Annual Financial Report

RNS Number : 2304U

Dunedin Income Growth Inv Tst PLC

28 March 2019

DUNEDIN INCOME GROWTH INVESTMENT TRUST PLC

Legal Entity Identifier (LEI): 549300PPXLZPR5JTL763

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 JANUARY 2019

Investment Objective

The Company's objective is to achieve growth of income and capital from a portfolio invested mainly in companies listed or quoted in the United Kingdom.

Investment Policy

In pursuit of its objective, the Company's investment policy is to invest in high quality companies with strong income potential and providing an above-average portfolio yield.

Details of the Company's policies in relation to risk diversification and gearing are contained in the Strategic Report.

Benchmark

The Company's benchmark is the FTSE All-Share Index (total return). Performance is measured on a net asset value total return basis over the long-term.

Management

The Company's Manager is Aberdeen Standard Fund Managers Limited ("ASFML", the "AIFM" or the "Manager") which has delegated the investment management of the Company to Aberdeen Asset Managers Limited ("AAML" or the "Investment Manager"). Both companies are wholly owned subsidiaries of Standard Life Aberdeen plc, which was formed by the merger of Aberdeen Asset Management PLC and Standard Life plc in August 2017. Aberdeen Standard Investments is a brand of the investment business of the merged entity.

COMPANY OVERVIEW - FINANCIAL HIGHLIGHTS

Net asset value total return^{A B}		Earnings per share (revenue)
2019	(3.86)%	2019	12.68p
2018	+11.98%	2018	12.64p
Share price total return^A		Ongoing charges^A
2019	(0.83)%	2019	0.63%
2018	+11.74%	2018	0.61%
Discount to net asset value^{A C}		Dividends per Ordinary share
2019	6.96%	2019	2.89%
2018	8.14%	2018	12.10p

^A Alternative Performance Measure.
^B With debt at fair value, dividends reinvested).
^CWith debt at fair value.

For further information, please contact:

Ben Ritchie/Louise Kernohan

Aberdeen Asset Managers Limited 0207 463 6000

Scott Anderson

Aberdeen Asset Managers Limited 0131 222 1863

COMPANY OVERVIEW - CHAIRMAN'S STATEMENT

Against a weak market backdrop, your company's net asset value ("NAV") declined by 3.86% on a total return basis for the year ended 31 January 2019. This compares with a total return of -3.83% from the FTSE All-Share Index. The share price total return for the year was -0.83% reflecting a modest narrowing of the discount to NAV from 8.14% at the start of the year to 6.96% as at year end (on an ex-income basis with borrowings stated at fair value). As explained in more detail below, the equity portfolio performed well relative to the benchmark but this was offset by the impact of gearing in a falling market and ongoing charges.

It is disappointing to report on a year when the NAV total return was negative, albeit in line with the benchmark. However there are a number of factors that were more positive.

Throughout the year, the portfolio continued to evolve in line with our strategy to create a more active, better quality and higher growth investment proposition that can deliver reliable and growing dividends to our shareholders. The Board is encouraged with the progress made so far and the year under review was one of solid progress, with record earnings, a dividend increased ahead of inflation and continuing improvement in performance relative to the Company's peers.

There were positive contributions from stock selection and whilst gearing detracted from performance, the Board believes the long-term impact of gearing will be positive. In addition, our overseas holdings, which are principally in Europe, did not benefit from a weaker pound. Thus, overall stock selection was positive and the impact of gearing was negative in a market that fell over the year.

Over one and three years the NAV total return is broadly in line with the benchmark, and over the longer three year period the Company now ranks in the top quartile of all 25 investment trusts in the AIC UK Equity Income Sector (source: AIC).

The quality characteristics of the portfolio were much enhanced over the year, with the companies held having significantly higher margins and lower debt than the wider market. From a positioning perspective, the active share of the portfolio increased over the year by nearly 10% to more than 70%, while the Company's exposure to mid cap and smaller companies is now well over 30% having increased by around 5% over the period. At the same time, the average dividend growth rate of the companies within the portfolio has increased.

The Board believes that these changes position your Company to deliver both faster dividend growth and better capital performance over the medium term.

Earnings and Dividends

Income from investments was in line with the previous year, resulting in earnings per share of 12.68p (2018: 12.64p).

During the year the Board considered all aspects of the Company's strategy for revenue generation. We continue to believe that the use of option strategies to deliver revenue is a useful and helpful element of our strategy. Income from writing options contributed some 7% of the Company's total revenue. This level of income is helpful but not vital and, whilst option strategies continue to make a contribution to revenue without detracting from the overall performance of the Company, we shall continue to keep the flexibility, whilst carefully monitoring the implementation of the strategy.

Three interim dividends of 3.0p per share (2018: 2.575p) were paid in respect of the year, on 24 August 2018, 23 November 2018 and 22 February 2019.

Having been unchanged since 2013, the rates of interim dividends were increased during the year as the Board had been mindful that the increases in the overall annual rate of dividend since then had caused the final dividend to become a growing percentage of the total annual payment. During the year, the Board therefore announced its intention to increase the rate of each interim dividend this year to 3.0p per share so as to create a more even balance between the rates of the interim and final dividends. At the same time, the Board stated that, as a result of this rebalancing, it expected that the final dividend would be lower than last year but that it remained our intention to continue a policy of growing total annual dividends in real terms over the medium term.

Accordingly, the Board is proposing a final dividend of 3.45p per share (2018: 4.375p), payable on 29 May 2019 to shareholders on the register on 3 May 2019. This will make a total dividend of 12.45p per share for the year, an increase of 2.9% on last year and slightly ahead of the rate of inflation which was 1.8% as measured by the Consumer Price Index. This will be the 35th year out of the past 39 that the Company has grown its dividend, with the level of distribution maintained in the other four years. The importance of dividends to the overall return from the Company, and indeed the index, is highly significant.

Following payment of the final dividend, we will be able to add a further 0.38p per share to the Company's revenue reserves, meaning that 11.54p per share will be available to support future distributions, representing 93% of the current annual dividend cost, a further strengthening of your company's financial position.

Our strategy is to reduce the Company's dependence on higher yielding, lower growth companies. The income performance has been somewhat stronger than expected and we have not experienced a drop in earnings. However, as we look forward into the year ahead, it is likely that we will see a decline in the earnings per share. Our strategy, however, should enhance the Company's longer term potential for both faster dividend growth and better capital performance. As stated above, our distribution policy remains to grow the dividend faster than inflation over the medium term and, with the Company's robust revenue reserves and the healthy underlying dividend growth of the companies within the portfolio, that policy remains well supported.

Market Background

The year under review was very much one of contrasts. The first half proved reasonably strong for equities with the FTSE All-Share Index reaching an all-time high in May 2018 and consensus extremely optimistic around the prospects for global growth. However, over the course of the latter part of the year, concerns around the Chinese economy, the pace of monetary tightening in the United States and trade policy tensions resulted in a sharp sell-off from the end of September. Since the end of 2018, equities have rallied and recovered some of their earlier losses given signs that some of these risks may have eased, in particular following a more dovish message from the Federal Reserve.

Despite the recent recovery in equity markets the global economic picture deteriorated over the course of 2018. In particular, China slowed quite significantly due to the impact of both domestic policies and the uncertainty caused by ongoing trade disputes. This in turn has had a knock on effect on the European economy with export-related growth declining sharply. While the US economy has remained relatively strong, even there the signs are that growth is cooling as the impact of tax cuts fades and interest rates rise.

Meanwhile, the UK economy has so far proven surprisingly resilient despite ongoing political travails and the uncertainty posed by the withdrawal from the EU. Employment data has remained strong and we have started to see signs of higher rates of income growth. However, in recent months there has been more evidence of a weakening environment for business investment given low levels of visibility on future trading arrangements for companies. That uncertainty over the shape of the UK's trading relationship with both the EU and the rest of the world, as a result of Brexit, and any consequent impact upon the Company's portfolio is likely to persist for some considerable time.

Performance

As noted above, the Company's NAV total return for the year was -3.86%. The total return from the equity portfolio was -2.67%, an outperformance of 1.16% compared to the total return of -3.83% from the FTSE All-Share Index. Within the equity portfolio it is positive to note that the Company benefitted from a strong performance from precisely the kind of companies to which the Investment Manager has been seeking to expand our exposure. Namely, high quality businesses with cash flows and balance sheets capable of providing reasonable levels of dividend yield but, critically, combined with good long-term growth prospects.

The Company also benefitted from a strong performance from a number of our overseas holdings, which, once again, have added value while further broadening the opportunity set for your Investment Manager to pick from and diversifying our income stream. A number of the new smaller market cap investments have made a useful contribution to performance.

Gearing

As shareholders will recall, in December 2015 the Company borrowed £30 million through the issue of loan notes bearing an interest rate of 3.99% with a maturity date of 2045, recognising that the debenture was repayable in 2019. The proceeds of the loan note issuance remain invested in a portfolio of corporate bonds which, taking into account the call features or prepayment options on several of the bonds, broadly matches the duration of the debenture and the income from which largely offsets the interest cost of the issue. These bonds will be sold at the most appropriate time and the proceeds deployed to meet the repayment of the debenture.

With debt valued at par, the Company's net gearing increased from 14.47% to 16.21% during the year. However, on a pure equity basis, after netting off cash and bonds, gearing rose from 7.83% to 8.81%. It is this latter figure that represents more accurately the true extent to which the movement in the NAV could differ from the return on an ungeared portfolio in the future. The Board believes this remains a relatively conservative level of equity gearing and, with part of the revolving credit facility undrawn, this provides the Company with financial flexibility should opportunities to deploy additional capital arise.

In April this year the Company will repay the £28.6 million debenture and exit from its bond holdings. This will significantly reduce the headline level of gearing and simplify the Company's capital structure. The Board believes that, despite a low level of equity gearing, investors' perception of the Company's level of leverage is influenced by the headline level of gearing; that is the total borrowings without taking into account the bond portfolio. The repayment of the debenture, and disposal of the bond holdings, will therefore mark an important step in simplifying and clarifying the strength of the Company's balance sheet.

After the repayment of the debenture, the Company will employ two sources of gearing, the £30 million loan notes maturing in 2045 and a £15 million multi-currency revolving credit facility that expires in July 2021. Under the terms of the revolving credit facility the Company has the option to increase the level of the commitment from £15 million to £30 million at any time, subject to the lender's credit approval. A Sterling equivalent of £11.4 million was drawn down at the year end.

Discount

The discount at which the price of the Company's shares trade relative to the NAV narrowed from 8.14% at the beginning of the year to 6.96% as at 31 January 2019 (on an ex-income basis with borrowings stated at fair value).

The Company's shares continued to trade at a relatively wide discount for the first eight months of the financial year. During this time the Company purchased 1,387,018 shares to hold in treasury, at a cost of £3.6 million, providing a small accretion to the NAV per share.

As stated above, the Board believes that the successful implementation by the Investment Manager of the investment strategy should enhance the Company's longer term potential for improved performance. We believe that this, in turn, should lead to a re-rating of the Company's shares relative to its peers.

We will again seek shareholders' permission at the forthcoming Annual General Meeting to buy back shares and are prepared to continue to use this measure in the light of both the Company's absolute level of discount and that relative to those of its peer group.

Annual General Meeting

The Annual General Meeting will be held at Discovery Point, Discovery Quay, Dundee DD1 4XA on Thursday 23 May 2019 at 12 noon.

Summary

During the year a history of the Company was published as we approach the 150th anniversary of the Company's establishment. I commend this to shareholders. It is an interesting and at times colourful story which highlights the long-term nature of investing and the durability of investment trusts as a vehicle for a wide range of investors, and in particular private investors. The book is available on the Company's website.

Looking back over the longer-term it is clear that in times of economic stress, corporate pay-outs can come under pressure, sometimes severe pressure. The most recent instance of this was in 2008 when dividend payments fell significantly as corporates cut or were forced to cut their distributions.

Our strategy of broadening the base of companies we can invest in by building revenue reserves and reducing our reliance on the few major dividend paying companies that account for a significant proportion of income from the UK stockmarket, is designed to ensure that we can grow our dividend and deliver capital growth over the longer-term. The portfolio is increasingly different from the broader market, as evidenced by our higher active share. As a result, investors should expect there will be periods, perhaps extended, when performance will diverge from the benchmark index.

There is some encouragement that the implementation of the strategy is beginning to deliver better results. Our relative performance has improved, particularly against similar funds from which investors might choose an equity income strategy.

