pages 6 to 11 demonstrate

that, as at 31 August 2023, the portfolio was invested in 12 countries

and in 10 different industry sectors within such countries. There were

62 holdings in the portfolio at the year end. The Board therefore

believes that the objective of spreading investment risk has been

achieved.

Use of Gearing

The Company has a £100 million multi-currency revolving credit

facility with Bank of Nova Scotia which was US$50.0 million

(£39.5 million) drawn at the end of the financial year. The facility was

taken out on 18 July 2022, renewed on 20 July 2023, and expires on

18 July 2024.

The Company’s policy is to permit net borrowings (including foreign

currency borrowings) of up to 25% of the Company’s net assets

Business Review

continued

Schroder Oriental Income Fund Limited22

(measured when new borrowings are incurred). It is intended that the

Manager should have the flexibility to utilise this power to leverage

the Company’s portfolio in order to enhance returns where and to the

extent that this is considered appropriate by the directors. Full details

of the gearing employed by the Company are set out in note 20 on

page 67.

Promotion and shareholder relations

The Company promotes its shares to a broad range of investors

including discretionary wealth managers, private investors, financial

advisers and institutions which have the potential to be long-term

supporters of the investment strategy. The Board seeks to achieve

this through its Manager and corporate broker, which promote the

shares of the Company through regular contact with both current and

potential shareholders. These activities consist of investor lunches,

one-on-one meetings, webinars, regional road shows and attendances

at conferences. In addition, the Company’s shares are supported by

the Manager’s wider marketing of investment companies targeted at

all types of investors. This includes maintaining close relationships with

adviser and execution-only platforms, advertising in the trade press,

maintaining relationships with financial journalists and the provision of

digital information on Schroders’ website.

Shareholder relations are given high priority by both the Board and

the Manager. The Board also seeks active engagement with investors

and meetings with the Chairman are offered where appropriate. In

addition to the engagement and meetings held during the year the

chairs of the Board and committees, as well as the other directors,

attend the AGM and are available to respond to queries and concerns

from Shareholders.

Shareholders are also encouraged to sign up to the Manager’s

Investment Trusts update, to receive information on the Company

directly. https://www.schroders.com/en/uk/private-investor/

fundcentre/funds-in-focus/investment-trusts/schroders-

investmenttrusts/never-miss-an-update

Diversity

The below tables set out the gender and ethnic diversity composition of the Board (as at 31 August 2023 and at the date of this report).

Number of

Board members

Percentage of

the Board

Number of

senior positions

on the Board

(SID and Chair)

White British or other White (including minority-white

groups) 4 80% 2

Mixed/Multiple Ethnic Groups – – –

Asian/Asian British 1 20% 0

Black/African/Caribbean/Black British – – –

Other ethnic group, including Arab – – –

Not specied/prefer not to say – – –

Number of

Board members

Percentage of

the Board

Number of

senior positions

on the Board

(SID and Chair)

Men 2 40% 1

Women 3 60% 1

Not specied/prefer not to say – – –

Given that the Company is an investment trust with no executive

board members, the columns and references regarding executive

management have not been included.

The Board has adopted a diversity and inclusion policy. Appointments

and succession plans will always be based on merit and objective

criteria and, within this context, the Board seeks to promote diversity

of gender, social and ethnic backgrounds, cognitive and personal

strengths. The Board will encourage any recruitment agencies it

engages to find a range of candidates that meet the objective criteria

agreed for each appointment. Candidates for Board vacancies are

selected based on their skills and experience, which are matched

against the balance of skills and experience of the overall Board

taking into account the criteria for the role being offered.

The Board also considers the diversity and inclusion policies of its key

service providers.

Financial crime policy

The Company continues to be committed to carrying out its business

fairly, honestly and openly operates a financial crime policy, covering

bribery and corruption, tax evasion, money laundering, terrorist

financing and sanctions, as well as seeking confirmations that the

Company’s service providers’ policies are operating soundly.

Greenhouse gas emissions and energy usage

As the Company outsources its operations to third parties, it

consumed less than 40,000 kWh during the year and so has no

greenhouse gas emissions, energy consumption or energy efficiency

action to report under the Streamlined Energy and Carbon Reporting

requirements.

Taskforce for Climate-Related Financial Disclosures

On 30 June 2023, the Company's AIFM produced a product level

disclosure consistent with the Task Force on Climate-Related

Financial Disclosures ("TCFD") for the period 1 January 2022 to

31 December 2022. This can be found here: https://mybrand.

schroders.com/m/27644d68e529db89/original/TCFD-Schroder-

Oriental-Income-20221231.pdf. The Board met with representatives

from the Manager to review this report.

Responsible investment

The Company delegates to its Manager the responsibility for taking

ESG issues into account when assessing the selection, retention and

realisation of investments. The Board expects the Manager to engage

with investee companies on social, environmental and business ethics

issues and to promote best practice. The Board also expects the

Manager to exercise the Company’s voting rights in consideration of

these issues.

Schroder Oriental Income Fund Limited 23

Strategic report

Governance Financial

Introduction

Other information (unaudited)

Further detail on engagement and stewardship can be found on

pages 17 to 21.

In addition to the description of the Manager’s integration of ESG

into the investment process and the details in this Business Review, a

description of the Manager’s policy on these matters can be found on

the Schroders website at www.schroders.com. The Board notes that

Schroders believes that companies with good ESG management

often perform better and deliver superior returns over time. Engaging

with companies to understand how they approach ESG management

is an integral part of the investment process. Schroders has

committed to the UN Global Compact, amongst codes and standards,

and information about the application of Schroders’ sustainability

and responsible investment policies can be found at: https://www.

schroders.com/en/sustainability/corporate-responsibility/.

The Board has received reporting from the Manager on the

application of its policy.

Stakeholder engagement, section 172

During the year under review, the Board discharged its duty under

section 172 of the Companies Act 2006 to promote the success of the

Company for the benefit of its members as a whole, having regard to

the interests of all stakeholders. As an externally managed investment

trust, the Company has no employees, operations or premises.

The Board has identified its key stakeholders as the Company’s

Shareholders, the Manager, other service providers, the Investee

companies and the Company’s Lender.

The below explains how the directors have engaged with all

stakeholders and outlines key activities undertaken during the

reporting period.

Shareholders

The Company welcomes attendance and participation from

Shareholders at the Annual General Meeting, details of which

are on page 73 of this report. This will provide an opportunity for

Shareholders to engage with the Board and hear from the Portfolio

Managers, Richard Sennitt and Abbas Barkhordar. Shareholders

unable to attend the AGM are invited to submit questions to the

Company Secretary in advance of the meeting, and will be able to

view a presentation from the Manager online.

The annual and half year results presentations, as well as monthly

updates are available on the Company’s webpage with results

announced via a regulatory news service.

The directors receive regular updates on the shareholder register,

trading activity, and feedback received from investor meetings held

by the Manager and Broker, as well as meeting with interested

current and prospective Shareholders.

The Board is responsible for discount and premium management

and is alert to the value Shareholders place on maintaining as low

a level of discount volatility as possible. During the financial year, a

total of 8,010,000 shares were bought back and a further 2,220,000

have been bought back since the period end. The Board will continue

to buy back shares when it judges it is in the best interests of

Shareholders to do so.

The Manager

The Board maintains a constructive and collaborative relationship

with the Manager, encouraging open discussion.

The Board invites the Portfolio Managers to attend all Board and

certain committee meetings and receives regular reports on the

performance of the investments and the implementation of the

investment strategy, policy and objective. The portfolio activities

undertaken by the Portfolio Managers and the impact of decisions

affecting investment performance are set out in the Investment

Managers’ Review on pages 6 to 11.

The Management Engagement Committee reviews the performance

of the Manager, its remuneration and the discharge of its contractual

obligations at least annually. During the year, the Board visited

the Manager’s teams based in Hong Kong and Taiwan and was

impressed with the depth of resource and experience represented

within the Manager’s teams based in the region.

The Company’s lender

During the year under review, the Board renewed its revolving

credit facility agreement with The Bank of Nova Scotia. The Board

is responsible for ensuring that the Company adheres to all loan

covenants.

Other service providers

The Board maintains regular contact with its key service providers,

both at the Board and committee meetings, and through ad hoc

communication throughout the year. The need to foster business

relationships with key service providers is central to the directors’

decision-making as the Board of an externally managed investment

trust.

During the period, the Management Engagement Committee

undertook reviews of the third-party service providers and agreed that

their continued appointment remained in the best interests of the

Company and its Shareholders. The Committee periodically reviews

the market rates for services received, to ensure that the Company

continues to receive high quality service at a competitive cost.

During the year, directors attended a meeting to assess the internal

controls of certain service providers including the Company’s

Depositary and Custodian HSBC, the Designated Administrator,

Registrar and Schroder’s Group Internal Audit. These meetings

enable the Board to conduct due diligence on operations and IT risks

amongst service providers; and to receive up to date information on

changes in regulation and market practice in the industry. The Board

also engaged with its service providers on their own commitments on

ESG, Financial Crime, Modern Slavery, Whistleblowing, Diversity and

Inclusion, Business Continuity and Cybersecurity.

Investee companies

The Board believes that it is in the interests of all stakeholders to

consider ESG factors. The Board supports and encourages the policy

of engagement on ESG matters which the Schroders investment

team has implemented as part of the investment decision making

process, details of which can be found on pages 16 to 21.

The Manager has discretionary powers to exercise voting rights

on behalf of the Company and it reports on voting decisions to the

Board. The Board monitors investment decisions and questions

the Portfolio Managers’ rationale for exposures taken and voting

decisions made.

In addition to regular discussions with the Manager regarding the

ESG aspects of portfolio companies, the Board met with Schroders

engagement team to gain a more in depth understanding of the

Manager’s active engagement with investee companies. The Board

also met with certain investee companies on its visit to the region.

Principal risks and uncertainties

Schroder Oriental Income Fund Limited24

Principal and emerging risks

The Board is responsible for the Company’s system of risk

management and internal control and for reviewing its effectiveness.

The Board has adopted a detailed matrix of principal risks affecting

the Company’s business as an investment trust and has established

associated policies and processes designed to manage and, where

possible, mitigate those risks, which are monitored by the Audit and

Risk Committee on an ongoing basis. This system assists the Board

in determining the nature and extent of the risks it is willing to take in

achieving the Company’s strategic objectives.

Although the Board believes that it has a robust framework of internal

controls in place this can provide only reasonable, and not absolute,

assurance against material financial misstatement or loss and is

designed to manage, not eliminate, risk.

Both the principal risks and the monitoring system are also subject

to robust review at least annually. The last assessment took place in

October 2023.

Actions taken by the Board and, where appropriate, its committees, to

manage and mitigate the Company’s principal risks and uncertainties

are set out in the table below.

During the year, the Board also discussed and monitored a number

of risks that could potentially impact the Company’s ability to meet

its strategic objectives. The Board recognised that there continues to

be an elevated geopolitical risk relating to the region, which is closely

monitored.

The Board considered in detail whether there were any material

emerging risks and concluded that there were none at present.

*The “Change” column on the right highlights at a glance the Board’s

assessment of any increases or decreases in risk during the year after

mitigation and management. The arrows show the risks as increased,

decreased, or stable.

Risk Mitigation and management

Change (post

mitigation and

management)*

Geopolitical risk

Political developments globally might materially affect

the ability of the Company to achieve its investment

objective.

The Board monitored news coverage of global events

with follow up email correspondence when particular

issues or concerns arose. The Board also visited Hong

Kong and Taiwan and met with investee companies and

analysts to understand the tensions and opportunities

in the region better.

The Board recognises that there continues to be an

elevated geopolitical risk relating to the region and

continued to monitor key political developments in the

region including US/China tension, the political situation

in Hong Kong, Taiwan, and Singapore, and domestic

political developments in mainland China, in addition

to the Ukraine war and the conflict between Israel and

Hamas.

The Manager also ensured that the portfolio is

adequately diversified in the context of the investment

policy.

Market risk

The Company is exposed to the effect of market

fluctuations due to the nature of its business. A

significant fall in regional equity markets could have an

adverse impact on the market value of the Company’s

underlying investments.

The Board notes the impact of inflation on

macroeconomic and market factors.

The Board continues to monitor the market volatility

caused by current geo-political issues and will continue

to do so on an ongoing basis. The Board also monitors

macroeconomic and market factors, including the

impact of inflation.

The risk profile of the portfolio, including the potential

impact of changes in currency, is discussed with the

Manager.

The Manager seeks to invest in companies with strong

balance sheets and sustainable business models.

Gearing is maintained at relatively low levels.

Schroder Oriental Income Fund Limited 25

Strategic report

Governance Financial

Introduction

Other information (unaudited)

Risk Mitigation and management

Change (post

mitigation and

management)*

Currency/exchange rate risk

The Company is exposed to the effect of currency

fluctuations due to the nature of its business. The

Company invests predominantly in assets which are

denominated in a range of currencies. Its exposure to

changes in the exchange rate between sterling and

other currencies has the potential to have significant

impact on returns and the sterling value of dividend

income from underlying investments.

The Board notes that the variability in inflation and

interest rates would in turn lead to volatility in exchange

rates.

The Board recognises that there continues to be an

elevated currency / exchange rate risk relating to the

region and monitored it carefully during the period.

The risk profile of the portfolio, including the potential

impact of changes in currency, is discussed with the

Manager.

The Company has no formal policy of hedging currency

risk but may use foreign currency borrowings or forward

foreign currency contracts to limit exposure. The

Company does not hedge against sterling.

Investment Performance

The Company’s investment objectives may become out

of line with the requirements of investors, resulting in a

wide discount of the share price to underlying NAV per

share.

The appropriateness of the Company’s investment

mandate and the long-term investment strategy is

periodically reviewed and the success of the Company in

meeting its stated objectives is monitored.

The investment mandate and the long-term investment

strategy are monitored by the Board. Share price

relative to NAV per share is monitored by the Board as

a key performance indicator and is reviewed against the

Company’s peers on a regular basis. The use of buyback

authorities is considered regularly. The Manager and

corporate broker monitor market feedback and the

Board considers this at each quarterly meeting.

Proactive engagement with Shareholders takes place via

the AGM, feedback from Shareholder presentations, and

ad hoc meetings with the Board.

The Manager’s investment strategy and levels of

resourcing, if inappropriate, may result in the Company

underperforming the market and/or peer group

companies, leading to the Company and its objectives

becoming unattractive to investors.

The Board sets overall investment strategy and

guidelines for use of derivatives and leverage, amongst

other metrics. It also monitors investment performance

and risk against objectives and strategy, and conducts

an annual review of the Manager’s ongoing suitability.

The directors attend a presentation by the Manager’s

risk and internal audit functions at least annually.

The Board also reviews the Manager’s compliance with

agreed investment restrictions, relative performance,

the portfolio’s risk profile, and whether appropriate

strategies are employed to mitigate any negative impact

of substantial changes in markets.

Climate Change

The Company's investments, and shareholder returns,

could be affected by climate change. Investors and

regulators are increasingly questioning how the

Company’s investments and performance could be

affected by climate change, environmental, social and

governance factors.

The Manager has integrated ESG considerations,

including climate change, into the investment process

and reports on its ESG engagement at regular

board meetings. The Manager has implemented a

comprehensive ESG policy which is outlined in detail on

pages 16 to 21.The Board ensures that ESG factors are

incorporated into reports to Shareholders.

Principal risks and uncertainties

continued

Schroder Oriental Income Fund Limited26

Risk Mitigation and management

Change (post

mitigation and

management)*

Service provider performance

The Company has no employees and has delegated

certain functions to a number of service providers.

Failure of controls, including as a result of fraud, and

poor performance of any service provider, could lead to

disruption, reputational damage or loss.

Service providers are appointed subject to due diligence

processes and with material service providers having

clearly documented contractual arrangements.

Regular reports are provided by key service providers

and the quality of their services is monitored, including

an annual presentation to the Audit and Risk Committee

chair and other directors from key risk and internal

controls personnel at the Company’s main service

providers.

Review of annual audited internal controls reports from

key service providers, including confirmation of business

continuity arrangements and IT controls, is undertaken.

Service providers’ internal controls reports continue to

be robust.

Cyber

The Company’s service providers are all exposed to the

risk of cyber attacks. Cyber attacks could lead to loss

of personal or confidential information, unauthorised

payments or inability to carry out operations in a timely

manner.

The Company has outsource arrangements with

service providers who report on cyber risk mitigation

and management at least annually, which includes

confirmation of business continuity capability in the

event of a cyber attack and appoints a custodian/

depositary in respect of assets.

In addition, the Board receives presentations from the

Manager, the registrar, and the safekeeping agent and

custodian on cyber risk.

Risk assessment and internal controls review by the Board

Risk assessment includes consideration of the scope and quality of

the systems of internal control operating within key service providers,

and ensures regular communication of the results of monitoring

by such providers to the Audit and Risk Committee, including the

incidence of significant control failings or weaknesses that have been

identified at any time and the extent to which they have resulted in

unforeseen outcomes or contingencies that may have a material

impact on the Company’s performance or condition.

No significant control failings or weaknesses were identified from

the Audit and Risk Committee’s ongoing risk assessment which has

been in place throughout the financial year and up to the date of

this report. The Board is satisfied that it has undertaken a detailed

review of the risks facing the Company and that the internal control

environment continues to operate effectively.

A full analysis of the financial risks facing the Company is set out in

note 20 to the accounts on pages 65 to 69.

Viability statement

The directors have assessed the viability of the Company over a five

year period, taking into account the Company’s position at 31 August

2023 and 7 November 2023 and the potential impact of the principal

risks and uncertainties it faces for the review period. The directors

have assessed the Company’s operational resilience and they are

satisfied that the Company’s outsourced service providers will

continue to operate effectively, following the implementation of their

business continuity plans.

A period of five years has been chosen as the Board believes that

this reflects a suitable time horizon for strategic planning, taking

into account the investment policy, liquidity of investments, potential

impact of economic cycles, nature of operating costs, dividends and

availability of funding. This time period also reflects the average hold

period of an investment.

