Annual Financial Report

North American Income Trust (The)

05 April 2024

 

THE NORTH AMERICAN INCOME TRUST PLC

 

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 JANUARY 2024

Legal Entity Identifier (LEI):  5493007GCUW7G2BKY360

 

Investment Objective

To provide investors with above average dividend income and long-term capital growth through active management of a portfolio consisting predominately of S&P 500 US equities.

Financial Results and Performance

Performance Highlights

Net asset value total returnAB			Share price total returnAB
-1.6%			-0.9%
2023	+9.6%		2023	+12.4%
Revenue return per share			Dividends per share
12.0p			11.7p
2023	12.2p		2023	11.0p
Net asset value per Ordinary share			Total assetsC
317.8p			£475.7m
2023	337.2p		2023	£513.4m
Dividend yieldAD			Ongoing chargesA
4.0%			0.99%
2023	3.60%		2023	0.93%
A Considered to be an Alternative Performance Measure..
B Includes dividends reinvested.
C Total Assets define as per the Statement of Financial Position less current liabilities.
D Calculated as the dividend for the year divided by the year end share price.

Financial Calendar, Dividends and Highlights

Annual General Meeting (Edinburgh)	21 June 2024
Half year end	31 July 2024
Payment dates of quarterly dividends for financial year ending 31 January 2025	August 2024 October 2024 January 2025 May 2025
Financial year end	31 January 2025

Dividends

	Rate	xd date	Record date	Payment date
1st Interim dividend 2024	2.60p	20 July 2023	21 July 2023	4 August 2023
2nd Interim dividend 2024	2.60p	12 October 2023	13 October 2023	27 October 2023
3rd Interim dividend 2024	2.60p	28 December 2023	29 December 2023	19 January 2024
4th interim dividend 2024	3.90p	11 April 2024	12 April 2024	3 May 2024
Total dividends 2024	11.70p
1st Interim dividend 2023	2.50p	21 July 2022	22 July 2022	5 August 2022
2nd Interim dividend 2023	2.50p	6 October 2022	7 October 2022	28 October 2022
3rd Interim dividend 2023	2.50p	2 February 2023	3 February 2023	24 February 2023
Final dividend 2023	3.50p	4 May 2023	5 May 2023	12 June 2023
Total dividends 2023	11.00p

Highlights

	31 January 2024	31 January 2023	% change
Total assets	£475.7m	£513.4m	-7.3
Equity shareholders' funds	£436.5m	£472.9m	-7.7
Share price (mid market)	289.00p	306.00p	-5.6
Net asset value per Ordinary share	317.78p	337.21p	-5.8
Discount (difference between share price and net asset value)AB	(9.1%)	(9.3%)
Net gearing A	(4.1%)	(2.9%)
Dividends and earnings
Revenue return per share	11.95p	12.21p	-2.1
Dividends per share	11.70p	11.00p	+6.4
Dividend yield (based on year end share price)A	4.0%	3.6%
Dividend coverA	1.02	1.11
Revenue reserves per share
Prior to payment of fourth interim dividend	16.06	N/A
After payment of fourth interim dividend	12.16	N/A
Prior to payment of third interim and final dividends	N/A	17.57p
After payment of third interim and final dividends	N/A	11.57p
Operating costs
Ongoing chargesA	0.99%	0.93%
A Considered to be an Alternative Performance Measure.
B Including undistributed revenue.

Strategic Report

Chair's Statement

Market Review

Macroeconomic uncertainty prevailed during the Company's financial year to 31 January 2024. Investors were particularly focused on monetary policy developments, geopolitical tensions and the uncertainty surrounding the possibility of either a recession or a soft landing for the US economy.

Against this backdrop, the Company's net asset value (NAV) total return per share (which includes dividends reinvested) decreased by 1.6% in sterling terms compared to a 2.6% rise in the total return of the Company's primary reference index, the Russell 1000 Value Index, in sterling terms. The Company's share price total return fell by 0.9% as the Company's discount to NAV narrowed marginally to 9.1%, from 9.3% at the previous year end.