The Board believes that the repositioning of the Company's portfolio leaves it relatively well placed amidst an uncertain economic and political environment, for which the outlook is finely balanced. In such market conditions your Investment Manager's focus will remain on identifying companies that can continue to prosper, even in more difficult conditions, and sustain and grow their distributions to shareholders.

The dividend has increased ahead of inflation over five years, the Company's shares currently yield 4.9% based on the dividends declared or paid for the year under review and, as stated above, our revenue reserves represent 93% of the annual dividend cost. The Board is focused on the Company continuing to deliver relative total return outperformance, particularly against comparable vehicles which, we believe, combined with a demonstration of the portfolio's income growth potential and the forthcoming simplification of the balance sheet, should result in the share price more closely reflecting the underlying asset value of the Company.

David Barron

Chairman

27 March 2019

STRATEGIC REPORT - OVERVIEW OF STRATEGY

Business Model

The Company is an investment trust with a premium listing on the London Stock Exchange.

Investment Objective

The Company's objective is to achieve growth of income and capital from a portfolio invested mainly in companies listed or quoted in the United Kingdom.

Investment Policy

In pursuit of its objective, the Company's investment policy is to invest in high quality companies with strong income potential and providing an above-average portfolio yield.

Risk Diversification

The Company maintains a diversified portfolio consisting, substantially, of equity or equity-related securities, and it can invest in other financial instruments. The Company is invested mainly in companies listed or quoted in the United Kingdom and can invest up to 20% of its gross assets overseas.

It is the policy of the Company to invest no more than 15% of its gross assets in other listed investment companies and no more than 15% of its gross assets in any one company.

Gearing

The Board is responsible for determining the gearing strategy for the Company, with day-to-day gearing decisions being made by the Manager within the remit set by the Board. The Board has set its gearing limit at a maximum of 30% of the net asset value at the time of draw down. Gearing is used selectively to leverage the Company's portfolio in order to enhance returns where and to the extent considered appropriate.

Delivering the Investment Objective

The Directors are responsible for determining the Company's investment objective and investment policy. Day-to-day management of the Company's assets has been delegated, via the AIFM, to the Investment Manager.

Investment Process

The Investment Manager believes that company fundamentals ultimately drive stock prices but are often priced inefficiently. They believe that in-depth company research delivers insights that can be used to exploit these market inefficiencies.

Benchmark

The Company's benchmark is the FTSE All-Share Index (total return). Performance is measured on a net asset value total return basis over the long-term.

Key Performance Indicators ("KPIs")

The Board uses a number of financial performance measures to assess the Company's success in achieving its objective and determining the progress of the Company in pursuing its investment policy. The main KPIs are shown in the table below:

KPI	Description
Performance	The Board considers the Company's NAV total return figures to be the best single indicator of performance over time.
Performance of NAV against benchmark index and comparable investment trusts	The Board measures the Company's NAV total return performance against the total return of the benchmark index - the FTSE All-Share Index. The Board also monitors performance relative to a peer group of investment trusts which have similar objectives, policies and yield characteristics.
Revenue return per Ordinary share	The Board monitors the Company's net revenue return.
Dividend per Ordinary share	The Board monitors the Company's annual dividends per Ordinary share.
Share price performance	The Board monitors the performance of the Company's share price on a total return basis.
Discount/premium to NAV	The discount/premium of the share price relative to the NAV per share is monitored by the Board.
Ongoing charges	The Board monitors the Company's operating costs carefully.

Principal Risks and Uncertainties

There are a number of risks which, if realised, could have a material adverse effect on the Company and its financial condition, performance and prospects. The risks and uncertainties faced by the Company are reviewed by the Audit Committee in the form of a risk matrix and the assessment of risks and their mitigation continues to be an area of significant focus for the Audit Committee. The principal risks and uncertainties facing the Company at the current time, together with a description of the mitigating actions the Board has taken, are set out in the table below. The Board has carried out a robust assessment of these risks, which include those that would threaten its business model, future performance, solvency or liquidity. The principal risks associated with an investment in the Company's shares are published monthly in the Company's factsheet and they can be found in the pre-investment disclosure document ("PIDD") published by the Manager, both of which are available on the Company's website.

Risk

Mitigating Action

Investment objectives - a lack of demand for the Company's shares due to its objectives becoming unattractive to investors could result in a widening of the discount of the share price to its underlying net asset value and a fall in the value of its shares.

Board review. The Board formally reviews the Company's objectives and strategies for achieving them on an annual basis, or more regularly if appropriate.

Shareholder communication. The Board is cognisant of the importance of regular communication with shareholders. Directors attend meetings with the Company's largest shareholders and meet other shareholders at the Annual General Meeting. The Board reviews shareholder correspondence and investor relations reports and also receives feedback from the Company's broker.

Discount monitoring. The Board, through the Manager, keeps the level of discount under constant review. The Board is responsible for the Company's share buy back policy and is prepared to authorise the use of share buy backs to provide liquidity to the market and try to limit any widening of the discount.

Investment strategies - the Company adopts inappropriate investment strategies in pursuit of its objectives which could result in investors avoiding the Company's shares, leading to a widening of the discount and poor investment performance.

Adherence to investment guidelines. The Board sets investment guidelines and restrictions which the Manager follows, covering matters such as asset allocation, diversification, gearing, currency exposure, use of derivatives etc. These guidelines are reviewed regularly and the Manager reports on compliance with them at Board meetings.

In order to ensure adequate diversification, the Board has set absolute limits on maximum holdings and exposures in the portfolio at the time of investment, which are in addition to the limits contained in the Company's investment policy, including the following:

- No more than 10% of gross assets to be invested in any single stock; and

- The top five holdings should not account for more than 40% of gross assets.

Regular shareholder communication and discount monitoring, as above.

Investment performance - the appointment or continuing appointment of an investment manager with inadequate resources, skills or expertise or which makes poor investment decisions. This could result in poor investment performance, a loss of value for shareholders and a widening discount.

Monitoring of performance. The Board meets the Manager on a regular basis and keeps under close review (inter alia) its resources, adherence to investment processes, the adequacy of risk controls, and investment performance.

Management Engagement Committee. A detailed formal appraisal of the Manager is carried out annually by the Management Engagement Committee.

Income/dividends - the Company adopts an unsustainable dividend policy resulting in cuts to or suspension of dividends to shareholders, or one which fails to meet investor demands.

Revenue forecasting and monitoring. The Manager presents detailed forecasts of income and expenditure covering both the current and subsequent financial years at Board meetings. Dividend income received is compared to forecasts and variances analysed.

Use of reserves. The Company has built up significant revenue reserves which are available to smooth dividend distributions to shareholders should there be a shortfall in revenue returns.

Financial/market - insufficient oversight or controls over financial risks, including market risk, foreign currency risk, liquidity risk and credit risk could result in losses to the Company.

Management controls. The Manager has a range of procedures and controls relating to the Company's financial instruments, including a review of investment risk parameters by its Investment Risk department and a review of credit worthiness of counterparties by its Counterparty Credit Risk team.

Foreign currency hedging. It is not the Company's policy to hedge foreign currency exposure but the Company may, from time to time, partially mitigate it by drawing down borrowings in foreign currencies.

Board review. As stated above, the Board sets investment guidelines and restrictions which are reviewed regularly and the Manager reports on compliance with them at Board meetings.

Further details of the Company's financial instruments and risk management are included in note 17 to the financial statements.

Gearing - gearing accentuates the effect of rises or falls in the market value of the Company's investment portfolio on its net asset value. An inappropriate level of gearing at a time of falling values could result in a significant fall in the value of the Company's net asset value and shares. Such a fall in the value of the Company's net assets could result in a breach of loan covenants and trigger demands for early repayment or require investments to be sold to meet any shortfall. This could result in further losses.

Gearing restrictions. The Board sets gearing limits within which the Manager can operate.

Monitoring. Both the limits and actual levels of gearing are monitored on an ongoing basis by the Manager and at regular Board meetings. In the event of a possible impending covenant breach, appropriate action would be taken to reduce borrowing levels.

Scrutiny of loan agreements. The Board takes advice from the Manager and the Company's lawyers before approving details of loan agreements. Care is taken to ensure that covenants are appropriate and unlikely to be breached.

Limits on derivative exposure. The Board has set limits on derivative exposures and positions are monitored at regular Board meetings.

Regulatory - changes to, or failure to comply with, relevant regulations (including the Companies Act, The Financial Services and Markets Act, The Alternative Investment Fund Managers Directive, accounting standards, investment trust regulations, the Listing Rules, Disclosure Guidance and Transparency Rules and Prospectus Rules) could result in fines, loss of reputation, reduced demand for the Company's shares and potentially loss of an advantageous tax regime.

Board awareness. The Directors have an awareness of the more important regulations and are provided with information on changes by the Association of Investment Companies. In terms of day to day compliance with regulations, the Board is reliant on the knowledge and expertise of the Manager. However, where necessary, the Board engages the service of external advisers.

Management controls. The Manager's company secretariat and accounting teams use checklists to aid compliance and these are backed by the Manager's compliance monitoring programme and risk based internal audit investigations.

Operational - the Company is reliant on services provided by third parties (in particular those of the Manager and the Depositary) and any control gaps and failures in their operations could expose the Company to loss or damage.

Agreements. Written agreements are in place defining the roles and responsibilities of all third party service providers.

Internal control systems of the Manager. The Board receives reports on the operation and efficacy of the Manager's IT and control systems, including those relating to cyber crime, and its internal audit and compliance functions.

Safekeeping of assets. The Depositary is ultimately responsible for the safekeeping of the Company's assets and its records are reconciled to those of the Manager on a regular basis. Through a delegation by the Depositary, the Company's investments and cash balances are held in segregated accounts by the Custodian.

Monitoring of other third party service providers. The Manager monitors closely the control environments and quality of services provided by third parties, including those of the Depositary. This includes controls relating to cyber crime and is conducted through service level agreements, regular meetings and key performance indicators. The Directors review reports on the Manager's monitoring of third party service providers on a periodic basis.

Promoting the Company

The Board recognises the importance of promoting the Company to existing and prospective investors. The Board believes an effective way to achieve this is through subscription to and participation in the promotional programme run by the Manager on behalf of a number of investment trusts under its management. The Company's financial contribution to the programme is matched by the Manager. The Manager's marketing and investor relations teams report to the Board giving analysis of the promotional activities as well as updates on the shareholder register and any changes in the make up of that register.

The purpose of the programme is both to communicate effectively with existing shareholders and to gain new shareholders with the aim of improving liquidity and enhancing the value and rating of the Company's shares. Communicating the long-term attractions of the Company is key and therefore the Company also supports the Manager's investor relations programme which involves regional roadshows, promotional and public relations campaigns.

Board Diversity Policy

The Board recognises the importance of having a range of skilled, experienced individuals with the right knowledge represented on the Board in order to allow it to fulfil its obligations. The Board also recognises the benefits and is supportive of the principle of diversity in its recruitment of new Board members. The Board will not display any bias for age, gender, race, sexual orientation, religion, ethnic or national origins, or disability in considering the appointment of its Directors. In view of its size, the Board will continue to ensure that all appointments are made on the basis of merit against the specification prepared for each appointment and the Board does not therefore consider it appropriate to set measurable objectives in relation to its diversity.

At 31 January 2019, there were three male and two female Directors on the Board.

Environmental, Social and Human Rights Issues

The Company has no employees as the Board has delegated the day to day management and administrative functions to the Manager. There are therefore no disclosures to be made in respect of employees. The Company's socially responsible investment policy is set out below.

Socially Responsible Investment Policy

The Directors, through the Manager, encourage companies in which investments are made to adhere to best practice in the area of corporate governance and socially responsible business. The Manager believes that this can best be achieved by entering into a dialogue with company management to encourage them, where necessary, to improve their policies in both areas. The Manager's ultimate objective, however, is to deliver superior investment returns for its clients. Accordingly, whilst the Manager will seek to favour companies which pursue best practice in these areas, this must not be to the detriment of the return on the investment portfolio.

UK Stewardship Code and Proxy Voting as an Institutional Shareholder

Responsibility for actively monitoring the activities of portfolio companies has been delegated by the Board to the Manager which has sub-delegated that authority to the Investment Manager.

The full text of the Company's response to the Stewardship Code may be found on its website.

Modern Slavery Act

Due to the nature of its business, being a company that does not offer goods and services to customers, the Board considers that the Company is not within the scope of the Modern Slavery Act 2015 because it has no turnover. The Company is therefore not required to make a slavery and human trafficking statement. In any event, the Board considers the Company's supply chains, dealing predominantly with professional advisers and service providers in the financial services industry, to be low risk in relation to this matter.