In its assessment of the viability of the Company, the directors have

considered each of the Company’s principal risks and uncertainties

detailed on pages 24 to 26 and in particular the impact of a significant

fall in regional equity markets on the value of the Company’s

investment portfolio. The directors have also considered the

Company’s income and expenditure projections and the fact that the

Company’s investments comprise readily realisable securities which

can be sold to meet funding requirements if necessary.

The directors have also considered a stress test which represents

a severe but plausible scenario along with movement in foreign

exchange rates. This scenario assumes a severe stock market

collapse and/or exchange rate movements at the beginning of the

five year period, resulting in a 50% fall in the value of the Company’s

investments and investment income and no subsequent recovery in

either prices or income in the following five years. It is assumed that

the Company continues to pay an annual dividend in line with current

levels and that the borrowing facility remains available and remains

drawn, subject to the gearing limit.

The Company’s investments comprise highly liquid, large, listed

companies and so its assets are readily realisable securities and

could be sold to meet funding requirements or the repayment of the

gearing facility should the need arise. There is no expectation that the

nature of the investments held within the portfolio will be materially

different in the future.

The operating costs of the Company are predictable and modest in

comparison with the assets and there are no capital commitments

foreseen which would alter that position. Furthermore, the Company

has no employees and consequently has no redundancy or other

employment related liabilities.

The Board reviews the performance of the Company’s service

providers regularly, including the Manager, along with internal

controls reports to provide assurance regarding the effective

operation of internal controls as reported on by their reporting

Schroder Oriental Income Fund Limited 27

Strategic report

Governance Financial

Introduction

Other information (unaudited)

accountants. The Board also considers the business continuity

arrangements of the Company’s key service providers.

The Board monitors the portfolio risk profile, limits imposed on

gearing, counterparty exposure, liquidity risk and financial controls at

its quarterly meetings.

Although there continue to be regulatory changes which could

increase costs or impact revenue, the directors do not believe that

this would be sufficient to affect its viability. The Board also notes that

certain geopolitical risks, if they materialise, would have a serious

effect on the viability of the Company, but that it was not appropriate

to conclude that the Company was not viable on the basis of these.

The Board has assumed that the business model of a closed

ended investment company, as well as the Company’s investment

objective, will continue to be attractive to investors. The directors also

considered the beneficial tax treatment the Company is eligible for as

an investment trust. If changes to these taxation arrangements were

to be made it would affect the viability of the Company to act as an

effective investment vehicle.

Based on the above the directors have concluded that there is a

reasonable expectation that the Company will be able to continue

in operation and meet its liabilities as they fall due over the five year

period of their assessment.

Going concern

The directors have assessed the principal risks, the impact of the

emerging risks and uncertainties and the matters referred to in the

viability statement. The directors have not identified any material

uncertainties relating to events or conditions that, individually or

collectively, may cast significant doubt on the Company’s ability to

continue as a going concern for the period assessed by the directors,

being the period to 30 November 2024 which is at least 12 months

from the date the financial statements were authorised for issue.

By order of the Board

Schroder Investment Management Limited

Company Secretary

8 November 2023

Governance

Board of Directors 30

Directors’ report 32

Audit and Risk Committee report 35

Management Engagement Committee report 38

Nomination and Remuneration

Committee report 39

Directors’ Remuneration Report 41

Statement of Directors’ responsibilities 44

Gove rnance

30 Schroder Oriental Income Fund Limited

Board of Directors

Paul Meader

Status: independent non-executive

chairman

Alexa Coates

Status: independent non-executive

director

Length of service: 7 years – appointed a

director in January 2016

Experience: Paul Meader is an independent

director of investment companies, insurers

and investment funds. Until 2012 he was

Head of Portfolio Management for Canaccord

Genuity based in Guernsey, prior to which

he was Chief Executive of Corazon Capital.

He has over 35 years’ experience in financial

markets in London, Dublin and Guernsey,

holding senior positions in portfolio

management and trading. Prior to joining

Corazon he was Managing Director of

Rothschild’s Swiss private-banking subsidiary

in Guernsey. He is a Chartered Fellow of

the Chartered Institute for Securities &

Investments, a former Commissioner of the

Guernsey Financial Services Commission and

past chairman of the Guernsey International

Business Association. He is a graduate of

Hertford College, Oxford. Paul also holds a

number of directorships in other companies,

one of which is publicly quoted: ICG-Longbow

Senior Secured UK Property Debt Investments

Limited.

Committee membership: Audit and Risk,

Management Engagement (chair), and

Nomination and Remuneration Committees

Remuneration for the reporting period:

£47,000 per annum

Number of shares held: 11,000*

Length of service: 5 years – appointed a

director in February 2018

Experience: Alexa Coates is a chartered

accountant who brings 30 years of significant

financial expertise to the Board. Alexa was

a senior executive of HSBC for nine years,

where she served as the global CFO for the

group’s asset management business and

then led the finance function for commercial

banking operations in Europe. Prior to joining

HSBC, Alexa worked in senior roles in retail,

healthcare and professional services at J

Sainsbury plc, BUPA, Williams Lea Group Ltd

and CIT Bank. She started her career at Ernst

& Young, where she worked in the UK and

France. Alexa is a non-executive director and

audit committee chair of Marsh Limited, the

insurance broker, Aviva Investors and its UK

fund services company as well as a

non-executive director and chair of the audit

and risk committee of Polar Capital Holdings

plc, a publicly quoted company.

Committee membership: Audit and Risk

(chair), Management Engagement, and

Nomination and Remuneration Committees

Remuneration for the reporting period:

£42,000 per annum

Number of shares held: 10,000*

Schroder Oriental Income Fund Limited 31

Strategic report

Governance Financial

Introduction

Other information (unaudited)

Kate Cornish-Bowden

Status: senior independent

non-executive director

Isabel Liu

Status: independent non-executive

director

Nick Winsor

Status: independent non-executive

director

Length of service: 5 years – appointed in

December 2018

Experience: Kate Cornish-Bowden is the

chair of International Biotechnology Trust

plc and a non-executive director of Finsbury

Growth & Income Trust plc and CC Japan

Income & Growth Trust plc where she is chair

of the audit committee. Kate worked for 12

years as a fund manager for Morgan Stanley

Investment Management, where she was

managing director and head of the global

equity team. Prior to Morgan Stanley she

worked as a research analyst at M&G. Kate is

a member of the Chartered Financial Analyst

Institute (CFA), holds a Masters in Business

Administration (MBA), and has completed

the Financial Times Non-Executive Director

Diploma.

Committee membership: Audit and Risk,

Management Engagement, and Nomination

and Remuneration Committees

Remuneration for the reporting period:

£37,000 per annum

Number of shares held: 29,000*

Length of service: 2 years – appointed in

November 2021

Experience: Isabel has 25 years’ global

experience investing equity in infrastructure.

She started her investment career in Asia with

the $1 billion AIG Asian Infrastructure Fund.

She was Managing Director of the Asia Pacific

investment business of John Laing plc. After

relocating from Hong Kong to London, she

was Investment Director for the €1 billion

ABN AMRO Global Infrastructure Fund. Most

recently Isabel served as Board Director at

Pensions Infrastructure Platform, sponsored

by UK pension schemes. She has also

been Chair of the Audit Risk Assurance and

Remuneration Committee as a Board Member

of Transport Focus. Isabel is a non-executive

director of Utilico Emerging Markets Trust plc

and Gresham House Energy Storage Fund Plc.

Isabel holds a BA in Economics from the Ohio

State University, a Masters in Public Policy

from Harvard Kennedy School, and an MBA

from the University of Chicago Booth School

of Business.

Committee membership: Audit and Risk,

Management Engagement, and Nomination

and Remuneration Committees

Remuneration for the reporting period:

£37,000 per annum

Number of shares held: 18,634*

Length of service: 3 years – appointed in

March 2020

Experience: Nick is an independent

consultant and non-executive director.

He has more than 35 years of retail and

commercial banking experience with HSBC

Group in a number of international markets:

Brunei; Channel Islands; Hong Kong; India;

Japan; Qatar; Singapore; Taiwan; UAE and

the UK. He was CEO of HSBC’s businesses

in the Channel Islands and Isle of Man, CEO

and VP of HSBC Bank (Taiwan) Limited and a

Director of HSBC Bank Middle East Limited.

Before this, he was Head of Personal Financial

Services for the Asia Pacific Region. Nick is

a non-executive director of Metro Bank plc

and Metro Bank Holdings plc and a member

of the latter’s Risk Oversight Committee. He

is also the senior independent director of

the States of Jersey Development Company,

Chair of the Remuneration and Nomination

Committee and member of the Audit and

Risk Committee. Nick is a non-executive

director of Bankers without Boundaries, a

not for profit investment bank, and the Chair

of Autism Jersey. He was awarded an MBE

in the Queen’s 2020 Birthday Honours list

for services to the community. Nick holds a

Masters in Physics from Oxford University and

is a Fellow of the Institute of Directors.

Committee membership: Audit and Risk,

Management Engagement, and Nomination

and Remuneration (chair) Committees

Remuneration for the reporting period:

£37,000 per annum

Number of shares held: 20,000*

*Shareholdings are as at 7 November 2023, full details of directors’ shareholdings are set out in the Remuneration Report on page 43.

32 Schroder Oriental Income Fund Limited

Directors’ Report

Directors and officers

Chairman

The Chairman is an independent non-executive director who

is responsible for leadership of the Board and ensuring its

effectiveness in all aspects of its role. The Chairman’s other significant

commitments are detailed on page 30. He has no conflicting

relationships.

Senior Independent Director (“SID”)

The SID is responsible for the evaluation of the Chairman, and also

serves as a secondary point of contact for Shareholders.

Company Secretary

Schroder Investment Management Limited provides company

secretarial support to the Board and is responsible for assisting

the Chairman with Board meetings and advising the Board with

respect to governance. The Company Secretary also manages the

relationship with the Company’s service providers, except for the

Manager. Shareholders wishing to lodge questions in advance of the

AGM are invited to do so by writing to the Company Secretary at the

address given on the outside back cover.

Role and operation of the Board

The Board is the Company’s governing body; it sets the Company’s

strategy and is collectively responsible to Shareholders for its

long-term success. The Board is responsible for appointing and

subsequently monitoring the activities of the Manager and other

service providers to seek to ensure that the investment objective of

the Company continues to be met. The Board also ensures that the

Manager adheres to the investment restrictions set by the Board

and acts within the parameters set by it in respect of any gearing.

The Business Review on pages 14 to 29 sets out further detail of how

the Board reviews the Company’s strategy, risk management and

internal controls and also includes other information required for the

Directors’ Report and is incorporated by reference.

A formal schedule of matters specifically reserved for decision by the

Board has been defined and a procedure adopted for directors, in the

furtherance of their duties, to take independent professional advice at

the expense of the Company.

The Chairman ensures that all directors receive relevant

management, regulatory and financial information in a timely manner

and that they are provided, on a regular basis, with key information

on the Company’s policies, regulatory requirements and internal

controls.

The Board meets at least quarterly and receives and considers

reports regularly from the Manager and other key advisers and ad

hoc reports and information are supplied to the Board as required.

Four Board meetings are usually scheduled each year to deal with

matters including: the setting and monitoring of investment strategy,

approval of borrowings and/or cash positions, review of investment

performance, the level of discount of the Company’s shares to NAV,

promotion of the Company, and services provided by third parties.

Additional meetings of the Board are arranged as required.

The Board has approved a policy on directors’ conflicts of interest.

Under this policy, directors are required to disclose all actual

and potential conflicts of interest to the board as they arise for

consideration and approval. The Board may impose restrictions or

refuse to authorise such conflicts if deemed appropriate. No directors

have any connections with the Manager, shared directorships

with other directors or material interests in any contract which is

significant to the Company’s business.

Committees

In order to assist the Board in fulfilling its governance responsibilities,

it has delegated certain functions to committees. The roles and

responsibilities of these committees, together with details of work

undertaken during the year under review, is outlined over the next

few pages.

The reports of the Audit and Risk Committee, Management

Engagement Committee and Nomination and Remuneration

Committee are incorporated into and form part of the Directors’

Report. Each committee’s effectiveness was assessed, and judged to

be satisfactory, as part of the Board’s annual review of the Board and

its committees.

Key service providers

The Board has adopted an outsourced business model and has

appointed the following key service providers:

Manager

The Company is an alternative investment fund as defined by the

AIFM Directive and has appointed Schroder Unit Trusts Limited

(“SUTL”) as the Manager in accordance with the terms of an

alternative investment fund manager (“AIFM”) agreement. The AIFM

agreement, which is governed by the laws of England and Wales, can

be terminated by either party on 12 months’ notice or on immediate

notice in the event of certain breaches or the insolvency of either

party. As at the date of this report no such notice had been given by

either party.

SUTL is authorised and regulated by the FCA and provides portfolio

management, risk management, accounting and company secretarial

services to the Company under the AIFM agreement. Part of

the fund accounting and administration activities are currently

performed by HSBC Securities Services (UK) Limited. The Manager

also provides general marketing support for the Company and

manages relationships with key investors, in conjunction with

the Chairman, other Board members or the corporate broker as

appropriate. The Manager has delegated investment management,

marketing, administrative, accounting and company secretarial

services to another wholly owned subsidiary of Schroders plc,

Schroder Investment Management Limited. The Manager has in place

appropriate professional indemnity cover.

The Schroders Group manages £726.1 billion (as at 30 June 2023) on

behalf of institutional and retail investors, financial institutions and

high net worth clients from around the world, invested in a broad

range of asset classes across equities, fixed income, multi-asset and

alternatives.

The Manager is entitled to receive a management fee of an amount

equivalent to 0.75% per annum of the net assets of the Company,

reducing to 0.70% per annum on net assets above £250 million

and 0.65% per annum on net assets above £750 million. The fee is

payable quarterly in arrears and calculated as at the last business day

in February, May, August and November in each year.

The Manager is also entitled to receive a performance fee based

on the performance of the Company’s NAV per ordinary share.

The performance fee is 10% of the amount in pounds sterling of

any gains, being the amount by which the closing adjusted NAV

per ordinary share (adjusted as described below) at the end of the

relevant calculation period exceeds the highest of:

(i) A hurdle, being 108% of the NAV per ordinary share, taken from

the audited balance sheet at the end of the previous calculation

period;

Schroder Oriental Income Fund Limited 33

Strategic report

Governance Financial

Introduction

Other information (unaudited)

(ii) The highest closing NAV per ordinary share (unadjusted) as per

the audited accounts for any previous financial year in which a

performance fee has been paid; and

(iii) 100p

Closing Adjusted NAV per ordinary share is the NAV per share on

the last day of the financial year in respect of which the performance

fee is being calculated, adjusted to add back any performance fee

accrued during the year but not crystallised; to adjust for the deemed

reinvestment of any dividends paid by the Company during the

period; and to remove the impact on NAV per share due to any share

buy-backs and issues.

The total amount of any performance fee payable in respect of any

one accounting period has been capped at 0.65% of the net asset

value, calculated at the end of the relevant accounting period.

Any investment management fees payable to the Manager or to

other subsidiaries of Schroders plc in respect of investments by

the Company in collective investment schemes and investment

companies managed or advised by the Schroders Group are

deducted from the fee payable to the Manager under the AIFM

agreement. There were no such investments during the year ended

31 August 2023.

The management and performance fees payable in respect

of the year ended 31 August 2023 amounted to £4,838,000

(2022: £5,149,000) and £nil (2022: nil) respectively. The Manager is

also entitled to a fee for providing administrative, accounting and

company secretarial services to the Company. For these services, it

receives an annual fee, payable quarterly in arrears, of £150,000.

Details of all amounts payable to the Manager are set out in note 17

on page 64.

The Board has reviewed the performance of the Manager, and fees

paid to it, during the year under review and continues to consider

that it has the appropriate depth and quality of resource to achieve

above-average returns in the longer term. Thus, the Board considers

that the Manager’s appointment under the terms of the AIFM

agreement, is in the best interests of Shareholders as a whole.

Safekeeping and cashflow monitoring agent

HSBC Bank plc (“HSBC Bank”), which is authorised by the Prudential

Regulation Authority and regulated by the FCA and the Prudential

Regulation Authority, has been appointed to carry out certain duties

of a safekeeping and cashflow monitoring agent specified in the AIFM

Directive for the Company, including:

– safekeeping of the assets of the Company which are entrusted to

it;

– cash monitoring; and

– oversight of the Company and the Manager to the extent

described in the AIFM Directive.

HSBC Bank is liable to the Company for losses suffered by it as

a result of any negligence, wilful default, fraud or fraudulent

misrepresentation on its part.

The Company, the Manager and HSBC Bank may terminate the

safekeeping and cashflow monitoring agent services agreement

pursuant to which HSBC Bank provides these services at any time by

giving 90 days’ notice in writing. HSBC Bank may only be removed

from office when a new safekeeping and cashflow monitoring agent

is appointed by the Company.

Registrar

Computershare Investor Services (Guernsey) Limited

(“Computershare”) has been appointed as the Company’s registrar.

Computershare’s services to the Company include share register

maintenance (including the issuance, transfer and cancellation

of shares as necessary), acting as agent for the payment of any

dividends, management of company meetings (including the

registering of proxy votes and scrutineer services as necessary),

handling shareholder queries and correspondence and processing

corporate actions.

Corporate Governance Statement

The Board of the Company has chosen to adopt the principles and

provisions of the AIC Code of Corporate Governance (the “AIC Code”).

The Code addresses the Principles and Provisions set out in the UK

Corporate Governance Code (the “UK Code”), as well as setting out

additional Provisions on issues that are of specific relevance to the

Company as an investment company.

The Board considers that reporting against the Principles and

Provisions of the AIC Code, which has been endorsed by the Financial

Reporting Council and the Guernsey Financial Services Commission,

provides more relevant information to Shareholders.

The Financial Conduct Authority requires all UK listed companies

to disclose how they have complied with the provisions of the

Code. This statement, together with the Statement of Directors’

Responsibilities, viability statement and going concern statement set

out on pages 26 and 27 respectively indicates how the Company has

complied with the principles of good governance of the Code and its

requirements on internal control. The Strategic Report and Directors’

Report provide further details on the Company’s risk management,

governance and diversity policies.

