The Board has carried out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future

exposure to these risks and the impact on the Company’s operations. This assessment involved an evaluation of the potential impact on the Company of these

at the 2023 AGM.

In accordance with provision 31 of the 2018 revision of the UK Code, the Directors have assessed the prospects of the Company over a longer period than

the 12 months required by the going concern provision. During the year, the Board conducted a review for a period covering two years, including a review

of a comprehensive cash flow projection, together with adverse scenarios to stress test the cash positions of the Company. The Board considered two years to

This has remained the same timeframe as the prior year due to the delay in divestment as a result of the dynamic zero policy for COVID-19 which continued

to be adopted in Macau and China with restrictions that hindered economic and business recovery until early 2023 and the post restriction property market

conditions that followed easing of those constraints. Based on an assessment of the principal risks facing the Company and the stress testing based assessment of

and projected sales) and meet its liabilities as they fall due over the two-year period of their assessment. It is expected that the timeframe for the disposal of the

Fidelity International

Apollo Multi Asset Management

Premier Miton Investors

Banque de Luxembourg (PB)

Hargreaves Lansdown, stockbrokers (EO)

Biographies of the Directors who served during the year are detailed on pages 14 – 15.

Mark Huntley Chairman, Chairman of the Management Engagement Committee and the Chairman of the Disclosure and

Alan Clifton Director, Chairman of the Audit and Risk Committee and the Nomination and Remuneration Committee 18 May 2006

Carmen Ling Director 24 February 2022

Alan Clifton

Carmen Ling

There have been no changes to the aforementioned interests since 30 June 2023.

The Board notes the changes to the Financial Conduct Authority (FCA) rules (“UK Listing Rules”) relating to the restrictions on the retail distribution of

Following the receipt of legal advice, the Board confirms that it has conducted the Company’s affairs in such a manner that the Company would have qualified

The Directors have considered the impact of the EU Alternative Investment Fund Managers Directive (no. 2011/61/EU) (“AIFM Directive”), which was

transposed into United Kingdom law on 22 July 2013 with the transitional period having ended in June 2014, on the Company and its operations.

The Company is a non-EU domiciled Alternative Investment Fund which does not currently intend to market its shares within Europe. The Directors,

Directors of the Company are all non-executive and, by way of remuneration, receive an annual fee. During the year, the Directors received the following

Mark Huntley

Alan Clifton

Section 172 of the UK Companies Act 2006 applies directly to UK domiciled companies. Nonetheless the AIC Code requires that the matters set out in section

172 are reported on by all companies, irrespective of domicile.

Section 172 recognises that directors are responsible for acting in a way that they consider, in good faith, is the most likely to promote the success of the

Company for the benefit of its stakeholders as a whole. In doing so, they are also required to consider the broader implications of their decisions and operations

by the Directors during the year are described below.

— Net asset value preservation

— Divestment of remaining properties, and

— Operating cost reduction

the form of Regulatory News Service (“RNS”)

its semi-annual financial statements.

In addition, the Company directly and, through

its Manager undertake periodic roadshows to

meet with existing and prospective investors to

solicit their feedback and understand any areas of

concern.

The Manager and Board have achieved a

substantial operating cost reduction.

interaction provides mutual understanding of the

Company’s prospects and outlook for divestment.

Independent valuation reports confirm the fair

value of the Company’s properties.

The Company does not have any direct employees;

however it works closely with a number of service

providers (the Manager, the Investment Adviser,

Administrators, Company Secretary, Brokers and

The Company’s Management Engagement

Committee has identified its key service providers.

On an annual basis it undertakes a review of

performance based on a questionnaire through

also regularly review all material contracts for

service quality and value.

The Group has interest-bearing loans with three

banks.

These facilities provides the Group with the resources

which can be used to finance capital expenditure or

working capital and therefore their availability is a

key component of the Company’s ability to operate.

The Group’s engagement with its bankers is

primarily through its Manager who provides

regular reports to the banks and has an open line of

communication in respect of the ongoing operation

and maintenance of the facilities.

property management services are provided at

As an Investment Company whose purpose is the

investment in real estate in Macau, the Company’s

direct engagement with the local community and the

environment is limited.

As discussed above the Board actively engages with

the Company’s service providers on a regular basis.

The Audit and Risk Committee reviews the appointment of the external auditor, its effectiveness and its relationship with the Group, which includes monitoring

necessary, as a director, to be aware of any relevant audit information and to establish that Deloitte LLP is made aware of any pertinent information. This

Financial risk management policies and objectives are disclosed in Note 2.

Principal risks and uncertainties are discussed in the Corporate Governance Report on page 57.