Viability Statement

The Board considers that the Company, which does not have a fixed life, is a long term investment vehicle and, for the purposes of this statement, has decided that five years is an appropriate period over which to consider its viability. The Board considers that this period reflects a balance between looking out over a long term horizon and the inherent uncertainties of looking out further than five years.

Taking into account the Company's current position and the potential impact of its principal risks and uncertainties, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due for a period of five years from the date of this Report.

In assessing the viability of the Company over the review period, the Directors have focused upon the following factors:

- The principal risks and uncertainties detailed above and the steps taken to mitigate these risks.

- The relevance of the Company's investment objective, especially in the current low yield environment.

- The Company is invested in readily-realisable listed securities.

- Share buy backs carried out in the past have not resulted in significant reductions to the capital of the Company.

- Although the Company's stated investment policy contains a gearing limit of 30% of the net asset value at the time of draw down, the Board's policy is to have a relatively modest level of equity gearing and the financial covenants attached to the Company's borrowings provide for significant headroom.

- The repayment of the Company's £28.6 million 7 7/8% Debenture Stock on 30 April 2019 has been pre-financed through the issue of £30 million 3.99% Loan Notes which are repayable in December 2045, the proceeds of which are invested in a portfolio of fixed interest securities which broadly match the duration of the Debenture.

In making its assessment, the Board is also aware that there are other matters that could have an impact on the Company's prospects or viability in the future, including a large economic shock or significant stock market volatility, and changes in regulation or investor sentiment.

Outlook

The Board's view on the general outlook for the Company can be found in the Chairman's Statement whilst the Investment Manager's views on the outlook for the portfolio are included in their statement below.

On behalf of the Board

David Barron

Chairman

27 March 2019

STRATEGIC REPORT - RESULTS

FINANCIAL HIGHLIGHTS

	31 January 2019	31 January 2018	% change
Total assets	£471,480,000	£512,159,000	(7.94)
Equity shareholders' funds	£401,731,000	£442,384,000	(9.19)
Market capitalisation	£358,868,000	£389,167,000	(7.79)
Net asset value per Ordinary share	270.90p	295.55p	(8.34)
Net asset value per Ordinary share with debt at fair value ^{A F}	260.11p	283.04p	(8.10)
Share price (mid)	242.00p	260.00p	(6.92)
FTSE All-Share Index	3,825.62	4,137.66	(7.54)

Discount (difference between share price and net asset value)
Discount where borrowings are deducted at fair value ^F	(6.96)%	(8.14)%

Gearing
Net gearing ^{B F}	16.21%	14.47%
Equity gearing ^{C F}	8.81%	7.83%

Dividends and earnings
Total return per share	(11.95)p	30.83p
Revenue return per share	12.68p	12.64p	+0.32
Total dividend per share for the year	12.45p	12.10p	+2.89
Dividend cover ^F	1.02	1.04

Revenue reserves
Prior to payment of third interim dividend declared and proposed final dividend ^D	17.99p	18.11p
After payment of third interim dividend declared and proposed final dividend ^{D E}	11.54p	11.16p

Operating costs
Ongoing charges ^F	0.63%	0.61%

^A Based on capital only net asset values.
^B Calculated by dividing total borrowings less cash and cash equivalents by shareholders' funds, expressed as a percentage.
^C Calculated as the amount by which the total value of equity securities held exceeds shareholders' funds, expressed as a percentage of shareholders' funds.
^D Calculated by dividing the revenue reserve per the Statement of Financial Position by the number of shares in issue at the reporting date per note 14.
^E Third interim dividend for the year ended 31 January 2019 of 3.000p per share (2018 - 2.575p). Proposed final dividend for the year ended 31 January 2019 of 3.450p (2018 - 4.375p).
^F Considered to be an Alternative Performance Measure.

PERFORMANCE

	1 year	3 year	5 year
	% return	% return	% return
Total return (Capital return plus net dividends reinvested)
Net asset value ^{A B}	(3.86)%	+28.36%	+26.19%
FTSE All-Share Index	(3.83)%	+28.49%	+31.24%
Share price ^B	(0.83)%	+29.05%	+19.18%

Capital return
Net asset value ^A	(9.20)%	+11.10%	+0.57%
FTSE All-Share Index	(7.54)%	+14.68%	+9.41%
Share price	(6.92)%	+10.00%	(6.83)%

^A Cum-income NAV with debt at fair value, adjusted to exclude the third interim dividend for the year ended 31 January 2019 which went ex-dividend on 31 January 2019 but was not paid until 22 February 2019 due to the difference in recognition of dividends payable on an ex-dividend date basis under AIC reporting guidelines and upon payment under accounting standards.
^B Considered to be an Alternative Performance Measure
Source: Standard Life Aberdeen, Factset & Morningstar

TEN YEAR FINANCIAL RECORD

Year ended 31 January	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019
Total revenue (£'000)	14,251	16,904	19,173	18,866	20,750	20,994	20,359	21,963	22,317	22,263
Per share (p)
Revenue return	7.99	10.15	11.00	10.77	11.89	11.90	12.11	12.55	12.64	12.68
Dividends paid/proposed	10.25	10.25	10.65	10.75	11.10	11.25	11.40	11.70	12.10	12.45
Revenue reserve^A	7.16	7.06	7.42	7.45	8.22	8.89	9.63	10.51	11.16	11.54
Net asset value^B	198.80	226.81	222.88	251.48	262.34	279.66	237.48	270.34	290.57	266.83
Total return	51.15	39.00	6.50	41.30	22.24	27.76	(28.94)	43.83	30.83	(11.95)
	_____	_____	_____	_____	_____	_____	_____	_____	_____	_____
Shareholders' funds (£'000)	303,603	346,927	341,280	385,605	403,526	428,702	368,041	415,810	442,384	401,731
	_____	_____	_____	_____	_____	_____	_____	_____	_____	_____

^A After payment of third interim and final dividends.
^B With debt at fair value.

DIVIDENDS

Dividend per share	Rate	xd date	Record date	Payment date
Proposed final dividend 2019	3.450p	2 May 2019	3 May 2019	29 May 2019
Third interim dividend 2019	3.000p	31 January 2019	1 February 2019	22 February 2019
Second interim dividend 2019	3.000p	1 November 2018	2 November 2018	23 November 2018
First interim dividend 2019	3.000p	2 August 2018	3 August 2018	24 August 2018
	_____
Total dividend 2019	12.45p
	_____

Dividend per share	Rate	xd date	Record date	Payment date
Proposed final dividend 2018	4.375p	3 May 2018	4 May 2018	30 May 2018
Third interim dividend 2018	2.575p	1 February 2018	2 February 2018	23 February 2018
Second interim dividend 2018	2.575p	2 November 2017	3 November 2017	24 November 2017
First interim dividend 2018	2.575p	3 August 2017	4 August 2017	25 August 2017
	_____
Total dividend 2018	12.10p
	_____

STRATEGIC REPORT - INVESTMENT MANAGER'S REVIEW

Introduction

The year ended 31 January 2019 has been one of further progress. Since our appointment as lead managers nearly three years ago we have looked to increase the focus on growth of both capital and income and differentiate the Company in what is a highly competitive sector. It has been another active year in terms of executing this. We are encouraged that our strategy is producing tangible results, with positive relative performance for the equity portfolio whilst also improving both the underlying quality of the portfolio and its income growth potential. Since September 2016 we have nearly doubled the amount of income coming from faster growing companies and meaningfully increased the average underlying dividend growth rate of the holdings within the portfolio whilst the amount of income we deem at risk in the financial year ahead has fallen sharply. During this financial year the particular focus has been on improving the underlying quality of the holdings and this is reflected in meaningfully higher returns and stronger balance sheets in aggregate for the portfolio compared to where it stood twelve months ago. This has in part involved increasing exposure to small and mid-cap companies that have greater opportunity for long term growth and which now make up more than 30% of the equity portfolio. It has also required us to be increasingly selective and continue to focus the portfolio's capital towards the very best businesses that we can find.

Performance

In terms of income performance it was a solid year given the reorientation of the portfolio. Total income was more or less flat year on year with an increase of 1.2% from the equity holdings offset by declining fixed income revenue as the duration of the portfolio was reduced to closer match the maturing 2019 debenture. It is once again important to stress that maximisation of income in the near term has not been a priority and we have reduced holdings in higher yielding businesses, cutting near term earnings, in order to increase investments in lower yielding but faster growing companies. Option writing contributed 6.7% of the total income for the year. The Company benefited from special distributions from both Direct Line Insurance and Aveva and, in general, company dividend performance was ahead of our expectations with particularly notable increases from mining holdings BHP Billiton and Rio Tinto as well as French employee benefit manager Edenred. Only Inmarsat cut its dividend during the period and this was both expected and a precursor to a bid situation that allowed us to exit. Overall this has allowed us to make a further addition to revenue reserves that will support our strategy of focusing on greater income growth.

From a relative return perspective the equity portfolio outperformed the FTSE All-Share Index by 1.16% falling by 2.67% in total return terms against a return of -3.83% for the benchmark. This outperformance was driven by the stock selection within the portfolio. At the net asset level this was offset by the impact of costs and gearing. At the company level notable outperformers included Edenred, which benefitted from a recovery in its operations in Brazil as well as continued strong growth in its payments and expense management units. Aveva, which specialises in design software for large capital projects, saw improved demand from its customers in oil & gas and the first synergies being delivered from the merger with Schneider. Pleasingly, Telecom Plus, one of our newer holdings, performed well during the second half of the year as market conditions within the UK utility supply market continued to shift in its favour. Once again the portfolio benefited from its overseas holdings which made a further useful contribution to performance.

One of the main headwinds to performance came from the underweight position in the oil and gas sector which performed relatively robustly for much of the year. Our positioning here is driven by the lack of dividend growth from the companies and the relatively capital intensive and cyclical nature of the industry. Given high yields, we retain some exposure to both Total and Royal Dutch Shell but, given our strategy, this area is likely to remain a modest weighting relative to the large benchmark exposure. The holding in British American Tobacco was also hit following a series of potential regulatory changes within the key US tobacco market that dented investor confidence following the company's acquisition of Reynolds American in 2017. We retain the holding, believing the impact of such changes to be overly discounted in the current share price. Relative to the benchmark, we also missed out by not owning BSKYB or Shire Pharmaceutical which were both taken over during the year and together provided a near 1% impact on relative returns.

Portfolio Activity

It was another busy year as we continued to evolve the portfolio towards companies with superior capital and dividend growth prospects and higher quality characteristics. We would highlight that as long term, buy and hold investors we do not expect to be making this number of portfolio changes on an ongoing basis, however we believe this has been the best course of action for positioning the Company in the optimal way to deliver the desired outcome.

We introduced a number of new holdings into the portfolio. In line with our strategy, these companies are predominantly towards the small and mid-cap end of the market, where companies have a combination of established positions in their respective industries together with significant opportunity to grow from a low base. This translates into the ability to sustain a higher dividend or to grow the dividend at a faster pace. In addition, these companies sit well with our investment process where we have a well-resourced team investing the time to uncover and research companies that often go unnoticed by others.

We gave details in the Half Yearly Report of a number of such new introductions, including Abcam, Dechra Pharmaceuticals, Genus, Just Eat and London Stock Exchange. In the second half of the year we introduced Ashmore, a specialist emerging market debt asset manager; Rightmove, the leading online real estate advertiser; Rentokil, the facilities management business with a focus on pest control and hygiene; and engineer Spirax Sarco which sells critical steam control products to a wide range of end markets, most of which are defensive. These are a diverse range of businesses but common factors include structural drivers that enable them to grow their revenues independently of GDP, plus sustainable competitive advantages that should allow them to maintain their growth rate which in turn translates into strong long term expansion in cash flow and dividends.

We also initiated positions in some higher yielding companies to add diversity to the mix of income. The companies we selected have sound business models and well underpinned dividends. Examples here are Rio Tinto, Direct Line Insurance and Telecom Plus.

In the latter part of the year we took the opportunity to increase the Company's exposure to domestic earnings. This may seem a contrarian move given the elevated uncertainty over Brexit but, given the unclear outcome and the Company's significant exposure to overseas revenues, it seemed judicious to us to reduce this exposure and add to UK focused businesses where we can find those of appropriate quality.