The Company complied with the Principles and Provisions of the AIC

Code during the year under review and to date.

The AIC Code is available on the AIC website (www.theaic.co.uk). It

includes an explanation of how the AIC Code adapts the Principles

and Provisions set out in the UK Code to make them relevant for

investment companies.

The Guernsey Financial Services Commission’s Finance Sector Code

of Corporate Governance (the “GFSC Code”) provides a framework

which applies to all companies in the regulated finance sector in

Guernsey. The Company reports against the AIC Code, which meets

the requirements of the GFSC Code.

34 Schroder Oriental Income Fund Limited

Directors’ Report

continued

Share capital and substantial share interests

As at 7 November 2023, the Company had 271,233,024 ordinary shares of 1p in issue. 20,260,000 shares were held in treasury. 8,010,000

shares were bought back during the year ended 31 August 2023. 2,220,000 shares were bought back in the period from the year-end until

7 November 2023. Accordingly, the total number of voting rights in the Company at 7 November 2023 is 250,973,024. Details of changes to

the Company’s share capital during the year under review are given in note 13 to the accounts on page 62. All shares in issue rank equally with

respect to voting, dividends and any distribution on winding up.

The Company has received notifications in accordance with the Financial Conduct Authority’s (“FCA”) Disclosure Guidance and Transparency

Rule 5.1.2R of the below interests in 5% or more of the voting rights attaching to the Company’s issued share capital. The Company is reliant on

investors to comply with these regulations, and certain investors may be exempted from providing these. As such, this should not be relied on

as an exhaustive list of Shareholders holding above 5% of the Company’s voting rights.

Ordinary shares as at 31 August 2023 % total voting rights

Evelyn Partners Limited 10.20%

Investec Wealth & Investment Limited 9.91%

Since the year end and at the date of this report, Rathbones Investment Management Limited has on 22 September 2023 notified an increase

in their notified holding to 38,128,821 ordinary shares and 15.08% of total voting rights, as driven by the all-share combination of Rathbones

Group Plc with Investec Wealth & Investment Limited which completed on 21 September 2023. Subsequent to this, on 11 October 2023

Rathbones Investment Management Limited notified a decrease in their notified holding to 37,800,104 ordinary shares and 14.97% of total

voting rights as at 6 October 2023.

Provision of information to the auditors

The directors at the date of approval of this report confirm that, so far as each of them is aware, there is no relevant audit information of which

the Company’s auditors are unaware; and each director has taken all the steps that he or she ought to have taken as a director in order to make

himself or herself aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.

Directors’ attendance at meetings

The number of scheduled meetings of the Board and its committees held during the financial year and the attendance of individual directors is

shown below. Whenever possible all directors attend the AGM.

Board

Audit and

Risk Committee

Nomination and

Remuneration

Committee

Management

Engagement

Committee

Alexa Coates 5/5 3/3 2/2 2/2

Kate Cornish-Bowden 5/5 3/3 2/2 2/2

Isabel Liu 5/5 3/3 2/2 2/2

Paul Meader 5/5 3/3 2/2 2/2

Nick Winsor 5/5 3/3 2/2 2/2

Directors’ and officers’ liability insurance and indemnities

Directors’ and officers’ liability insurance cover was in place in respect of the directors throughout the year under review. The Company provides

an indemnity to each director to the extent permitted by Guernsey law whereby the Company is able to indemnify such director against any

liability incurred in proceedings in which the director is successful, and for costs in defending a claim brought against the director for breach of

duty where the director acted honestly and reasonably.

By order of the Board

Alexa Coates

Director

8 November 2023

Schroder Oriental Income Fund Limited 35

Audit and Risk Committee Report

Strategic report

Governance Financial

Introduction

Other information (unaudited)

Risk

management

Internal

controls

Review of

external

auditors and

their work

Interim and

annual

report

Accounting

policies and

judgements

The responsibilities and work carried out by the Audit and Risk Committee during the year under review are set out in the following report.

The duties and responsibilities of the committee, which include monitoring the integrity of the Company’s financial reporting and internal

controls, are set out in further detail below, and may be found in the terms of reference which are set out on the Company’s webpages,

www.schroders.co.uk/orientalincome.

All directors are members of the committee. Alexa Coates is the chair of the committee. The Board has satisfied itself that at least one of the

committee’s members has recent and relevant financial experience and that the committee as a whole has competence relevant to the sector

in which the company operates. The AIC Code permits the Chairman of the Board to be a member of the audit committee of an investment

trust. Recognising Paul Meader’s significant experience, it is considered appropriate for the Chairman to be a member of the Audit and Risk

Committee.

Approach

The committee’s key roles and responsibilities are set out below.

Risks and Internal Controls Financial Reporting Audit

Principal risks

To establish a process for identifying,

assessing, managing and monitoring

emerging and principal risks of the Company.

Accounting policies

To oversee the accounting policies adopted

by the Company.

Audit results

To discuss any matters arising from the

audit and recommendations made by the

auditors.

Risks and uncertainties

To ensure a robust assessment of the

Company’s emerging and principal risks

and procedures are in place to identify

emerging risks, and an explanation of how

these are being managed or mitigated.

Financial statements

To monitor the integrity of the nancial

statements of the Company and any formal

announcements relating to the Company’s

nancial performance and valuation. To

review the annual and half year reports

and to advise the Board on whether

the annual report is fair, balanced and

understandable.

The Financial Reporting Council carried out

a review of the company’s annual report

and accounts for the year ended 31 August

2022 in accordance with Part 2 of the FRC

Corporate Reporting Review Operating

Procedures

. There were no ndings or

matters brought to the attention of the

Board as a result of this review.

Auditors‘ appointment, independence

and performance

To make recommendations to the

Board, in relation to the appointment,

re‑appointment, eectiveness and removal

of the external auditors, to review their

independence, and to approve their

remuneration and terms of engagement.

Reviewing the audit plan and engagement

letter. Formulating policies on non audit

services.

Internal controls

To keep under review the adequacy and

eectiveness of the Company’s systems

of internal control and risk management,

and review the annual report disclosures

relating to this. To monitor the Company’s

accounting and nancial internal

control systems, and to consider the

appropriateness of having an internal

auditor.

Going concern

To review the position and make

recommendations to the Board in relation

to whether it considers it appropriate

to adopt the going concern basis of

accounting in preparing its annual and

half‑yearly nancial statements.

The table overleaf sets out how the committee discharged its duties during the year. The committee met three times during the year. Further

details on attendance can be found on page 34. An evaluation of the committee’s effectiveness and review of its terms of reference were

completed during the year.

1 The Financial Reporting Council has asked us to draw readers’ attention to the fact that the review was based solely on the annual report and accounts and did

not benefit from detailed knowledge of the Company’s business or an understanding of the underlying transactions entered into. It was, however, conducted by

staff of the FRC who have an understanding of the relevant legal and accounting framework.

36 Schroder Oriental Income Fund Limited

Audit and Risk Committee Report

continued

Application during the year

Risks and Internal Controls Financial Reporting Audit

Principal and emerging risks

Reviewed the principal and emerging risks

faced by the Company and the systems,

processes and oversight in place to

manage and mitigate them.

Valuation and existence of holdings

Ensured that portfolio holdings and

assurance reports were reviewed by the

Board.

Meetings with the auditors

Met the auditors without representatives

of the Manager present. Representatives

of the auditors attended the committee

meeting at which the draft annual report

and accounts were considered.

Internal controls and risk mitigation

Consideration of several key aspects of

internal control and risk management

operating within the Manager, depositary

and registrar, including assurance reports.

Calculation of the investment

management fee and performance fee

Consideration of the methodology

used to calculate the fees, matched

against the criteria set out in the AIFM

agreement.

Auditors’ independence

PricewaterhouseCoopers CI LLP were

appointed as auditors on 25 May 2018. The

auditors are required to rotate the senior

statutory auditor every ve years. There are

no contractual obligations restricting the

choice of external auditors.

Following the company becoming tax

resident in the UK on 1 September 2020,

PricewaterhouseCoopers CI LLP resigned

& PricewaterhouseCoopers LLP was

appointed as auditors to the company to

enable a smoother more ecient audit

process and therefore reduce costs to

Shareholders.

The Company is compliant with the

provisions of the September 2014

Competition and Markets Authority Order,

which requires that FTSE 350 companies

put their audit out to tender at least every

ten years.

Service provider control reviews

Reviewed the operational controls

maintained by the Manager, depositary

and registrar in July 2023 at an annual

review meeting. Received quarterly reports

covering the operation of the service

providers.

Recognition of investment income

Considered dividends received against

forecast and the allocation of special

dividends to income or capital.

Effectiveness of the independent audit

process and auditors performance

Evaluated the eectiveness of the

independent audit rm and process prior

to making a recommendation that it should

be re-appointed at the forthcoming AGM.

Evaluated the auditors’ performance against

agreed criteria including: qualication;

knowledge, expertise and resources;

independence policies; eectiveness of

audit planning; adherence to auditing

standards; and overall competence;

alongside feedback from the Manager on

the audit process. Assessed all relationships

with the auditors and received conrmation

from the auditors that they remained

independent and that it had implemented

policies and procedures to meet the

requirements of the Auditing Practices

Board’s Ethical Standards. The Committee

is therefore satised that the auditors are

independent. Professional scepticism of the

auditors was questioned and the committee

was satised with the auditors’ replies.

Schroder Oriental Income Fund Limited 37

Strategic report

Governance Financial

Introduction

Other information (unaudited)

Significant issues that the committee considered in relation to the financial statements, and how these issues were addressed, are outlined

below.

Application during the year

Risks and Internal Controls Financial Reporting Audit

Compliance with the investment

trust qualifying rules in S1158 of the

Corporation Tax Act 2010

Consideration of the Manager’s report

conrming compliance.

Overall accuracy of the annual report

and accounts

Consideration of the draft annual report

and accounts and the letter from the

Manager in support of the letter of

representation to the auditors.

Audit results

Met with and reviewed a comprehensive

report from the auditors which detailed

the results of the audit, compliance with

regulatory requirements, safeguards that

have been established, and on their own

internal quality control procedures.

Internal audit

Considered the need for an internal audit

function and concluded that this would not

be appropriate, given the Company’s size

and outsourced business model.

Fair, balanced and understandable

Reviewed the annual report and accounts

to ensure that it was fair, balanced and

understandable.

Provision of non-audit services by the

auditors

The committee has reviewed the FRC’s

Guidance on Audit Committees and has

formulated a policy on the provision of non-

audit services by the Company’s auditors.

The committee has determined that the

Company’s appointed auditors will not

be considered for the provision of certain

non-audit services, such as accounting and

preparation of the nancial statements,

internal audit and custody. The auditors

may, if required, provide other non-audit

services which will be judged on a case-by-

case basis.

The auditors did not provide any non audit

services to the Company during the year.

Going concern and viability

Reviewed the impact of risks on going

concern and longer-term viability, as

described further on pages 26 and 27.

Consent to continue as auditors

PricewaterhouseCoopers LLP has indicated

to the committee their willingness to

continue to act as auditors.

Recommendations made to, and approved by, the Board:

As a result of the work performed, the committee has concluded that the annual report for the year ended 31 August 2023, taken as a

whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company’s position,

performance, business model and strategy, and has reported on these findings to the Board. The Board’s conclusions in this respect are

set out in the Statement of Directors’ Responsibilities on page 44.

Having reviewed the performance of the auditors as described above, the committee considered it appropriate to recommend the firm’s

re-appointment. Resolutions to re-appoint PricewaterhouseCoopers LLP as auditors to the Company, and to authorise the Directors to

determine their remuneration will be proposed at the AGM.

Alexa Coates

Audit and Risk Committee chair

8 November 2023

38 Schroder Oriental Income Fund Limited

Management Engagement Committee Report

The Management Engagement Committee is responsible for (1) the monitoring and oversight of the Manager’s performance and fees, and

confirming the Manager’s ongoing suitability, and (2) reviewing and assessing the Company’s other service providers, including reviewing

their fees. All directors are members of the committee. Paul Meader is the chair of the committee. Its terms of reference are available on the

Company’s webpages, www.schroders.co.uk/orientalincome.

Approach

Oversight of the Manager Oversight of other service providers

The committee:

• reviews the Manager’s performance, over the short and long

term, against the reference index, peer group and the market;

• considers the reporting it has received from the Manager

throughout the year, and the reporting from the Manager to the

Shareholders;

• assesses management fees on an absolute and relative basis,

receiving input from the Company’s broker, including peer group

and industry figures, as well as the structure of the fees;

• reviews the appropriateness of the Manager’s contract, including

terms such as notice period.

• visits the Manager’s Asian and London offices periodically to

meet with relevant investment and controls functions; and

• assesses if the Company receives appropriate administrative,

accounting, company secretarial and marketing support from

the Manager.

The committee reviews the performance and competitiveness of

the following service providers on at least an annual basis:

• Safekeeping agent

• Corporate broker

• Registrar

• Lender

The committee also receives a report from the Company

Secretary on ancillary service providers, and considers any

recommendations.

The committee noted the Audit and Risk Committee’s review of

the auditors.

Application during the year

The committee met with senior management, as well as

representatives from various business functions supporting the

portfolio manager, including in the Manager’s teams based in

Hong Kong and Taiwan.

The committee undertook a detailed review of the Manager’s

performance and agreed that it has the appropriate depth and

quality of resource to deliver superior returns over the longer

term.

The committee also reviewed the terms of the AIFM agreement

and agreed they remained t for purpose.

The committee conducted a detailed review of each of the

Company’s key service providers, including their anti-modern

slavery, anti-bribery, sustainability, diversity and inclusion policies,

and concluded that their continued appointment was appropriate.

The committee noted that the Audit and Risk Committee had

undertaken a detailed evaluation of the Manager, registrar, and

safekeeping agents’ internal controls.

Recommendations made to, and approved by, the Board:

• That the ongoing appointment of the Manager on the terms of the AIFM agreement was in the best interests of Shareholders as a

whole.

• That the Company’s service providers’ performance remained satisfactory.

Schroder Oriental Income Fund Limited 39

Nomination and Remuneration Committee Report

Strategic report

Governance Financial

Introduction

Other information (unaudited)

Selection

Annual

review of

succession

policy

Annual

evaluation

Application

of succession

policy

Induction

The Nomination and Remuneration Committee is responsible for (1) the recruitment, selection, induction and remuneration of all directors,

(2) their assessment during their tenure, and (3) the Board’s succession. All directors are members of the committee. Nick Winsor is the chair of

the committee. Its terms of reference are available on the Company’s webpages, www.schroders.co.uk/orientalincome.

Approach

Selection and induction Board evaluation and directors’ fees Succession

• Committee prepares a job specification

for each role. Proposals are sought

from independent search firms, which

are evaluated by the Board and a firm

selected.

• Such a specification is prepared for the

chairman and the chairs of committees,

the committee also considers current

board members.

• Job specification outlines the knowledge,

professional skills, personal qualities and

experience requirements.

• A search firm sources a long list of

potential candidates, who are assessed

against the job specification.

• Committee discusses the long list, invites

a number of candidates for interview

and makes a recommendation to the

Board.

• Committee reviews the induction and

training of new directors.

• Committee assesses each director

annually.

• Evaluation focuses on whether each

director continues to demonstrate

commitment to their role and provides

a valuable contribution to the Board

during the year, taking into account time

commitment, independence, conflicts

and training needs.

• Following the evaluation, the committee

provides a recommendation to

Shareholders with respect to the annual

re-election of directors at the AGM.

• Committee reviews directors’ fees,

taking into account comparative data

and reports to Shareholders in the

remuneration report.

• Proposed changes to the remuneration

policy for directors are discussed and

then reported to Shareholders.

• The Board’s succession policy is that

directors’ tenure will be for no longer

than nine years, except in exceptional

circumstances, and that each director

will be subject to annual re-election at

AGMs.

• Committee reviews the Board’s current

and future needs at least annually.

Should any need be identified, the

committee will initiate the selection

process.

• Committee oversees the handover

process for retiring directors.

For application see page 40

40 Schroder Oriental Income Fund Limited

Nomination and Remuneration Committee Report

continued

Application during the year

Selection and induction

Board evaluation and directors’

fees Succession

• In anticipation of Ms Kate Cornish

Bowden’s departure, the committee

discussed the need to appoint a suitable

replacement.

• A skills matrix for the Board was

reviewed and a job specification was

agreed for the role.

• Search firms were approached to

provide suitable proposals.

• The Board evaluation, including

evaluation of its committees, was

undertaken between April and

August 2023.

• The committee also reviewed each

director’s time commitment and

independence by reviewing a complete

list of appointments, including pro bono

not for profit roles, to ensure that each

director remained free from conflict and

had sufficient time available to discharge

each of their duties effectively.

• The committee considered each

director’s contributions, and noted that

in addition to extensive experience

as professionals and non-executive

directors, each director had valuable

skills and experience, as detailed in their

biographies on pages 30 and 31.

• All directors were considered to

be independent in character and

judgement.

• Based on its assessment, the committee

provided individual recommendations

for each directors’ re-election.

• The committee reviewed directors’

fees, using external benchmarking, and

recommended an increase in directors’

fees, as detailed in the remuneration

report.

• The committee reviewed the succession

policy and agreed it was still fit for

purpose.

• As announced by the Company on

3 August 2023, Ms Kate Cornish

Bowden has advised the Board that

she will resign on 17 November as

a director of the Company prior to

Schroders’ appointment as the AIFM of

International Biotechnology Trust plc,

of which she is Chair. The Board has

initiated a selection process.

Recommendations made to, and approved by, the Board:

• That all directors continue to demonstrate commitment to their roles, provide a valuable contribution to the deliberations of the Board,

contribute towards the Company’s long-term success, and remain free from conflicts with the Company and its directors, so should all

be recommended for re-election by Shareholders at the AGM, noting that Ms Cornish-Bowden has advised the Board that she does

not intend to stand for re-election.

• That directors’ fees per annum be increased to the following levels effective from 1 September 2023: chairman £50,000, Audit and Risk

Committee chair: £45,000 and other directors: £40,000, with the senior independent director to receive an additional £2,000.