The investment trust sector, in general, experienced a widening of discounts over much of 2023, exacerbated by global uncertainty and higher interest rates available for cash which in turn led to increased activity in the sector in an effort to realise shareholder value. The Company uses its shareholder authority to buyback its own shares seeking to limit discount volatility and also provide liquidity in the Company's shares while signalling our confidence in the intrinsic value of the Company's portfolio.

Even with the volatility witnessed in financial markets, US equities recorded gains over the year, with growth stocks significantly outperforming value stocks. The Investment Manager's Review goes into further detail on performance.

The US Federal Reserve (the "Fed") continued with its monetary tightening measures in the first half of the financial year, with the central bank increasing the target range for the federal funds rate to 5.25%-5.50%, a level unseen in over two decades. In the latter half of the financial year, the Fed maintained interest rates and the messaging turned more dovish as price pressures reduced, fuelling expectations of monetary easing. However, annual core inflation remained above the Fed's 2% target, while conflicts in the Middle East and Ukraine increased the risk of an uptick in inflation and, at the end of 2023, the Fed signalled that it would proceed cautiously.

On a positive note, the US economy remained strong and avoided the widely anticipated recession after the Fed's prolonged period of monetary tightening, as well as the banking sector failures that occurred earlier in 2023. The US government reached an agreement in June 2023 to suspend its debt ceiling, thereby avoiding a government shutdown, which helped markets. As the financial year progressed, investors embraced the likelihood of a soft landing for the economy, as opposed to a recession. Nevertheless, as I allude to in the Outlook section, the Board and Manager are well aware that macroeconomic uncertainty continues, especially with the ongoing conflicts in the Middle East and Ukraine and the upcoming US election.

Performance

The Company's portfolio underperformed its reference benchmark in sterling terms over the year to 31 January 2024. Stock selection, mainly in the materials sector, weighed on performance relative to the Russell 1000 Value Index, the primary reference index. Sector allocation, especially in the industrials sector, was also negative.

For more details on performance, refer to the Investment Manager's review.

The Board monitors portfolio performance regularly and receives quarterly reports from the Manager on portfolio changes and the decisions behind them.

Revenue Account

The Company's equity portfolio generated £17.1 million in revenue during the financial year, close to the £17.8 million in the previous year. Options continue to be part of the portfolio and represented 17.2% of the Company's total gross income, whilst corporate bonds accounted for only 2.6%. The Company's revenue return per ordinary share dipped marginally to 12.0 pence compared to last year's 12.2 pence.

Dividend

The Board remains committed to the Company's progressive dividend policy and extending the track record of thirteen consecutive years of dividend growth. The Board declared, on 28 March 2024, a fourth interim dividend of 3.9 pence per share, resulting in total dividends for the year ended 31 January 2024 of 11.7 pence per share (2023 - 11.0p) and representing annual growth of 6.4%. The fourth interim dividend will be paid on 3 May 2024 to shareholders on the register on 12 April 2024 (ex-dividend date: 11 April 2024).

In reaching its decision on dividends, the Board always balances the wish to increase the amount distributed to shareholders with the recognition that currency can have a variable impact on earnings per share. The Investment Manager's continued efforts to build the revenue reserve, which stands at over one year's cover, gives comfort that at times of stress the Company can dip into this reserve to maintain the dividend.

Management of Premium and Discount

The Company's share price ended the year at 289.0 pence, a 9.1% discount to the total NAV of 317.8 pence. This compares to a 9.3% discount at the end of the 2023 financial year. The Board continues to work with the Manager in both promoting the Company's benefits to a wider audience and providing liquidity to the market through the use of share buybacks. Over the course of the year, the Company's shares mainly traded at discounts ranging between 9.0% and 15.0%.

During the year, 2,882,402 shares were bought back and cancelled at an average price of 275 pence and an average discount of 11.5%. The total cost was £8.0 million. Since 31 January 2024, the Company has bought back an additional 1,187,253 Ordinary shares at a cost of £3.3m.

Gearing

The Board believes that the sensible use of gearing should enhance returns to our shareholders over the longer term. The Company benefits from its long-term financing agreements totalling US$50 million with MetLife which comprise two loans of US$25 million with terms of 10 and 15 years. These are fixed at 2.7% and 3.0% per annum expiring in December 2030 and 2035 respectively. Net gearing at 31 January 2024 stood at 4.1% (2023: 2.9%).

