Annual Financial Report

RNS Number : 5414V

Dunedin Income Growth Inv Tst PLC

06 April 2023

DUNEDIN INCOME GROWTH INVESTMENT TRUST PLC

Legal Entity Identifier (LEI): 549300PPXLZPR5JTL763

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 JANUARY 2023

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 that meet the Company's sustainable and responsible investing criteria as set by the Board.

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 abrdn Fund Managers Limited ("aFML", the "AIFM" or the "Manager") which has delegated the investment management of the Company to abrdn Investments Limited (the "Investment Manager"). Both companies are wholly owned subsidiaries of abrdn plc.

For further information, please contact:

William Hemmings

abrdn Fund Managers Limited

0207 463 6223

Luke Mason

abrdn Fund Managers Limited

0207 463 5971

Performance Highlights

Net asset value total return^AB		Earnings per share (revenue)
+2.4%		13.0p
2022	+8.1%	2022	12.9p

Ongoing charges^A		Share price total return^A
0.64%		(0.9)%
2022	0.59%	2022	+12.5%

Premium/(discount) to net asset value^AB		Dividends per Ordinary share
(2.9)%		13.1p
2022	0.3%	2022	12.9p
^A Alternative Performance Measure.
^B With debt at fair value, dividends reinvested.

Calendar and Financial Highlights

Calendar

Online shareholder presentation	3 May 2023
Annual General Meeting (Dundee)	16 May 2023
Expected payment dates of quarterly dividends	30 May 2023 25 August 2023 24 November 2023 23 February 2024
Half year end	31 July 2023
Expected announcement of results for the six months ending 31 July 2023	September 2023
Financial year end	31 January 2024
Expected announcement of results for the year ending 31 January 2024	April 2024

Financial Highlights

	31 January 2023	31 January 2022	% change
Total assets (£'000)	492,105	507,344	(3.00)
Equity shareholders' funds (£'000)	448,605	464,579	(3.44)
Market capitalisation (£'000)	435,898	459,310	(5.10)
Net asset value per Ordinary share	302.57p	313.56p	(3.50)
Net asset value per Ordinary share with debt at fair value^A	302.80p	309.03p	(2.01)
Share price (mid)	294.00p	310.00p	(5.16)
FTSE All-Share Index	4,255.72	4,191.81	+1.52

Premium/(discount) (difference between share price and net asset value)
Premium/(discount) where borrowings are deducted at fair value^A	(2.91%)	+0.31%

Gearing
Net gearing^A	7.11%	8.41%

Dividends and earnings
Total return per share	1.92p	23.78p
Revenue return per share	13.02p	12.87p	+1.17
Total dividend per share for the year	13.10p	12.90p	+1.55
Dividend cover^A	0.99	1.00

Revenue reserves
Prior to payment of third and final dividends^B	16.07p	15.95p
After payment of third and final dividends^BC	8.97p	9.05p

Operating costs
Ongoing charges^AD	0.64%	0.59%
^A Considered to be an Alternative Performance Measure.
^B 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 16.
^C Third interim dividend for the year ended 31 January 2023 of 3.00p per share (2022 - 3.00p). Final dividend for the year ended 31 January 2023 of 4.10p per share (2022 - final dividend of 3.90p). See note 16 for further details.
^D Calculated in accordance with the latest AIC guidance issued in October 2020 to increase the scope of reporting the look-through costs of holdings in investment companies.

Strategic Report

Chairman's Statement

The Company was launched in Dundee in 1873 and this year we celebrate its 150^th anniversary. In an eventful and difficult year for markets, the Company produced a positive absolute net asset value total return of 2.4% and delivered an increase in its dividend for the 12th year in succession, providing a dividend yield of 4.5% at the year end. In recognition of its heritage, the Company's AGM this year will be held in Dundee.

A book entitled "The History of Dunedin Income Growth Trust PLC" is available on the Company's website.

Performance

In a difficult year for markets, your Company delivered a positive absolute return for the year ended 31 January 2023, albeit this lagged the return of the wider market in what was a positive year for UK equities in a global context. The Company's net asset value ("NAV") increased by 2.4% on a total return basis, underperforming the FTSE All-Share Index which produced a total return of 5.2%.

Emerging from the shadow of Covid, 2022 proved to be an eventful year, dominated by the Russian invasion of Ukraine, the highest levels of inflation in a generation and a consequential rapid rise in interest rates, not to mention producing the shortest tenured Prime Minister in British political history. Despite all of this, UK equities proved more resilient than many global markets, benefitting from their exposure to more "old economy" sectors, particularly commodities, and their relatively low starting valuations.

While the portfolio's total return trailed the FTSE All-Share Index, it delivered a positive absolute return. Returns in the market were more highly concentrated than usual, with just 23% of companies outperforming in the FTSE All-Share Index. The best performing sectors were energy, defence and mining which are typically sectors in which the Company is, and has been, underweight, given the investment approach. Given the backdrop, we believe this to be a creditable result given the strategic focus of the portfolio on high quality companies with an emphasis on dividend growth and sustainability, which we believe will deliver more sustainable returns over the medium to long term.

Despite the headwinds to performance, partly driven by our distinct approach and style, the Company has delivered a NAV total return of 29.7% compared to the benchmark return of 23.1% over five years, and over the same period ranks 5th out of 20 in the AIC UK Equity Income sector by NAV total return.

The Board recognises the importance of the dividend return to shareholders and we are pleased to report that the portfolio has seen continued revenue growth, with revenue earnings per share reaching another record high and some way above our original expectations for the year.

Although underperforming over the short term, the NAV total return of the Company remains ahead of the benchmark and peers over the longer term and it is encouraging that the Company's shares are trading at a tighter discount than the average of the UK equity income sector. The portfolio remains highly differentiated to its peer group, offering a highly active, relatively concentrated strategy, with a sustainability overlay that remains unique within the sector and rare within the wider investment trust universe.

From an Environmental, Social and Governance ("ESG") perspective we recognise the growing backlash against the consideration of ESG factors by portfolio managers and asset owners, particularly in North America. In addition, there is significant scepticism about the ESG claims of many portfolio managers. We believe it is correct to apply intellectual rigour and challenge to sustainability claims being made by investors and companies alike. This should raise the standard of ESG integration and responsible investment globally.

We remain committed to the sustainability ambitions of the Company and believe it is the right approach when investing for the long term and to deliver sustainable and growing dividends. We expect that investors will return their focus towards this segment of the market as environmental and social risks rise and asset owners turn their attention to the impact of their holdings. For us, this is about both avoiding risks and taking advantage of opportunities to invest behind the powerful demand trends stemming from the climate transition and social equality. The conflict in Ukraine has only served to accelerate the energy transition in order to address security of supply. It has also thrown a social spotlight on companies with both governments and consumers forcing businesses to divest their operations in Russia. Social awareness is likely to become a bigger dynamic and risk.

Earnings

Income increased by 2.0% during the year, reflecting good progress in dividend distributions from companies in the portfolio, helping to mitigate the lack of the very large one-off dividends we had received during the previous year, notably from the mining sector, as well as GlaxoSmithKline's rebasing of its dividend following the demerger of Haleon. The revenue return per share increased by 1.2% reaching an all-time high of 13.0p, growing slightly less than income due mainly to higher withholding taxes on overseas income.

Dividend

Having paid three quarterly dividends of 3.0p per share, we are proposing a final dividend of 4.1p per share, payable on 30 May 2023 to shareholders on the register on 5 May 2023. This will make a total dividend of 13.1p per share for the year, an increase of 1.6% on last year. This will be the 39th year out of the past 43 that the Company has grown its dividend, with the distribution maintained in the other four years. Furthermore, having increased the dividend in every year since 2011, the Company is classified as a 'next generation of dividend heroes' by the Association of Investment Companies, being one of the 27 investment trusts that have raised their dividend for 10 to 19 consecutive years.

Following payment of the final dividend, we will have utilised 0.08p per share of the Company's revenue reserves, meaning that 8.97p per share will be available to support future distributions, representing approximately 70% of the current annual dividend cost. The net revenue earned during the financial year represents 99.4% of the proposed dividend cost for the year. The Company has drawn 2.6p per share from revenue reserves since January 2019, both through the transition away from higher yielding, lower growth companies and, particularly in 2020/21, when 1.9p per share was utilised from revenue reserves following the impact of the Covid pandemic on the portfolio. It is our intention that revenue reserves are used to support the dividend in periods when the natural income generating capacity of the portfolio is impacted by one-off factors, rather than to increase dividends to levels that may not be sustained by underlying revenue account performance.

The resilient revenue account performance of the Company over recent years, and through the Covid pandemic compared with many of its peers, is note worthy.

Over recent years the Investment Manager has, as noted, been reducing the Company's dependence on higher yielding, lower growth companies and enhancing the Company's longer term potential for both faster dividend growth and better capital performance. The Company delivered a record level of revenue earnings per share during the year and, although the rate of dividend increase for the year lags the rate of inflation, the increased dividend of 13.1p per share represents a yield of 4.5% based on the share price of 294p at the end of the year, compared to a notional yield of 3.7% from the FTSE All-Share Index. 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, we believe that the policy remains well supported, although its delivery may prove more challenging if inflation remains persistently high.

As explained in more detail in the Directors' Report, during the year, the Board decided that, going forward, amounts of unclaimed dividends greater than 12 years old, which are returned annually to the Company by the Registrar in accordance with the Company Articles of Association, would be donated to charity. Accordingly, the Company made a donation of £16,000 (2022: £nil) to the abrdn Charitable Foundation, which directs funding to charities around the world.

Gearing

The Board believes that the sensible use of modest financial gearing, whilst amplifying market movements in the short term, will enhance returns of both capital and income to shareholders over the long term. We also recognise the benefit that having a reasonable proportion of long-term fixed rate funding provides to managing the Revenue Account, through greater certainty over financing costs.

The Company currently employs two sources of gearing. The £30 million loan notes maturing in 2045, and a £30 million multi-currency revolving credit facility that expires in July 2023. A Sterling equivalent of £13.8 million was drawn down at the year end. The Board will make a further announcement with regard to the multi-currency revolving facility in due course.