To this end we introduced Countryside Properties, a well-run UK housebuilder with a balanced business model that provides a degree of protection from the cyclicality of the new-build housing market. It runs with no debt on the balance sheet and from an income perspective we expect mid to high single digit dividend growth with the potential for additional capital returns over time. In addition we introduced Marshalls, the leading manufacturer of hard landscaping solutions in the UK. It has consistently progressed ahead of the market due to a combination of exposure to structural trends, market share gains and bolt-on acquisitions, with earnings further enhanced by ongoing cost efficiencies. The company manages a conservative balance sheet and as a result we see good potential for dividend growth over the medium term.

While it has been an active year for new holdings we also added capital selectively to existing positions, with market volatility providing us with the opportunity to do so at attractive valuations. For example we topped up the holdings of Aveva, British American Tobacco, Croda, Diageo and RELX. In addition, we participated in equity raises for Weir Group and Genus.

To fund these purchases we exited a number of holdings. In line with our strategy, a number of these positions are higher yielding but the total return opportunity is lower than we can find elsewhere. Examples here being BP, HSBC, Imperial Brands and Zurich Insurance. In addition there were some holdings with average to low yields where we believed likely dividend progression insufficient to warrant a position, such as AstraZeneca, Nestlé, Roche, Rolls Royce and RPC.

We exited some holdings where we saw the quality of the franchises deteriorating below the high bar that we aim for. Essentra, GIMA TT, Inmarsat, RPC, Sage and Wood Group fall into this category. GIMA TT, an Italian listed maker of packaging machines for the tobacco industry, was an unusually short term holding for us having subscribed to the IPO only last year. However, following meetings with other industry participants it seemed clear that their market was developing less quickly than we had anticipated and the investment thesis was not playing out. As a result we decided to sell and move on, as whilst we aim to invest with a long term horizon we have the ability to be nimble and move quickly should we see good reason. Finally, there were holdings we sold on valuation grounds following relative outperformance such as Temenos and Rotork.

Corporate Engagement

A key part of the responsibility of share ownership is corporate stewardship and engagement. Addressing the governance and risk controls of the companies we hold is an aspect of investing that we embrace at Aberdeen Standard Investments and it aligns well with our long term investment horizon. The investment team takes full responsibility with dedicated on-desk resource and helped by expert advisors within the company. In addition to the hundreds of visits each year with executive teams, we frequently engage with non-executive board members, risk officers and other relevant personnel from the companies in which we invest.

Environmental and Social analysis is entrenched in our day to day investment process and is the responsibility of the investment team as opposed to sitting in a separate unit. This has been the case for over a year now and is proving an effective initiative, adding an equivalent focus on these issues to that which we have long applied to governance. How the companies we invest in identify environmental and social risks is something we analyse closely and we are increasingly finding that companies which manage these risks well and place high importance on responsible business practices are those that are setting themselves up best to produce positive long term financial results.

Outlook

Our approach remains consistent and we continue to focus on improving the medium term income and capital growth potential of the portfolio while maintaining appropriate diversity and balancing the near term requirements of the dividend. We are pleased with our progress so far but see scope for additional improvement and expect to further increase the quality of the holdings and make additional increases in allocation to mid and small caps. Market volatility may provide us with opportunities to find new investment ideas that will enhance the portfolio at attractive valuations.

Equity markets have partially recovered over the past two months following the marked drawdown in the latter part of 2018, however as we write this, many of the economic and political headwinds have not gone away and we see the likelihood of further market volatility as high. Against this backdrop we believe your company is well positioned with low levels of equity gearing, substantial revenue reserves and a positive outlook for underlying earnings evolution. We remain committed to a long term perspective, where we focus on holding high quality businesses whose market positions, competitive advantages, growth prospects and balance sheets allow them the best opportunity to prosper.

Ben Ritchie and Louise Kernohan

Aberdeen Asset Managers Limited

27 March 2019

DIRECTORS' REPORT (EXTRACT)

The Directors present their report and the audited financial statements for the year ended 31 January 2019.

Results and Dividends

The financial statements for the year ended 31 January 2019 are contained below. First, second and third interim dividends, each of 3.0p per Ordinary share, were paid on 24 August 2018, 23 November 2018 and 22 February 2019 respectively. The Directors now recommend a final dividend of 3.45p per Ordinary share payable on 29 May 2019 to shareholders on the register on 3 May 2019. The ex-dividend date is 2 May 2019. A resolution in respect of the final dividend will be proposed at the forthcoming Annual General Meeting.

Investment Trust Status

The Company is registered as a public limited company (registered in Scotland No. SC000881) and is an investment company within the meaning of Section 833 of the Companies Act 2006. The Company has been approved by HM Revenue & Customs as an investment trust subject to it continuing to meet the relevant eligibility conditions of Section 1158 of the Corporation Tax Act 2010 and the ongoing requirements of Part 2 Chapter 3 Statutory Instrument 2011/2999 for all financial years commencing on or after 1 February 2012. The Directors are of the opinion that the Company has conducted its affairs for the year ended 31 January 2019 so as to enable it to comply with the ongoing requirements for investment trust status.

Individual Savings Accounts

The Company has conducted its affairs in such a way as to satisfy the requirements as a qualifying security for Individual Savings Accounts. The Directors intend that the Company will continue to conduct its affairs in this manner.

Capital Structure

The issued Ordinary share capital at 31 January 2019 consisted of 148,292,669 Ordinary shares of 25p and 5,385,266 Ordinary shares held in treasury. During the year, the Company purchased 1,387,018 Ordinary shares to be held in treasury. Since the end of the year, the Company has purchased a further 19,150 Ordinary shares to be held in treasury and, at the date of approval of this Report, there were 148,273,519 Ordinary shares of 25p in issue and 5,404,416 Ordinary shares held in treasury.

Voting Rights

Each Ordinary share holds one voting right and shareholders are entitled to vote on all resolutions which are proposed at general meetings of the Company. The Ordinary shares, excluding treasury shares, carry a right to receive dividends. On a winding up or other return of capital, after meeting the liabilities of the Company, the surplus assets will be paid to Ordinary shareholders in proportion to their shareholdings.

There are no restrictions on the transfer of Ordinary shares in the Company other than certain restrictions which may from time to time be imposed by law.

Management Agreement

The Company has appointed Aberdeen Standard Fund Managers Limited ("ASFML"), a wholly owned subsidiary of Standard Life Aberdeen plc, as its alternative investment fund manager. ASFML has been appointed to provide investment management, risk management, administration and company secretarial services and promotional activities to the Company. The Company's portfolio is managed by Aberdeen Asset Managers Limited ("AAML") by way of a group delegation agreement in place between ASFML and AAML. In addition, ASFML has sub-delegated administrative and secretarial services to Aberdeen Asset Management PLC and promotional activities to AAML. Details of the management fees and fees payable for promotional activities are shown in notes 4 and 5 to the financial statements.

The management agreement is terminable on not less than six months' notice. In the event of termination by the Company on less than the agreed notice period, compensation is payable to the Manager in lieu of the unexpired notice period.

Substantial Interests

As at 31 January 2019, the following interests in the issued Ordinary share capital of the Company had been disclosed in accordance with the requirements of the FCA's Disclosure Guidance and Transparency Rules:

Shareholder	Number of shares held	% held^B
Aberdeen Asset Managers Limited Retail Plans^A	35,335,931	23.8
1607 Capital Partners LLC	16,501,981	11.1
D C Thomson & Company Ltd	5,900,000	4.0

(i) ^A Non-beneficial interest

(ii) ^B Based on 148,292,669 Ordinary shares in issue as at 31 January 2019

There have been no changes notified to the Company as at the date of approval of this Report.

Corporate Governance

The Company is committed to high standards of corporate governance. The Board is accountable to the Company's shareholders for good governance and this statement describes how the Company has applied the principles identified in the UK Corporate Governance Code as published in April 2016 (the "2016 UK Code"), which is available on the Financial Reporting Council's (the "FRC") website: frc.org.uk.

The Board has also considered the principles and recommendations of the AIC Code of Corporate Governance as published in July 2016 (the "2016 AIC Code") by reference to the AIC Corporate Governance Guide for Investment Companies (the "2016 AIC Guide"). The 2016 AIC Code, as explained by the 2016 AIC Guide, addresses all the principles set out in the 2016 UK Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to investment trusts. The 2016 AIC Code and 2016 AIC Guide are available on the AIC's website: theaic.co.uk.

The Board considers that reporting in accordance with the principles and recommendations of the 2016 AIC Code, and by reference to the 2016 AIC Guide (which incorporates the 2016 UK Code), will provide better information to shareholders.

The Board confirms that, during the year, the Company complied with the recommendations of the 2016 AIC Code and the relevant provisions of the 2016 UK Code, except as set out below.

The 2016 UK Code includes provisions relating to:

- the role of the chief executive (A.1.2);

- executive directors' remuneration (D.1.1 and D.1.2);

- the need for an internal audit function (C.3.6).

For the reasons set out in the 2016 AIC Guide, and as explained in the 2016 UK Code, the Board considers that these provisions are not relevant to the position of the Company, being an externally managed investment company. In particular, all of the Company's day-to-day management and administrative functions are outsourced to third parties. As a result, the Company has no executive directors, employees or internal operations. The Company has therefore not reported further in respect of these provisions.

The full text of the Company's Corporate Governance Statement can be found on its website.

The Board notes the content of the new UK Code of Corporate Governance published by the FRC in July 2018 (the "2018 UK Code"), which is applicable for accounting periods beginning on or after 1 January 2019, and the new AIC Code of Corporate Governance published in February 2019 (the "2019 AIC Code"). The Board expects the Company to be compliant with the relevant provisions of the 2018 UK Code and the 2019 AIC Code for the year ending 31 January 2020.

Directors

Howard Williams was appointed as a Director on 1 April 2018 and John Carson retired as a Director on 24 May 2018. At the year-end, the Board comprised five non-executive Directors, each of which is considered by the Board to be independent of the Company and the Manager. David Barron is the Chairman.

The Directors attended scheduled Board and Committee meetings during the year ended 31 January 2019 as follows (with their eligibility to attend the relevant meetings in brackets):

	Scheduled Board Meetings	Audit Committee Meetings	Management Engagement Committee Meetings	Nomination and Remuneration Committee Meetings
David Barron	5 (5)	2 (2)	1 (1)	1 (1)
John Carson	2 (2)	1 (1)	- (-)	- (-)
Catherine Claydon	5 (5)	2 (2)	1 (1)	1 (1)
Jasper Judd	5 (5)	2 (2)	1 (1)	1 (1)
Elisabeth Scott	5 (5)	2 (2)	1 (1)	1 (1)
Howard Williams	4 (4)	1 (1)	1 (1)	1 (1)

The Board meets more frequently when business needs require.

Under the terms of the Company's Articles of Association, Directors are subject to election at the first Annual General Meeting after their appointment and are required to retire and be subject to re-election at least every three years thereafter. However, in light of the publication of the 2018 UK Code which stipulates that all directors of a Company with a premium listing should seek annual re-election, the Board has decided that all Directors will retire annually with effect from the Annual General Meeting in 2019.

Accordingly, Jasper Judd, Catherine Claydon, Elisabeth Scott, Howard Williams and David Barron retire at the Annual General Meeting and, being eligible, offer themselves for re-election.

Directors' and Officers' Liability Insurance

The Company maintains insurance in respect of Directors' and Officers' liabilities in relation to their acts on behalf of the Company. Each Director is entitled to be indemnified out of the assets of the Company to the extent permitted by law against any loss or liability incurred by him or her in the execution of his or her duties in relation to the affairs of the Company. These rights are included in the Articles of Association of the Company.

Management of Conflicts of Interest

The Board has a procedure in place to deal with a situation where a Director has a conflict of interest. As part of this process, each Director prepares a list of other positions held and all other conflict situations that may need to be authorised either in relation to the Director concerned or his or her connected persons. The Board considers each Director's situation and decides whether to approve any conflict, taking into consideration what is in the best interests of the Company and whether the Director's ability to act in accordance with his or her wider duties is affected. Each Director is required to notify the Company Secretary of any potential, or actual, conflict situations that will need authorising by the Board. Authorisations given by the Board are reviewed at each Board meeting.

No Director has a service contract with the Company although all Directors are issued with letters of appointment. There were no contracts during, or at the end of the year, in which any Director was interested.

The Company has a policy of conducting its business in an honest and ethical manner. The Company takes a zero-tolerance approach to bribery and corruption and has procedures in place that are proportionate to the Company's circumstances to prevent them. The Manager also adopts a group-wide zero-tolerance approach and has its own detailed policy and procedures in place to prevent bribery and corruption. Copies of the Manager's anti-bribery and corruption policies are available on its website.