Promotional Activity

During the last year we have continued to work with our Manager to strengthen and modernise our marketing efforts. We aim to keep all shareholders informed and updated on their investment, particularly during periods of volatility. Updates include commentary, articles and videos allowing investors to hear directly from the Investment Manager on a regular basis - to understand both the outlook and the decisions being made within the portfolio itself. All of this communication can be found on the Company's website, northamericanincome.co.uk, and helps to inform shareholders' investment decisions to ensure they remain aligned with their individual needs.

You can also follow 'abrdn Investment Trusts' on LinkedIn and X (previously Twitter) or register for email updates here: northamericanincome.co.uk/signup

The Board also notes the announcement by abrdn plc, in December 2023, that it had commenced a programme whereby it would purchase shares in the Company equivalent to six months' management fees; as at the date of approval of this report, 254,476 shares had been purchased by the Manager at an aggregate cost of £727,000.

Environmental, Social and Governance ("ESG") Matters

The Investment Manager continues to engage regularly with the portfolio's holdings to understand their processes, prospects and reports, including on matters related to environmental, social and governance issues. More information regarding the Manager's approach to ESG integration in Equities can be found in the published Annual Report.

Board Activity

In May 2023, the Board was pleased to travel to North America and meet with the Investment Manager and local experts, including analysts, senior management and economists. Directors also met with one of the investee companies which provided a deeper level of engagement than can be attained in the board room. The benefit of these face-to-face meetings is evident in the follow-up afterwards. Since our visit, the Board has focused in particular on performance attribution reporting and the Board keeps under review the most appropriate reference index against which to measure the performance of the Company. We also continue to receive updates on people change within the wider abrdn investment team and developments in these areas are being monitored with interest.

Also, during the year, Directors took the opportunity to meet with investors to gain a deeper understanding of their interests in the Company and address questions on a more informal basis. As usual, we encourage all shareholders to contact the Board with any queries by email to: [e-mail].

In the Interim Report, I announced my intention to retire as a Director of the Company at the conclusion of the forthcoming Annual General Meeting ("AGM"), having served for nine years. Since then, the Board has been reviewing its succession planning, and undertook a thorough process to appoint the next Chair. This involved the appointment of a committee to consider the skills required for the role and whether the Board had any suitable internal candidates or whether an external search was required in this instance. Charles Park put himself forward as an internal candidate and the committee, excluding Charles Park, considered his suitability for the role as Chair. Charles Park has been a strong contributor since he joined the Board in 2017 and has significant business experience and understanding of the Company that make him a preferred candidate for the role. The committee therefore unanimously recommended the appointment of Charles Park as the Chair, with effect from the conclusion of the AGM on 21 June 2024. We are delighted that he has agreed to accept the role. Patrick Edwardson has agreed to step up to become the Senior Independent Director with effect from the same date.

In view of these changes in the Board composition, the Board plans to conduct an external process to appoint a new independent Non-Executive Director. The intention is that the successful candidate will be appointed later this year and an announcement will be made to the London stock exchange in due course.

As usual, towards the end of the year, the Board undertook its board evaluation. Whilst the Board does not currently consider it appropriate to utilise an external agent for this process, due to the current size and composition of the Board, the approach is kept under review. The results of the board evaluation are outlined in the Statement of Corporate Governance in the published Annual Report.

Outlook

At the time of writing, investors expect the Fed to end its rate-hiking cycle and begin monetary easing in 2024. This is despite the Fed's somewhat conservative tone as its favoured measure of annual inflation, the core Personal Consumption Expenditures Price Index, remained above 2%. Additionally, conflict in the Middle East has increased the risk of a resurgence in inflation, due to possible oil-supply disruptions and rising shipping costs.

While a robust US economy helped the country to avoid a recession in 2023, the risk has not completely gone. The Board and Investment Manager believe that a mild recession or soft landing remain in the balance. Meanwhile, the upcoming US election may add to market volatility, as investors remain focused on potential changes to government policies. Added to this, geopolitical issues elsewhere in the world could affect the global economy and financial markets in general.