With debt valued at par, the Company's net gearing decreased from 8.4% to 7.1% during the year. This decline was due to holding a higher cash balance at the year end. The Board believes this remains a relatively conservative level of gearing and, with part of the revolving credit facility undrawn, this provides the Company with financial flexibility should opportunities to deploy additional capital arise.

Discount

The share price total return for the year of -0.9% underperformed the NAV total return, reflecting a move from a small premium of 0.3% at the end of last year to a modest discount of 2.9% as at 31 January 2023 (on a cum-income basis with borrowings stated at fair value).

During the year, 100,000 shares were issued at a premium to the NAV.

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. In recent years, we have seen a re-rating of the shares and the Board believes a consistent rating of the Company's shares close to the underlying asset value is of significant benefit to shareholders. As in previous years, we will seek shareholders' permission at the forthcoming AGM to buy back shares and issue new shares.

Annual General Meeting and Online Shareholder Presentation

AGM

The AGM will be held at 12 noon on 16 May 2023 at V&A Dundee, 1 Riverside Esplanade, Dundee DD1 4EZ. The meeting will include a presentation from the Investment Manager and will be followed by lunch.

We encourage all shareholders to complete and return the Proxy Form enclosed with the Annual Report so as to ensure that your votes are represented at the meeting. If you hold your shares in the Company via a share plan or a platform and would like to attend and/or vote at the AGM, then you will need to make arrangements with the relevant administrator. For this purpose, investors who hold their shares in the Company via the abrdn Investment Plan for Children, Share Plan or ISA will find a Letter of Direction enclosed. Shareholders are encouraged to complete and return their Proxy Forms / Letters of Direction in accordance with the instructions.

Online Shareholder Presentation

In order to encourage as much interaction as possible with our shareholders, and especially for those who are unable to attend the AGM, we will also be hosting an Online Shareholder Presentation, which will be held at 11.00 am on 3 May 2023. At this event you will receive a presentation from the Investment Manager and have the opportunity to ask live questions of the Chairman and the Investment Manager. The online presentation is being held ahead of the AGM to allow shareholders to submit their proxy votes subsequently.

Full details on how to register for the online event can be found at: https://bit.ly/abrdn-dunedin-income

Details are also contained on the Company's website.

Amendment to Investment Policy (Overseas Exposure)

During the year, the Board and Investment Manager reviewed the guidelines governing the management of the portfolio and determined that the part of the investment policy relating to the limit on the exposure to investments in companies listed or quoted overseas should be amended from its current limit of 20% to a new limit of 25%. This higher limit will provide the Investment Manager with greater flexibility to invest in overseas companies but does not represent a change in the way that the portfolio is managed and it is not a material change to the investment policy that would require shareholder approval. The change will take effect on 1 May 2023.

Outlook

Over recent years the Company has undergone a significant shift in its portfolio to focus more on total return and dividend growth and adjusted its mandate to formally incorporate a greater focus on sustainability. While the past two financial years have been a difficult period for relative performance, the Board believes that this is the correct strategy to deliver earnings and dividend growth over the longer term. The volatile economic and political environment that has been unleashed by both the rapid tightening in global monetary policy and the conflict in the Ukraine should further support a focus on resilience, although we recognise some of the headwinds to the Investment Manager's style of investment that these conditions have created in the recent years.

As we look forward, there are some reasons for cautious optimism. Commodity prices have retreated, particularly natural gas. This could lead to the prospect of falling energy bills for consumers as we move through 2023. Government finances are in better shape than anticipated at the time of the mini budget in October, as energy price caps have proved less expensive than originally expected. Supply chain disruption is easing, freight rates have fallen sharply and Europe has managed to navigate the energy price crisis. The US consumer has, so far at least, remained resilient and China has removed its Covid related restrictions far more quickly than had been envisaged. Meanwhile, the market valuation of UK equities is attractive on an absolute and relative basis.

We also believe that the income growth of the Company is not overly dependent on interest rates or commodity prices, albeit a lack of exposure to these elements has been a detractor to performance over the past 18 months. These are both areas where forecasting accuracy is notoriously low. That gives your portfolio managers a higher degree of confidence on the likely path of income generation. We believe the balance of the portfolio means it is well set to navigate volatile markets and demonstrate resilience in a range of different market environments.

That all said, inflation remains high and the impact of the significant tightening in monetary policy has arguably yet to be fully felt in the real economy. Yield curve inversion tends to be a precursor to a recession and it is likely still too early to signal that we will avoid an outright economic contraction. In such an environment, we think it is important to maintain a relatively well balanced portfolio. Against a challenging backdrop, the Investment Manager's focus on investing in companies with pricing power, strong balance sheets and with greater exposure to structural, rather than cyclical, growth should offer greater resilience in both capital and income generation. The Company's track record over the past five years adopting this strategy remains creditable.

The Board is confident that the Company is well-positioned to deliver relative total return outperformance over the medium and long term. This, combined with the ambition to grow the dividend in real terms over the medium term, should enable the Company's shares to continue to trade close to NAV and return to real growth in dividend distributions.

David Barron
Chairman
5 April 2023

Overview of Strategy

Business

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

Investment Objective

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.

The Company may only make material changes to its investment policy (including the level of gearing set by the Board) with the approval of shareholders in the form of an ordinary resolution.

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.

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.

Promoting the Success of the Company

The Board's statement below describes how the Directors have discharged their duties and responsibilities over the course of the financial year under section 172 (1) of the Companies Act 2006 and how they have promoted the success of the Company for the benefit of the members as a whole.

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 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.
Premium/discount to NAV	The premium/discount 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

The Board carries out a regular review of the risk environment in which the Company operates, changes to the environment and individual risks. The Board also considers emerging risks which might affect the Company. The Board receives updates from the Manager on the risks that could affect the Company. During the year, the prominent emerging risk was inflation and the resultant volatility that it created in global stock markets . In addition, the conflict in Ukraine and continued tensions between China and the USA have created geo-political uncertainties which have further increased market risk and volatility.

There are a number of other risks which, if realised, could have a material adverse effect on the Company and its financial condition, performance and prospects. The Board has carried out a robust assessment of the Company's principal and emerging risks, which include those that would threaten its business model, future performance, solvency, liquidity or reputation.

The principal and emerging risks and uncertainties faced by the Company are reviewed by the Audit Committee in the form of risk matrices.

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 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 NAV 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 and, as explained in the Chairman's Statement, the Company will hold an online shareholder presentation in advance of the Annual General Meeting this year including the opportunity for an interactive question and answer session. The Board reviews shareholder correspondence and investor relations reports and also receives feedback from the Company's Stockbroker. 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 and use of derivatives, as well as the Company's sustainable and responsible investment criteria. 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 Investment Manager on a regular basis and keeps under close review (inter alia) its resources and adherence to investment processes, including in relation to the Company's sustainable and responsible investment criteria. The Board also keep under review 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 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 19 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 NAV. 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 assets and share price. 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 Packaged Retail and Insurance-based Investment Product 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. In addition, all Directors are encouraged to attend relevant training courses. 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 (including cyber-crime) - 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 Depositary. 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.
Geo-political (including a pandemic, climate change and the conflict in Ukraine) - the impact of geo-political events could result in losses to the Company.	Board and Manager awareness. Geo-political events over which the Company has no control are always a risk. The Board and Manager do what they can to address these risks where possible.

Promotional Activities

The Board recognises the importance of promoting the Company to prospective investors both for improving liquidity and enhancing the rating of the Company's shares. The Board believes one effective way to achieve this is through subscription to, and participation in, the promotional programme run by abrdn 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 Company also supports the Manager's investor relations programme which involves regional roadshows, promotional and public relations campaigns. The Manager's promotional and investor relations teams report to the Board on a quarterly basis 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 promotional and investor relations programmes 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. The promotional programme includes commissioning independent paid for research on the Company, most recently from Kepler Trust Intelligence. A copy of the latest research note is available from the Key Literature section of the Company's website.

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 2023, there were three male and two female Directors on the Board.

Environmental, Social and Human Rights Issues

The Company ha s 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.

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. 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.

The UK Stewardship Code and Proxy Voting

The Company supports the UK Stewardship Code, and seeks to play its role in supporting good stewardship of the companies in which it invests. 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. abrdn plc is a tier 1 signatory of the UK Stewardship Code which aims to enhance the quality of engagement by investors with investee companies in order to improve their socially responsible performance and the long term investment return to shareholders. While delivery of stewardship activities has been delegated to the Manager, the Board acknowledges its role in setting the tone for the effective delivery of stewardship on the Company's behalf.

The Board has also given discretionary powers to the Manager to exercise voting rights on resolutions proposed by the investee companies within the Company's portfolio. The Manager reports on a quarterly basis on stewardship (including voting) issues.

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.

Under Listing Rule 15.4.29(R), the Company, as a closed ended investment company, is exempt from complying with the Task Force on Climate-related Financial Disclosures.

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.

- 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 maximum gearing limit of 30% of the NAV 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 ability of the Company to refinance its £30 million multi-currency credit facility when it matures in July 2023 (see Going Concern below).

- The level of ongoing charges.

- The robustness of the operations of the Company's third party service suppliers.

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 the conflict in Ukraine, economic shocks or significant stock market volatility caused by other factors, 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 its statement.

On behalf of the Board
David Barron
Chairman
5 April 2023

Promoting the Success of the Company

Introduction

Section 172 (1) of the Companies Act 2006 (the "Act") requires each Director to act in the way he/she considers, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole.

The Board is required to describe to the Company's shareholders how the Directors have discharged their duties and responsibilities over the course of the financial year under that provision of the Act (the "Section 172 Statement"). This statement provides an explanation of how the Directors have promoted the success of the Company for the benefit of its members as a whole, taking into account, among other things, the likely long term consequences of decisions, the need to foster relationships with all stakeholders and the impact of the Company's operations on the environment.

The Purpose of the Company and
Role of the Board

The purpose of the Company is to act as a vehicle to provide, over time, financial returns (both income and capital) to its shareholders. Investment trusts, such as the Company, are long-term investment vehicles and are typically externally managed, have no employees, and are overseen by an independent non-executive board of directors.

The Board, which at the end of the year comprised five independent non-executive Directors with a broad range of skills and experience across all major functions that affect the Company, retains responsibility for taking all decisions relating to the Company's investment objective and policy, gearing, corporate governance and strategy, and for monitoring the performance of the Company's service providers.