Schroder Oriental Income Fund Limited 41

Directors’ Remuneration Report

Strategic report

Governance Financial

Introduction

Other information (unaudited)

Introduction

The following remuneration policy is currently in force and is subject

to a binding vote every three years. The next vote will take place at

the forthcoming AGM and the current policy provisions will apply

until that date. The below directors’ annual report on remuneration is

subject to an annual advisory vote. An ordinary resolution to approve

this report will be put to Shareholders at the forthcoming AGM.

At the AGM held on 11 December 2020 when the policy was last

voted on by Shareholders, 99.69% of the votes cast (including

votes cast at the chairman’s discretion) in respect of approval of

the directors’ remuneration policy were in favour, while 0.31% were

against. 112,388 votes were withheld.

At the AGM held on 6 December 2022, 99.81% of the votes cast

(including votes cast at the chairman’s discretion) in respect of

approval of the directors’ remuneration report for the year ended

31 August 2022 were in favour, while 0.17% were against. 33,468

votes were withheld.

Directors’ remuneration policy

The determination of the directors’ fees is a matter dealt with by the

Nomination and Remuneration Committee and the Board.

It is the Nomination and Remuneration Committee’s policy to

determine the level of directors’ remuneration having regard to

amounts payable to non-executive directors in the industry generally,

the role that individual directors fulfil in respect of Board and

committee responsibilities, and time committed to the Company’s

affairs, taking into account the aggregate limit of fees set out in the

Company’s articles of incorporation (currently £300,000). Any increase

in the level set out therein requires approval by the Board and the

Company’s Shareholders.

The chairman of the Board, the chair of the Audit and Risk Committee,

and the senior independent director each receives fees at a higher

rate than the other directors to reflect their additional responsibilities.

The fees payable to directors are not performance related. They are

set at a level to recruit and retain individuals of sufficient calibre,

with the level of knowledge, experience and expertise necessary to

promote the success of the Company in reaching its short and long-

term strategic objectives.

The Board and its committees exclusively comprise non-executive

directors. No director past or present has an entitlement to a pension

from the Company, and the Company has not, and does not intend

to, operate a share scheme for directors or to award any share

options or long-term performance incentives to any director. No

director has a service contract with the Company, although directors

have a letter of appointment. Directors do not receive exit payments

and are not provided with any compensation for loss of office. No

other payments are made to directors other than the reimbursement

of reasonable out-of-pocket expenses incurred in attending to the

Company’s business.

Implementation of policy

The terms of directors’ letters of appointment are available for

inspection at the Company’s registered office address during normal

business hours and during the AGM at the location of such meeting.

The Board did not seek the views of Shareholders in setting this

remuneration policy. Any comments on the remuneration policy

received from Shareholders would be considered on a case-by-case

basis.

As the Company does not have any employees, no employee pay

and employment conditions were taken into account when setting

this remuneration policy and no employees were consulted in its

construction.

Directors’ fees are reviewed annually and take into account research

from third parties on the fee levels of directors of peer group

companies, as well as industry norms and factors affecting the time

commitment expected of the directors. New directors are subject to

the provisions set out in this remuneration policy.

Directors’ annual report on remuneration

This report sets out how the remuneration policy was implemented

during the year ended 31 August 2023.

42 Schroder Oriental Income Fund Limited

Directors’ Remuneration Report

continued

Remuneration Report for the year ended 31August 2023

Fees paid to directors

The following amounts were paid by the Company to directors for their services in respect of the year ended 31 August 2023 and the preceding

financial year. Directors’ remuneration is all fixed; they do not receive any variable remuneration. The performance of the Company over the

financial year is presented on page 13.

Fees Taxable benets

Total Change over year ended 31 August

Director

2023

2022

2023

2022

2023

2022

2023

2022

2021

Paul Meader 47,000 45,000 2,254 3,127 49,254 48,127 2.3 13.9 20.7

Alexa Coates 42,000 40,000 119 563 42,119 40,563 3.8 1.4 0.0

Kate Cornish-Bowden 37,000 35,000 109 467 37,109 35,467 4.6 1.3 0.0

lsabel Liu

37,000 28,839 275 356 37,275 29,195 27.7 n/a n/a

Nick Winsor 37,000 35,000 109 467 37,109 35,467 4.6 1.3 n/a

Total 200,000 183,839 2,866 4,980 202,866 188,819

1 Comprise amounts reimbursed for expenses incurred in carrying out business for the Company, and which have been grossed up to include PAYE and NI

contributions.

2 Appointed as a director on 4 November 2021.

The information in the above table has been audited.

Consideration of matters relating to directors’ remuneration

Directors’ remuneration was last reviewed by the Board in July 2023. The members of the Board at the time that remuneration levels were

considered were as set out on pages 30 to 31. Information on fees paid to directors of investment trusts managed by Schroders and peer

group companies provided by the Manager and corporate broker was taken into consideration.

Following annual review, the Board agreed that fees should be increased with effect from 1 September 2023 to the following

levels: chairman: £50,000, Audit and Risk Committee chair: £45,000, the senior independent director: £42,000, and other directors: £40,000.

Directors’ fees were last increased from 1 September 2022. The Board will continue to review fee levels on an annual basis.

10year performance of the share price total return versus the MSCI All Countries Pacific

exJapan Index, with net dividends reinvested, in sterling terms

80.0

100.0

120.0

140.0

160.0

180.0

200.0

220.0

240.0

260.0

280.0

300.0

Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19Aug-20Aug-21Aug-22 Aug-23

Share price total return

MSCI All Countries Pacific ex Japan Index with net

dividends reinvested, sterling adjusted

Source: Morningstar. Rebased to 100 at 31 August 2012. The MSCI All Countries Pacific ex Japan Index with net dividends reinvested, sterling adjusted, has been

chosen as an appropriate comparison, as it comprises companies within the Company’s primary investment objective.

Schroder Oriental Income Fund Limited 43

Strategic report

Governance Financial

Introduction

Other information (unaudited)

Expenditure by the Company on remuneration and distributions to Shareholders

The table below compares the remuneration payable to directors to distributions paid to Shareholders during the year under review and the

prior financial year. In considering these figures, Shareholders should take into account the Company’s investment objective.

Year ended

31 August

2023

Year ended

31 August

2022 Change

£000 £000 %

Remuneration payable to Directors 203 189 +7.4

Distributions paid to Shareholders:

Dividends 29,901 27,968

Share buybacks 20,022 17,172

Total distributions paid to Shareholders 49,923 45,140 +10.6

Directors’ share interests

The Company’s articles of incorporation do not require directors to own shares in the Company. The interests of directors, including those of

connected persons, at the beginning and end of the financial year under review are set out below.

Ordinary

of 1p each

31 August

2023

Ordinary

of 1p each

31 August

2022

Paul Meader 11,000 11,000

Alexa Coates 10,000 10,000

Kate Cornish-Bowden 29,000 24,780

Nick Winsor 20,000 20,000

Isabel Liu 17,386 8,918

The information in the above table has been audited. Since the year end, the shares held by Isabel Liu, including those of connected persons,

has increased to 18,634.

Alexa Coates

Director

8 November 2023

44 Schroder Oriental Income Fund Limited

Statement of Directors’ Responsibilities

in respect of the Annual Report and Accounts

The directors are responsible for preparing the financial statements

in accordance with applicable Guernsey law and generally accepted

accounting principles.

Guernsey company law requires the directors to prepare financial

statements for each financial year which give a true and fair view of

the state of affairs of the Company and of the profit or loss of the

Company for that period. In preparing these financial statements, the

directors should:

• select suitable accounting policies, and apply them consistently;

• present information, including accounting policies, in a manner

that provides relevant, reliable, comparable and understandable

information;

• provide additional disclosures when compliance with the specific

requirements in International Financial Reporting Standards

(“IFRS”) as adopted by the European Union is insufficient to

enable users to understand the impact of particular transactions,

other events and conditions on the entity’s financial position and

financial performance;

• state that the Company has complied with IFRS as adopted by the

European Union, subject to any material departures disclosed and

explained in the financial statements;

• prepare the financial statements on the going concern basis

unless it is inappropriate to presume that the Company will

continue in business; and

• make judgements and estimates that are reasonable and

prudent.

The directors are responsible for keeping proper accounting records

that disclose with reasonable accuracy at any time the financial

position of the Company and enable them to ensure that the financial

statements comply with The Companies (Guernsey) Law, 2008 (as

amended). They are also responsible for safeguarding the assets

of the Company and hence for taking reasonable steps for the

prevention and detection of fraud and other irregularities.

Directors’ Statement

Each of the directors, whose names and functions are listed on pages

30 and 31, confirms that, to the best of their knowledge:

• the financial statements, which have been prepared in accordance

with IFRS as adopted by the European Union and with The

Companies (Guernsey) Law, 2008 (as amended) and in accordance

with the requirements set out above, and give a true and fair view

of the assets, liabilities, financial position and the net return of the

Company;

• the Strategic Review includes a fair review of the development and

performance of the business and the position of the Company,

together with a description of the principal risks and uncertainties

that it faces; and

• the Annual Report and Accounts, taken as a whole, are fair,

balanced and understandable and provide the information

necessary for Shareholders to assess the Company’s position and

performance, business model and strategy.

So far as each of the directors are aware, there is no relevant audit

information of which the Company’s auditors are unaware, and each

director has taken all the steps that he or she ought to have taken as

a director in order to make himself or herself aware of any relevant

audit information and to establish that the Company’s auditors is

aware of that information.

On behalf of the Board

Alexa Coates

Director

8 November 2023

Financial

Independent Auditors’ Report 46

Statement of Comprehensive Income 52

Statement of Changes in Equity 53

Balance sheet 54

Cash ow statement 55

Notes to the Accounts 56

Independent Auditors’ Report

to the members of Schroder Oriental Income Fund Limited

Schroder Oriental Income Fund Limited46

Report on the audit of the financial statements

Opinion

In our opinion, Schroder Oriental Income Fund Limited’s financial statements:

• give a true and fair view of the state of the company’s affairs as at 31 August 2023 and of its loss and cash flows for the year then ended;

• have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union;

and

• have been prepared in accordance with the requirements of The Companies (Guernsey) Law, 2008 (as amended).

We have audited the financial statements, included within the Annual report and accounts (the “Annual Report”), which comprise: Balance

Sheet as at 31 August 2023; Statement of Comprehensive Income, Statement of Changes in Equity and Cash Flow Statement for the year

then ended; and the notes to the financial statements, which include a description of the significant accounting policies.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities

under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial 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 remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial

statements in the UK, which includes the Financial Reporting Council’s (“FRC”) Ethical Standard, as applicable to listed public interest entities

in accordance with the requirements of the Crown Dependencies’ Audit Rules and Guidance for market-traded companies, and we have

fulfilled our other ethical responsibilities in accordance with these requirements.

Our audit approach

Overview

Audit scope

• The company is a standalone authorised, closed ended investment company registered in the Bailiwick of Guernsey with its shares listed

on the main market of the London Stock Exchange.

• The company engages Schroder Unit Trusts Limited (the “Manager”) to manage the company’s assets.

• The company engages HSBC Bank plc (the “Custodian”) to carry out duties of safekeeping and cashflow monitoring agent.

• We conducted our audit using information provided by the Manager and Schroder Investment Management Limited (the “Investment

Manager”), as well as HSBC Securities Services (“HSS”) to whom the Manager has delegated the provision of certain administrative

functions.

• We tailored the scope of our audit taking into account the types of investments within the company, the involvement of the third parties

referred to above, the accounting processes and controls, and the industry in which the company operates.

• We obtained an understanding of the control environment in place at both the Manager and HSS, and adopted a fully substantive testing

approach using reports obtained from HSS.

Key audit matters

• Income from and losses on investments

• Valuation and existence of investments at fair value through profit or loss

Materiality

• Overall materiality: £6,482,000 (2022: £7,241,000) based on 1% of net assets.

• Performance materiality: £4,861,000 (2022: £5,430,000).

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial

statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)

identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit;

Schroder Oriental Income Fund Limited 47

Strategic report

Governance Financial

Introduction

Other information (unaudited)

and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon,

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.

This is not a complete list of all risks identified by our audit.

The key audit matters below are consistent with last year.

Key audit matter How our audit addressed the key audit matter

Income from and losses on investments

Refer to the Note 1 Accounting Policies, Note 2 Gains/(losses) on

investments held at fair value through profit or loss, and Note 3

Income.

We focused on the accuracy, occurrence and completeness of

both net capital gains/losses on investments and dividend income.

We assessed the presentation of income in the Statement of

Comprehensive Income in accordance with the requirements of The

Association of Investment Companies’ Statement of Recommended

Practice (the “AIC SORP”).

We assessed and found that the accounting policies implemented

were in accordance with IFRS and the AIC SORP, and that income

(revenue and capital gains and losses on investments) has been

accounted for in accordance with the stated accounting policy.

We understood and assessed the design and implementation of key

controls surrounding income recognition.

Dividend Income

We tested the accuracy of all dividend receipts by agreeing the

dividend rates for investments to independent market data.

We tested occurrence by testing that all dividends recorded in the

year had been declared in the market by investment holdings, and

we traced a sample of dividends received to bank statements.

To test for completeness, we tested that the appropriate dividends

had been received in the year by reference to independent data of

dividends declared for all dividends during the year.

We tested the allocation and presentation of dividend income

between the revenue and capital return columns of the Statement

of Comprehensive Income in line with the requirements set out

in the AIC SORP by determining the reasons behind dividend

distributions.

Gains/losses on investments at fair value through profit

or loss

The gains/losses on investments held at fair value comprise realised

and unrealised gains/losses. For unrealised gains and losses, we

tested the valuation of the portfolio at the year-end, together with

testing the reconciliation of opening and closing investments,

thereby we have assessed the accuracy of the gains/losses

recorded.

We have also verified the occurrence of the gains/losses through

our testing of the existence of investments.

For realised gains/losses, we tested a sample of disposals by

agreeing the proceeds to bank statements in order to verify the

occurrence of the gain/loss. We re-performed the calculation of a

sample of realised gains/losses in order to assess the accuracy of

the gains/losses recorded.

Based on the audit procedures performed and evidence obtained,

we concluded that income from and losses on investments was not

materially misstated.

Valuation and existence of investments at fair value through

profit or loss

Refer to Note 1 Accounting Policies and Note 10 Investments at fair

value through profit or loss.

The investment portfolio at 31 August 2023 comprised listed

equity investments. We focused on the valuation and existence of

investments because investments represent the principal element of

the net asset value as disclosed in the Balance Sheet in the financial

statements.

We tested the valuation of the listed investments by agreeing the

prices used in the valuation to independent third party sources.

We tested the existence of listed investments by agreeing the

holdings to an independent confirmation from the Custodian, as at

31 August 2023.

No material misstatements were identified from this testing.

Independent Auditors’ Report

to the members of Schroder Oriental Income Fund Limited

continued

Schroder Oriental Income Fund Limited48

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give 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 it operates.

The company is a standalone authorised, closed ended investment company that has outsourced the management and safekeeping of

its assets to Schroders and HSBC respectively. The company’s accounting is delegated to the Administrator who maintains the company’s

accounting records and who has implemented controls over those accounting records. We applied professional judgement to determine the

extent of testing required over each balance in the financial statements and obtained our audit evidence which was substantive in nature

from the manager and the administrator.

The impact of climate risk on our audit

In conducting our audit, we made enquiries of the Directors and the Investment Manager to understand the extent of the potential impact

of climate change risk on the company’s financial statements. The Directors and Investment Manager concluded that the impact on the

measurement and disclosures within the financial statements is not material because the company’s investment portfolio is made up of

level 1 quoted securities which are valued at fair value based on market prices. We found this to be consistent with our understanding of the

company’s investment activities. We also considered the consistency of the climate change disclosures included in the Strategic Report with

the financial statements and our knowledge from our audit.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together

with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on

the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate

on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Overall company materiality £6,482,000 (2022: £7,241,000).

How we determined it Approximately 1% of net assets

Rationale for benchmark applied We believe that net assets is the primary measure used by the

shareholders in assessing the performance of the entity, and is a

generally accepted auditing benchmark. This benchmark provides

an appropriate and consistent year on year basis for our audit.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected

misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the

nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our

performance materiality was 75% (2022: 75%) of overall materiality, amounting to £4,861,000 (2022: £5,430,000) for the company financial

statements.

In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and

aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.

We agreed with those charged with governance that we would report to them misstatements identified during our audit above £324,000

(2022: £362,000) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the company’s ability to continue to adopt the going concern basis of accounting included:

• evaluating the directors’ updated risk assessment and considering whether it addressed relevant threats;

• evaluating the directors’ assessment of potential operational impacts, considering their consistency with other available information and

our understanding of the business and assessed the potential impact on the financial statements;

• reviewing the directors’ assessment of the company’s financial position in the context of its ability to meet future expected operating

expenses and debt repayments, their assessment of liquidity as well as their review of the operational resilience of the company and

oversight of key third-party service providers;

• assessing the premium/discount at which the company’s share price trades compared to the net asset value per share; and

• assessing the implication of significant reductions in Net Asset Value (NAV) as a result of market performance on the ongoing ability of

the company to operate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or

collectively, may cast significant doubt on the company’s ability to continue as a going concern for a period of at least twelve months from

when the financial statements are authorised for issue.

Schroder Oriental Income Fund Limited 49

Strategic report

Governance Financial

Introduction

Other information (unaudited)

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of

the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the company’s ability to

continue as a going concern.

In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or

draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to

adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this

report.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report

thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other

information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form

of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information 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 we identify an apparent material inconsistency or material misstatement, we are required to perform procedures

to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. 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 based on these responsibilities.

Corporate governance statement

ISAs (UK) require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the corporate

governance statement relating to the company’s compliance with the provisions of the UK Corporate Governance Code, which the Listing

Rules of the Financial Conduct Authority specify for review by auditors of premium listed companies. Our additional responsibilities with

respect to the corporate governance statement as other information are described in the Reporting on other information section of this

report.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance

statement is materially consistent with the financial statements and our knowledge obtained during the audit, and we have nothing material

to add or draw attention to in relation to:

• The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;

• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an

explanation of how these are being managed or mitigated;

• The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of

accounting in preparing them, and their identification of any material uncertainties to the company’s ability to continue to do so over a

period of at least twelve months from the date of approval of the financial statements;

• The directors’ explanation as to their assessment of the company’s prospects, the period this assessment covers and why the period is

appropriate; and

• The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in operation and

meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any necessary

qualifications or assumptions.