It is pleasing therefore to note that the Investment Manager has designed the Company's portfolio to include financially robust companies with strong income-generating potential and sound governance practices. The investment team continues to review the portfolio and seek opportunities to ensure its ability to withstand any volatility surrounding the forthcoming US Presidential election, as well as a possible economic downturn, as it seeks to protect against downside risks. The Company has made progressive annual dividend payments for thirteen consecutive years, including the period through the Covid-19 pandemic. The Board continues to remain positive on the strategy's ability to face turbulent times together with the sustainability of the Company's income and the comfort of the revenue reserve which has been built up to the equivalent of over one year's full dividend.

Annual General Meeting ("AGM") and Online Shareholder Presentation

AGM & Continuation Vote

The Company's AGM will be held at 12.00 Noon on 21 June 2024, at the Manager's offices at 1 George Street, Edinburgh, EH2 2LL and, as ever, the Board would welcome your attendance.

The Company is required to hold a continuation vote every three years and the next one is at the forthcoming AGM. The Directors will be voting in favour of continuation and would encourage shareholders to do likewise in the belief that the Company has a successful long-term investment formula. The Board continues to believe that the Company's investment objective of seeking to provide above average dividend income and capital growth from investment in a diversified portfolio of North American securities remains relevant for shareholders and new investors alike. Our history of annual dividend increases since 2011 means that we are included in the Association of Investment Companies 'Next Generation Dividend Heroes' listing and we hope that this progression continues.

Online Shareholder Presentation

In order to encourage as much interaction as possible with our shareholders, there will also be an online shareholder presentation at 2.00p.m. on 10 June 2024. At this event, you will receive a presentation from the Investment Manager and have the opportunity to ask questions of the Chair and the Investment Manager. As with last year, the online presentation is being held ahead of the AGM to allow shareholders to submit their proxy votes prior to the meeting.  Full details on how to register for this online event are available via the website.

Shareholders are also encouraged to submit questions, in advance of both the online shareholder presentation and the AGM, to the following email address: [e-mail].

If you are unable to attend the online event, the Investment Manager's presentation will be available on the Company's website shortly after the presentation. We encourage all shareholders to complete and return the form of proxy enclosed with the Annual Report to ensure that your votes are represented at the meeting (whether or not you intend to attend in person). 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 administrator of your share plan or platform.

Dame Susan Rice
Chair
4 April 2024

Overview of Strategy

Introduction

The Company is an investment trust and its Ordinary shares are listed on the premium segment of the London Stock Exchange. The Company aims to attract long-term private and institutional investors wanting to benefit from the income and growth prospects of North American companies. The Board does not envisage any change in the Company's activity in the foreseeable future. 

Investment Objective and Purpose

To provide investors with above average dividend income and long-term capital growth through active management of a portfolio consisting predominantly of S&P 500 US equities.

Reference Index

The Board reviews performance against the index which it considers to be the most relevant, the Russell 1000 Value Index, together with peer group comparators (in sterling terms). The aim is to provide investors with above average dividend income from predominantly US equities which means that investment performance can diverge, possibly quite materially in either direction, from this index. The Board also compares performance against the S&P 500 Index whilst having regard to the very different make-up of this index and its inclusion of many of the fast growing tech companies which often do not pay dividends.

Investment Policy

The Company invests in a portfolio predominantly comprised of S&P 500 constituents. The Company may also invest in Canadian stocks and US mid and small capitalisation companies to provide for diversified sources of income. The Company may invest up to 20% of its gross assets in fixed income investments, which may include non-investment grade debt. The Company's investment policy is flexible, enabling it to invest in all types of securities, including (but not limited to) equities, preference shares, debt, convertible securities, warrants, depositary receipts and other equity-related securities.

The maximum single investment will not exceed 10% of gross assets at the time of investment and it is expected that the portfolio will contain around 50 holdings (including fixed income investments), with an absolute minimum of 35 holdings.  The composition of the Company's portfolio is not restricted by minimum or maximum market capitalisation, sector or country weightings.