On behalf of the Board

4 October 2023

The Board has put in place a framework for corporate governance which it believes is appropriate for an investment company. Paragraph 9.8.6R of the UK

Listing Rules obliges Boards to report upon their corporate governance arrangements against the UK Code issued by the Financial Reporting Council (the

Code provides better information to shareholders. The FRC has provided the AIC with an endorsement letter to cover the latest edition of the AIC Code.

Throughout the accounting period, the Company has complied with the recommendations of the AIC Code and thus the relevant provisions of Section 1 of the

UK Code, except as set out below.

The UK Code includes provisions relating to:

• executive directors’ remuneration;

present genuine practical challenges for a company that is both in the late stage of life, with a clearly defined but narrow strategic objective. All Directors are

with the requirements of the AIC Code.

The Board consists of three non-executive directors, all of whom are independent of the Company’s Manager and Investment Adviser.

the AIC Code states that a Board should consider appointing one independent non-executive director to be the senior independent director. The Board, having

the need to periodically refresh board’s composition, with the limited expected life of the Company in mind.

The Company has benefitted greatly from the knowledge, expertise and skill mix of the Board as it has had to navigate through the difficulties of the current

situation. Whilst there are no concerns about either stale behaviour or lack of vigour to deliver the Company’s strategy, any appointment of a director requires

To fulfil the recommendation of AIC Code Provision 15 and to give sufficient attention to strategy, the Board discusses strategy at each of its regular scheduled

meetings, but holds a separate session annually devoted to this.

Between meetings, there is regular contact with the Manager and the Administrator, and the Board requires to be supplied in a timely manner with information

The terms and conditions of appointment of non-executive directors are available for inspection from the Company’s registered office.

Pursuant to Principle J of the AIC Code which requires a formal and rigorous annual evaluation of its performance, the Board formally reviews its performance

the Management Engagement Committee, the Disclosure and Communications Committee and individual Directors has taken the form of self-appraisal

the results, the Board considered that the overall performance of the Board during the year had been satisfactory and that the Board is confident in its ability

procedures are followed and that it complies with Guernsey Law and applicable rules and regulations of the GFSC and the LSE. Where necessary, in carrying

Carmen Ling 4 2 2 2

In addition to the above, there were two additional Board meetings and two other committee meetings held during the year.

The Board is responsible for the Group’s system of internal control and for reviewing its effectiveness, and the Board has, therefore, established a process

designed to meet the particular needs of the Group in managing the risks to which it is exposed.

The process takes a risk-based approach to internal control through a matrix which identifies the key functions carried out by the Manager and other key

service providers, the various activities undertaken within those functions, the risks associated with each activity and the controls employed to minimise those

risks. A residual risk rating is then applied. Regular reports are provided to the Board, highlighting material changes to risk ratings and a formal review of these

procedures is carried out by the Audit and Risk Committee and reported to the Board on an annual basis and has been completed during the financial year. By

their nature, these procedures provide a reasonable, but not absolute, assurance against material misstatement or loss.

In accordance with Listing Rule 15.6.2(2)R and having formally appraised the performance and resources of the Manager, in the opinion of the Directors, the

continuing appointment of the Manager, on the terms agreed, is in the interests of shareholders as a whole.

The Company welcomes the views of shareholders and places great importance on communication with its shareholders. Senior members of the Manager are

All shareholders can address their individual concerns to the Company in writing at its registered address. The AGM of the Company provides a forum for

shareholders to meet and discuss issues with the Directors and the Manager. The Manager and Board also engage with shareholders on an ongoing basis.

In addition, the Company maintains a website (www.mpofund.com) which contains comprehensive information, including company notifications, share

information, financial reports, investment objectives and policy, investor contacts and information on the Board and corporate governance.

The Board has considered the AIC Code recommendations in respect of arrangements by which staff of the Administrator and Investment Manager may, in

confidence, raise concerns within their respective organisations about possible improprieties in matters of financial reporting or other matters.

It has concluded that adequate arrangements are in place for the proportionate and independent investigation of such matters and, where necessary, for

through active asset management initiatives and carrying out due diligence work on potential tenants before entering into any new lease agreements. All the

For each material risk, the likelihood and consequence are identified, management controls and frequency of monitoring are confirmed and results are reported

The Company’s principal risk factors are fully discussed in the Company’s prospectus, are available on the Company’s website and should be reviewed by

The members of the Audit and Risk Committee are:

• the clarity of the disclosures and compliance with financial reporting standards and relevant financial and governance reporting requirements;

• whether the Annual Report and Audited Consolidated Financial Statements, taken as a whole, are fair, balanced and understandable and provide the

• any correspondence from regulators in relation to Company’s financial reporting.