The Board's philosophy is that the Company should operate in a transparent culture where all parties are provided with the opportunity to offer practical challenge and participate in positive debate which is focused on the aim of achieving the expectations of shareholders and other stakeholders alike. The Board reviews the culture and manner in which the Manager and Investment Manager operate at its regular meetings and receives regular reporting and feedback from the other key service providers. The Board works very closely with the Manager and Investment Manager in reviewing how stakeholder issues are handled, ensuring good governance and responsibility in managing the Company's affairs, as well as visibility and openness in how the affairs are conducted.

The Company's main stakeholders have been identified as its Shareholders, the Manager (and Investment Manager), Service Providers, Investee Companies, Debt Providers and, more broadly, the environment and community at large.

How the Board Engages with Stakeholders

The Board considers its stakeholders at Board meetings and receives feedback on the Manager's interactions with them.

Further details are included in the table below.

Stakeholder	How We Engage
Shareholders	Shareholders are key stakeholders and the Board places great importance on communication with them. The Board welcomes all shareholders' views and aims to act fairly between all of them. The Manager and Company's Stockbroker meet regularly with current and prospective shareholders to discuss performance and shareholder feedback is discussed by the Directors at Board meetings. In addition, the Manager meets with analysts who cover the investment trust sector and the Directors attend meetings with the Company's largest shareholders and meet other shareholders at the Annual General Meeting. The Company subscribes to the Manager's investor relations programme in order to maintain communication channels, in particular, with the Company's institutional shareholder base. Regular updates are provided to shareholders through the Annual Report, Half Yearly Report, monthly factsheets, Company announcements, including daily NAV announcements, and the Company's website. The Company's Annual General Meeting provides a forum, both formal and informal, for shareholders to meet and discuss issues with the Directors and Manager. The Board encourages as many shareholders as possible to attend the Company's Annual General and to provide feedback on the Company. In addition to the Annual General Meeting, this year the Board will again hold an interactive online shareholder presentation at which shareholders will receive updates from the Chairman and Investment Manager and there will be the opportunity for an interactive question and answer session.
Manager (and Investment Manager)	The Investment Manager's Review details the key investment decisions taken during the year. The Investment Manager has continued to manage the Company's assets in accordance with the mandate provided by the Company, with the oversight of the Board. The Board regularly reviews the Company's performance against its investment objective and the Board undertakes an annual strategy review meeting to ensure that the Company is positioned well for the future delivery of its objective for its stakeholders. The Board receives presentations from the Investment Manager at every Board meeting to help it to exercise effective oversight of the Investment Manager and the Company's strategy. The Board, through the Management Engagement Committee, formally reviews the performance of the Manager at least annually.
Service Providers	The Board seeks to maintain constructive relationships with the Company's suppliers either directly or through the Manager, with regular communications and meetings. The Management Engagement Committee conducts an annual review of the performance, terms and conditions of the Company's main service providers to ensure they are performing in line with Board expectations, carrying out their responsibilities and providing value for money.
Investee Companies	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 Board has also given discretionary powers to the Manager to exercise voting rights on resolutions proposed by the investee companies within the Company's portfolio. The Manager reports on a quarterly basis on stewardship (including voting) issues. Through engagement and exercising voting rights, the Investment Manager actively works with companies to improve corporate standards, transparency and accountability. The Manager reports regularly to the Board on investment and engagement activity.
Debt Providers	On behalf of the Board, the Manager maintains a positive working relationship with The Bank of Nova Scotia, London Branch, the provider of the Company's multi-currency loan facility, and provides regular updates on business activity and compliance with its loan covenants. The Manager also provides regular covenant compliance certificates to the holders of the Company's £30 million Loan Notes.
Environment and Community	The Board and Manager are committed to investing in a responsible manner and the Investment Manager embeds Environmental, Social and Governance ("ESG") considerations into the research and analysis as part of the investment decision-making process.

Specific Examples of Stakeholder Consideration During the Year

While the importance of giving due consideration to the Company's stakeholders is not a new requirement, and is considered during every Board decision, the Directors were particularly mindful of stakeholder considerations during the following decisions undertaken during the year ended 31 January 2023. Each of these decisions was made after taking into account the short and long term benefits for stakeholders.

Investment Objective and Portfolio

The Investment Manager's Review details the key investment decisions taken during the year. The overall shape and structure of the investment portfolio is an important factor in delivering the Company's stated investment objective and is reviewed at every Board meeting, including compliance with the Company's sustainable and responsible investing criteria.

During the year, the Management Engagement Committee decided that the continuing appointment of the Manager is in the best interests of shareholders.

Dividend

Following the payment of the final dividend for the year, of 4.1p per Ordinary share, total dividends for the year will amount to 13.1p per Ordinary share. This represents an increase of 1.6% compared to the previous year. This will be the 39th year out of the past 43 that the Company has grown its dividend, with the distribution maintained in the other four years, and is in accordance with its policy to grow total annual dividends in real terms over the medium term.

Through meetings with shareholders and feedback from the Manager and the Company's Stockbroker, the Board is conscious of the importance that shareholders place on the level of dividends paid by the Company.

Promotional Activities

During the year, the Board and Manager agreed a set of key marketing messages designed to assist with the promotion of the Company. The Board also agreed a series of key performance indicators with the Manager relating to promotional activities, to help it monitor progress with the activities undertaken.

Online Shareholder Presentation

To encourage and promote stronger interaction and engagement with the Company's shareholders, the Board will hold an interactive online shareholder presentation which will be held at 11.00am on Wednesday 3 May 2023. At the presentation, shareholders will receive updates from the Chairman and Investment Manager and there will be the opportunity for an interactive question and answer session. The online presentation is being held ahead of the Annual General Meeting to allow shareholders to submit their proxy votes prior to the meeting. Details of how to register for the event can be found in the Chairman's Statement.

On behalf of the Board
David Barron
Chairman
5 April 2023

Performance

Performance (total return)

	1 year	3 year	5 year
	% return	% return	% return
Total return (Capital return plus net dividends reinvested)
Net asset value^AB	+2.4%	+10.4%	+29.7%
Share price^B	(0.9%)	+11.6%	+42.5%
FTSE All-Share Index	+5.2%	+15.6%	+23.1%

Capital return
Net asset value^A	(2.0%)	(3.0%)	+4.2%
Share price	(5.2%)	(2.3%)	+13.1%
FTSE All-Share Index	+1.5%	+4.9%	+2.9%
^A Cum-income NAV with debt at fair value.
^B Considered to be an Alternative Performance Measure
Source: abrdn, Factset & Morningstar

Ten Year Financial Record

Year ended 31 January	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023
Total revenue (£'000)	20,750	20,994	20,359	21,963	22,317	22,263	20,518	18,346	21,518	21,950
Per share (p)
Revenue return	11.89	11.90	12.11	12.55	12.64	12.68	12.08	10.90	12.87	13.02
Dividends paid/proposed	11.10	11.25	11.40	11.70	12.10	12.45	12.70	12.80	12.90	13.10
Revenue reserve^A	8.22	8.89	9.63	10.51	11.16	11.54	10.94	9.07	9.05	8.97
Net asset value^B	262.34	279.66	237.48	270.34	290.57	266.83	312.22	297.64	309.03	302.80
Total return^C	22.24	27.76	(28.94)	43.83	30.83	(11.95)	58.57	(1.81)	23.78	1.92
Shareholders' funds (£'000)	403,526	428,702	368,041	415,810	442,384	401,731	469,806	448,293	464,579	448,605
^A After payment of third interim and final dividends (see note 16 for further details).
^B With debt at fair value.
^C Per Statement of Comprehensive Income.

Investment Manager's Review

Introduction

For the year ended 31 January 2023, the Company's net asset value ("NAV") total return for the year of 2.4% compared to a total return of 5.2% from the benchmark FTSE All-Share Index. Many of the trends that we highlighted last year continued in 2022/23 and again it was a period when our style and strategy were out of favour with investors. The benchmark returns were highly concentrated in the oil and gas, mining and defence sectors, where the portfolio is typically underweight due to the sustainability objectives of the Company. Net income generated per share hit a new record level of just over 13p a share.

The economic outlook brings with it a degree of uncertainty and potential for macro-economic slowdown. Given this, we consider the portfolio to be in good shape with our focus on higher quality companies, an emphasis on investments that can deliver both income and capital growth whilst also meeting the Company's sustainable and responsible investing criteria, positioning the Company to be able to cope with what may be difficult market conditions ahead.

The portfolio remains highly differentiated compared to both peers and its benchmark. It is the only equity income investment trust with a formal sustainability objective, the active share of the portfolio increased in the year to 86% while the number of holdings consolidated to a focussed group of 36 at the year end. We see attractive opportunities emerging in domestic-facing and mid-sized companies - just under half of the portfolio is invested outside the FTSE 100 Index and almost 20% is held in companies listed outside the UK as we seek to gain exposure to innovative and high quality companies listed in European markets.

The portfolio offers an attractive 4.3% dividend yield, 15% ahead of the FTSE All -Share Index at the end of 2022. The free cash flow performance of companies held in the portfolio has been strong, with many growing their dividends significantly during the year. As result, income generation came in well ahead of our initial expectations. The discount at which the Company's shares trade ended the year at 2.9%, narrower than the average of the sector.

Performance

We are pleased with the portfolio's income progression in the year. Having started the year expecting net revenue of around 12p per share, the net income generation of 13.0p per share exceeded our expectation. This is despite missing the very substantial contribution from Rio Tinto's special dividends and the expected dividend cut at GlaxoSmithKline given corporate changes. A number of holdings in the portfolio delivered strong dividend growth, including Morgan Sindall , ASML , London Stock Exchange , Pets at Home , Novo-Nordisk and TotalEnergies . We continued writing options based on our fundamental analysis of holdings in the portfolio and this has been a benefit to the Company by diversifying and increasing the level of income generated.