The Company may borrow up to an amount equal to 20% of its net assets.

Subject to the prior approval of the Board, the Company may also use derivative instruments for efficient portfolio management, hedging and investment purposes. The Company's aggregate exposure to such instruments for investment purposes (excluding collateral held in respect of any such derivatives) will not exceed 20% of the Company's net assets at the time of the relevant acquisition, trade or borrowing.

The Company does not generally hedge its exposure to foreign currency. The Company will not acquire securities that are unlisted or unquoted at the time of investment (with the exception of securities which are about to be listed or traded on a stock exchange). However, the Company may continue to hold securities that cease to be listed or quoted, if appropriate.

The Company may participate in the underwriting or sub-underwriting of investments where appropriate to do so.

The Company may invest in open-ended collective investment schemes and closed-ended funds that invest in the North American region. However, the Company will not invest more than 10%, in aggregate, of the value of its gross assets in other listed investment companies (including listed investment trusts), provided that this restriction does not apply to investments in any such investment companies which themselves have stated investment policies to invest no more than 15% of their gross assets in other listed investment companies.

The Company will normally be substantially fully invested in accordance with its investment objective but, during periods in which changes in economic conditions or other factors so warrant, the Company may reduce its exposure to securities and increase its position in cash and money market instruments.

Management

The Board has appointed abrdn Fund Managers Limited ("aFML") to act as the alternative investment fund manager ("AIFM" or the "Manager").

The Directors are responsible for determining the investment policy and the investment objective of the Company. The Company's portfolio is managed on a day-to-day basis by abrdn Inc. (the "Investment Manager") by way of a delegation agreement in place between aFML and abrdn Inc.

The Investment Manager invests in a range of North American companies, following a bottom-up investment process based on a disciplined evaluation of companies through direct visits by its fund managers. Stock selection is the major source of added value, concentrating on quality first, then price. The Investment Manager seeks companies that are well-positioned in their sector with strong balance sheets and cash generation and proven management through various economic cycles.
Top-down investment factors are secondary in the Investment Manager's portfolio construction, with diversification rather than formal controls guiding stock and sector weights.

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 identified by the Board in relation to the Company which are considered at each Board meeting are as follows:

KPI	Description
Net asset value and share price performance against the reference index	The Board reviews the Company's NAV and share price total return performance against the Russell 1000 Value Index (in sterling terms). Performance graphs and tables are provided in the published Annual Report. The Board also reviews the performance of the Company against its peer group of investment trusts with similar investment objectives.
Revenue return and dividend yield A	The Board monitors the Company's net revenue return and dividend yield through the receipt of detailed income forecasts. A graph showing the dividends and yields over five years is provided in the published Annual Report.
Share price discount/Premium to net asset value A	The discount/premium relative to the net asset value per share is closely monitored by the Board. A graph showing the share price discount/premium relative to the net asset value is shown in the published Annual Report.
Ongoing charges ratio ("OCR") A	The Board reviews the Company's operating costs carefully against its peer group of investment trusts with similar investment objectives. The Company's OCR is provided above.

^A Considered to be an Alternative Performance Measure.^.

Principal Risks and Uncertainties

There are a number of risks which, if realised, could have a material adverse effect on the Company and its business model, financial position, performance and prospects. The Board has in place a robust process to identify, assess and monitor the principal risks and uncertainties facing the Company and to identify and evaluate emerging risks, such as geopolitical developments. This process is supported by a risk matrix which identifies the key risks for the Company, including emerging risks, and covers strategy, investment management, operations, shareholders, regulatory and financial obligations and third party service providers. This risk matrix is reviewed on a regular basis. A summary of the principal risks and uncertainties facing the Company, which have been identified by the Board, is set out in the following table, together with a description of the mitigating actions it has taken.

The principal risks associated with an investment in the Company's shares are published monthly in the Company's factsheet or they can be found in the pre-investment disclosure document ("PIDD") published by the Manager, both of which are on the Company's website.