Our review of the directors’ statement regarding the longer-term viability of the company was substantially less in scope than an audit and

only consisted of making inquiries and considering the directors’ process supporting their statement; checking that the statement is in

alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is consistent with the

financial statements and our knowledge and understanding of the company and its environment obtained in the course of the audit.

In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate

governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:

• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the

information necessary for the members to assess the company’s position, performance, business model and strategy;

• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and

• The section of the Annual Report describing the work of the Audit and Risk Committee.

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 for review by the

auditors.

Independent Auditors’ Report

to the members of Schroder Oriental Income Fund Limited

continued

Schroder Oriental Income Fund Limited50

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of Directors’ Responsibilities in respect of the Annual Report and Accounts, the directors are

responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give

a true and fair view. The directors are also responsible for such internal control as they determine 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, the directors are 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 the directors either

intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors’ 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 auditors’ 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 (UK) 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our

responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our

procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations

related to breaches of section 1158 of the Corporation Tax Act 2010, and we considered the extent to which non-compliance might have

a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial

statements such as Section 262 of The Companies (Guernsey) Law, 2008. We evaluated management’s incentives and opportunities for

fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were

related to posting inappropriate journal entries to increase revenue (investment income and capital gains) or to increase net asset value.

Audit procedures performed by the engagement team included:

• discussions with the Manager and the Audit and Risk Committee, including specific enquiry of known or suspected instances of non-

compliance with laws and regulation and fraud where applicable;

• reviewing relevant meeting minutes, including those of the Audit and Risk Committee;

• assessment of the company’s compliance with the requirements of section 1158 of the Corporation Tax Act 2010, including recalculation

of numerical aspects of the eligibility conditions;

• identifying and testing journal entries, in particular any material or revenue-impacting manual journal entries posted as part of the

Annual Report preparation process; and

• designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance

with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not

detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve

deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques.

However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to

target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a

conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/

auditorsresponsibilities. This description forms part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Section 262 of

The Companies (Guernsey) Law, 2008 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any

other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our

prior consent in writing.

Schroder Oriental Income Fund Limited 51

Strategic report

Governance Financial

Introduction

Other information (unaudited)

Other required reporting

The Companies (Guernsey) Law, 2008 exception reporting

Under The Companies (Guernsey) Law, 2008 we are required to report to you if, in our opinion:

• we have not obtained all the information and explanations we require for our audit; or

• proper accounting records have not been kept by the company; or

• the financial statements are not in agreement with the accounting records.

We have no exceptions to report arising from this responsibility.

Colleen Local

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Recognised Auditor

London

8 November 2023

Notes:

a. The maintenance and integrity of the Schroder Oriental Income Fund Limited website is the responsibility of the directors; the work carried out by the

auditor does not involve consideration of these matters and, accordingly, the auditor accepts no responsibility for any changes that may have occurred to

the financial statements since they were initially presented on the website.

b. Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Statement of Comprehensive Income

for the year ended 31August 2023

Schroder Oriental Income Fund Limited52

2023 2022

Note

Revenue

£’000

Capital

£’000

Total

£’000

Revenue

£’000

Capital

£’000

Total

£’000

Losses on investments at fair value through prot or

loss 2 – (55,772) (55,772) – (7,810) (7,810)

Net foreign currency gains/(losses) – 3,262 3,262 – (6,572) (6,572)

Income from investments 3 36,430 386 36,816 39,047 1,448 40,495

Other income 3 142 – 142 24 – 24

Total income/(loss) 36,572 (52,124) (15,552) 39,071 (12,934) 26,137

Management fee 4 (1,935) (2,903) (4,838) (1,545) (3,604) (5,149)

Other administrative expenses 5 (1,130) (3) (1,133) (1,114) (4) (1,118)

Prot/(loss)beforenancecostsandtaxation 33,507 (55,030) (21,523) 36,412 (16,542) 19,870

Finance costs 6 (854) (1,280) (2,134) (161) (376) (537)

Prot/(loss)beforetaxation 32,653 (56,310) (23,657) 36,251 (16,918) 19,333

Taxation 7 (2,254) – (2,254) (2,146) – (2,146)

NetProt/(loss)andtotalcomprehensive

income/(expenses) 30,399 (56,310) (25,911) 34,105 (16,918) 17,187

Earnings/(loss) per share 9 11.81p (21.88) p (10.07) p 12.94p (6.42) p 6.52p

The “Total” column of this statement represents the Company’s Statement of Comprehensive Income, prepared in accordance with IFRS. The

“Revenue and Capital” columns represent supplementary information prepared under guidance set out in the statement of recommended

practice for investment trust companies (the “SORP”) issued by the Association of Investment Companies in July 2022.

The Company does not have any income or expense that is not included in net profit/(loss) for the year. Accordingly the “Net profit/(loss)” for

the year is also the “Total comprehensive income/(expenses)” for the year.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the

year.

The notes on pages 56 to 70 form an integral part of these accounts.

Statement of Changes in Equity

for the year ended 31August 2023

Schroder Oriental Income Fund Limited 53

Strategic report

Governance Financial

Introduction

Other information (unaudited)

Note

capital

£’000

Treasury

reserve

£’000

Capital

redemption

reserve

£’000

Special

reserve

£’000

Capital

reserves

£’000

Revenue

reserve

£’000

Total

£’000

At 31 August 2021 234,347 (9,500) 39 150,374 345,929 30,230 751,419

Repurchase of ordinary shares into

treasury – (16,491) – – – – (16,491)

Net (loss) /prot and total comprehensive

income/(expenses) – – – – (16,918) 34,105 17,187

Dividends paid in the year 8 – – – – – (27,968) (27,968)

At 31 August 2022 234,347 (25,991) 39 150,374 329,011 36,367 724,147

Issue of ordinary shares – – – – – – –

Repurchase of ordinary shares into

treasury – (20,127) – – – – (20,127)

Net (loss) /prot and total comprehensive

income/(expenses) – – – – (56,310) 30,399 (25,911)

Dividends paid in the year 8 – – – – – (29,901) (29,901)

At 31 August 2023 234,347 (46,118) 39 150,374 272,701 36,865 648,208

The notes on pages 56 to 70 form an integral part of these accounts.

Balance Sheet

at 31 August 2023

Schroder Oriental Income Fund Limited54

Note

2023

£’000

2022

£’000

Non current assets

Investments at fair value through prot or loss 10 676,323 750,372

Current assets 11

Receivables 4,271 4,355

Cash and cash equivalents 11,000 14,155

15,271 18,510

Total assets 691,594 768,882

Current liabilities

Payables 12 (43,386) (44,735)

Net assets 648,208 724,147

Equity attributable to equity holders

Share capital 13 234,347 234,347

Treasury share reserve 14 (46,118) (25,991)

Capital redemption reserve 14 39 39

Special reserve 14 150,374 150,374

Capital reserves 14 272,701 329,011

Revenue reserve 14 36,865 36,367

Total equity Shareholders’ funds 648,208 724,147

Net asset value per share 15 256.01p 277.24p

The financial statements on pages 52 to 55 were approved by the Board of Directors on 8 November 2023 and signed on its behalf by:

Alexa Coates

Director

The notes on pages 56 to 70 form an integral part of these accounts.

Registered in Guernsey as a public company limited by shares

Company registration number: 43298

Cash Flow Statement

for the year ended 31August 2023

Schroder Oriental Income Fund Limited 55

Strategic report

Governance Financial

Introduction

Other information (unaudited)

2023

£’000

2022

£’000

Operating activities

(Loss) /prot before nance costs and taxation (21,523) 19,870

Add back net foreign currency (gains) /losses (3,262) 6,572

Losses on investments at fair value through prot or loss 55,772 7,810

Net sales of investments at fair value through prot or loss 20,161 16,211

Decrease in receivables 274 1,032

Increase/(decrease) in payables 10 (5,676)

Overseas taxation paid (2,247) (2,229)

Netcashinowfromoperatingactivitiesbeforeinterest 49,185 43,590

Interest paid (2,168) (509)

Netcashinowfromoperatingactivities 47,017 43,081

Financing activities

Repurchase of ordinary shares into treasury (20,022) (17,172)

Dividends paid (29,901) (27,968)

Net cash outowfromnancingactivities (49,923) (45,140)

Decrease in cash and cash equivalents (2,906) (2,059)

Cash and cash equivalents at the start of the year 14,155 16,147

Eect of foreign exchange rates on cash and cash equivalents (249) 67

Cash and cash equivalents at the end of the year 11,000 14,155

Dividends received during the year amounted to £37,004,000 (2022: £41,682,000) and bond and deposit interest receipts amounted to

£117,000 (2022: £15,000) .

The notes on pages 56 to 70 form an integral part of these accounts.

Notes to the accounts

for the year ended 31 August 2023

Schroder Oriental Income Fund Limited56

1. Accounting Policies

(a) Basis of accounting

The financial statements have been prepared in accordance with The Companies Guernsey Law 2008 and International Financial Reporting

Standards (“IFRS”) , which comprise standards and interpretations approved by the International Accounting Standards Board (“IASB”) ,

together with interpretations of International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards

Board (“IASB”) as adopted by the European Union.

Where consistent with the requirements of IFRS, the directors have sought to prepare the accounts on a basis compliant with presentational

guidance set out in the statement of recommended practice for investment trust companies (the “SORP”) issued by the Association of

Investment Companies in July 2022.

The policies applied in these financial statements are consistent with those applied in the preceding year.

The Company’s share capital is denominated in sterling and this is the currency in which its Shareholders operate and expenses are

generally paid. The Board has therefore determined that sterling is the functional currency and the currency in which the accounts are

presented. Amounts have been rounded to the nearest thousand.

The financial statements have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation

of investments held at fair value through profit or loss. The directors believe that the Company has adequate resources to continue

operating to 30 November 2024, which is at least 12 months from the date of approval of these accounts. In forming this opinion, the

directors have taken into consideration: the controls and monitoring processes in place; the Company’s level of debt and other payables; the

low level of operating expenses, comprising largely variable costs which would reduce pro rata in the event of a market downturn; and that

the Company’s assets comprise cash and readily realisable securities quoted in active markets. In forming this opinion, the directors have

also considered any potential impact of climate change, inflation, high interest rates and the energy crisis on the viability of the Company.

Further details of directors’ considerations regarding this are given in the Chairman’s Statement, Portfolio Managers’ Review, Going Concern

Statement, Viability Statement and under the Principal and emerging risks heading on page 24.

The principal accounting polices adopted are set out below.

(b) Presentation of the Statement of Comprehensive Income

In order to better reflect the activities of an investment company and in accordance with the recommendations of the SORP, supplementary

information has been presented which analyses items in the Statement of Comprehensive Income between those which are income in

nature and those which are capital in nature.

The Company’s business is investing in financial assets with a view to profiting from their total return in the form of income and capital

growth. This portfolio of financial assets is managed and its performance evaluated on a fair value basis, in accordance with a documented

investment objective and information is provided internally on that basis to the Company’s board of directors. Accordingly, investments are

designated upon initial recognition as investments at fair value through profit or loss, and are measured at subsequent reporting dates at

fair value, which are quoted bid market prices for investments traded in active markets.

Investments that are unlisted or not actively traded are valued using a variety of techniques to determine their fair value; all such valuations

are reviewed by both the AIFM’s fair value pricing committee and by the directors.

Investments are recognised and derecognised on the trade date where a purchase or sale is under a contract whose terms require delivery

within a timeframe established by the market concerned.

(d) Accounting for reserves

Gains and losses on sales of investments, including the related foreign exchange gains and losses, are included in the Statement of

Comprehensive Income and in capital reserves within “Gains and losses on sales of investments”. Increases and decreases in the valuation of

investments held at the year end, including the related foreign exchange gains and losses, are included in the Statement of Comprehensive

Income and in capital reserves within “Holding gains and losses on investments”.

Foreign exchange gains and losses on cash and deposit balances are included in the Statement of Comprehensive Income and in capital

reserves within Gains and losses on sales of investments. Unrealised exchange gains and losses on foreign currency loans are included in

the Statement of Comprehensive Income and dealt with in capital reserves within Holding gains and losses on investments.

(e) Repurchases of shares into treasury and subsequent reissues

The cost of repurchasing shares into Treasury is debited to “Treasury share reserve”. The sales proceeds of Treasury shares reissued are

credited back to Treasury share reserve until the debit balance on that reserve is extinguished and thereafter to capital reserves.

Schroder Oriental Income Fund Limited 57

Strategic report

Governance Financial

Introduction

Other information (unaudited)

1. Accounting Policies continued

(f) Income

Dividends receivable from equity shares are included in revenue on an ex-dividend basis except where, in the opinion of the board, the

dividend is capital in nature, in which case it is included in capital.

Income from fixed interest debt securities is recognised using the effective interest method.

Deposit interest outstanding at the year end is calculated and accrued on a time apportionment basis using market rates of interest.

(g) Expenses

All expenses are accounted for on an accruals basis. Expenses are allocated wholly to revenue with the following exceptions:

– The management fee is allocated 40% to revenue and 60% to capital in line with the board’s expected long-term split of revenue and

capital return from the Company’s investment portfolio.

– Any performance fee is allocated 100% to capital.

– Expenses incidental to the purchase or sale of investments are charged to capital. These expenses are commonly referred to as

transaction costs and mainly comprise brokerage commission. Details of transaction costs are given in note 10 on page 61.

(h) Finance costs

Finance costs, including any premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in

profit or loss using the effective interest method.

Finance cost are allocated 40% to revenue and 60% to capital in line with the board’s expected long-term split of revenue and capital return

from the Company’s investment portfolio.

(i) Other financial assets and liabilities

Cash and cash equivalents may comprise cash and demand deposits which are readily convertible to a known amount of cash and are

subject to insignificant risk of changes in value. Other receivables are non interest bearing, short-term in nature and are accordingly stated

at nominal value as reduced by appropriate allowances for estimated irrecoverable amounts.

Interest bearing bank loans are initially recognised at cost, being the proceeds received net of direct issue costs, and subsequently at

amortised cost.

(j) Taxation

The taxation charge is the total of both current taxation and deferred taxation.

Current taxation comprises of the tax withheld at the source on foreign income, with adjustments for any amounts recoverable under tax

treaties. The taxation is recorded in the revenue section of the Statement of Comprehensive Income, except when it pertains to capital

related items where it will be accounted for in the capital section of the statement.

Deferred taxation represents the taxation liability or asset arising from anticipated variations in the treatment of items for accounting

purposes compared to tax purposes. The calculation is based on tax rates that have been officially approved or are highly likely for the

period when the tax becomes payable. Deferred tax assets are recognised when there is an expectation of having future taxable profits.

(k) Foreign currency

The results and financial position are expressed in sterling. Transactions in currencies other than sterling are recorded at the rates of

exchange prevailing on the dates of the transaction. At each balance sheet date, monetary items and non monetary assets and liabilities

that are denominated in foreign currencies are retranslated at the rates prevailing at 1600 hours on the balance sheet date. Gains or losses

arising on translation are included in net profit or loss for the year and presented as revenue or capital as appropriate.

(l) New and amended accounting standards

At the date of authorisation of these financial statements there are no new or revised Standards or Interpretations, which are in issue but

which are not yet effective, which the board expects to have any significant effect on the Company’s accounts.

(m) Significant accounting judgments, estimates and assumptions

Other than the directors’ assessment of going concern, no significant judgements, estimates or assumptions have been required in the

preparation of these financial statements in accordance with IFRS.

(n) Dividends payable to Shareholders

Interim dividends to Shareholders are recorded in the Financial Statements when paid.

Notes to the accounts

continued

Schroder Oriental Income Fund Limited58

2. Gains/(losses) on investments held at fair value through profit or loss

2023

£’000

2022

£’000

Gains/(losses) on sales of investments based on historic cost 20,618 (923)

Amounts recognised in investment holding losses in the previous year in respect of

investments sold in the year (24,198) (2,532)

Losses on sales of investments based on the carrying value at the previous balance sheet date (3,580) (3,455)

Net movement in investment holding losses (52,192) (4,355)

Losses on investments held at fair value through prot or loss (55,772) (7,810)

3. Income

2023

£’000

2022

£’000

Income from investments:

Overseas dividends 36,430 39,047

Other income:

Deposit interest 142 24

Total income 36,572 39,071

Capital:

Special dividend allocated to capital 386 1,448

4. Management fee

2023 2022

Revenue

£’000

Capital

£’000

Total

£’000

Revenue

£’000

Capital

£’000

Total

£’000

Management fee 1,935 2,903 4,838 1,545 3,604 5,149

The basis for calculating the investment management fee and any performance fee is set out in the Directors’ Report on pages 32 and 33.

With effect from 1 September 2022, the board determined that the management fee will be allocated 40% to revenue and 60% to capital

in line with the board’s expected long-term split of revenue and capital return from the Company’s investment portfolio. Prior to this date,

these expenses had been allocated 30% to revenue and 70% to capital.

5. Other administrative expenses

2023 2022

Revenue

£’000

Capital

£’000

Total

£’000

Revenue

£’000

Capital

£’000

Total

£’000

Administration expenses 717 3 720 722 4 726

Directors’ fees 203 – 203 189 – 189

Secretarial fee 150 – 150 150 – 150

Auditors’ remuneration for audit services

60 – 60 53 – 53

1,130 3 1,133 1,114 4 1,118

No amounts are payable to the auditor for non-audit services

6. Finance costs

2023 2022

Revenue

£’000

Capital

£’000

Total

£’000

Revenue

£’000

Capital

£’000

Total

£’000

Interest on bank loans and overdrafts 854 1,280 2,134 161 376 537

With effect from 1 September 2022, the board determined that the finance costs will be allocated 40% to revenue and 60% to capital in line

with the board’s expected long-term split of revenue and capital return from the Company’s investment portfolio. Prior to this date, these

expenses had been allocated 30% to revenue and 70% to capital.