The year under review saw markets digest a number of extraordinary exogenous shocks. From the tragic war in Ukraine leading to soaring power prices, the highest level of inflation since the 1980's, aggressive central banks tightening, UK Government leadership change and swings in consumer confidence. These factors have caused sharp rotations and shifts in market sentiment towards many companies that performed well in the preceding decade. Against this difficult backdrop, the Company delivered a flat absolute return in the first six months to July but lagged in the second half when the UK political environment deteriorated.

There are a number of themes driving markets. The portfolio's underperformance relative to the benchmark was primarily driven by market style rotation and factor risk, offset by positive stock selection. The Company's sustainable and responsible investing approach includes negative exclusions, alongside the positive allocation to sustainable leaders and improvers and corporate engagement. Risk analysis concludes that, this year, the Company's negative exclusions, which restrict the investable universe by approximately 22%, caused a headwind to performance but that the portfolio outperformed its investable universe.

Reassuringly, fundamental analysis and stock selection contributed positively in the year. The UK market has been a hunting ground for international buyers looking to take advantage of discounted valuations and the underappreciated quality of many companies. Global investors are looking on the UK market more favourably than in recent years and we see M&A as a feature of the market which we expect to continue going forward. A number of holdings in the portfolio were bid for in the year as global investors capitalised on the opportunity to acquire companies with strong business models and market leadership at attractive valuations, further boosted by Sterling weakness. The Company's long-standing holding in the industrial software company Aveva came to an end when it was bought by majority shareholder Schneider Electric, valuing the company at £9.9 billion. In addition, the events and database business Euromoney Institutional Investor received a take-over offer from the private equity sector.

The portfolio benefited from its overseas exposure. TotalEnergies' portfolio of assets delivered strong profit progression and cash return including a 6% dividend yield in addition to share buybacks. While near term weakness in natural gas prices will hold back earnings momentum, we see the company as well positioned to benefit from structural under-investment in upstream energy markets and judge its energy transition strategy as credible. Danish pharmaceutical company Novo-Nordisk raised guidance through the year, driven by growth in diabetes therapies and the positive launch of anti-obesity treatment Wegovy. The prepaid vouchers and employee benefits solutions company Edenred out-performed expectations with growth in its SME business, supporting margins. It remains at an attractive valuation for the growth we expect the company to deliver.

After building a position in Games Workshop in the year, the company issued a surprise announcement that it had reached an agreement with Amazon to develop Games Workshop's intellectual property into exciting film and TV content. Recent addition to the portfolio Taylor Wimpey contributed positively with its shares recovering from lows at the time of the mini budget as the market recognised its highly discounted valuation.

The FTSE All-Share Index return for the year was highly concentrated in a narrow set of companies, namely in the Energy and Basic Materials sectors. Supply constraints due to the war in Ukraine, coupled with post Covid recovery in activity led to strong oil price appreciation. As a consequence, BP and Shell delivered healthy profit growth, cash generation and shareholder returns over the period. The Metals and Mining sector also had a strong year, with the diversified miner Glencore returning over 50% on the back of strong commodity price inflation including in thermal coal. The Company's investment policy leads us to be underweight these sectors due to our preference for investments with a higher degree of earnings visibility and stability and more dependable dividend distribution track records. Not owning large index constituents such as BP, Shell, Glencore, Rio Tinto and Anglo American proved a significant relative headwind over the year.

In addition to the quality focus of the portfolio, the sustainable and responsible investment approach draws attention to the long-term risk facing the Energy sector as global economies transition to low carbon fuels to mitigate climate change. The policy focuses our efforts on companies at the forefront of energy transition, with a material proportion of revenues from transition energies such as national gas, in addition to renewables. Here we see Total Energies as a leader in the sector. The decision to hold back investing in BP and Shell for environmental reasons has been corroborated this year, with both companies pulling back on plans to roll out low carbon energy capex. However, we recognised this was taken well by the market given the uncertainty of returns in alternative energy assets.

Political turmoil in UK politics in the second half of the year, triggered by the government's 'mini-budget', led to a sharp rise in interest rate expectations, a fall in Sterling and a sell-off in companies heavily exposed to the UK. 2022 saw the UK domestic focused FTSE 250 Index lag the large cap FTSE 100 Index, with the quantum of underperformance greater than during the 2008/09 financial crisis. With 27% of the portfolio invested in UK mid and small caps, this allocation detracted from performance with companies such as the housebuilder Persimmon , online greetings cards company Moonpig , and leading high street pet retailer Pets at Home underperforming in the period. Whilst there are pockets of weakness, particularly in housing transactions and big ticket discretionary spend, recent trading has indicated the UK consumer is holding up. Meanwhile, valuations have been rebased and we believe the long run track record of alpha generation from UK mid-caps will return.

There are two stock specific detractors in the year to highlight. Direct Line Insurance issued a disappointing profits warning in January 2023 on the back of major weather losses, claims inflation, delays to motor rate rises and commercial property investment losses. Pressure on the company's balance sheet has meant its dividend has been suspended as the company looks to rebuild its capital position. The building materials company Marshalls lowered forecasts in October following softening consumer demand in its landscaping business. The company embarked on a restructuring programme to manage its cost base and protect profitability and has subsequently issued a reassuring update to the market.

Portfolio Activity

We continue to concentrate the portfolio in companies with highly attractive prospects for total returns. We have recycled the capital from companies held in the portfolio that have been bid for, including Aveva and Euromoney Institutional Investor.

We significantly increased the position in Unilever in the first half of the year. It has been pleasing to see its investment in brand and product lead to sector leading pricing power and demand elasticity in what has been a period of high input cost inflation.

The market volatility around the mini budget led to sharp share price corrections. This presented an opportunity for us to buy domestic oriented quality companies facing near-term uncertainty but where future long-term prospective returns look attractive. We initiated a position in the large housebuilder Taylor Wimpey in October 2022, at a point when mortgage rates spiked and availability sharply reduced. Whilst the company faces near term headwinds, the valuation includes a lot of negativity and does not reflect the strength of the balance sheet and commitment to its attractive cash returns. We also topped up the holdings in business materials manufacturer Marshalls , construction group Morgan Sindall, and gaming company Games Workshop during the year.

We introduced several new positions to the portfolio in the second half of the year. We initiated a holding in Sage , a developer of accounting software for small and medium sized businesses. The company has been through a significant investment phase over the past few years, and we believe it is nearing an inflection point for its revenue growth and margin expansion potential. Together, these should drive strong increases in cash generation and dividend payments.

We started a position in Hiscox, a specialist insurance company with units operating in both the retail and reinsurance markets. Pricing for insurance premiums looks extremely positive, while new management is rebuilding credibility after a series of missteps giving the potential for a rerating of the valuation. We also expect that distributions to shareholders should accelerate as profitability comes through. A holding was also started in Oxford Instruments , a manufacturer of specialist tools for industrial and academic users. The business has high levels of intellectual property, attractive long-term growth prospects, and a strong balance sheet which underpins the investment case. The holding has been added to since the year end.

We have implemented a number of strategic actions through options, most notably writing calls over the holding in GlaxoSmithKline ahead of its spin-out of Haleon, generating significant revenue from a position which we wanted to exit over the medium term.

Outlook

We retain the relatively cautious outlook that we have had for some time. We remain positive on the potential long-term returns available from the portfolio and fundamental company analysis points to attractive opportunities amongst innovative and resilient mid-sized companies. The market recovery since the mini budget has been strong as the political environment stabilised in the UK. The economic backdrop remains one of high and potentially persistent inflation plus tightening monetary policy. We maintain a cautious view of economic activity and corporate profitability as we go into the next financial year. In an uncertain environment, we believe our focus on quality companies provides protection through a downturn; those companies with strong pricing power, high margins and resilient balance sheets are better placed to navigate through a range of economic scenarios.

Against this backdrop, we see reasons to be positive. 2022 was a challenging year for the UK domestic focused FTSE 250 Index and, in turn, the portfolio's overweight exposure to this index. The mid-cap underperformance relative to the large cap FTSE 100 Index was worse than during the 2008/09 global financial crisis. Valuations have been rebased and we believe the long run track record of alpha generation from UK mid-caps will return. There are signs that the UK consumer is in a healthier position than feared, with household wallets benefiting from wage inflation and lower energy costs. Finally, the UK equity market remains at a highly attractive valuation on an absolute basis and relative to global markets. This view is reflected in the bids for holdings in the portfolio, including Aveva and Euromoney Institutional Investor, and presents an opportunity for positive prospective returns.

Overall, we will continue to seek to keep a balance to the positioning of the portfolio, giving ourselves the potential to perform in a range of market environments. Our primary attention remains on seeking long term capital growth, but we will continue to look to participate in opportunities where share prices in good companies with attractive long-term prospects have been oversold and at the same time focus on those that meet the Company's sustainable and responsible investing criteria.

Ben Ritchie and Rebecca Maclean,
abrdn Investments Limited
5 April 2023

Portfolio

As at 31 January 2023
		Valuation	Total	Valuation
		2023	assets	2022
Company	Sector	£'000	%	£'000
AstraZeneca	Pharmaceuticals and Biotechnology	38,221	7.8	27,116
Unilever	Personal Care, Drug and Grocery Stores	35,175	7.2	8,486
TotalEnergies	Oil, Gas and Coal	28,736	5.8	21,177
Diageo	Beverages	25,344	5.2	26,809
Relx	Media	24,794	5.0	25,378
SSE	Electricity	20,814	4.2	25,499
Nordea Bank	Banks	20,309	4.1	21,375
Prudential	Life Insurance	17,980	3.7	18,542
Chesnara	Life Insurance	16,934	3.4	16,756
Coca-Cola Hellenic Bottling Company	Beverages	15,617	3.2	15,772
Ten largest investments		243,924	49.6
Volvo	Industrial Transportation	14,667	3.0	7,472
London Stock Exchange	Finance and Credit Services	13,697	2.8	9,816
Assura	Real Estate Investment Trusts	13,327	2.7	13,083
Games Workshop	Leisure Goods	12,772	2.6	5,150
Intermediate Capital	Investment Banking and Brokerage Services	12,451	2.5	14,438
Taylor Wimpey	Household Goods and Home Construction	11,926	2.4	-
Weir Group	Industrial Engineering	11,653	2.4	14,717
Pets At Home	Retailers	11,329	2.3	13,729
Close Brothers	Banks	11,001	2.2	13,127
Hiscox	Non-life Insurance	10,869	2.2	-
Twenty largest investments		367,616	74.7
ASML	Technology Hardware and Equipment	10,202	2.1	11,990
Sage	Software and Computer Services	10,059	2.0	-
Novo-Nordisk	Pharmaceuticals and Biotechnology	9,909	2.0	14,234
Edenred	Industrial Support Services	9,319	1.9	8,875
Croda	Chemicals	9,297	1.9	10,764
Direct Line Insurance	Non-life Insurance	9,180	1.9	15,773
Marshalls	Construction and Materials	9,109	1.9	11,612
M&G	Investment Banking and Brokerage Services	9,072	1.8	9,683
Morgan Sindall	Construction and Materials	8,085	1.6	9,766
Genus	Pharmaceuticals and Biotechnology	6,020	1.2	5,082
Thirty largest investments		457,868	93.0
Dechra Pharmaceuticals	Pharmaceuticals and Biotechnology	5,803	1.2	5,518
Ashmore	Investment Banking and Brokerage Services	5,391	1.1	11,262
Sirius Real Estate	Real Estate Investment and Services	4,112	0.9	12,733
Moonpig	Retailers	3,551	0.7	4,713
Ubisoft	Leisure Goods	2,090	0.4	5,306
Oxford Instruments	Electronic and Electrical Equipment	80	-	-
Total investments		478,895	97.3
Net current assets^A		13,210	2.7
Total assets less current liabilities^A		492,105	100.0
^A Excluding bank loan of £13,762,000