In relation to the corporate offence of failing to prevent tax evasion, it is the Company's policy to conduct all business in an honest and ethical manner. The Company takes a zero-tolerance approach to facilitation of tax evasion whether under UK law or under the law of any foreign country and is committed to acting professionally, fairly and with integrity in all its business dealings and relationships.

Going Concern

The Company's assets consist mainly of equity shares in companies listed on the London Stock Exchange and in most circumstances are realisable within a short timescale. The Board has set limits for borrowing and derivative contract positions and regularly reviews actual exposures, cash flow projections and compliance with loan covenants.

The repayment of the Company's £28.6 million 7 7/8% Debenture Stock is due on 30 April 2019 and has been pre-financed through the issue of £30 million 3.99% Loan Notes which are repayable in December 2045, the proceeds of which are invested in a portfolio of fixed interest securities which broadly match the duration of the Debenture and which will be realised to repay the Debenture Stock.

The Directors believe that the Company has adequate financial resources to continue in operational existence for the foreseeable future and for at least twelve months from the date of this Report. Accordingly, they continue to adopt the going concern basis of accounting in preparing the financial statements.

Accountability and Audit

Each Director confirms that, so far as he or she is aware, there is no relevant audit information of which the Company's auditor is unaware, and they have taken all the steps that they could reasonably be expected to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Independent Auditor

The Company's auditor, Deloitte LLP, has indicated its willingness to remain in office. The Board will propose resolutions at the Annual General Meeting to appoint Deloitte LLP as auditor for the ensuing year and to authorise the Directors to determine its remuneration.

Relations with Shareholders

The Directors place a great deal of importance on communications with shareholders. Shareholders and investors may obtain up to date information on the Company through its website and the Manager's information service.

The Board's policy is to communicate directly with shareholders and their representative bodies without the involvement of the management group (including the Company Secretary or the Manager) in situations where direct communication is required, and representatives from the Board meet with major shareholders on an annual basis in order to gauge their views. In addition, the Company Secretary only acts on behalf of the Board, not the Manager, and there is no filtering of communication. At each Board meeting the Board receives full details of any communication from shareholders to which the Chairman responds personally as appropriate.

The notice of the Annual General Meeting is sent out at least 20 working days in advance of the meeting. All shareholders have the opportunity to put questions to the Board and Manager at the meeting.

Global Greenhouse Gas Emissions

The Company has no greenhouse gas emissions to report from its operations, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013.

Annual General Meeting

The Annual General Meeting will be held at Discovery Point, Discovery Quay, Dundee DD1 4XA on Thursday 23 May 2019 at 12 noon.

By order of the Board

Aberdeen Asset Management PLC

Company Secretary

40 Princes Street

Edinburgh EH2 2BY

27 March 2019

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with UK Accounting Standards, including FRS 102 'The Financial Reporting Standard Applicable in the UK and Republic of Ireland'.

Under Company law the Directors must not approve the financial statements unless they are satisfied that they 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 are required to:

- select suitable accounting policies and then apply them consistently;

- make judgments and estimates that are reasonable and prudent;

- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

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 Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Statement of Corporate Governance that comply with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website, but not for the content of any information included on the website that has been prepared or issued by third parties. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors confirm that to the best of their knowledge:

- the financial statements have been prepared in accordance with applicable accounting standards and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

- in the opinion of the Directors, the Annual Report taken as a whole, is fair, balanced and understandable and it provides the information necessary to assess the Company's position and performance, business model and strategy; and

- the Strategic Report and Directors' Report include 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 the Company faces.

On behalf of the Board

David Barron

Chairman

27 March 2019

STATEMENT OF COMPREHENSIVE INCOME

		Year ended 31 January 2019			Year ended 31 January 2018
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
(Losses)/gains on investments	10	-	(33,446)	(33,446)	-	30,708	30,708
Currency losses		-	(40)	(40)	-	(217)	(217)
Income	3	22,263	-	22,263	22,317	-	22,317
Investment management fee	4	(668)	(1,001)	(1,669)	(687)	(1,030)	(1,717)
Administrative expenses	5	(942)	-	(942)	(954)	-	(954)
		______	______	______	______	______	______
Net return before finance costs and taxation		20,653	(34,487)	(13,834)	20,676	29,461	50,137

Finance costs	6	(1,450)	(2,165)	(3,615)	(1,445)	(2,159)	(3,604)
		______	______	______	______	______	______
Return before taxation		19,203	(36,652)	(17,449)	19,231	27,302	46,533

Taxation	7	(332)	-	(332)	(262)	-	(262)
		______	______	______	______	______	______
Return after taxation		18,871	(36,652)	(17,781)	18,969	27,302	46,271
		______	______	______	______	______	______

Return per Ordinary share (pence)	9	12.68	(24.63)	(11.95)	12.64	18.19	30.83
		______	______	______	______	______	______

The column of this statement headed "Total" represents the profit and loss account of the Company.
All revenue and capital items in the above statement derive from continuing operations.
The accompanying notes are an integral part of the financial statements.

STATEMENT OF FINANCIAL POSITION

		31 January 2019	31 January 2018
	Notes	£'000	£'000
Non-current assets
Equity securities		437,108	477,015
Fixed interest securities		28,214	28,246
		_________	_________
Investments at fair value through profit or loss	10	465,322	505,261
		_________	_________
Current assets
Debtors	11	3,708	2,022
Cash and cash equivalents		3,548	5,983
		_________	_________
		7,256	8,005
		_________	_________
Creditors: amounts falling due within one year
Bank loan	12	(11,427)	(11,476)
Debenture Stock	12	(28,597)	-
Other creditors	12	(1,098)	(1,107)
		_________	_________
		(41,122)	(12,583)
		_________	_________
Net current liabilities		(33,866)	(4,578)
		_________	_________
Total assets less current liabilities		431,456	500,683

Creditors: amounts falling due after more than one year	13	(29,725)	(58,299)
		_________	_________
Net assets		401,731	442,384
		_________	_________
Capital and reserves
Called-up share capital	14	38,419	38,419
Share premium account		4,619	4,619
Capital redemption reserve		1,606	1,606
Capital reserve		330,402	370,634
Revenue reserve		26,685	27,106
		_________	_________
Equity shareholders' funds		401,731	442,384
		_________	_________

Net asset value per Ordinary share (pence)	16	270.90	295.55
		_________	_________
The accompanying notes are an integral part of the financial statements.

STATEMENT OF CHANGES IN EQUITY

For the year ended 31 January 2019
			Share	Capital
		Share	premium	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 January 2018		38,419	4,619	1,606	370,634	27,106	442,384
Return after taxation		-	-	-	(36,652)	18,871	(17,781)
Dividends paid	8	-	-	-	-	(19,292)	(19,292)
Buyback of Ordinary shares for treasury		-	-	-	(3,580)	-	(3,580)
		______	______	______	______	______	______
Balance at 31 January 2019		38,419	4,619	1,606	330,402	26,685	401,731
		______	______	______	______	______	______

For the year ended 31 January 2018
			Share	Capital
		Share	premium	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 January 2017		38,419	4,619	1,606	345,486	25,680	415,810
Return after taxation		-	-	-	27,302	18,969	46,271
Dividends paid	8	-	-	-	-	(17,543)	(17,543)
Buyback of Ordinary shares for treasury		-	-	-	(2,154)	-	(2,154)
		______	______	______	______	______	______
Balance at 31 January 2018		38,419	4,619	1,606	370,634	27,106	442,384
		______	______	______	______	______	______

The Revenue reserve and the part of the Capital reserve represented by realised capital gains represent the amount of the Company's reserves distributable by way of dividend.
The accompanying notes are an integral part of the financial statements.

STATEMENT OF CASH FLOWS

		Year ended	Year ended
		31 January 2019	31 January 2018
	Notes	£'000	£'000
Operating activities
Net return before finance costs and taxation		(13,834)	50,137
Adjustment for:
Losses/(gains) on investments		33,446	(30,708)
Currency losses		40	217
Increase in accrued dividend income		(243)	(316)
Increase in accrued interest income		(253)	(33)
Stock dividends included in dividend income		(956)	(1,009)
Amortisation of fixed income book cost		633	362
Decrease/(increase) in other debtors excluding tax		6	(8)
Increase/(decrease) in other creditors		220	(127)
Net tax paid		(438)	(424)
		______	______
Net cash flow from operating activities		18,621	18,091

Investing activities
Purchases of investments		(198,438)	(80,500)
Sales of investments		203,936	83,013
		______	______
Net cash from investing activities		5,498	2,513

Financing activities
Interest paid		(3,593)	(3,578)
Dividends paid	8	(19,292)	(17,543)
Buyback of Ordinary shares for treasury		(3,580)	(2,154)
		______	______
Net cash used in financing activities		(26,465)	(23,275)
		______	______
Decrease in cash and cash equivalents		(2,346)	(2,671)
		______	______
Analysis of changes in cash and cash equivalents during the year
Opening balance		5,983	8,648
Effect of exchange rate fluctuations on cash held		(89)	6
Decrease in cash as above		(2,346)	(2,671)
		______	______
Closing balance		3,548	5,983
		______	______

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JANUARY 2019

1.	Principal activity
	The Company is a closed-end investment company, registered in Scotland No. SC000881, with its Ordinary shares being listed on the London Stock Exchange.

2.	Accounting policies
	(a)	Basis of preparation and going concern
		The financial statements have been prepared in accordance with Financial Reporting Standard 102 and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in November 2014 and updated in February 2018 with consequential amendments. The financial statements are prepared in sterling which is the functional currency of the Company and rounded to the nearest £'000. They have also been prepared on a going concern basis and on the assumption that approval as an investment trust will continue to be granted.

		The Directors have, at the time of approving the financial statements, a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements. Further detail is included in the Directors' Report.

		Critical accounting judgements and key sources of estimation uncertainty
		The preparation of financial statements requires the use of certain significant accounting judgements, estimates and assumptions which requires management to exercise its judgement in the process of applying the accounting policies and are continually evaluated. The Board considers that there are no accounting judgements, estimates and assumptions which would significantly impact the financial statements.

	(b)	Revenue, expenses and interest payable
		Income from equity investments (other than special dividends), including taxes deducted at source, is included in revenue by reference to the date on which the investment is quoted ex-dividend. Special dividends are credited to revenue or capital according to the circumstances. Foreign income is converted at the exchange rate applicable at the time of receipt. Interest receivable on short term deposits and expenses are accounted for on an accruals basis. Income from underwriting commission is recognised as earned. Interest payable is calculated on an effective yield basis. Stock lending income is recognised on an accruals basis.

		The fixed returns on debt securities are recognised on a time apportionment basis so as to reflect the effective yield on the debt securities.

		Underwriting commission is taken to revenue, unless any shares underwritten are required to be taken up, in which case the proportionate commission received is deducted from the cost of the investment.

		Expenses are charged to capital when they are incurred in connection with the maintenance or enhancement of the value of investments. In this respect, the investment management fee and relevant finance costs including the amortisation of expenses and premium related to the debenture issue and loan note placement are allocated between revenue and capital in line with the Board's expectation of returns from the Company's investments over the long-term of 40% to revenue and 60% to capital.

	(c)	Investments
		Investments have been designated upon initial recognition as fair value through profit or loss. Investments are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require delivery within the timeframe established by the market concerned, and are measured initially at fair value. Subsequent to initial recognition, investments are recognised at fair value through profit or loss. For listed investments, this is deemed to be bid market prices or closing prices for SETS stocks sourced from the London Stock Exchange. SETS is the London Stock Exchange electronic trading service covering most of the market including all FTSE All-Share and the most liquid AIM constituents. Gains or losses arising from changes in fair value are included in net profit or loss for the period as a capital item in the Statement of Comprehensive Income.

	(d)	Dividends payable
		Dividends payable to equity shareholders are recognised in the financial statements when they have been approved by Shareholders and become a liability of the Company. Interim dividends are recognised in the financial statements in the period in which they are paid.

	(e)	Nature and purpose of reserves
		Called-up share capital
		The Ordinary share capital on the Statement of Financial Position relates to the number of shares in issue and in treasury. Only when the shares are cancelled, either from treasury or directly, is a transfer made to the capital redemption reserve.

		Share premium account
		The balance classified as share premium includes the premium above nominal value from the proceeds on issue of any equity share capital comprising Ordinary shares of 25p.

		Capital redemption reserve
		The capital redemption reserve is used to record the amount equivalent to the nominal value of any of the Company's own shares purchased and cancelled in order to maintain the Company's capital.