Schroder Oriental Income Fund Limited 59

Strategic report

Governance Financial

Introduction

Other information (unaudited)

7. Taxation

(a) Analysis of tax charge for the year

2023 2022

Revenue

£’000

Capital

£’000

Total

£’000

Revenue

£’000

Capital

£’000

Total

£’000

Irrecoverable overseas tax 2,254 – 2,254 2,146 – 2,146

Taxation for the year 2,254 – 2,254 2,146 – 2,146

The Company became resident in the United Kingdom for tax taxation purposes, with effect from 1 September 2020. The Company has no

corporation tax liability for the year ended 31 August 2023 (2022: the same) .

(b) Factors affecting tax charge for the year

The tax assessed for the year ended 31 August 2023 is higher (2022: lower) than the Company’s applicable rate of corporation tax for that

year of 21.5% (2022:19%) .

The factors affecting the tax charge for the year are as follows:

2023 2022

Revenue

£’000

Capital

£’000

Total

£’000

Revenue

£’000

Capital

£’000

Total

£’000

Net return/(loss) before taxation 32,653 (56,310) (23,657) 36,251 (16,918) 19,333

Net return/(loss) before taxation multiplied by

the Company’s applicable rate of corporation

tax for the year of 21.5% (2022:19%)

7,020

(12,107)

(5,087)

6,888

(3,215)

3,673

Eects of:

Capital losses on investments – 11,290 11,290 – 2,732 2,732

Revenue not chargeable to corporation tax (6,917) (83) (7,000) (6,406) (275) (6,681)

Expenses disallowed – 1 1 – 1 1

Unrelieved expenses – 899 899 – 316 316

Marginal Tax Relief – – – (267) 267 –

Double Tax Relief (103) – (103) (215) 174 (41)

Irrecoverable overseas tax 2,254 – 2,254 2,146 – 2,146

Taxation for the year 2,254 – 2,254 2,146 – 2,146

The Company has an unrecognised deferred tax asset of £3,713,000 (2022: £2,745,000) based on a main rate of corporation tax of 25%. In

its 2020 budget, the UK government announced that the main rate of corporation tax would increase to 25% for the fiscal year beginning on

1 April 2023.

The deferred tax asset has arisen due to the excess of deductible expenses over taxable income. Given the composition of the Company’s

portfolio, it is not likely that this asset will be utilised in the foreseeable future and therefore no asset has been recognised in the accounts.

The Company was granted status as an investment trust company by HMRC effective from 1 September 2020, and intends to continue to

meet the conditions required to retain that status. Therefore, no provision has been made for deferred UK capital gains tax on any capital

gains or losses arising on the revaluation or disposal of investments.

Notes to the accounts

continued

Schroder Oriental Income Fund Limited60

8. Dividends

(a) Dividends paid and declared

2023

£’000

2022

£’000

2022 fourth interim dividend of 5.60p (2021: 4.80p) 14,527 12,727

First interim dividend of 2.00p (2022: 1.90p) 5,165 5,013

Second interim dividend of 2.00p (2022: 1.90p) 5,124 4,997

Third interim dividend of 2.00p (2022: 2.00p) 5,085 5,231

Total dividends paid in the year 29,901 27,968

2023

£’000

2022

£’000

Fourth interim dividend declared of 5.80p (2022: 5.60p) 14,685 14,627

Under The Companies (Guernsey) Law 2008, the Company may pay dividends out of both capital and revenue reserves, subject to passing

a solvency test. However all dividends paid and declared to date have been paid, or will be paid, out of revenue profits. The Company has

passed the solvency test for all dividends paid to date.

The fourth interim dividend declared in respect of the year ended 31 August 2022 differs from the amount actually paid due to shares

repurchased and cancelled after the balance sheet date but prior to the share register record date.

(b) Dividends for the purposes of Section 1158 of the Corporation Tax Act 2010 (“Section 1158”)

The Company was granted status as an investment trust company by HMRC effective from 1 September 2020, and intends to continue to

meet the minimum distribution requirements of Section 1158, in order to retain that status. Those requirements are considered on the basis

of dividends declared in respect of the financial year as shown below. The revenue available for distribution by way of dividend for the year is

£30,399,000 (2022: £34,105,000) .

2023

£’000

2022

£’000

First interim dividend of 2.00p (2022: 1.90p) 5,165 5,013

Second interim dividend of 2.00p (2022: 1.90p) 5,124 4,997

Third interim dividend of 2.00p (2022: 2.00p) 5,085 5,231

Fourth interim dividend of 5.80p (2022: 5.60p) 14,685 14,627

Total dividends of 11.80p (2022: 11.40p) 30,059 29,868

9. Earnings/(loss) per share

2023

£’000

2022

£’000

Revenue prot 30,399 34,105

Capital loss (56,310) (16,918)

Total (loss) /prot (25,911) 17,187

Weighted average number of Ordinary shares in issue during the year 257,369,408 263,653,736

Revenue earnings per share 11.81p 12.94p

Capital loss per share (21.88) p (6.42) p

Total (loss) /earnings per share (10.07) p 6.52p

Schroder Oriental Income Fund Limited 61

Strategic report

Governance Financial

Introduction

Other information (unaudited)

10. Investments at fair value through profit or loss

2023

£’000

2022

£’000

Opening book cost 621,849 639,015

Opening investment holding gains 128,523 135,410

Opening fair value 750,372 774,425

Analysis of transactions made during the year

Purchases at cost 124,788 130,731

Sales proceeds (143,065) (146,974)

Losses on investments held at fair value through prot or loss (55,772) (7,810)

Closing fair value 676,323 750,372

Closing book cost 624,190 621,849

Closing investment holding gains 52,133 128,523

Closing fair value 676,323 750,372

All investments are listed on a recognised stock exchange.

The Company received £143,065,000 (2022: £146,974,000) from disposal of investments in the year. The book cost of these investments

when they were purchased was £122,447,000 (2022: £147,897,000) . These investments have been revalued over time and until they were

sold any unrealised gains/losses were included in the fair value of the investments.

The following transaction costs, mainly comprising brokerage commissions, were incurred during the year:

2023

£’000

2022

£’000

On acquisitions 114 90

On disposals 221 247

335 337

11. Current assets

Receivables

2023

£’000

2022

£’000

Dividends and interest receivable 3,992 4,207

Securities sold awaiting settlement 199 2

Other receivables 80 146

4,271 4,355

The directors consider that the carrying amount of receivables approximates to their fair value.

Cash and cash equivalents

Cash and cash equivalents comprises bank balances and cash held by the Company, including short-term deposits. The carrying amount of

these represents their fair value. Cash balances in excess of a predetermined amount are placed on short-term deposit at market rates of

interest.

Notes to the accounts

continued

Schroder Oriental Income Fund Limited62

12. Current liabilities

Payables

2023

£’000

2022

£’000

Bank loan 39,459 42,970

Securities purchased awaiting settlement 2,081 –

Repurchase of ordinary shares into treasury awaiting settlement 367 262

Other payables and accruals 1,479 1,503

43,386 44,735

The bank loan comprises US$50 million drawn down on the Company’s £100 million multicurrency credit facility with the Bank of Nova Scotia.

The facility is secured and drawings are subject to covenants and restrictions which are customary for a facility of this nature and all of these

have been complied with.

Further details of the facility are given in note 20(a) ii on page 67.

The bank loan at the prior year end comprised US$50 million drawn down on the Company’s £100 million multicurrency credit facility with

Bank of Nova Scotia.

13. Share capital

2023

£’000

2022

£’000

Ordinary shares of 1p each, allotted, called-up and fully paid:

Opening balance of 261,203,024 (2022: 267,468,024) shares, excluding shares held in treasury 208,356 224,847

Repurchase of 8,010,000 (2022: 6,265,000) shares into treasury (20,127) (16,491)

Subtotal of 253,193,024 (2022: 261,203,024) shares, excluding shares held in treasury 188,229 208,356

18,040,000 (2022: 10,030,000) shares held in treasury 46,118 25,991

Closing balance of 271,233,024 (2022: 271,233,024) shares 234,347 234,347

The ordinary shares rank pari passu, and each share carries one vote in the event of a poll at a general meeting. The Company has authority

to issue an unlimited number of ordinary shares.

During the year, the Company purchased 8,010,000 of its own shares, nominal value £80,100 to hold in treasury for a total consideration of

£20,127,000 representing 3.1% of the shares outstanding at the beginning of the year. The reason for these share purchases was to seek to

manage the volatility of the share price discount to net asset value per share.

Schroder Oriental Income Fund Limited 63

Strategic report

Governance Financial

Introduction

Other information (unaudited)

14. Reserves

Capital reserves

capital

£’000

Treasury

reserve

£’000

Capital

redemption

reserve

£’000

Special

reserve

£’000

Gains and

losses on

sales

investments

£’000

Investment

holding

gains and

losses

£’000

Revenue

reserve

£’000

At 1 September 2022 234,347 (25,991) 39 150,374 202,408 126,603 36,367

Losses on sales of investments based on the carrying

value at the previous balance sheet date – – – – (3,580) – –

Movement in investment holding gains and losses – – – – – (52,192) –

Transfer on disposal of investments – – – – 24,198 (24,198) –

Realised exchange losses on cash and short-term deposits – – – – (249) – –

Exchange gains on foreign currency credit facility – – – – – 3,511 –

Repurchase of ordinary shares into treasury – (20,127) – – – – –

Management fee, nance costs and other expenses

charged to capital – – – – (4,186) – –

Dividends allocated to capital – – – – 386 – –

Dividends paid in the year – – – – – – (29,901)

Net revenue prot for the year – – – – – – 30,399

At 31 August 2023 234,347 (46,118) 39 150,374 218,977 53,724 36,865

Capital reserves

capital

£’000

Treasury

reserve

£’000

Capital

redemption

reserve

£’000

Special

reserve

£’000

Gains and

losses on

sales

investments

£’000

Investment

holding

gains and

losses

£’000

Revenue

reserve

£’000

At 1 September 2021 234,347 (9,500) 39 150,374 205,800 140,129 30,230

Losses on sales of investments based on the carrying

value at the previous balance sheet date – – – – (3,455) – –

Movement in investment holding gains and losses – – – – – (4,355) –

Transfer on disposal of investments – – – – 2,532 (2,532) –

Realised exchange gains on cash and short-term deposits – – – – 67 – –

Exchange losses on foreign currency credit facility – – – – – (6,639) –

Repurchase of ordinary shares into treasury – (16,491) – – – – –

Management fee, nance costs and other expenses

charged to capital – – – – (3,984) – –

Dividends allocated to capital – – – – 1,448 – –

Dividends paid in the year – – – – – – (27,968)

Net revenue prot for the year – – – – – – 34,105

At 31 August 2022 234,347 (25,991) 39 150,374 202,408 126,603 36,367

Under The Companies (Guernsey) Law 2008, the Company may buy back its own shares, or pay dividends, out of any reserves, subject to

passing a solvency test. This test considers whether, immediately after the payment, the Company’s assets exceed its liabilities and whether it

will be able to pay its debts when they fall due.

15. Net asset value per share

2023 2022

Net assets attributable to Shareholders (£’000) 648,208 724,147

Shares in issue at the year end 253,193,024 261,203,024

Net asset value per share 256.01p 277.24p

16. Contingent liabilities and capital commitments

There were no contingent liabilities or capital commitments at the balance sheet date (2022: none) .

Notes to the accounts

continued

Schroder Oriental Income Fund Limited64

17. Transactions with the Manager

The Company has appointed Schroder Unit Trusts Limited (“the Manager”) , a wholly owned subsidiary of Schroders plc, to provide

investment management, accounting, secretarial and administration services. Details of the management and performance fee agreement

are given in the Directors’ Report on pages 32 and 33. The management fee payable in respect of the year amounted to £4,838,000 (2022:

£5,149,000) , of which £1,148,000 (2022: £1,276,000) was outstanding at the year end. The company secretarial fee payable to the Manager

amounted to £150,000 (2022: £150,000) of which £37,500 (2022: £37,500) was outstanding at the year end. No performance fee is payable in

respect of the year (2022: nil was payable and outstanding at the year end) .

If the Company invests in funds managed or advised by the Manager or any of its associated companies, any fee earned by the Manager

from those funds is deducted from the management fee payable by the Company. There have been no such investments during the current

or comparative year.

18. Related Party transactions

Details of the remuneration payable to Directors are given in the Directors’ Remuneration Report on page 42 and details of directors’

shareholdings are given in the Directors’ Remuneration Report on page 41. Details of transactions with the Manager are given in note 17

above. There have been no other transactions with related parties during the year (2022: nil) .

19. Disclosures regarding financial instruments measured at fair value

The Company’s portfolio of investments, which may comprise investments in equities, equity linked securities, government bonds and

derivatives, are carried in the balance sheet at fair value. Other financial instruments held by the Company may comprise amounts due to or

from brokers, dividends and interest receivable, accruals, cash at bank and drawings on the credit facility.

For these instruments, the balance sheet amount is a reasonable approximation of fair value.

The investments are categorised into a hierarchy comprising the following three levels:

Level 1 – valued using quoted prices in active markets.

Level 2 – valued by reference to valuation techniques using observable inputs other than quoted market prices included within Level 1.

Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data.

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value

measurement of the relevant asset.

Details of the valuation techniques used by the Company are given in note 1(c) on page 56.

At 31 August 2023, the Company’s investment portfolio was categorised as follows:

2023

Level 1

£’000

Level 2

£’000

Level 3

£’000

Total

£’000

Investments in equities and equity linked securities 658,116 18,207 – 676,323

Total 658,116 18,207 – 676,323

Level 2 investments comprise one holding in Midea Group warrants 08/07/2024. There were no transfers between Levels 1, 2 or 3 during the

year ended 31 August 2023.

2022

Level 1

£’000

Level 2

£’000

Level 3

£’000

Total

£’000

Investments in equities and equity linked securities 730,624 19,748 – 750,372

Total 730,624 19,748 – 750,372

Level 2 investments comprise one holding in Midea Group warrants 21/06/2023. There were no transfers between Levels 1, 2 or 3 during the

year ended 31 August 2022.

Schroder Oriental Income Fund Limited 65

Strategic report

Governance Financial

Introduction

Other information (unaudited)

20. Financial instruments’ exposure to risk and risk management policies

The Company’s investment objective is to provide a total return for investors primarily through investments in equities and equity-related

investments, of companies which are based in, or which derive a significant proportion of their revenues from, the Asia Pacific region and

which offer attractive yields. In pursuing this objective, the Company is exposed to a variety of risks that could result in a reduction in the

Company’s net assets. These risks include market risk (comprising currency risk, interest rate risk and market price risk) , liquidity risk and

credit risk. The directors’ policy for managing these risks is set out below. The board coordinates the Company’s risk management policy.

The objectives, policies and processes for managing the risks and the methods used to measure the risks that are set out below, have not

changed from those applying in the comparative year.

The Company’s classes of financial instruments are as follows:

– investments in equities and equity-related securities of companies in the Asia Pacific region which are held in accordance with the

Company’s investment objective;

– short-term receivables, payables and cash arising directly from its operations; and

– a multicurrency credit facility with Bank of Nova Scotia, the purpose of which is to assist in financing the Company’s operations.

(a) Market risk

The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This

market risk comprises three elements – currency risk, interest rate risk and market price risk. Information to enable an evaluation of the

nature and extent of these three elements of market risk is given in parts (i) to (iii) of this note, together with sensitivity analysis where

appropriate. The board reviews and agrees policies for managing these risks and these policies have remained unchanged from those

applying in the comparative year. The Manager assesses the exposure to market risk when making each investment decision and monitors

the overall level of market risk on the whole of the investment portfolio on an ongoing basis.

(i) Currency risk

The majority of the Company’s assets, liabilities and income are denominated in currencies other than sterling, which is the Company’s

functional currency and the presentational currency of the accounts. As a result, movements in exchange rates will affect the sterling value

of those items.

Management of currency risk

The Manager monitors the Company’s exposure to foreign currencies and regularly reports to the board. The Manager measures the risk

to the Company of the foreign currency exposure by considering the effect on the Company’s net asset value and income of a movement in

the rates of exchange to which the Company’s assets, liabilities, income and expenses are exposed. The Company may use foreign currency

borrowings or forward foreign currency contracts to limit the exposure to anticipated changes in exchange rates which might otherwise

affect the value of the portfolio of investments.

Income denominated in foreign currencies is converted into sterling on receipt.

Notes to the accounts

continued

Schroder Oriental Income Fund Limited66

20. Financial instruments’ exposure to risk and risk management policies continued

Foreign currency exposure

The fair value of the Company’s monetary items that have foreign currency exposure at 31 August are shown below. The Company’s

investments (which are not monetary items) have been included separately in the analysis so as to show the overall level of exposure.

2023

Japanese

yen

£’000

Hong Kong

dollars

£’000

Australian

dollars

£’000

Singapore

dollars

£’000

Taiwan

dollars

£’000

Thai

baht

£’000

New

Zealand

dollars

£’000

dollars

£’000

Other

£’000

Total

£’000

Current assets – 991 1,585 1,881 668 143 – 1,213 493 6,974

Current liabilities – (150) (702) (1,380) – – – (39,466) – (41,698)

Foreign currency exposure on

net monetary items – 841 883 501 668 143 – (38,253) 493 (34,724)

Investments at fair value

through prot or loss

13,065 135,215 88,660 98,987 123,753 13,888 3,591 18,207 143,375 638,741

Total net foreign currency

exposure 13,065 136,056 89,543 99,488 124,421 14,031 3,591 (20,046) 143,868 604,017

2022

Japanese

yen

£’000

Hong Kong

dollars

£’000

Australian

dollars

£’000

Singapore

dollars

£’000

Taiwan

dollars

£’000

Thai

baht

£’000

New

Zealand

dollars

£’000

dollars

£’000

Other

£’000

Total

£’000

Current assets 2 1,075 1,096 459 568 150 16 128 555 4,049

Current liabilities – – – – – – – (42,977) – (42,977)

Foreign currency exposure on

net monetary items 2 1,075 1,096 459 568 150 16 (42,849) 555 (38,928)

Investments at fair value

through prot or loss

9,982 153,099 100,532 116,588 148,905 14,878 4,671 19,749 135,370 703,774

Total net foreign currency

exposure 9,984 154,174 101,628 117,047 149,473 15,028 4,687 (23,100) 135,925 664,846

Excluding any stocks priced in sterling.