Sector Analysis

As at 31 January 2023
		FTSE All-Share	Portfolio	Portfolio
		Index weighting	weighting	weighting
		2023	2023	2022
		%	%	%
Energy	Oil, Gas and Coal	11.0	5.8	4.2
		11.0	5.8	4.2
Basic Materials	Chemicals	0.7	1.9	2.1
	Industrial Metals & Mining	7.9	-	-
	Precious Metals & Mining	0.3	-	-
		8.9	1.9	2.1
Industrials	Aerospace & Defence	1.7	-	-
	Construction and Materials	1.5	3.5	4.2
	Electronic & Electrical Equipment	1.0	-	-
	General Industrials	1.8	-	-
	Industrial Engineering	0.6	2.4	2.9
	Industrial Support Services	3.3	1.9	3.5
	Industrial Transportation	1.2	3.0	1.5
		11.1	10.7	12.1
Consumer Discretionary	Consumer Services	1.4	-	-
	Household Goods and Home Construction	1.1	2.5	2.4
	Leisure Goods	0.2	3.0	2.0
	Media	3.3	5.0	5.0
	Personal Goods	0.5	-	-
	Retailers	1.6	3.0	3.6
	Travel & Leisure	3.0	-	-
		11.1	13.6	13.0
Health Care	Healthcare Providers	0.1	-	-
	Medical Equipment and Services	0.6	-	-
	Pharmaceuticals and Biotechnology	10.0	12.2	13.2
		10.7	12.2	13.2
Consumer Staples	Beverages	3.6	8.3	8.4
	Food Producers	0.6	-	-
	Personal Care, Drug and Grocery Stores	7.3	7.1	1.7
	Tobacco	3.7	-	-
		15.2	15.5	10.1
Real Estate	Real Estate Investment and Services	0.4	0.8	2.5
	Real Estate Investment Trusts	2.2	2.7	2.7
		2.6	3.5	5.1
Utilities	Electricity	0.9	4.2	5.0
	Gas, Water & Multi-utilities	2.5	-	-
		3.4	4.2	5.0
Financials	Banks	9.4	6.3	6.8
	Finance and Credit Services	1.3	2.8	1.9
	Investment Banking and Brokerage Services	2.6	5.5	7.0
	Life Insurance	3.0	7.1	7.0
	Non-life Insurance	0.8	4.1	5.3
		17.1	25.7	28.0
Investment Companies	Equity Investment Instruments	6.2	-	-
Technology	Software and Computer Services	1.1	2.0	3.8
	Technology Hardware and Equipment	-	2.1	2.4
		1.1	4.1	6.2
Telecommunications	Telecommunications Equipment	0.1	-	-
	Telecommunications Service Providers	1.5	-	-
		1.6	-	-
Total investments		100.0	97.3	99.0
Net current assets before borrowings^A			2.7	1.0
Total assets less current liabilities^A			100.0	100.0
^A Excluding bank loan of £13,762,000

Directors' Report (extract)

The Directors present their report and the audited financial statements for the year ended 31 January 2023.

Results and Dividends

The financial statements for the year ended 31 January 2023 are contained below. First, second and third interim dividends, each of 3.00p per Ordinary share, were paid on 26 August 2022, 25 November 2022 and 24 February 2023 respectively. The Directors recommend a final dividend of 4.10p per Ordinary share, payable on 30 May 2023 to shareholders on the register on 5 May 2023. The ex-dividend date is 4 May 2023. A resolution to approve the final dividend will be proposed at the Annual General Meeting.

Principal Activity and 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 2023 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.

Donations to Charity

During the year, the Board decided that amounts of unclaimed dividends greater than 12 years old, which are returned annually to the Company by the Registrar in accordance with the Company Articles of Association, would be donated to charity. Accordingly, the Company made a donation of £16,000 (2022: £nil) to the abrdn Charitable Foundation, which directs funding to charities around the world.

The abrdn Charitable Foundation is a registered charity. Its board of directors includes independent representation from the abrdn Group and provides oversight and guidance for its charitable giving activities.

Capital Structure and Voting Rights

The issued Ordinary share capital at 31 January 2023 consisted of 148,264,670 Ordinary shares of 25p and 5,413,265 Ordinary shares held in treasury.

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, or voting rights attaching to, the 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 abrdn Fund Managers Limited ("aFML") (formerly Aberdeen Standard Fund Managers Limited), a wholly owned subsidiary of abrdn plc, as its alternative investment fund manager. aFML 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 abrdn Investments Limited ("aIL) (formerly Aberdeen Asset Managers Limited) by way of a group delegation agreement in place between aFML and aIL. In addition, aFML has sub-delegated administrative and secretarial services to abrdn Holdings Limited (formerly Aberdeen Asset Management PLC) and promotional activities to aIL. 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 2023, 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
Abrdn Retail Plans^A	34,562,852	23.3
^A Non-beneficial interest

There have been no changes notified to the Company between the year end and the date of approval of
this Report.

Directors

Throughout the year, 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 and Howard Williams is the Senior Independent Director.

The Directors attended scheduled Board and Committee meetings during the year ended 31 January 2023 as follows (with their eligibility to attend the relevant meetings in brackets):

	Board Meetings	Audit Committee Meetings	Management Engagement Committee Meetings	Nomination and Remuneration Committee Meetings
David Barron	6 (6)	- (-)	1 (1)	1 (1)
Gay Collins	6 (6)	2 (2)	1 (1)	1 (1)
Jasper Judd	6 (6)	2 (2)	1 (1)	1 (1)
Christine Montgomery	6 (6)	2 (2)	1 (1)	1 (1)
Howard Williams	6 (6)	2 (2)	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, the Board has decided that all Directors will retire annually. Accordingly, Gay Collins, Jasper Judd, Howard Williams, Christine Montgomery and David Barron will retire at the Annual General Meeting and, being eligible, offer themselves for re-election.

The Board believes that all the Directors seeking re-election remain independent of the Manager and free from any relationship which could materially interfere with the exercise of their judgement on issues of strategy, performance, resources and standards of conduct. The Board believes that each Director has the requisite high level and range of business, investment and financial experience which enables the Board to provide clear and effective leadership and proper governance of the Company. Following formal performance evaluations, each Director's performance continues to be effective and demonstrates commitment to the role, and their individual performances contribute to the long-term sustainable success of the Company. The Board therefore recommends the re-election of each of the Directors at the Annual General Meeting.

Board's Policy on Tenure

In normal circumstances, it is the Board's expectation that Directors will not serve beyond the Annual General Meeting following the ninth anniversary of their appointment. However, the Board takes the view that independence of individual Directors is not necessarily compromised by length of tenure on the Board and that continuity and experience can add significantly to the Board's strength. The Board believes that recommendation for re-election should be on an individual basis following a rigorous review which assesses the contribution made by the Director concerned, but also taking into account the need for managed succession and diversity.

It is the Board's policy that the Chairman of the Board will not serve as a Director beyond the Annual General Meeting following the ninth anniversary of his or her appointment to the Board. However, this may be extended in exceptional circumstances or to facilitate effective succession planning and the development of a diverse Board. In such a situation the reasons for the extension will be fully explained to shareholders and a timetable for the departure of the Chairman clearly set out.

The Role of the Chairman and Senior Independent Director

The Chairman is responsible for providing effective leadership of the Board, demonstrating objective judgement and promoting a culture of openness and debate. The Chairman facilitates the effective contribution and encourages active engagement by each Director. In conjunction with the Company Secretary, the Chairman ensures that Directors receive accurate, timely and clear information to assist them with effective decision-making. The Chairman acts upon the results of the Board evaluation process by recognising strengths and addressing any weaknesses and also ensures that the Board engages with major shareholders and that all Directors understand shareholder views.

The Senior Independent Director acts as a sounding board for the Chairman and acts as an intermediary for other Directors, when necessary. Working closely with the Nomination and Remuneration Committee, the Senior Independent Director takes responsibility for an orderly succession process for the Chairman, and leads the annual appraisal of the Chairman's performance. The Senior Independent Director is also available to shareholders to discuss any concerns they may have.

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.

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 July 2018 (the "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 provisions of the AIC Code of Corporate Governance as published in February 2019 (the "AIC Code"). The AIC Code addresses the principles and provisions set out in the UK Code, as well as setting out additional provisions on issues that are of specific relevance to the Company. The AIC Code is available on the AIC's website: theaic.co.uk.

The Board considers that reporting against the principles and provisions of the AIC Code, which has been endorsed by the FRC, provides more relevant information to shareholders.

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

The UK Code includes provisions relating to:

- interaction with the workforce (provisions 2, 5 and 6);

- the role and responsibility of the chief executive (provisions 9 and 14);

- previous experience of the chairman of a remuneration committee (provision 32); and

- executive directors' remuneration (provisions 33 and 36 to 40).