		Capital reserve
		Gains or losses on disposal of investments and changes in fair values of investments are transferred to the capital reserve. The capital element of the management fee and relevant finance costs are charged to this reserve. Any associated tax relief is also credited to this reserve. The part of this reserve represented by realised capital gains is available for distribution by way of dividend.

		The costs of share buybacks to be held in treasury are also deducted from this reserve.

		Revenue reserve
		Income and expenses which are recognised in the revenue column of the Statement of Comprehensive Income are transferred to the revenue reserve. The revenue reserve is available for distribution by way of dividend.

	(f)	Taxation
		The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes.

		Owing to the Company's status as an investment trust, and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.

	(g)	Foreign currency
		Monetary assets and liabilities and non-monetary assets held at fair value denominated in foreign currencies are converted into sterling at the rate of exchange ruling at the reporting date. Transactions during the year involving foreign currencies are converted at the rate of exchange ruling at the transaction date. Gains or losses arising from a change in exchange rates subsequent to the date of a transaction are included as a currency gain or loss in revenue or capital in the Statement of Comprehensive Income, depending on whether the gain or loss is of a revenue or capital nature. The Company receives a proportion of its investment income in foreign currency. These amounts are translated at the rate ruling on the date of receipt.

	(h)	Traded options
		The Company may enter into certain derivative contracts (e.g. options). Option contracts are accounted for as separate derivative contracts and are therefore shown in other assets or other liabilities at their fair value. The initial fair value is based on the initial premium, which is recognised upfront. The premium received and fair value changes in the open position which occur due to the movement in underlying securities are recognised in the revenue column, losses realised on the exercise of the contracts are recorded in the capital column of the Statement of Comprehensive Income.

		In addition, the Company may enter into derivative contracts to manage market risk and gains or losses arising on such contracts are recorded in the capital column of the Statement of Comprehensive Income.

	(i)	Borrowings
		Borrowings are measured initially at the fair value of the consideration received, net of any issue expenses, and subsequently at amortised cost using the effective interest method. The finance costs of such borrowings are accounted for on an accruals basis using the effective interest rate method and are charged 40% to revenue and 60% to capital in the Statement of Comprehensive Income to reflect the Company's investment policy and prospective income and capital growth.

		2019	2018
3.	Income	£'000	£'000
	Income from investments
	UK dividend income	15,706	15,383
	Overseas dividends	3,160	3,203
	Fixed income	946	1,290
	Stock dividends	956	1,009
		______	______
		20,768	20,885
		______	______
	Other income
	Income on derivatives	1,495	1,413
	Underwriting commission	-	5
	Income from stock lending	-	14
		______	______
		1,495	1,432
		______	______
	Total income	22,263	22,317
		______	______

	During the year, the Company earned premiums totalling £1,495,000 (2018 - £1,413,000) in exchange for entering into derivative transactions. The Company had no open positions in derivative contracts at 31 January 2019 (2018 - no open positions). Losses realised on the exercise of derivative transactions are disclosed in note 10.

		2019			2018
		Revenue	Capital	Total	Revenue	Capital	Total
4.	Management fee	£'000	£'000	£'000	£'000	£'000	£'000
	Management fee	668	1,001	1,669	687	1,030	1,717
		______	______	______	______	______	______

	The Company has an agreement with Aberdeen Standard Fund Managers Limited ("ASFML") for the provision of investment management, risk management, accounting, administrative and secretarial services. The management fee is calculated and charged, on a monthly basis, at 0.45% per annum on the first £225 million, 0.35% per annum on the next £200 million and 0.25% per annum on amounts over £425 million of the net assets of the Company, with debt at par and excluding commonly managed funds. The balance due at the year end was £128,000 (2018 - £nil). The management fee is allocated 40% to revenue and 60% to capital. There were no commonly managed funds held in the portfolio during the year to 31 January 2019 (2018 - none).

	The management agreement may be terminated by either party on six months' written notice.

			2019	2018
5.	Administrative expenses		£'000	£'000
	Directors' fees		132	126
	Auditor's remuneration (excluding irrecoverable VAT):
	fees payable to the Company's auditor for the audit of the Company's annual accounts		20	19
	fees payable to the Company's auditor for other services
		- interim review	6	6
		- other services	2	1
	Promotional activities		372	372
	Registrar's fees		47	45
	Share plan fees		87	72
	Printing and postage		48	49
	Other expenses		228	264
			______	______
			942	954
			______	______

	Expenses of £372,000 (2018 - £372,000) were paid to ASFML in respect of the promotion of the Company. The balance outstanding at the year end was £124,000 (2018 - £31,000).

	All of the expenses above, with the exception of auditor's remuneration, include irrecoverable VAT where applicable. The VAT charged on the auditor's remuneration is disclosed within other expenses.

		2019			2018
		Revenue	Capital	Total	Revenue	Capital	Total
6.	Finance costs	£'000	£'000	£'000	£'000	£'000	£'000
	Bank loan	54	82	136	50	75	125
	Debenture Stock	901	1,351	2,252	901	1,352	2,253
	Amortised Debenture Stock premium and issue expenses	5	8	13	5	8	13
	Loan Notes - repayable after more than 5 years	479	718	1,197	479	718	1,197
	Amortised Loan Notes issue expenses	4	6	10	4	6	10
	Bank overdraft	7	-	7	6	-	6
		______	______	______	______	______	______
		1,450	2,165	3,615	1,445	2,159	3,604
		______	______	______	______	______	______

	Finance costs (excluding bank overdraft interest) are allocated 40% to revenue and 60% to capital.

			2019			2018
			Revenue	Capital	Total	Revenue		Capital	Total
7.	Taxation		£'000	£'000	£'000	£'000		£'000	£'000
	(a)	Analysis of charge for the year
		Overseas tax suffered	551	-	551	498		-	498
		Overseas tax reclaimable	(219)	-	(219)	(236)		-	(236)
			______	______	______	______		______	______
		Total tax charge for the year	332	-	332	262		-	262
			______	______	______	______		______	______

	(b)	Factors affecting the tax charge for the year
		The UK corporation tax rate is 19% (2018 - effective rate of 19.17%). The tax assessed for the year is lower than the rate of corporation tax. The differences are explained below:

			2019				2018
			Revenue	Capital	Total		Revenue	Capital	Total
			£'000	£'000	£'000		£'000	£'000	£'000
		Return before taxation	19,203	(36,652)	(17,449)		19,231	27,302	46,533

		Corporation tax at 19% (2018 - 19.17%)	3,649	(6,964)	(3,315)		3,687	5,234	8,921
		Effects of:
		Non-taxable UK dividend income	(2,925)	-	(2,925)		(2,948)	-	(2,948)
		Non-taxable stock dividends	(182)	-	(182)		(194)	-	(194)
		Capital losses/(gains) on investments not taxable	-	6,355	6,355		-	(5,887)	(5,887)
		Expenses not deductible for tax purposes	1	-	1		-	-	-
		Currency losses not taxable	-	8	8		-	42	42
		Overseas taxes	332	-	332		262	-	262
		Non-taxable overseas dividends	(558)	-	(558)		(551)	-	(551)
		Corporate interest restriction	-	-	-		123	184	307
		Excess management expenses	15	601	616		(117)	427	310
			______	______	______		______	______	______
		Total tax charge	332	-	332		262	-	262
			______	______	______		______	______	______

	(c)	Factors that may affect future tax charges
		At the year end, the Company has, for taxation purposes only, accumulated unrelieved management expenses and loan relationship deficits of £126,416,000 (2018 - £121,573,000). A deferred tax asset in respect of this has not been recognised and these unrelieved expenses will only be utilised if the Company has profits chargeable to corporation tax in the future.

		2019	2018
8.	Ordinary dividends on equity shares	£'000	£'000
	Amounts recognised as distributions paid during the year:
	Third interim dividend for 2018 - 2.575p (2017 - 2.575p)	3,854	3,876
	Final dividend for 2018 - 4.375p (2017 - 3.975p)	6,540	5,969
	First interim dividend for 2019 - 3.000p (2018 - 2.575p)	4,464	3,865
	Second interim dividend for 2019 - 3.000p (2018 - 2.575p)	4,449	3,865
	Return of unclaimed dividends	(15)	(32)
		______	______
		19,292	17,543
		______	______

	A third interim dividend of 3.000p per Ordinary share was declared on 6 December 2018, payable on 22 February 2019 to shareholders on the register on 1 February 2019 and has not been included as a liability in these financial statements.

	The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.

	The table below sets out the total dividends paid and proposed in respect of the financial year, which is the basis upon which the requirements of Sections 1158-1159 of the Corporation Tax Act 2010 are considered. The net revenue available for distribution by way of dividend for the year is £18,871,000 (2018 - £18,969,000).

		2019	2018
		£'000	£'000
	First interim dividend for 2019 - 3.000p (2018 - 2.575p)	4,464	3,865
	Second interim dividend for 2019 - 3.000p (2018 - 2.575p)	4,449	3,865
	Third interim dividend for 2019 - 3.000p (2018 - 2.575p)	4,449	3,857
	Proposed final dividend for 2019 - 3.450p (2018 - 4.375p)	5,115	6,540
		______	______
		18,477	18,127
		______	______

	19,150 Ordinary shares have been bought back since the year end and the proposed final dividend is based on the latest share capital of 148,273,519 Ordinary shares.

		2019		2018
9.	Return per Ordinary share	£'000	p	£'000	p
	Revenue return	18,871	12.68	18,969	12.64
	Capital return	(36,652)	(24.63)	27,302	18.19
		______	______	______	______
	Total return	(17,781)	(11.95)	46,271	30.83
		______	______	______	______
	Weighted average number of Ordinary shares in issue		148,838,510		150,103,822
			________		________

		Listed	Listed
		2019	2018
10.	Investments: listed at fair value through profit or loss	£'000	£'000
	Opening fair value	505,261	470,664
	Opening investment holding gains	(126,163)	(101,391)
		______	______
	Opening book cost	379,098	369,273
		______	______
	Purchases at cost	198,533	81,375
	Sales - proceeds	(205,026)	(77,486)
	Sales - realised gains ^A	36,030	5,936
		______	______
	Closing book cost	408,635	379,098
	Closing investment holdings gains	56,687	126,163
		______	______
	Closing fair value	465,322	505,261
		______	______

		2019	2018
	(Losses)/gains on investments	£'000	£'000
	Realised gains on sales ^A	36,030	5,936
	Change in investment holdings gains	(69,476)	24,772
		______	______
		(33,446)	30,708
		______	______

	^A Includes losses realised on the exercise of traded options of £356,000 (2018 - £198,000). Premiums received of £1,495,000 (2018 - £1,413,000) are included within income per note 3.

	Transaction costs
	During the year expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains on investments in the Statement of Comprehensive Income. The total costs were as follows:

		2019	2018
		£'000	£'000
	Purchases	837	215
	Sales	59	28
		______	______
		896	243
		______	______

	The above transaction costs are calculated in line with the AIC SORP. The transaction costs in the Company's Key Information Document are calculated on a different basis and in line with the PRIIPs regulations.

		2019	2018
	Stock lending	£'000	£'000
	Maximum aggregate value of securities on loan during the year	-	4,640
	Fee income from stock lending	-	14
		______	______

	Stock lending is the temporary transfer of securities by a lender to a borrower, with an agreement by the borrower to return equivalent securities to the lender at an agreed date. Fee income is received for making the investments available to the borrower. The principal risks and rewards of holding the investments, namely the market movements in share prices and dividend income, are retained by the Company. In all cases the securities lent continue to be recognised on the Statement of Financial Position.

	All stocks lent under these arrangements are fully secured by collateral. The value of the collateral held at 31 January 2019 was £nil (2018 - £nil).

		2019	2018
11.	Debtors: amounts falling due within one year	£'000	£'000
	Net dividends and interest receivable	1,882	1,386
	Tax recoverable	714	607
	Amounts due from brokers	1,090	-
	Other loans and receivables	22	29
		______	______
		3,708	2,022
		______	______

12.	Creditors: amounts falling due within one year		2019	2018
	(a)	Bank loan	£'000	£'000
		EUR 13,100,000 - 13 February 2018	-	11,476
		EUR 13,100,000 - 14 February 2019	11,427	-
			______	______
			11,427	11,476
			______	______

		The Company has a multi-currency revolving credit facility agreement (which expires 13 July 2021) with Scotiabank for £15,000,000, with the ability to increase to £30,000,000. At 31 January 2019 €13,100,000 had been drawn down at a rate of 0.9% (2018 - €13,100,000 at a rate of 0.8%), which matured on 14 February 2019. At the date this Report was approved €13,100,000 had been drawn down at a rate of 0.9%, maturing on 15 April 2019. The terms of the loan facility contain covenants that the adjusted asset coverage is not be less than 4.00 to 1.00 and that the minimum net assets of the Company are £200 million.