The above year end amounts are broadly representative of the exposure to foreign currency risk during the current and comparative year.

Foreign currency sensitivity

The following tables illustrate the sensitivity of net profit for the year and net assets with regard to the Company’s monetary financial assets

and financial liabilities and exchange rates. The sensitivity analysis is based on the Company’s monetary currency financial instruments held

at each balance sheet date and assumes a 10% (2022: 10%) appreciation or depreciation in sterling against the currencies to which the

Company is exposed, which is considered to be a reasonable illustration based on the volatility of exchange rates during the year.

If sterling had weakened by 10% this would have had the following effect:

2023

£’000

2022

£’000

Statement of Comprehensive Income – net prot/(loss)

Net revenue prot/(loss) 3,346 3,676

Net capital prot/(loss) (3,562) (3,786)

Net assets (216) (110)

Conversely if sterling had strengthened by 10% this would have had the following effect:

2023

£’000

2022

£’000

Statement of Comprehensive Income – net prot/(loss)

Net revenue prot/(loss) (3,346) (3,676)

Net capital prot/(loss) 3,562 3,786

Net assets 216 110

In the opinion of the directors, the above sensitivity analysis with respect to monetary financial assets and liabilities is broadly representative

of the whole of the current and comparative year. The sensitivity of the Company’s investments to changes in foreign currency exchange

rates is subsumed into market price risk sensitivity on page 68.

Schroder Oriental Income Fund Limited 67

Strategic report

Governance Financial

Introduction

Other information (unaudited)

20. Financial instruments’ exposure to risk and risk management policies continued

(ii) Interest rate risk

Interest rate movements may affect the level of income receivable on cash deposits and the interest payable on variable rate borrowings

when interest rates are re-set.

Management of interest rate risk

Liquidity and borrowings are managed with the aim of increasing returns to Shareholders. The Company’s gearing policy is to limit gearing

to 25% where gearing is defined as borrowings used for investment purposes, less cash, expressed as a percentage of net assets.

The possible effects on cash flows that could arise as a result of changes in interest rates are taken into account when the Company draws

on the credit facility. However, amounts drawn down on this facility are for short-term periods and therefore exposure to interest rate risk is

not significant.

Interest rate exposure

The exposure of financial assets and financial liabilities to floating interest rates, giving cash flow interest rate risk when rates are re-set, is

shown below:

2023

£’000

2022

£’000

Exposure to oating interest rates:

Cash and cash equivalents 11,000 14,155

Other payables: drawings on the credit facility (39,459) (42,970)

Total exposure (28,459) (28,815)

Cash deposits at call, earn interest based on the Sterling Overnight Interest Average (“SONIA”) (2022: SONIA) rates.

The Company has arranged a £100 million credit facility with The Bank of Nova Scotia, effective from 20 July 2023. Interest is payable at the

aggregate of the compounded Risk Free Rate (“RFR”) for the relevant currency and loan period, plus a margin. Amounts are normally drawn

down on the facility for a one month period, at the end of which it may be rolled over or adjusted. At 31 August 2023, the Company had

drawn down US$50.0 million (£39.5 million) for a one month period, at an interest rate of 6.6% per annum.

The above year end amounts are not representative of the exposure to interest rates during the year as the level of cash balances and

drawings on the credit facility have fluctuated. The maximum and minimum net interest rate exposure during the year has been as follows:

2023

£’000

2022

£’000

Maximum interest rate exposure during the year - net debt (36,718) (32,379)

Minimum interest rate exposure during the year - net debt (28,459) (12,713)

Interest rate sensitivity

The following table illustrates the sensitivity of the return after taxation for the year and net assets to a 1.0% (2022: 1.0%) increase or

decrease in interest rates in regards to the Company’s monetary financial assets and financial liabilities. This level of change is considered to

be a reasonable illustration based on observation of current market conditions. The sensitivity analysis is based on the Company’s monetary

financial instruments held at the balance sheet date with all other variables held constant.

2023 2022

1.0% increase

in rate

£’000

1.0% decrease

in rate

£’000

1.0% increase

in rate

£’000

1.0% decrease

in rate

£’000

Statement of Comprehensive Income – net prot

Net revenue prot/(loss) (48) 48 13 (13)

Net capital prot/(loss) (237) 237 (301) 301

Net total prot/(loss) (285) 285 (288) 288

Net assets (285) 285 (288) 288

In the opinion of the Directors, this sensitivity analysis may not be representative of the Company’s future exposure to interest rate changes

due to fluctuations in the level of cash balances and drawings on the credit facility.

Notes to the accounts

continued

Schroder Oriental Income Fund Limited68

20. Financial instruments’ exposure to risk and risk management policies continued

(iii) Market price risk

Market price risk includes changes in market prices which may affect the value of the Company’ investments.

Management of market price risk

The Board meets on at least four occasions each year to consider the asset allocation of the portfolio and the risk associated with particular

industry sectors. The investment management team has responsibility for monitoring the portfolio, which is selected in accordance with the

Company’s investment objective and seeks to ensure that individual stocks meet an acceptable risk/reward profile.

Market price risk exposure

The Company’s total exposure to changes in market prices at 31 August comprised the following:

2023

£’000

2022

£’000

Investments at fair value through prot or loss 676,323 750,372

The above data is broadly representative of the exposure to market price risk during the year.

Concentration of exposure to market price risk

An analysis of the Company’s investments is given on page 12. This shows that the portfolio principally comprises investments quoted on

Asian stock markets. Accordingly there is a concentration of exposure to that region. However it should be noted that an investment may not

be entirely exposed to the economic conditions in its country of domicile or of listing.

Market price risk sensitivity

The following table illustrates the sensitivity of the net profit for the year and net assets to an increase or decrease of 20% (2022: 20%) in

the fair values of the Company’s equities. This level of change is considered to be a reasonable illustration based on observation of current

market conditions. The sensitivity analysis is based on the Company’s equities, adjusting for changes in the management fee, but with all

other variables held constant.

2023 2022

20% increase

in fair value

£’000

20% decrease

in fair value

£’000

20% increase

in fair value

£’000

20% decrease

in fair value

£’000

Statement of Comprehensive Income – net prot/(loss)

Net revenue prot/(loss) (379) 379 (315) 315

Net capital prot/(loss) 134,696 (134,696) 149,339 (149,339)

Net total prot/(loss) for the year and net assets 134,317 (134,317) 149,024 (149,024)

(b) Liquidity risk

This is the risk that the Company will encounter difficulty in meeting its obligations associated with financial liabilities that are settled by

delivering cash or another financial asset.

Management of the risk

Liquidity risk is not significant as the Company’s assets comprise mainly readily realisable securities, which can be sold to meet funding

requirements if necessary. Short-term flexibility is achieved through the use of a credit facility.

The Board’s policy is for the Company to remain fully invested in normal market conditions and that the credit facility be used to manage

working capital requirements and to gear the Company as appropriate.

Liquidity risk exposure

Contractual maturities of financial liabilities, based on the earliest date on which payment can be required are as follows:

Three months

or less

2023

£’000

Three months

or less

2022

£’000

Other payables

Bank loan – including interest 39,680 43,086

Securities purchased awaiting settlement 2,081 –

Other payables and accruals 1,479 1,469

43,240 44,555

Schroder Oriental Income Fund Limited 69

Strategic report

Governance Financial

Introduction

Other information (unaudited)

20. Financial instruments’ exposure to risk and risk management policies continued

Credit risk is the risk that the failure of the counterparty to a transaction to discharge its obligations under that transaction could result in

loss to the Company.

Management of credit risk

This risk is managed as follows:

Portfolio dealing

The Company invests almost entirely in markets that operate a “Delivery Versus Payment” settlement process which mitigates the risk

of losing the principal of a trade during settlement. The Manager continuously monitors dealing activity to ensure best execution, which

involves measuring various indicators including the quality of trade settlement and incidence of failed trades. Counterparties must be pre-

approved by the Manager’s credit committee.

The Company may sometimes invest in equity linked securities, such as low exercise price options, warrants, participatory notes and

depositary receipts, which provide synthetic equity exposure where the Company may otherwise find it problematic to invest in the

underlying assets directly. They have the same economic risks as a direct investment, except that there is a counterparty risk to the issuing

investment bank. Counterparties must be approved by the Manager’s Credit Risk Team based on a list of criteria and are monitored on an

ongoing basis by Schroders’ Portfolio Compliance Team.

Exposure to the Custodian

The Custodian of the Company’s assets is HSBC Bank plc which has Long-Term Credit Ratings of AA- with Fitch and A1 with Moody’s.

The Company’s investments are held in accounts which are segregated from the Custodian’s own trading assets. If the Custodian were to

become insolvent, the Company’s right of ownership of its investments is clear and they are therefore protected. However the Company’s

cash balances are all deposited with the Custodian as banker and held on the Custodian’s balance sheet. In accordance with usual banking

practice, the Company will rank as a general creditor to the Custodian in respect of cash balances and open currency contracts.

Credit risk exposure

The following amounts shown in the Balance Sheet, represent the maximum exposure to credit risk at the current and comparative year end.

2023 2022

Balance

sheet

£’000

Maximum

exposure

£’000

Balance

sheet

£’000

Maximum

exposure

£’000

Current assets

Receivables – dividends and interest 3,992 3,992 4,207 4,207

Securities sold awaiting settlement 199 199 2 2

Cash and cash equivalents 11,000 11,000 14,155 14,155

15,191 15,191 18,364 18,364

No items included in “Receivables” are past their due date and none have been provided for.

Notes to the accounts

continued

Schroder Oriental Income Fund Limited70

21. Capital management policies and procedures

The Company’s objectives, policies and processes for managing capital are unchanged from the preceding year.

The Company’s debt and capital structure comprises the following:

2023

£’000

2022

£’000

Debt

Bank loan 39,459 42,970

Equity

Share capital 234,347 234,347

Reserves 413,861 489,800

648,208 724,147

Total debt and equity 687,667 767,117

The Company’s capital management objectives are to ensure that it will continue as a going concern and to maximise total return to its

equity Shareholders through an appropriate level of gearing.

The board’s policy is to limit gearing to 25%. Gearing for this purpose is defined as borrowings used for investment purposes, less cash,

expressed as a percentage of net assets.

2023

£’000

2022

£’000

Borrowings used for investment purposes, less cash 28,459 28,815

Net assets 648,208 724,147

Gearing 4.4% 4.0%

The Board, with the assistance of the Manager, monitors and reviews the broad structure of the Company’s capital on an ongoing basis. This

review includes:

– the planned level of gearing, which takes into account the Manager’s views on the market;

– the need to buy back the Company’s own shares for cancellation or to hold in treasury, which takes into account the share price discount;

– the opportunities for issues of new shares or to reissue shares from treasury; and

– the amount of dividend to be paid, in excess of that which is required to be distributed.

Other

information

(unaudited)

Other Information (unaudited)

Annual General Meeting – Recommendations 72

Notice of Annual General Meeting 73

Explanatory Notes to the Notice of Meeting 74

Definitions of Terms and Performance

Measures 75

Shareholder Information 77

Information about the Company IBC

Schroder Oriental Income Fund Limited72

Annual General Meeting – Recommendations

The Annual General Meeting (“AGM”) of the Company will be held

on Monday, 4 December 2023 at 2.00 pm. The formal Notice of

Meeting is set out on page 73.

The following information is important and requires your immediate

attention. If you are in any doubt about the action you should take,

you should consult an independent financial adviser, authorised

under the Financial Services and Markets Act 2000. If you have sold

or transferred all of your ordinary shares in the Company, please

forward this document with its accompanying form of proxy at once

to the purchaser or transferee, or to the stockbroker, bank or other

agent through whom the sale or transfer was effected, for onward

transmission to the purchaser or transferee.

Ordinary business

Resolutions 1 to 9 are all ordinary resolutions. Resolutions 2 and 3

concern the Directors’ Remuneration Policy and Report, on pages

41 to 43.

Resolutions 4 to 7 invite Shareholders to re-elect each of the

directors standing for re-election for another year, following the

recommendations of the Nomination and Remuneration Committee,

set out on pages 39 to 40 (their biographies are set out on pages

30 and 31). Resolutions 8 and 9 concern the re-appointment and

remuneration of the Company’s auditors, discussed in the Audit and

Risk Committee report on pages 35 to 37.

Special business

Resolution10 – approval of the Company’s dividend policy

(ordinary resolution)

In line with corporate governance best practice the Board is putting

the Company’s dividend policy to Shareholders for approval. No

change to the Company’s dividend policy is proposed at this time.

Resolution11 – authority to make market purchases of the

Company’s own shares (special resolution)

At the AGM held on 4 December 2022, the Company was granted

authority to make market purchases of up to 38,886,762 ordinary

shares for cancellation or holding in treasury. 7,955,000 ordinary

shares were bought back under this authority and the Company

therefore has remaining authority to purchase up to 30,931,762

ordinary shares. This authority will expire at the forthcoming AGM.

The directors believe it is in the best interests of the Company and

its Shareholders to have a general authority for the Company to buy

back its ordinary shares in the market as they keep under review the

share price discount to NAV per share and the purchase of ordinary

shares. A special resolution will be proposed at the forthcoming

AGM to give the Company authority to make market purchases of

up to 14.99% of the ordinary shares in issue as at 7 November 2023

(excluding treasury shares). The directors will exercise this authority

only if the directors consider that any purchase would be for the

benefit of the Company and its Shareholders, taking into account

relevant factors and circumstances at the time. Any shares so

purchased would be cancelled or held in treasury for potential

reissue. If renewed, the authority to be given at the 2023 AGM will

lapse at the conclusion of the AGM in 2024 unless renewed, varied

or revoked earlier.

Resolution12 – disapplication of pre-emption rights

(extraordinary resolution)

The directors are seeking authority to allot a limited number of

unissued ordinary shares for cash without first offering them to

existing Shareholders in accordance with statutory pre-emption

procedures.

An extraordinary resolution will be proposed at the forthcoming

AGM to authorise the directors to allot shares up to a maximum

aggregate nominal amount of £250,973 (being 10% of the issued

share capital ex treasury as at 7 November 2023) and to give the

directors authority to allot securities for cash on a non pre-emptive

basis up to a maximum aggregate nominal amount of £250,973

(being 10% of the Company’s issued share capital ex treasury as at

7 November 2023).

The directors do not intend to allot shares pursuant to these

authorities other than to take advantage of opportunities in the

market as they arise and only if they believe it to be advantageous

to the Company’s existing Shareholders to do so and when it should

not result in any dilution of NAV per share. If approved, both of

these authorities will expire at the conclusion of the AGM in 2024

unless renewed, varied or revoked earlier.

Recommendations

The Board considers that the resolutions relating to the above items

of business are in the best interests of Shareholders as a whole.

Accordingly, the Board unanimously recommends to Shareholders

that they vote in favour of the above resolutions and the other

resolutions to be proposed at the forthcoming AGM, as they intend

to do in respect of their own beneficial holdings.

Schroder Oriental Income Fund Limited 73

Strategic report

Governance Financial

Introduction

Notice of Annual General Meeting

Other information (unaudited)

NOTICE is hereby given that the annual general meeting of

Schroder Oriental Income Fund Limited will be held on 4 December

2023 at 2.00 pm at 1 London Wall Place, London EC2Y 5AU to

consider and, if thought fit, to pass the following resolutions, of

which resolutions 1 to 10 will be proposed as ordinary resolutions.

Resolution 11 will be proposed as a special resolution and

resolution 12 will be proposed as an extraordinary resolution:

1. To receive the Directors’ Report and the audited accounts for

the year ended 31 August 2023.

2. To approve the Directors’ Remuneration Policy

3. To approve the Directors’ Remuneration Report for the year

ended 31 August 2023.

4. To approve the re-election of Paul Meader as a director of the

Company.

5. To approve the re-election of Alexa Coates as a director of the

Company.

6. To approve the re-election of Isabel Liu as a director of the

Company.

7. To approve the re-election of Nick Winsor as a director of the

Company.

8. To re-appoint PricewaterhouseCoopers LLP as the Company’s

auditors.

9. To authorise the directors to determine the remuneration of

PricewaterhouseCoopers LLP as auditors to the Company.

10. To approve the Company’s dividend policy as set out on

page 15 of the Annual Report and Accounts.

11. To consider and, if thought fit, to pass the following resolution

as a special resolution:

“That the Company be and is hereby generally and

unconditionally authorised in accordance with section 315 of

The Companies (Guernsey) Law, 2008 (as amended), to make

market purchases of ordinary shares of 1p each in the capital

of the Company (“Share”) at whatever discount the prevailing

market price represents to the prevailing net asset value per

share, provided that:

(a) the maximum number of Shares hereby authorised to be

purchased shall be 37,620,856, representing 14.99% of the

issued share capital (ex treasury) as at 7 November 2023;

(b) the maximum price (exclusive of expenses) which may be

paid for a Share shall not exceed the higher of

(i) 105% of the average of the middle market quotations

for the Shares as taken from the London Stock

Exchange Daily Official List for the five business days

immediately preceding the date of purchase; and

(ii) the higher of the last independent bid and the

highest current independent bid on the London Stock

Exchange;

being the nominal value per Share;

(d) the authority hereby conferred shall expire at the

conclusion of the next annual general meeting of the

Company in 2024 (unless previously renewed, varied or

revoked prior to such date);

(e) the Company may make a contract to purchase Shares

under the authority hereby conferred which will or may

be executed wholly or partly after the expiration of such

authority and may make a purchase of Shares pursuant to

any such contract; and

(f) Any Shares so purchased will be held in treasury or

cancelled.”