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.

Full details of the Company's compliance with AIC Code can be found on its website.

Going Concern

The Company's assets consist mainly of equity shares in companies listed on the London Stock Exchange and in most circumstances are considered to be 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 Directors have considered the fact that Company's investments comprise readily realisable securities which can be sold to meet funding requirements if necessary. The Directors have also performed stress testing on the portfolio and the loan financial covenants.

The Company has borrowings in the form of £30 million 3.99% Loan Notes that mature in December 2045, and a £30 million multi-currency revolving credit facility with The Bank of Nova Scotia, London Branch, which matures in July 2023. The Board has reviewed indicative quotes for the renewal of the multi-currency revolving credit facility and expects to be able to renew it upon its maturity with a similar facility.

Following this assessment, 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 re-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 Customer Services Department (see Contact Addresses).

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 and Manager meet with major shareholders on at least an annual basis in order to gauge their views.

abrdn Holdings Limited has been appointed Company Secretary to the Company. Whilst abrdn Holdings Limited is a wholly owned subsidiary of the abrdn Group, there is a clear separation of roles between the Manager and Company Secretary with different board compositions and different reporting lines in place. 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.

Directors attend meetings with the Company's largest shareholders and meet other shareholders at the Annual General Meeting and, as explained in the Chairman's Statement, the Company will hold an online shareholder presentation in advance of the Annual General Meeting this year, which will include an interactive question and answer session.

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.

Disclosures in Strategic Report

In accordance with Section 414 C (11) of the Companies Act 2006, the following information otherwise required to be set out in the Directors' Report has been included in the Strategic Report: risk management objectives and policies and likely future developments in the business.

Annual General Meeting

The Annual General Meeting will be held at V&A Dundee, 1 Riverside Esplanade, Dundee DD1 4EZ on Tuesday 16 May 2023 at 12 noon.

By order of the Board
abrdn Holdings Limited
Company Secretary
1 George Street
Edinburgh EH2 2LL
5 April 2023

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

- 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
5 April 2023

Statement of Comprehensive Income

		Year ended 31 January 2023			Year ended 31 January 2022
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
(Losses)/gains on investments	10	-	(13,996)	(13,996)	-	17,551	17,551
Currency (loss)/profit		-	(558)	(558)	-	525	525
Income	3	21,950	-	21,950	21,518	-	21,518
Investment management fee	4	(682)	(1,022)	(1,704)	(727)	(1,091)	(1,818)
Administrative expenses	5	(951)	-	(951)	(882)	-	(882)
Net return before finance costs and taxation		20,317	(15,576)	4,741	19,909	16,985	36,894

Finance costs	6	(597)	(888)	(1,485)	(569)	(824)	(1,393)
Return before taxation		19,720	(16,464)	3,256	19,340	16,161	35,501

Taxation	7	(412)	-	(412)	(267)	-	(267)
Return after taxation		19,308	(16,464)	2,844	19,073	16,161	35,234

Return per Ordinary share (pence)	9	13.02	(11.10)	1.92	12.87	10.91	23.78

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

		As at	As at
		31 January 2023	31 January 2022
	Notes	£'000	£'000
Non-current assets
Investments at fair value through profit or loss	10	478,895	502,423

Current assets
Debtors	11	2,452	2,672
Cash and cash equivalents		12,267	2,855
		14,719	5,527

Creditors: amounts falling due within one year
Bank loan	12	(13,762)	(13,034)
Other creditors	12	(1,509)	(606)
		(15,271)	(13,640)
Net current liabilities		(552)	(8,113)
Total assets less current liabilities		478,343	494,310

Creditors: amounts falling due after more than one year	13	(29,738)	(29,731)
Net assets		448,605	464,579

Capital and reserves
Called-up share capital	14	38,419	38,419
Share premium account		4,908	4,619
Capital redemption reserve		1,606	1,606
Capital reserve		379,839	396,303
Revenue reserve	16	23,833	23,632
Equity shareholders' funds		448,605	464,579

Net asset value per Ordinary share (pence)	17	302.57	313.56

The financial statements were approved and authorised for issue by the Board of Directors on 5 April 2023 and were signed on its behalf by:
David Barron
Director
The accompanying notes are an integral part of the financial statements.

Statement of Changes in Equity

For the year ended 31 January 2023
			Share	Capital
		Share	premium	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 January 2022		38,419	4,619	1,606	396,303	23,632	464,579
Return after taxation		-	-	-	(16,464)	19,308	2,844
Issue of shares from Treasury		-	289	-	-	-	289
Dividends paid	8	-	-	-	-	(19,107)	(19,107)
Balance at 31 January 2023		38,419	4,908	1,606	379,839	23,833	448,605


For the year ended 31 January 2022
			Share	Capital
		Share	premium	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 January 2021		38,419	4,619	1,606	380,142	23,507	448,293
Return after taxation		-	-	-	16,161	19,073	35,234
Dividends paid	8	-	-	-	-	(18,948)	(18,948)
Balance at 31 January 2022		38,419	4,619	1,606	396,303	23,632	464,579

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 2023	31 January 2022
	Notes	£'000	£'000
Operating activities
Net return before finance costs and taxation		4,741	36,894
Adjustment for:
Losses/(gains) on investments		13,996	(17,551)
Currency losses/(gains)		558	(525)
Decrease/(increase) in accrued dividend income		18	(223)
Stock dividends included in dividend income		-	(1,333)
(Increase)/decrease in other debtors excluding tax		(16)	5
Increase/(decrease) in other creditors		186	(66)
Overseas withholding tax		(1,052)	(811)
Net cash flow from operating activities		18,431	16,390

Investing activities
Purchases of investments		(109,784)	(142,812)
Sales of investments		120,822	145,846
Net cash from investing activities		11,038	3,034

Financing activities
Interest paid		(1,409)	(1,380)
Dividends paid	8	(19,107)	(18,948)
Issue of shares from treasury		289	-
Loan repayment		-	(13,323)
Loan drawdowns		-	13,323
Net cash used in financing activities		(20,227)	(20,328)
Increase/(decrease) in cash and cash equivalents		9,242	(904)

Analysis of changes in cash and cash equivalents during the year
Opening balance		2,855	4,002
Effect of exchange rate fluctuations on cash held		170	(243)
Increase/(decrease) in cash as above		9,242	(904)
Closing balance		12,267	2,855

The accompanying notes are an integral part of the financial statements. A reconciliation of the changes in net debt can be found in note 18 .

Notes to the Financial Statements

For the year ended 31 January 2023

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, the requirements of the Companies Act 2006 and with the AIC ("Association of Investment Companies") Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in July 2022. 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 the assumption that approval as an investment trust will continue to be granted.
		The Company's assets consist mainly of equity shares in companies listed on the London Stock Exchange and in most circumstances are considered to be 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 Directors have considered the fact that Company's investments comprise readily realisable securities which can be sold to meet funding requirements if necessary. The Directors have also performed stress testing on the portfolio and the loan financial covenants.
		The Company has borrowings in the form of £30 million 3.99% Loan Notes that mature in December 2045, and a £30 million multi-currency revolving credit facility with The Bank of Nova Scotia, London Branch, which matures in July 2023. The Board has reviewed indicative quotes for the renewal of the multi-currency revolving credit facility and expects to be able to renew it upon its maturity with a similar facility.
		Following this assessment, 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.
		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 which 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.
		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, 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 . Final 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 the 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 the disposal of investments and changes in the 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. Certain other items including gains or losses on foreign currency and special dividends are also allocated to this reserve as appropriate. 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.
	(j)	Treasury shares . When the Company purchases the Company's equity share capital to be held as treasury shares, the amount of the consideration paid, which includes directly attributable costs, is net of any tax effects, and is recognised as a deduction from the capital reserve. When these shares are sold subsequently, the amount received is recognised as an increase in equity, and any resulting surplus on the transaction is transferred to the share premium account and any resulting deficit is transferred from the capital reserve.

3.	Income
		2023	2022
		£'000	£'000
	Income from investments
	UK dividend income	13,643	14,463
	Overseas dividends	6,262	3,895
	Stock dividends	-	1,333
		19,905	19,691

	Other income
	Income on derivatives	2,007	1,826
	Deposit interest		-
	Interest received on withholding tax refunds	38	1
		2,045	1,827
	Total income	21,950	21,518

	During the year, the Company earned premiums totalling £2,007,000 (2022 - £1,826,000) in exchange for entering into derivative transactions. The Company had no open positions in derivative contracts at 31 January 2023 (2022 - no open positions). Losses realised on the exercise of derivative transactions are disclosed in note 10.

4.	Management fee
		2023			2022
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
	Management fee	682	1,022	1,704	727	1,091	1,818

	The Company has an agreement with abrdn Fund Managers Limited ("aFML") 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 £286,000 (2022 - £154,000). 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 2023 (2022 - none).
	The management agreement may be terminated by either party on six months' written notice.

5.	Administrative expenses
			2023	2022
			£'000	£'000
	Directors' fees		153	142
	Auditor's remuneration (excluding VAT):
	- fees payable to the Company's Auditor for the audit of the Company's annual accounts		30	23
	- fees payable to the Company's Auditor for other services:
		- interim review	7	7
	Irrecoverable VAT		61	98
	Promotional activities		243	189
	Registrar's fees		43	43
	Share plan fees		120	85
	Printing and postage		65	48
	Other expenses		229	247
			951	882

	Expenses of £243,000 (2022 - £189,000) were paid to aFML in respect of the promotional activities of the Company. The balance outstanding at the year end was £81,000 (2022 - £24,000).
	The Company was granted VAT registered status during the year, backdated to 1 January 2021. As a result the above current year expenses, where applicable, are disclosed net of VAT.