			2019	2018
	(b)	Debenture Stock	£'000	£'000
		7⅞% Debenture Stock 2019	28,600	-
		Unamortised Debenture Stock premium and issue expenses	(3)	-
			______	______
		Amortised cost of Debenture Stock	28,597	-
			______	______

		The 7⅞% Debenture Stock was issued in 1997 and is due to be redeemed at par on 30 April 2019. Interest is payable in half-yearly instalments in April and October. The Debenture Stock is secured by a floating charge over the whole of the assets of the Company. The Company has complied with the Debenture Stock Trust Deed covenant that total borrowings should not be greater than adjusted capital and reserves throughout the year and up to the date this Report was signed.

		The fair value of the Debenture Stock as at 31 January 2019 was £28,969,000 (2018 - £30,684,000), the value being calculated per the disclosure in note 17. The effect on the net asset value of deducting the Debenture Stock at fair value rather than at par is disclosed in note 16.

			2019	2018
	(c)	Other creditors	£'000	£'000
		Debenture Stock, Loan Notes and bank loan interest	751	753
		Amounts due to stockbrokers	-	228
		Sundry creditors	347	126
			______	______
			1,098	1,107
			______	______

		2019	2018
13.	Creditors: amounts falling due after more than one year	£'000	£'000
	7⅞% Debenture Stock 2019	-	28,600
	Unamortised Debenture Stock premium and issue expenses	-	(16)
	Amortised cost of Debenture Stock	-	28,584

	3.99% Loan Notes 2045	30,000	30,000
	Unamortised Loan Note issue expenses	(275)	(285)
		______	______
	Amortised cost of Loan Notes	29,725	29,715
		______	______
	Total	29,725	58,299
		______	______

	The 3.99% Loan Notes were issued in December 2015 and are due to be redeemed at par on 8 December 2045. Interest is payable in half-yearly instalments in June and December. The Loan Notes are secured by a floating charge over the whole of the assets of the Company. The Company has complied with the Loan Note Trust Deed covenant that total net borrowings (ie. after the deduction of cash balances) should not exceed 33% of the Company's net asset value and that the Company's net asset value should not be less than £200 million.

	The fair value of the Loan Notes as at 31 January 2019 was £35,391,000 (2018 - £35,069,000), the value being calculated per the disclosure in note 17. The effect on the net asset value of deducting the Loan Notes at fair value rather than at par is disclosed in note 16.

		2019	2018
14.	Called-up share capital	£'000	£'000
	Allotted, called up and fully paid:
	148,292,669 (2018 - 149,679,687) Ordinary shares of 25p each - equity	37,073	37,420
	Treasury shares:
	5,385,266 (2018 - 3,998,248) Ordinary shares of 25p each - equity	1,346	999
		______	______
		38,419	38,419
		______	______

	The Ordinary share capital on the Statement of Financial Position relates to the number of shares in issue and in treasury. Only when the shares are cancelled, either from treasury or directly, is a transfer made to the capital redemption reserve.

	During the year the Company repurchased 1,387,018 Ordinary shares (2018 - 833,000) at a cost of £3,580,000 including expenses (2018 - £2,154,000). All of these shares were placed in treasury.

	Since the year end a further 19,150 Ordinary shares of 25p each have been purchased by the Company at a total cost of £49,000. These are held in treasury.

		2019			2018
		Equity			Equity
		share capital			share capital
		(including	Loan	Debenture	(including	Loan	Debenture
15.	Analysis of changes in financing	premium)	Notes	stock	premium)	Notes	stock
	during the year	£'000	£'000	£'000	£'000	£'000	£'000
	Opening balance at 31 January 2018	43,038	29,715	28,584	43,038	29,705	28,571
	Movement in unamortised Debenture Stock discount and issue expenses	-	-	13	-	-	13
	Movement in unamortised Loan Notes issue expenses	-	10	-	-	10	-
		______	______	______	______	______	______
	Closing balance at 31 January 2019	43,038	29,725	28,597	43,038	29,715	28,584
		______	______	______	______	______	______

16.	Net asset value per share
	Equity shareholders' funds have been calculated in accordance with the provisions of FRS 102. The analysis of equity shareholders' funds on the face of the Statement of Financial Position does not reflect the rights under the Articles of Association of the Ordinary shareholders on a return of assets. These rights are reflected in the net asset value and the net asset value per share attributable to Ordinary shareholders at the year end, adjusted to reflect the deduction of the Debenture Stock and Loan Notes at par. A reconciliation between the two sets of figures is as follows:

		2019	2018
	Net assets attributable (£'000)	401,731	442,384
	Number of Ordinary shares in issue at year end ^A	148,292,669	149,679,687
	Net asset value per Ordinary share	270.90p	295.55p
		______	______
	^A Excluding shares held in treasury.

	Adjusted net assets	2019	2018
	Net assets attributable (£'000) as above	401,731	442,384
	Unamortised Debenture Stock premium and issue expenses (note 12)	(3)	(16)
	Unamortised Loan Note issue expenses (note 13)	(275)	(285)
		______	______
	Adjusted net assets attributable (£'000)	401,453	442,083
		______	______
	Number of Ordinary shares in issue at year end^A	148,292,669	149,679,687
	Adjusted net asset value per Ordinary share	270.72p	295.35p
		______	______
	^A Excluding shares held in treasury.

	Net assets - debt at fair value	£'000	£'000
	Net assets attributable	401,731	442,384
	Amortised cost Debenture Stock	28,597	28,584
	Amortised cost Loan Notes	29,725	29,715
	Market value Debenture Stock	(28,969)	(30,684)
	Market value Loan Notes	(35,391)	(35,069)
		______	______
	Net assets attributable	395,693	434,930
		______	______
	Number of Ordinary shares in issue at the period end^A	148,292,669	149,679,687
	Net asset value per Ordinary share (debt at fair value)	266.83p	290.57p
	^A Excluding shares held in treasury.	______	______

	Net assets - debt at fair value - adjusted^A	£'000	£'000
	Net assets attributable	401,731	442,384
	Amortised cost Debenture Stock	28,597	28,584
	Amortised cost Loan Notes	29,725	29,715
	Market value Debenture Stock	(28,969)	(30,684)
	Market value Loan Notes	(35,391)	(35,069)
		______	______
	Net assets attributable	395,693	434,930
		______	______
	Number of Ordinary shares in issue at the period end ^B	148,292,669	149,679,687
		_________	_________
	Net asset value per Ordinary share (debt at fair value)	266.83p	290.57p
	Less: 3rd interim dividend 2019	(3.00)p	-
		______	______
	Net asset value per Ordinary share (debt at fair value) - adjusted	263.83p	290.57p
		______	______

	^A Cum-income NAV with debt at fair value, adjusted to exclude the third interim dividend for the year ended 31 January 2019 which went ex-dividend on 31 January 2019 but was not paid until 22 February 2019 due to the difference in recognition of dividends payable on an ex-dividend date basis under AIC reporting guidelines and upon payment under accounting standards.
	^B Excluding shares held in treasury.

	Net assets - debt at fair value (capital basis)	£'000	£'000
	Net assets attributable	395,693	434,930
	Less: revenue return for the period	(18,871)	(18,969)
	Add: interim dividends paid	8,913	7,730
	Less: refund of unclaimed dividends	(15)	(32)
		______	______
	Net assets attributable	385,720	423,659
		______	______
	Number of Ordinary shares in issue at the period end^A	148,292,669	149,679,687
	Net asset value per Ordinary share (debt at fair value)	260.11p	283.04p
		______	______
	^A Excluding shares held in treasury.

17.

Financial instruments and risk management

The Company's investment activities expose it to various types of financial risk associated with the financial instruments and markets in which it invests. The Company's financial instruments comprise securities and other investments, cash balances, loans and debtors and creditors that arise directly from its operations; for example, in respect of sales and purchases awaiting settlement, and debtors for accrued income. The Company also has the ability to enter into derivative transactions in the form of option contracts for the purpose of generating income and futures/options for hedging market exposures.

During the year, the Company entered into certain options contracts for the purpose of generating income. Positions closed during the year realised a loss of £356,000 (2018 - £198,000). As disclosed in note 3, the premium received and fair value changes in respect of options written in the year was £1,495,000 (2018 - £1,413,000). The largest position in derivative contracts held during the year at any given time was £955,000 (2018 - £510,000). The Company had no open positions in derivative contracts at 31 January 2019 (2018 - none).

The Board relies on Aberdeen Standard Fund Managers Limited ("ASFML" or the "Manager") for the provision of risk management activities under the terms of its management agreement with ASFML (further details of which are included under note 4). The Board regularly reviews and agrees policies for managing each of the key financial risks identified with the Manager. The types of risk and the Manager's approach to the management of each type of risk, are summarised below. Such approach has been applied throughout the year and has not changed since the previous accounting period. The numerical disclosures exclude short-term debtors and creditors on the grounds that they are not considered to be material.

The Company's Manager has an independent Investment Risk department for reviewing the investment risk parameters of all core equity, fixed income and alternative asset classes on a regular basis. The department reports to the Manager's Performance Review Committee which is chaired by the Manager's Chief Investment Officer. The department's responsibility is to review and monitor ex-ante (predicted) portfolio risk and style characteristics using best practice, industry standard multi-factor models.

Risk management framework

The directors of ASFML collectively assume responsibility for ASFML's obligations under the AIFMD including reviewing investment performance and monitoring the Company's risk profile during the year.

ASFML is a fully integrated member of the Standard Life Aberdeen Group (the "Group") which provides a variety of services and support to ASFML in the conduct of its business activities, including in the oversight of the risk management framework for the Company. ASFML has delegated the day to day administration of the investment policy to Aberdeen Asset Managers Limited, which is responsible for ensuring that the Company is managed within the terms of its investment guidelines and the limits set out in its pre-investment disclosures to investors (details of which can be found on the Company's website). ASFML has retained responsibility for monitoring and oversight of investment performance, product risk and regulatory and operational risk for the Company.

The Manager conducts its risk oversight function through the operation of the Group's risk management processes and systems which are embedded within the Group's operations. The Group's Risk Division supports management in the identification and mitigation of risks and provides independent monitoring of the business. The Division includes Compliance, Business Risk, Market Risk, Risk Management and Legal. The team is headed up by the Group's Head of Risk, who reports to the co-Chief Executive Officers of the Group. The Risk Division achieves its objective through embedding the Risk Management Framework throughout the organisation using the Group's operational risk management system ("SHIELD").

The Group's Internal Audit Department is independent of the Risk Division and reports directly to the Group's co-Chief Executive Officers and to the Audit Committee of the Group's Board of Directors. The Internal Audit Department is responsible for providing an independent assessment of the Group's control environment.

The Group's corporate governance structure is supported by several committees to assist the board of directors of Aberdeen, its subsidiaries and the Company to fulfil their roles and responsibilities. The Group's Risk Division is represented on all committees, with the exception of those committees that deal with investment recommendations. The specific goals and guidelines on the functioning of those committees are described on the committees' terms of reference.

Risk Management

The main risks the Company faces from its financial instruments are (i) market risk (comprising interest rate risk, currency risk and other price risk), (ii) liquidity risk and (iii) credit risk.

The Board regularly reviews and agrees policies for managing each of these risks. The Group's policies for managing these risks are summarised below and have been applied throughout the year. The numerical disclosures exclude short-term debtors and creditors, other than for currency disclosures.

(i)

Market risk

Market risk comprises three elements - interest rate risk, currency risk and price risk.

Interest rate risk

Interest rate movements may affect:

- the fair value of the investments in fixed interest rate securities;

- the level of income receivable on cash deposits; and

- interest payable on the Company's variable rate borrowings.

Management of the risk

The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment and borrowing decisions.

The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis. Borrowings comprise fixed rate, revolving, and uncommitted facilities. Details of borrowings at 31 January 2019 are shown in notes 12 and 13.