During its review of the Group’s financial statements for the year ended 30 June 2023, the Audit and Risk Committee considered the following significant issues:

• going concern and viability in relation to the Continuation Vote in December 2023 and availability of loan refinancing;

• accounting treatment for taxes incurred in multiple jurisdictions;

• interest rates and inflation;

• income recognition for rental income; and

• progress on divestment.

The risk relating to going concern and viability is mitigated through ongoing management of cash resources, regular monitoring of compliance with loan

the valuations in accordance with current Royal Institution of Chartered Surveyors Appraisal and Valuation Standards.

the properties are situated. The Board ordinarily meets with the valuer at least once a year. The factors that affect the value and ownership of the investment

The risk relating to taxation is mitigated through the setup of the Group structure. When taxation queries arise, an independent taxation adviser is employed to

necessary. Other Directors and third parties may be invited by the Audit and Risk Committee to attend meetings as and when appropriate.

The Audit and Risk Committee Chairman, or other members of the Audit and Risk Committee appointed for the purpose, shall attend each AGM of the

The Audit and Risk Committee determined that the key risk of misstatement of the Company’s financial statements is the fair value of the investment property

Savills is required to make assumptions on establishing the current market valuation. The most significant assumptions (as described further in Note 6), relate

to future income streams and discount rates applicable to these estimates. The principal technique deployed was the income capitalisation method and these

estimates are based on the local market conditions existing at the reporting date.

Adviser.

The properties accounted for as inventory under IFRS are recorded at the lower of cost and net realisable value. The Company also discloses an Adjusted NAV

detailed above, Savills is required to make assumptions on establishing the current market valuation. The valuation of the Group’s inventories at fair value for

Ocorian Administration (Guernsey) Limited. The Audit and Risk Committee also considers the review of controls of the service organisations.

• discussions with or reports from the external auditor describing its arrangements to identify, report and manage any conflicts of interest; and

To assess the effectiveness of the external auditor, the Audit and Risk Committee will review:

• discussions or reports highlighting the major issues that arose during the course of the audit;

• the robustness of the external auditor in handling key accounting and audit judgements; especially with regard to the external auditor’s review of the

which will be put to shareholders at the AGM in December 2023.

best placed to provide the non-audit service, for example, the interim review service. Please see Note 23 for details of services provided by Deloitte LLP.

The Audit and Risk Committee met three times in the year ended 30 June 2023. Matters considered at these meetings included but were not limited to:

• review of the 2022 Interim Report and unaudited Interim Condensed Consolidated Financial Statements for the 6 months ended 31 December 2022;

• review of the quarterly results announcements issued in November 2022 and May 2023;

• challenge of the 2023 Annual Report and Audited Consolidated Financial Statements for the year ended 30 June 2023;

As a result of its work during the year, the Audit and Risk Committee has concluded that it has acted in accordance with its terms of reference and has ensured

The Directors are responsible for preparing the annual report and accounts in accordance with applicable laws and regulations. The Companies (Guernsey)

Law, 2008 requires the Directors to prepare financial statements for each financial year. The Directors prepare the Group’s financial statements in accordance

and cash flows of the Group for that period. In preparing these Group’s financial statements, the Directors are required to:

• provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to enable users to understand the impact of

• make an assessment of the Company’s ability to continue as a going concern.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s transactions and disclose with

reasonable accuracy, at any time, the financial position of the Group and which enable them to ensure that the financial statements comply with the Companies

of fraud and other irregularities.

The maintenance and integrity of the Company’s website (www.mpofund.com) is delegated to the Manager but is ultimately the responsibility of the Directors.

Each of the Directors, whose names are set out on pages 14 and 15 of the Annual Report, confirms that, to the best of their knowledge and belief that:

• The Group’s financial statements, prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial position and profit or loss

• The Directors are responsible for preparing the Annual Report and Group’s financial statements in accordance with applicable law and regulations.

So far as each Director is aware, there is no relevant audit information of which the Company’s external auditor is unaware, and each Director has taken all the

steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company’s external

(Guernsey) Law, 2008 (as amended).

On behalf of the Board

In addition to the matter described in the material uncertainty related to going concern section, we have determined the matters described below to be the key

audit matters to be communicated in our report.

Investment property 6

Deposits with lenders 21

Deposits with lenders 21

Cash and cash equivalents 25

Foreign currency translation reserve

Deferred taxation provision 9

Taxation provision 9

Interest-bearing loans 8

Net Asset Value per share (US

Income on sales of inventories 7

Rental income

Other income

Net loss on disposal of investment property 6

Net loss from fair value adjustment on investment property 6

Net sales proceeds from disposal of investment property 6