6.	Finance costs
		2023			2022
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
	Bank loan	110	166	276	68	102	170
	Loan Notes - repayable after more than five years	479	718	1,197	479	718	1,197
	Amortised Loan Notes issue expenses	3	4	7	3	4	7
	Bank overdraft	5	-	5	19	-	19
		597	888	1,485	569	824	1,393

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

7.	Taxation
				2023			2022
			Revenue	Capital	Total	Revenue	Capital	Total
			£'000	£'000	£'000	£'000	£'000	£'000
	(a)	Analysis of charge for the year
		Overseas tax suffered	1,154	-	1,154	961	-	961
		Overseas tax reclaimable	(742)	-	(742)	(694)	-	(694)
		Total tax charge for the year	412	-	412	267	-	267

	(b)	Factors affecting the tax charge for the year . The UK corporation tax rate is 19% (2022 - 19%). The tax assessed for the year is lower than the rate of corporation tax. The differences are explained below:

				2023			2022
			Revenue	Capital	Total	Revenue	Capital	Total
			£'000	£'000	£'000	£'000	£'000	£'000
		Return before taxation	19,720	(16,464)	3,256	19,340	16,161	35,501

		Corporation tax at 19% (2022 - 19%)	3,747	(3,128)	619	3,675	3,071	6,746
		Effects of:						-
		Non-taxable UK dividend income	(2,628)	-	(2,628)	(2,748)	-	(2,748)
		Non-taxable stock dividends		-	-	(254)	-	(254)
		Capital losses/(gains) on investments not taxable	-	2,659	2,659	-	(3,335)	(3,335)
		Expenses not deductible for tax purposes	1	-	1	1	-	1
		Currency (gains)/losses not taxable	-	106	106	-	(99)	(99)
		Overseas taxes	412	-	412	267	-	267
		Non-taxable overseas dividends	(1,050)	-	(1,050)	(687)	-	(687)
		Excess management expenses	(70)	363	293	13	363	376
		Total tax charge	412	-	412	267	-	267

	(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 £133,906,000 (2022 - £132,362,000). 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.
		The UK corporation tax rate will increase to 25% with effect from 1 April 2023. This will impact, where appropriate, the value of UK deferred tax balances and the tax charged on future UK profits.

8.	Ordinary dividends on equity shares
		2023	2022
		£'000	£'000
	Amounts recognised as distributions paid during the year:
	Third interim dividend for 2022 - 3.00p (2021 - 3.00p)	4,445	4,445
	Final dividend for 2022 - 3.90p (2021 - fourth interim - 3.80p)	5,782	5,630
	First interim dividend for 2023 - 3.00p (2022 - 3.00p)	4,448	4,445
	Second interim dividend for 2023 - 3.00p (2022 - 3.00p)	4,448	4,445
	Return of unclaimed dividends^A	(16)	(17)
		19,107	18,948
	^A Unclaimed dividends returned to the Company during the year ended 31 January 2023 have been donated to charity (see note 22).

	A third interim dividend of 3.00p per Ordinary share was declared on 6 December 2022, payable on 24 February 2023 to shareholders on the register on 3 February 2023 and has not been included as a liability in these financial statements. The final dividend of 4.10p per Ordinary share was approved by the Board on 5 April 2023, payable on 30 May 2023 to shareholders on the register on 5 May 2023 and has not been included as a liability in the 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 £19,308,000 (2022 - £19,073,000).

		2023	2022
		£'000	£'000
	First interim dividend for 2023 - 3.00p (2022 - 3.00p)	4,448	4,445
	Second interim dividend for 2023 - 3.00p (2022 - 3.00p)	4,448	4,445
	Third interim dividend for 2023 - 3.00p (2022 - 3.00p)	4,448	4,445
	Final dividend for 2023 - 4.10p (2022 - 3.90p)	6,079	5,782
		19,423	19,117

	The final dividend is based on the latest share capital of 148,264,670 Ordinary shares excluding those held in treasury.

9.	Return per Ordinary share
		2023		2022
		£'000	p	£'000	p
	Revenue return	19,308	13.02	19,073	12.87
	Capital return	(16,464)	(11.10)	16,161	10.91
	Total return	2,844	1.92	35,234	23.78

	Weighted average number of Ordinary shares in issue		148,256,451		148,164,670

10.	Investments at fair value through profit or loss
		2023	2022
		£'000	£'000
	Opening book cost	428,488	410,222
	Investment holdings gains	73,935	77,208
	Opening fair value	502,423	487,430
	Analysis of transactions made during the year
	Purchases	110,433	144,145
	Sales - proceeds	(119,965)	(146,703)
	(Losses)/gains on investments	(13,996)	17,551
	Closing fair value	478,895	502,423

	Closing book cost	424,815	428,488
	Closing investment holdings gains	54,080	73,935
	Closing fair value	478,895	502,423

	The Company received £119,965,000 (2022 - £146,703,000) from investments sold in the year. The book cost of these investments when they were purchased was £114,106,000 (2022 - £125,879,000). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.
	The realised gains figure above includes losses realised on the exercise of traded options of £625,000 (2022 - £971,000). Premiums received of £2,007,000 (2022 - £1,826,000) 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/(losses) on investments in the Statement of Comprehensive Income. The total costs were as follows:

		2023	2022
		£'000	£'000
	Purchases	506	592
	Sales	76	79
		582	671

	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.

11.	Debtors: amounts falling due within one year
		2023	2022
		£'000	£'000
	Net dividends and interest receivable	763	781
	Tax recoverable	1,657	1,017
	Amounts due from brokers	-	857
	Other loans and receivables	32	17
		2,452	2,672

12.	Creditors: amounts falling due within one year
			2023	2022
	(a)	Bank loan	£'000	£'000
		EUR 15,600,000 - 11 February 2022	-	13,034
		EUR 15,600,000 - 11 February 2023	13,762	-
			13,762	13,034

		The Company has a £30,000,000 multi-currency revolving credit facility with The Bank of Nova Scotia, London Branch committed until 13 July 2023. Under the terms of the facility, subject to the lender's credit approval, the Company has the option to increase the level of the facility from £30,000,000 to £40,000,000 at any time, should further investment opportunities be identified. As at 31 January 2023 €15,600,000 had been drawn down at a rate of 3.618% (2022 - €15,600,000 at a rate of 1.0%), which matured on 7 February 2023. At the date this Report was approved €15,600,000 had been drawn down at a rate of 3.551%, maturing on 6 April 2023. 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.

			2023	2022
	(b)	Other creditors	£'000	£'000
		Loan Notes and bank loan interest	257	189
		Amount due to brokers	649	-
		Sundry creditors	603	417
			1,509	606

13.	Creditors: amounts falling due after more than one year
		2023	2022
		£'000	£'000
	3.99% Loan Notes 2045	30,000	30,000
	Unamortised Loan Note issue expenses	(262)	(269)
		29,738	29,731

	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 2023 was £29,393,000 (2022 - £36,441,000), the value being calculated per the disclosure in note 19. The effect on the net asset value of deducting the Loan Notes at fair value rather than at par is disclosed in note 17.

14.	Called-up share capital
		2023	2022
		£'000	£'000
	Allotted, called up and fully paid:
	148,264,670 (2022 - 148,164,670) Ordinary shares of 25p each - equity	37,066	37,041
	Treasury shares:
	5,413,265 (2022 - 5,513,265) Ordinary shares of 25p each - equity	1,353	1,378
		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 issued 100,000 Ordinary shares at a price of 290p per share (2022 - no shares issued or repurchased). All of these shares were released from treasury.

15.	Analysis of changes in financing during the year
		2023		2022
		Equity		Equity
		share capital		share capital
		(including	Loan	(including	Loan
		premium)	Notes	premium)	Notes
		£'000	£'000	£'000	£'000
	Opening balance at 31 January 2022	43,038	29,731	43,038	29,724
	Issue of shares from Treasury	289	-	-	-
	Movement in unamortised Loan Notes issue expenses	-	7	-	7
	Closing balance at 31 January 2023	43,327	29,738	43,038	29,731

16.	Revenue reserve per share
	The following information is presented supplemental to the financial statements to show the Companies Act position at the year end.

			2023	2022
	Revenue reserve (£'000)		23,833	23,632
	Number of Ordinary shares in issue at year end		148,264,670	148,164,670

	Revenue reserve per Ordinary share (p)		16.07	15.95
	Less:	- third interim dividend (p)	(3.00)	(3.00)
		- final dividend (p)	(4.10)	(3.90)
	Revenue reserve per Ordinary share (p)		8.97	9.05

17.	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 Loan Notes at par. A reconciliation between the two sets of figures is as follows:

		2023	2022
	Net assets attributable (£'000)	448,605	464,579
	Number of Ordinary shares in issue at year end^A	148,264,670	148,164,670
	Net asset value per Ordinary share	302.57p	313.56p
	^A Excluding shares held in treasury.

	Adjusted net assets	2023	2022
	Net assets attributable (£'000) as above	448,605	464,579
	Unamortised Loan Note issue expenses (note 13)	(262)	(269)
	Adjusted net assets attributable (£'000)	448,343	464,310

	Number of Ordinary shares in issue at year end^A	148,264,670	148,164,670
	Adjusted net asset value per Ordinary share	302.39p	313.37p
	^A Excluding shares held in treasury.

	Net assets - debt at fair value	£'000	£'000
	Net assets attributable	448,605	464,579
	Amortised cost Loan Notes	29,738	29,731
	Market value Loan Notes	(29,393)	(36,441)
	Net assets attributable	448,950	457,869

	Number of Ordinary shares in issue at the period end^A	148,264,670	148,164,670
	Net asset value per Ordinary share (debt at fair value)	302.80p	309.03p
	^A Excluding shares held in treasury.	a)	b)

18.	Analysis of changes in net debt
		At	Currency		Non-cash	At
		31 January 2022	differences	Cash flows	movements	31 January 2023
		'000	'000	'000	'000	'000
	Cash and cash equivalents	2,855	170	9,242	-	12,267
	Debt due within one year	(13,034)	(728)	-	-	(13,762)
	Debt due after more than one year	(29,731)	-	-	(7)	(29,738)
		(39,910)	(558)	9,242	(7)	(31,233)


		At	Currency		Non-cash	At
		31 January 2021	differences	Cash flows	movements	31 January 2022
		'000	'000	'000	'000	'000
	Cash and cash equivalents	4,002	(243)	(904)	-	2,855
	Debt due within one year	(13,802)	768	-	-	(13,034)
	Debt due after more than one year	(29,724)	-	-	(7)	(29,731)
		(39,524)	525	(904)	(7)	(39,910)

	A statement reconciling the movement in net funds to the net cash flow has not been presented as there are no differences from the above analysis.