Interest risk profile

The interest rate risk profile of the portfolio of financial assets and liabilities at the Statement of Financial Position date was as follows:

Weighted

average

Weighted

period for

average

which

interest

Fixed

Floating

rate is fixed

rate

At 31 January 2019

Years

£'000

Assets

Sterling

8.57

5.38

28,214

3,548

_______

Total assets

28,214

3,548

_______

Liabilities

Bank loans

0.08

0.90

(11,427)

Loan Notes

26.87

3.99

(29,725)

Debenture Stock

0.25

7.87

(28,597)

_______

Total liabilities

(69,749)

_______

The weighted average period for which interest rates are fixed in relation to the Company's fixed interest portfolio at 8.57 years, extends significantly beyond the maturity date of the 7⅞% Debenture Stock, which matures on 30 April 2019. This is due to the large number of perpetual holdings within that portfolio which have call dates around the time of the maturity of the Debenture.

Weighted

average

Weighted

period for

average

which

interest

Fixed

Floating

rate is fixed

rate

At 31 January 2018

Years

£'000

Assets

Sterling

11.62

6.36

28,246

5,983

_______

Total assets

28,246

5,983

_______

Weighted

average

Weighted

period for

average

which

interest

Fixed

Floating

rate is fixed

rate

Years

£'000

Liabilities

Bank loans

0.08

0.80

(11,476)

Loan Notes

27.87

3.99

(29,715)

Debenture Stock

1.25

7.87

(28,584)

_______

Total liabilities

(69,775)

_______

The weighted average interest rate is based on the current yield of each asset, weighted by its market value. The weighted average interest rate on bank loans is based on the interest rate payable, weighted by the total value of the loans. The maturity dates of the Company's borrowings are shown in notes 12 and 13 to the financial statements.

The floating rate assets consist of cash deposits all earning interest at prevailing market rates.

The Company's equity portfolio and short-term debtors and creditors (excluding bank loans) have been excluded from the above tables. All financial liabilities are measured at amortised cost.

Interest rate sensitivity

Movements in interest rates would not significantly affect net assets attributable to the Company's shareholders and total profit.

Foreign currency risk

A proportion of the Company's investment portfolio is invested in overseas securities whose values are subject to fluctuation due to changes in exchange rates. In addition, the impact of changes in foreign exchange rates upon the profits of investee companies can result, indirectly, in changes in their valuations. Consequently the Statement of Financial Position can be affected by movements in exchange rates.

Management of the risk

It is not the Company's policy to hedge this risk on a continuing basis but the Company may, from time to time, match specific overseas investment with foreign currency borrowings. A proportion of the Company's borrowings, as detailed in note 12, is in foreign currency as at 31 January 2019. The revenue account is subject to currency fluctuations arising on dividends received in foreign currencies and, indirectly, due to the impact of foreign exchange rates upon the profits of investee companies. The Company does not hedge this currency risk.

Foreign currency risk exposure by currency of denomination:

31 January 2019

31 January 2018

Net

Total

Net

Total

monetary

currency

monetary

currency

Investments

assets

exposure

Investments

assets

exposure

£'000

Euro

60,068

(11,289)

48,779

58,864

(11,074)

47,790

Swiss Francs

9,979

573

10,552

27,603

719

28,322

Danish Krone

8,308

8,355

9,200

193

9,393

Sterling

386,967

(52,922)

334,045

409,594

(52,715)

356,879

_______

Total

465,322

(63,591)

401,731

505,261

(62,877)

442,384

_______

The asset allocation between specific markets can vary from time to time based on the Manager's opinion of the attractiveness of the individual stocks in these markets.

Foreign currency sensitivity

There is no sensitivity analysis included as the Board believes the amount exposed to foreign currency denominated monetary assets to be immaterial. Where the Company's equity investments (which are non-monetary items) are priced in a foreign currency, they have been included within the other price risk sensitivity analysis so as to show the overall level of exposure.

Price risk

Price risks (i.e. changes in market prices other than those arising from interest rate or currency risk) may affect the value of the quoted investments and traded options.

Management of the risk

It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular company or sector. Both the allocation of assets and the stock selection process act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. The investments held by the Company are listed on various stock exchanges in the UK and Europe.

Price risk sensitivity

If market prices at the Statement of Financial Position date had been 10% higher while all other variables remained constant, the return attributable to Ordinary shareholders for the year ended 31 January 2019 would have increased by £46,532,000 (2018 - increase of £50,526,000) and equity reserves would have increased by the same amount. Had market prices been 10% lower the converse would apply.

(ii)

Liquidity risk

This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities as they fall due in line with the maturity profile analysed below.

Within

than

1 year

1-2 years

2-3 years

3-4 years

4-5 years

5 years

Total

At 31 January 2019

£'000

Bank loans

11,427

Debenture Stock

28,600

Loan Notes

30,000

Interest cash flows on bank loans, debentures and loan notes

1,769

1,197

26,334

32,891

Cash flows on other creditors

347

______

42,143

1,197

56,334

103,265

______

Within

than

1 year

1-2 years

2-3 years

3-4 years

4-5 years

5 years

Total

At 31 January 2018

£'000

Bank loans

11,476

Debenture Stock

28,600

Loan Notes

30,000

Interest cash flows on bank loans, debentures and loan notes

3,457

2,323

1,197

27,531

36,902

Cash flows on other creditors

354

______

15,287

30,923

1,197

57,531

107,332

______

Management of the risk

The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis. Borrowings comprise Debenture Stock, Loan Notes and a revolving facility. The Debenture Stock and Loan Notes provide secure long-term funding while short term flexibility is achieved through the borrowing facility. It is the Board's policy to maintain a gearing level, measured on the most stringent basis of calculation after netting off cash equivalents, of less than 30% at all times. Details of borrowings at 31 January 2019 are shown in notes 12 and 13.

Liquidity risk is not considered to be significant as the Company's assets comprise mainly cash and listed securities, which can be sold to meet funding commitments if necessary. Short-term flexibility is achieved through the use of loan and overdraft facilities, details of which can be found in note 12. Under the terms of the loan facility, the Manager provides the lender with loan covenant reports on a monthly basis, to provide the lender with assurance that the terms of the facility are not being breached. The Manager will also review the credit rating of a lender on a regular basis. Details of the Board's policy on gearing are shown in the interest rate risk section of this note.

Liquidity risk exposure

At 31 January 2019 and 31 January 2018 the amortised cost of the Company's Debenture Stock was £28,597,000 and £28,584,000 respectively. This is due to be redeemed at par on 30 April 2019. At 31 January 2019 and 31 January 2018 the amortised cost of the Company's Loan Notes was £29,725,000 and £29,715,000 respectively. At 31 January 2019 and 31 January 2018 the Company's bank loans amounted to £11,427,000 and £11,476,000 respectively. The facility is committed until 13 July 2021.

(iii)

Credit risk

This is failure of the counterparty to a transaction to discharge its obligations under that transaction that could result in the Company suffering a loss.

Management of the risk

- investment transactions are carried out with a large number of brokers, whose credit standing is reviewed periodically by the Manager, and limits are set on the amount that may be due from any one broker;

- the risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the review of failed trade reports on a daily basis. In addition, both stock and cash reconciliations to the custodians' records are performed on a daily basis to ensure discrepancies are investigated on a timely basis. The Group's Compliance department carries out periodic reviews of the custodian's operations and reports its finding to the Aberdeen Group's Risk Management Committee. This review will also include checks on the maintenance and security of investments held;

- cash is held only with reputable banks whose credit ratings are monitored on a regular basis.

There are internal exposure limits to cash balances placed with counterparties. The credit worthiness of counterparties is also reviewed on a regular basis.

With the exception of securities on loan referred to in note 13, none of the Company's financial assets are secured by collateral or other credit enhancements.

Credit risk exposure

In summary, compared to the amounts in the Statement of Financial Position, the maximum exposure to credit risk at 31 January was as follows:

2019

2018

Balance

Maximum

Balance

Maximum

Sheet

exposure

Sheet

exposure

£'000

Non-current assets

Investments at fair value through profit or loss

465,322

28,214

505,261

28,246

Current assets

Cash and short term deposits

3,548

5,983

______

468,870

31,762

511,244

34,229

______

None of the Company's financial assets is past due or impaired.

Credit ratings

The table below provides a credit rating profile using Standard & Poors credit ratings for the quoted bonds at 31 January 2019 and 31 January 2018:

2019

2018

£'000

A+

1,393

1,981

1,239

A-

5,892

3,081

BB+

2,359

2,595

BBB+

4,683

5,252

BBB

7,894

9,156

BBB-

3,637

3,171

Non-rated^A

4,127

______

28,214

28,246

______

^A Porterbrook Rail Finance 5.5% 20/04/19 does not have a rating from Standard & Poors but has been rated Baa2 by Moody's.

Fair values of financial assets and financial liabilities

The fair value of borrowings has been calculated at £75,787,000 as at 31 January 2019 (2018 - £77,229,000) compared to an accounts value in the financial statements of £69,749,000 (2018 - £69,775,000) (notes 12 and 13). The fair value of each loan is determined by aggregating the expected future cash flows for that loan discounted at a rate comprising the borrower's margin plus an average of market rates applicable to loans of a similar period of time and currency. All other assets and liabilities of the Company are included in the Statement of Financial Position at fair value.

18.	Fair value hierarchy
	FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following classifications:

	Level 1: unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the measurement date.
	Level 2: inputs other than quoted prices included within Level 1 that are observable (ie developed using market data) for the asset or liability, either directly or indirectly.
	Level 3: inputs are unobservable (ie for which market data is unavailable) for the asset or liability.

	The financial assets and liabilities measured at fair value in the Statement of Financial Position are grouped into the fair value hierarchy at the reporting date as follows:

				Level 1	Level 2	Level 3	Total
	As at 31 January 2019		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	437,108	-	-	437,108
	Quoted bonds		b)	-	28,214	-	28,214
				______	______	______	______
	Total			437,108	28,214	-	465,322
				______	______	______	______

				Level 1	Level 2	Level 3	Total
	As at 31 January 2018			£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	477,015	-	-	477,015
	Quoted bonds		b)	-	28,246	-	28,246
				______	______	______	______
	Total			477,015	28,246	-	505,261
				______	______	______	______

	a)	Quoted equities
		The fair value of the Company's investments in quoted equities has been determined by reference to their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on recognised stock exchanges.
	b)	Quoted bonds
		The fair value of the Company's investments in quoted bonds has been determined by reference to their quoted bid prices at the reporting date. Bonds included in Fair Value Levels 2 are Corporate Bonds. Investments categorised as Level 2 are not considered to trade in active markets.

19.	Capital management policies and procedures
	The Company's capital management objectives are:
	to ensure that the Company will be able to continue as a going concern; and
	to maximise the return to its equity shareholders through an appropriate balance of equity capital and debt.

	The capital of the Company consists of equity, comprising issued capital, reserves and retained earnings.

	The Board monitors and reviews the broad structure of the Company's capital. This review includes the nature and planned level of gearing, which takes account of the Manager's views on future expected returns and the extent to which revenue in excess of that which is required to be distributed should be retained. The Company is not subject to any externally imposed capital requirements.

20.	Related party transactions and transactions with the Manager
	Directors' fees and interests
	Fees payable during the year to the Directors and their interest in shares of the Company are disclosed within the Directors' Remuneration Report.

	Transactions with the Manager
	The Company has an agreement with the Standard Life Aberdeen Group for the provision of management, secretarial, accounting and administration services and also for the provision of promotional activities. Details of transactions during the year and balances outstanding at the year end are disclosed in notes 4 and 5.

Additional Notes to Annual Financial Report

The Annual General Meeting will be held at Discovery Point, Discovery Quay, Dundee DD1 4XA on Thursday 23 May 2019 at 12 noon.

The Annual Financial Report Announcement is not the Company's statutory accounts. The above results for the year ended 31 January 2019 are an abridged version of the Company's full accounts, which have been approved and audited with an unqualified report. The 2018 and 2019 statutory accounts received unqualified reports from the Company's auditor and did not include any reference to matters to which the auditor drew attention by way of emphasis without qualifying the reports, and did not contain a statement under S498 of the Companies Act 2006. The financial information for 2018 is derived from the statutory accounts for the year ended 31 January 2018 which have been delivered to the Registrar of Companies. The accounts for the year ended 31 January 2019 will be filed with the Registrar of Companies in due course.

The Annual Report and Accounts will be posted to shareholders in April 2019 and copies will be available from the registered office of the Company and on the Company's website, www.dunedinincomegrowth.co.uk.*

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise. Investors may not get back the amount they originally invested.

By order of the Board

Aberdeen Asset Management PLC

Company Secretary

27 March 2019

* Neither the Company's website nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

FR CKODNABKDPNB

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