12. To consider and, if thought fit pass the following as an

extraordinary resolution:

“That the Board be and is hereby authorised in accordance

with Section 291 of The Companies (Guernsey) Law, 2008

(as amended) to allot ordinary shares for cash and/or sell

treasury shares up to 25,097,302 ordinary shares of 1p each

in aggregate, representing 10% of the share capital in issue

(ex treasury) on 7 November 2023, for cash and the right of

Shareholders to receive a pre-emptive offer in respect of such

ordinary shares shall be excluded pursuant to Article 3.24

of the Company’s articles of incorporation, provided that

this authority shall expire (unless previously renewed, varied

or revoked by the Company in general meeting) from the

conclusion of the annual general meeting of the Company to

be held in 2024 save that the Board may allot ordinary shares

for cash or sell treasury shares after the expiry of this authority

in pursuance of an offer or agreement made by the Company

before such expiry that would or might require ordinary shares

to be allotted or treasury shares to be sold after such expiry.”

By order of the Board

For and on behalf of

Schroder Investment Management Limited

Company Secretary

8 November 2023

PO Box 208

Arnold House

St Julian’s Avenue St Peter Port Guernsey GY1 3NF

Registered number: 43298

Schroder Oriental Income Fund Limited74

Explanatory Notes to the Notice of Meeting

1. An ordinary shareholder entitled to attend and vote at the

meeting is entitled to appoint one or more proxies to attend

and (insofar as permitted by the Company’s articles of

incorporation) to vote instead of him/her.

A proxy need not be a member. A form of proxy is enclosed

for Ordinary Shareholders which should be completed and

returned to the Company’s registrar, care of Computershare

Investor Services PLC, The Pavilions, Bridgwater Road,

Bristol BS99 6ZY, not later than 48 hours before the time fixed

for the meeting. Completion of the proxy will not preclude an

ordinary shareholder from attending and voting in person.

To appoint more than one proxy, an additional proxy form(s)

may be obtained by contacting the Registrar’s helpline

on 0370 707 4040 or you may photocopy this form. Please

indicate in the box next to the proxy holder’s name (see

reverse) the number of shares in relation to which they are

authorised to act as your proxy. Please also indicate by marking

the box provided if the proxy instruction is one of multiple

instructions being given. All forms must be signed and should

be returned together in the same envelope.

2. The biographies of each of the directors offering themselves

for re-election are set out on pages 30 and 31 of the annual

report and accounts for the year ended 31 August 2023.

3. As at 7 November 2023, the Company had 271,233,024

ordinary shares of 1p each in issue (20,260,000 shares were

held in treasury). Accordingly, the total number of voting rights

in the Company on 7 November 2023 was 250,973,024.

4. The Company’s privacy policy is available on its webpages

http://www.schroders.co.uk/orientalincome. Shareholders can

contact Computershare for details of how Computershare

processes their personal information as part of the AGM.

5. The ‘Vote Withheld‘ option overleaf is provided to enable you

to abstain on any particular resolution. 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. Pursuant to Regulation 41 of the Uncertificated Securities

(Guernsey) Regulations 2009, entitlement to attend and vote

at the meeting and the number of votes which may be cast

thereat will be determined by reference to the Register of

Members of the Company at close of business on the day

which is two days before the day of the meeting. Changes to

entries on the Register of Members after that time shall be

disregarded in determining the rights of any person to attend

and vote at the meeting.

7. To appoint one or more proxies or to give an instruction to

a proxy (whether previously appointed or otherwise) via the

CREST system, CREST messages must be received by the

issuer’s agent (ID number 3RA50) not later than 2 working

days (excluding non working days) before the time appointed

for holding the meeting. For this purpose, the time of receipt

will be taken to be the time (as determined by the timestamp

generated by the CREST system) from which the issuer’s agent

is able to retrieve the message. The Company may treat as

invalid a proxy appointment sent by CREST in the circumstances

set out in Regulation 34(1) of the Uncertificated Securities

(Guernsey) Regulations 2009.

Schroder Oriental Income Fund Limited 75

Strategic report

Governance Financial

Introduction

Definitions of Terms and Performance Measures

Other information (unaudited)

The terms and performance measures below are those

commonly used by investment companies to assess values,

investment performance and operating costs. Some of

the financial measures below are classified Alternative

Performance Measures as defined by the European Securities

and Markets Authority, and some numerical calculations are

given for those.

Net asset value (”NAV”) per share

The NAV per share of 256.01p (2022: 277.24p) represents the

net assets attributable to equity Shareholders of £648,208,000

(2022: £724,147,000) divided by the number of shares in issue of

253,193,024 (2022: 261,203,024).

The change in the NAV amounted to -7.7% (2022: -1.3%) over the

year. However this performance measure excludes the positive

impact of dividends paid out by the Company during the year. When

these dividends are factored into the calculation, the resulting

performance measure is termed the “total return”. Total return

calculations and definitions are given below.

Total return

The combined effect of any dividends paid, together with the rise

or fall in the NAV per share or share price. Total return statistics

enable the investor to make performance comparisons between

investment companies with different dividend policies. Any

dividends received by a shareholder are assumed to have been

reinvested in either the assets of the Company at its NAV per share

at the time the shares were quoted ex-dividend (to calculate the

NAV per share total return) or in additional shares of the Company

(to calculate the share price total return).

The NAV total return for the year ended 31 August 2023 is

calculated as follows:

NAV at 31/8/22 277.24p

NAV at 31/8/23 256.01p

Dividend XD date

NAV on

XD date Factor

Cumulative

factor

5.6p 10/11/22 250.92p 1.0223 1.0223

2.0p 26/01/23 286.60p 1.0070 1.0296

2.0p 20/04/23 271.96p 1.0077 1.0370

2.0p 03/08/23 264.36p 1.0076 1.0449

NAV total return, being the closing NAV, multiplied

by the cumulative factor, expressed as a percentage

increase in the opening NAV -3.5%

The NAV total return for the year ended 31 August 2022 is

calculated as follows:

NAV at 31/8/21 280.94p

NAV at 31/8/22 277.24p

Dividend XD date

NAV on

XD date Factor

Cumulative

factor

4.8p 11/11/21 277.66p 1.0173 1.0173

1.9p 27/01/22 279.27p 1.0068 1.0242

1.9p 28/04/22 279.68p 1.0068 1.0312

2.0p 04/08/22 270.27p 1.0074 1.0388

NAV total return, being the closing NAV, multiplied

by the cumulative factor, expressed as a percentage

increase in the opening NAV +2.5%

The share price total return for the year ended 31 August 2023 is

calculated as follows:

Share price at 31/8/22 264.00p

Share price at 31/8/23 244.50p

Dividend XD date

Share price

on XD date Factor

Cumulative

Factor

5.6p 10/11/22 248.00p 1.0226 1.0226

2.0p 26/01/23 277.50p 1.0072 1.0300

2.0p 20/04/23 260.00p 1.0077 1.0379

2.0p 03/08/23 252.50p 1.0079 1.0461

Share price total return, being the closing share price,

multiplied by the cumulative factor, expressed as a

percentage increase in the opening share price -3.1%

The share price total return for the year ended 31 August 2022 is

calculated as follows:

Share price at 31/8/21 271.50p

Share price at 31/8/22 264.00p

Dividend XD date

Share price

on XD date Factor

Cumulative

Factor

4.8p 11/11/21 262.50p 1.0183 1.0183

1.9p 27/01/22 270.00p 1.0070 1.0255

1.9p 28/04/22 262.00p 1.0073 1.0329

2.0p 04/08/22 255.00p 1.0078 1.0410

Share price total return, being the closing share price,

multiplied by the cumulative factor, expressed as a

percentage increase in the opening share price +1.2%

Definitions of Terms and Performance Measures

continued

Schroder Oriental Income Fund Limited76

Discount/premium

The amount by which the share price of an investment trust is

lower (discount) or higher (premium) than the NAV per share.

The discount or premium is expressed as a percentage of the

NAV per share. This metric is useful for investors to compare the

price of a share in the Company with the value of the underlying

assets attributable to it. A premium or discount is generally

the consequence of supply and demand for the shares on the

stock market. The discount at the year end amounted to 4.5%

(2022: discount of 4.8%), as the closing share price at 244.50p

(2022: 264.00p) was lower than the closing NAV of 256.01p

(2022: 277.24p).

Gearing

The gearing percentage reflects the amount of borrowings (i.e.

bank loans or overdrafts) which the Company has drawn down

and invested in the market. An investment trust can borrow money

to invest in additional investments for its portfolio. The effect

of the borrowing on the shareholders’ assets is called ‘gearing’.

If the Company’s assets grow, the shareholders’ assets grow

proportionately more because the debt remains the same. But if

the value of the Company’s assets falls, the situation is reversed.

Therefore, gearing can enhance performance in rising markets

but can also adversely impact performance in falling markets. This

represents borrowings used for investment purposes, less cash,

expressed as a percentage of net assets. The gearing figure at the

year end is calculated as follows:

2023

£’000

2022

£’000

Borrowings used for investment

purposes, less cash 28,459 28,815

Net assets 648,208 724,147

Gearing 4.4% 4.0%

Leverage

For the purpose of the Alternative Investment Fund Managers

(AIFM) Directive, leverage is any method which increases the

Company’s exposure, including the borrowing of cash and the

use of derivatives. It is expressed as the ratio of the Company’s

exposure to its net asset value and is required to be calculated

both on a “Gross” and a “Commitment” method. Under the Gross

method, exposure represents the sum of the absolute values of

all positions, so as to give an indication of overall exposure. Under

the Commitment method, exposure is calculated in a similar way,

but after netting off hedges which satisfy certain strict criteria.

The leverage ratios and limits at 31 August 2023 are presented on

page 71 under Shareholder Information.

Ongoing Charges

Ongoing Charges is calculated in accordance with the AIC’s

recommended methodology and represents the management

fee and all other operating expenses excluding finance costs,

transaction costs and any performance fee payable amounting to

£5,971,000 (2022: £6,267,000), expressed as a percentage of the

average daily net asset values during the year of £678,708,000

(2022: £731,663,000).

Schroder Oriental Income Fund Limited 77

Strategic report

Governance Financial

Introduction

Shareholder Information

Other information (unaudited)

Webpages and share price information

The Company has dedicated webpages, which may be found

at www.schroders.co.uk/orientalincome. The webpages are

the Company’s primary method of electronic communication

with Shareholders. They contain details of the Company’s share

price and copies of the annual report and accounts and other

documents published by the Company as well as information

on the directors, terms of reference of committees and other

governance arrangements. In addition, the webpages contain

links to announcements made by the Company to the market and

Schroders’ website. There is also a section entitled “How to Invest”.

The Company releases its NAV per share on both a cum and

ex-income basis to the market on a daily basis.

Share price information may also be found in the Financial Times

and on the Company’s webpages.

The Manager publishes monthly and quarterly updates on the

Company and other Schroders investment trusts, which may be

found under the “Literature” section on the Company’s webpages.

Association of Investment Companies

The Company is a member of the Association of Investment

Companies. Further information on the Association can be found on

its website, www.theaic.co.uk.

Individual Savings Account (“ISA”) status

The Company’s shares are eligible for stocks and shares ISAs.

Non-Mainstream Pooled Investments status

The Company currently conducts its affairs so that its shares can be

recommended by independent financial advisers to ordinary retail

investors in accordance with the FCA’s rules in relation to non-

mainstream investment products and intends to continue to do so

for the foreseeable future. The Company’s shares are excluded from

the FCA’s restrictions which apply to non-mainstream investment

products because they are shares in an investment trust.

Financial calendar

First interim dividend paid February

Second interim dividend paid May

Half year results announced April/May

Third interim dividend paid August

Financial year end 31 August

Annual results announced November

Fourth interim dividend paid November/December

Annual General Meeting December

Alternative Investment Fund Managers

Directive (“AIFMD”) disclosures

The AIFMD, as transposed into the FCA Handbook in the UK,

requires that certain pre-investment information be made available

to investors in Alternative Investment Funds (such as the Company)

and also that certain regular and periodic disclosures are made.

This information and these disclosures may be found either

below, elsewhere in this annual report, or in the Company’s AIFMD

information disclosure document published on the Company’s

webpages.

Leverage

The Company’s leverage policy and details of its leverage ratio

calculation and exposure limits as required by the AIFMD are

published on the Company’s webpages and within this report. The

Company is also required to periodically publish its actual leverage

exposures. As at 31 August 2023 these were:

Leverage exposure

Maximum

exposure

Actual

exposure

Gross Method 200.0% 112.1%

Commitment Method 200.0% 110.9%

Illiquid assets

As at the date of this report, none of the Company’s assets are

subject to special arrangements arising from their illiquid nature.

Remuneration disclosures

Quantitative remuneration disclosures to be made in this annual

report in accordance with FCA Handbook rule FUND3.3.5 may be

found in the Company’s AIFMD information disclosure document

published on the Company’s webpages.

Publication of Key Information Document

(“KID”) by the AIFM

Pursuant to the Packaged Retail and Insurance Based Investment

Products Regulation, the Manager, as the Company’s AIFM, is

required to publish a short KID on the Company. KIDs are designed

to provide certain prescribed information to retail investors,

including details of potential returns under different performance

scenarios and a risk/reward indicator. The Company’s KID is

available on its webpages.

How to invest

There are a number of ways to easily invest in the Company.

The Manager has set these out at

www.schroders.com/invest-in-a-trust/.

Shareholder Information

continued

Schroder Oriental Income Fund Limited78

Warning to Shareholders

Companies are aware that their shareholders have received

unsolicited telephone calls or correspondence concerning

investment matters. These are typically from overseas-based

‘brokers’ who target UK shareholders, offering to sell them what

often turn out to be worthless or high risk shares or investments.

These operations are commonly known as ‘boiler rooms’. These

‘brokers’ can be very persistent and extremely persuasive.

Shareholders are advised to be wary of any unsolicited advice, offers

to buy shares at a discount or offers of free company reports.

If you receive any unsolicited investment advice:

• Make sure you get the correct name of the person and

organisation

• Check that they are properly authorised by the FCA before

getting involved by visiting register.fca.org.uk

• Report the matter to the FCA by calling 0800 111 6768 or visiting

fca.org.uk/consumers/report-scam-unauthorised-firm

• Do not deal with any firm that you are unsure about

If you deal with an unauthorised firm, you will not be eligible to

receive payment under the Financial Services Compensation

Scheme.

The FCA provides a list of unauthorised firms of which it is aware,

which can be accessed at fca.org.uk/consumers/unauthorised-

firmsindividualslist.

More detailed information on this or similar activity can be found on

the FCA website at fca.org.uk/consumers/protect-yourself-scams.

Dividends

Paying dividends into a bank or building society account helps

reduce the risk of fraud and will provide you with quicker access to

your funds than payment by cheque. Applications for an electronic

mandate can be made by contacting the Registrar. If your dividend

is paid directly into your bank or building society account, you will

receive an annual consolidated dividend confirmation, which will

be sent to you in September each year at the time the interim

dividend is paid. Dividend confirmations are available electronically

at investorcentre.co.uk to those Shareholders who have their

payments mandated to their bank or building society accounts and

who have expressed a preference for electronic communications.

Schroder Oriental Income Fund Limited

Other information (unaudited)

Strategic report

Governance Financial

Introduction

Directors

Paul Meader

Alexa Coates

Kate Cornish-Bowden

Isabel Liu

Nick Winsor

Advisers

Alternative investment fund manager (the

“Manager”)

Schroder Unit Trusts Limited

1 London Wall Place

London

EC2Y 5AU

United Kingdom

Investment Manager and Company Secretary

Schroder Investment Management Limited

1 London Wall Place

London EC2Y 5AU

United Kingdom

Telephone: 020 7658 6596

Registered office

PO Box 208

Arnold House

St Julian’s Avenue

St Peter Port

Guernsey

GY1 3NF

Safekeeping and cashflow

monitoring agent (including custodian)

HSBC Bank plc

8 Canada Square

London E14 5HQ

United Kingdom

Lending bank

The Bank of Nova Scotia

201 Bishopsgate

London EC2M 3NS

United Kingdom

Corporate broker

Deutsche Numis

45 Gresham Street

London EC2V 7BF

United Kingdom

Independent auditors

PricewaterhouseCoopers LLP

7 More London Riverside

London SE1 2RT

Registrar

Computershare Investor Services (Guernsey) Limited

1st Floor

Tudor House Le Bordage

St Peter Port

Guernsey

GY1 1DB

Communications with Shareholders are mailed to the address

held on the register. Any notifications and enquiries relating to

shareholdings, including a change of address or other amendment

should be directed to Computershare Investor Services (Guernsey)

Limited at the address set out above.

Designated administrator

HSBC Securities Services (Guernsey) Limited

Arnold House

St Julian’s Avenue

St Peter Port

Guernsey

GY1 3NF

Shareholder enquiries

General enquiries about the Company should be addressed to the

company secretary at the address set out above.

Dealing codes

ISIN: GB00B0CRWN59

SEDOL: B0CRWN5

Ticker: SOI

Global intermediary identification number (GIIN)

1TVP6A.99999.SL.83

Legal entity identifier (LEI)

5493001U9X6P8SS0PK40

Privacy notice

The Company’s privacy notice is available on its webpages

Information about the Company

Important information: This document is intended to be for information purposes

only and it is not intended as promotional material in any respect. The material

is not intended as an oer or solicitation for the purchase or sale of any nancial

instrument. The material is not intended to provide, and should not be relied on for,

accounting, legal or tax advice, or investment recommendations. Information herein

is believed to be reliable but Schroders does not warrant its completeness or accuracy.

No responsibility can be accepted for errors of fact or opinion. Reliance should not

be placed on the views and information in the document when taking individual

investment and/or strategic decisions. Past performance is not a reliable indicator of

future results, prices of shares and the income from them may fall as well as rise and

investors may not get back the amount originally invested. Schroders has expressed

its own views in this document and these may change. Issued by Schroder Investment

Management Limited, 1 London Wall Place, London EC2Y 5AU, which is authorised

and regulated by the Financial Conduct Authority. For your security, communications

may be taped or monitored.

Schroder Investment Management Limited

1 London Wall Place, London EC2Y 5AU, United Kingdom

T +44 (0) 20 7658 6000

@schroders

schroders.com