19.	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 £625,000 (2022 - £971,000). As disclosed in note 3, the premium received and fair value changes in respect of options written in the year was £2,007,000 (2022 - £1,826,000). The largest position in derivative contracts held during the year at any given time was £889,000 (2022 - £558,000). The Company had no open positions in derivative contracts at 31 January 2023 (2022 - none).
	The Board relies on abrdn Fund Managers Limited ("aFML" or the "Manager") for the provision of risk management activities under the terms of its management agreement with aFML (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 aFML collectively assume responsibility for aFML's obligations under the AIFMD including reviewing investment performance and monitoring the Company's risk profile during the year.
	aFML is a fully integrated member of the abrdn Group (the "Group") which provides a variety of services and support to aFML in the conduct of its business activities, including in the oversight of the risk management framework for the Company. aFML has delegated the day to day administration of the investment policy to abrdn 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). aFML 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 Chief Risk Officer, who reports to the 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 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 abrdn, 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.
		(a) 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 2023 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	rate	rate
At 31 January 2023	Years	%	£'000	£'000
Assets
Sterling	-	-	-	12,267
Total assets	-	-	-	12,267

Liabilities
Bank loans	0.17	3.62	(13,762)	-
Loan Notes	22.87	3.99	(29,738)	-
Total liabilities	-	-	(43,500)	-

	Weighted
	average	Weighted
	period for	average
	which	interest	Fixed	Floating
	rate is fixed	rate	rate	rate
At 31 January 2022	Years	%	£'000	£'000
Assets
Sterling	-	-	-	2,855
Total assets	-	-	-	2,855

Liabilities
Bank loans	0.08	1.00	(13,034)	-
Loan Notes	23.87	3.99	(29,731)	-
Total liabilities	-	-	(42,765)	-

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.

( b) 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 2023. 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 2023			31 January 2022
		Net	Total		Net	Total
		monetary	currency		monetary	currency
	Investments	assets	exposure	Investments	assets	exposure
	£'000	£'000	£'000	£'000	£'000	£'000
Euro	44,258	(12,391)	31,867	63,632	(12,098)	51,534
Swiss Francs	15,617	90	15,707	-	216	216
Danish Krone	9,909	114	10,023	14,234	94	14,328
Norwegian Krone	10,202	12	10,214	-	13	13
Swedish Krona	34,976	1	34,977	28,847	-	28,847
Sterling	363,933	(18,116)	345,817	395,710	(26,069)	369,641
Total	478,895	(30,290)	448,605	502,423	(37,844)	464,579

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.
( c) 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. 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 2023 would have increased by £47,890,000 (2022 - increase of £50,242,000) 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.
							More
		Within	Within	Within	Within	Within	than
		1 year	1-2 years	2-3 years	3-4 years	4-5 years	5 years	Total
	At 31 January 2023	£'000	£'000	£'000	£'000	£'000	£'000	£'000
	Bank loans	13,762	-	-	-	-	-	13,762
	Loan Notes	-	-	-	-	-	30,000	30,000
	Interest cash flows on bank loans and loan notes	1,281	1,197	1,197	1,197	1,197	21,546	27,615
	Cash flows on other creditors	1,252	-	-	-	-	-	1,252
		16,295	1,197	1,197	1,197	1,197	51,546	72,629

							More
		Within	Within	Within	Within	Within	than
		1 year	1-2 years	2-3 years	3-4 years	4-5 years	5 years	Total
	At 31 January 2022	£'000	£'000	£'000	£'000	£'000	£'000	£'000
	Bank loans	13,034	-	-	-	-	-	13,034
	Loan Notes	-	-	-	-	-	30,000	30,000
	Interest cash flows on bank loans and loan notes	1,207	1,197	1,197	1,197	1,197	22,743	28,738
	Cash flows on other creditors	417	-	-	-	-	-	417
		14,658	1,197	1,197	1,197	1,197	52,743	72,189

	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 Loan Notes and a revolving facility. The 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 2023 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 2023 and 31 January 2022 the amortised cost of the Company's Loan Notes was £29,738,000 and £29,731,000 respectively. At 31 January 2023 and 31 January 2022 the Company's bank loans amounted to £13,762,000 and £13,034,000 respectively. The facility is committed until 13 July 2023.
(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 abrdn 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.
	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:

					2023		2022
					Balance	Maximum	Balance	Maximum
					Sheet	exposure	Sheet	exposure
					£'000	£'000	£'000	£'000
	Non-current assets
	Investments at fair value through profit or loss				478,895	-	502,423	-
	Current assets
	Cash and short term deposits				12,267	12,267	2,855	2,855
					491,162	12,267	505,278	2,855

	None of the Company's financial assets is past due or impaired.
	Fair values of financial assets and financial liabilities . The fair value of borrowings has been calculated at £43,155,000 as at 31 January 2023 (2022 - £49,475,000) compared to an accounts value in the financial statements of £43,500,000 (2022 - £42,765,000) (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.

20.	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 2023		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	478,895	-	-	478,895
	Total			478,895	-	-	478,895

				Level 1	Level 2	Level 3	Total
	As at 31 January 2022			£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	502,423	-	-	502,423
	Total			502,423	-	-	502,423

	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.

21.	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.

22.	Related party transactions and transactions with the Manager
	Directors' fees and interests. Fees payable during the year to the Directors and their interests in the shares of the Company are disclosed within the Directors' Remuneration Report.
	Transactions with the Manager. The Company has an agreement with the abrdn 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.
	During the year, the Company received £16,000 in respect of returned, unclaimed dividends accumulated over a number of years. The Board took the decision to donate these monies to the abrdn Charitable Foundation. The abrdn Charitable Foundation is a registered charity. Its board of directors includes independent representation from the abrdn Group and provides oversight and guidance for its charitable giving activities.

Alternative Performance Measures

Alternative performance measures are numerical measures of the Company's current, historical or future performance, financial position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company's applicable financial framework includes FRS 102 and the AIC SORP. The Directors assess the Company's performance against a range of criteria which are viewed as particularly relevant for closed-end investment companies.
Dividend cover
Dividend cover measures the revenue return per share divided by total dividends per share, expressed as a ratio.

		2023	2022
Revenue return per share	a	13.02p	12.87p
Dividends per share	b	13.10p	12.90p
Dividend cover	a/b	0.99	1.00

Net gearing
Net gearing measures total borrowings less cash and cash equivalents divided by shareholders' funds, expressed as a percentage. Under AIC reporting guidance cash and cash equivalents includes net amounts due to and from brokers at the period end as well as cash and short term deposits.

		2023	2022
Borrowings (£'000)	a	43,500	42,765
Cash (£'000)	b	12,267	2,855
Amounts due to brokers (£'000)	c	649	-
Amounts due from brokers (£'000)	d	-	857
Shareholders' funds (£'000)	e	448,605	464,579
Net gearing	(a-b+c-d)/e	7.11%	8.41%

Premium/(discount) to net asset value per share with debt at fair value
The premium/(discount) is the amount by which the share price is higher/(lower) than the net asset value per share with debt at fair value, expressed as a percentage of the net asset value with debt at fair value.

		2023	2022
Share price (p)	a	294.00p	310.00p
NAV per Ordinary share (p) (see note 17)	b	302.80p	309.03p
Discount	(a-b)/b	(2.91%)	0.31%

Ongoing charges
The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of investment management fees and administrative expenses less non-recurring charges, expressed as a percentage of the average net asset values with debt at fair value throughout the year.

		2023	2022
Investment management fees (£'000)		1,704	1,818
Administrative expenses (£'000)		951	882
Less: non-recurring charges (£'000)		-	(57)
Ongoing charges (£'000)		2,655	2,643
Average net assets (£'000)		430,038	472,893
Ongoing charges ratio (excluding look-through costs)		0.62%	0.56%
Look-through costs^AB		0.02%	0.03%
Ongoing charges ratio (including look-through costs)		0.64%	0.59%
^A Professional services comprising new Director recruitment costs and legal fees considered unlikely to recur.
^BCalculated in accordance with AIC guidance issued in October 2020 to include the Company's share of costs of holdings in investment companies on a look-through basis.

The ongoing charges ratio provided in the Company's Key Information Document is calculated in line with the PRIIPs regulations which amongst other things, includes the cost of borrowings and transaction costs.
Total return
NAV and share price total returns show how the NAV and share price has performed over a period of time in percentage terms, taking into account both capital returns and dividends paid to shareholders. Share price and NAV total returns are monitored against open-ended and closed-ended competitors, and the Reference Index, respectively.

			Share
Year ended 31 January 2023		NAV	Price
Opening at 1 February 2022	a	309.0p	310.0p
Closing at 31 January 2023	b	302.8p	294.0p
Price movements	c=(b/a)-1	-2.0%	-5.2%
Dividend reinvestment^A	d	4.4%	4.3%
Total return	c+d	+2.4%	(0.9%)

			Share
Year ended 31 January 2022		NAV	Price
Opening at 1 February 2021	a	297.6p	287.0p
Closing at 31 January 2022	b	309.0p	310.0p
Price movements	c=(b/a)-1	+3.8%	+8.0%
Dividend reinvestment^A	d	4.3%	4.5%
Total return	c+d	+8.1%	+12.5%
^A NAV total return involves investing the net dividend in the NAV of the Company with debt at fair value on the date on which that dividend goes ex-dividend. Share price total return involves reinvesting the net dividend in the share price of the Company on the date on which that dividend goes ex-dividend.

Additional Notes to Annual Financial Report

The Annual General Meeting will be held at V&A Dundee, 1 Riverside Esplanade, Dundee DD1 4EZ on Tuesday 16 May 2023 at 12 noon.

The Annual Financial Report Announcement is not the Company's statutory accounts. The above results for the year ended 31 January 2023 are an abridged version of the Company's full accounts, which have been approved and audited with an unqualified report. The 2022 and 2023 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 2022 is derived from the statutory accounts for the year ended 31 January 2022 which have been delivered to the Registrar of Companies. The accounts for the year ended 31 January 2023 will be filed with the Registrar of Companies in due course.

The Annual Report and Accounts will be posted to shareholders in April 2023 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

abrdn Holdings Limited

Company Secretary

5 April 2023

* 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.

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