Description	Mitigating Action
Market Risk The risks facing the Company relate to the Company's investment activities and include market risk (comprising interest rate risk and other price risk), liquidity risk and credit risk. The Company is exposed to variations in share prices and movements in the currency exchange rate due to the nature of its business. A fall in the market value of its portfolio would have an adverse effect on shareholders' funds. Any debt securities that may be held by the Company will be affected by general changes in interest rates that will in turn result in increases or decreases in the market value of those instruments.	The day-to-day management of the Company's assets has been delegated to the Manager under investment guidelines determined by the Board. The Board monitors adherence to these guidelines and receives regular reports from the Manager which include performance reporting. The Board regularly reviews these guidelines to ensure they remain appropriate. Details on financial risks, including market price volatility, inflation, interest rates, liquidity and foreign currency risks and the controls in place to manage these risks are provided in note 18 to the financial statements.
Major Market Event or Geopolitical Risk The Company is exposed to stock market volatility or illiquidity that could result from major market shocks due to a national or global crisis such as a pandemic, war, natural disaster, geopolitical developments or similar. There could also be the resulting impact of disruption on the operations of the Company and its service providers, temporarily or for prolonged duration.	The Board is cognisant of the heightened risks arising from geopolitical developments including stock market instability and economic effects or the potential impact on the operations of the third-party suppliers, including the Manager. The Manager reviews the investment risks arising from these macro developments on the companies in the portfolio, including but not limited to: employee absence, reduced demand, supply chain breakdown, balance sheet strength, ability to pay dividends, and takes the necessary investment decisions. The Manager communicates regularly with the underlying investee companies in order to navigate the Company through the current challenges. The Manager has disaster recovery and business continuity arrangements in place to ensure that it is able to continue to service its clients, including investment trusts. The Board monitors third party risk management frameworks through updates from the Manager.
Income and Dividend Risk The ability of the Company to pay dividends and any future dividend growth will depend primarily on the timing and level of income received from its investments (which may be affected by currency movements, exchange controls or withholding taxes imposed by jurisdictions in which the Company invests). Accordingly, there is no guarantee that the Company's dividend income objective will continue to be met and the amount of the dividends paid to Ordinary shareholders may go down as well as up.	The Board monitors this risk through the regular review of detailed revenue forecasts and considers the current and forecast level of income at each meeting. The Company has built up its revenue reserves over recent years which provides flexibility in future years, should the dividend environment become challenging.

Operational The Company is reliant on services provided by third parties (in particular those of the Manager). Failure by any service provider to carry out its contractual obligations could expose the Company to loss or damage. This includes accounting, financial or custody errors, IT failures, fraud or cyber risk, unforeseen natural disasters and other operational failures by the manager, depositary or custodian.	Written agreements are in place defining the roles and responsibilities of all third party service providers. The Board reviews reports on the operation and efficacy of the Manager's risk management and control systems, including those relating to cyber-crime. The Board also reviews regular reports from internal audit as well as independently audited third party control reports. The Manager monitors the control environment and quality of services provided by other third party service providers through due diligence reviews, service level agreements, regular meetings and key performance indicators. The Board reviews reports on the Manager's monitoring of third party service providers on a periodic basis.
Regulatory Risk 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, Consumer Duty, accounting standards, investment trust regulations, the Listing Rules, Disclosure Guidance and Transparency Rules and Prospectus Rules) could result in fines, loss of reputation, reduced demand for the Company's shares and potentially loss of an advantageous tax regime.	Directors are aware of the relevant regulations and are provided with information on changes by the Association of Investment Companies, as well as the Manager. The Manager provides six-monthly reports to the Audit Committee on its internal control systems, which monitor compliance with relevant regulations.  In addition, the Board will use the services of its professional advisers when necessary, to monitor compliance with regulatory requirements. The Manager and depositary provide reports to the Audit Committee on their operations to evidence that the AIFMD regulations are complied with. The Manager has implemented procedures to ensure compliance with the provisions of the Corporation Tax Act 2010 and reports results to the Board.
Gearing Risk Gearing is used to leverage the Company's portfolio in order to enhance returns. Gearing has the effect of accentuating market falls and market gains. The ability of the Company to meet its financial obligations, or an increase in the level of gearing, could result in the Company becoming over-geared or unable to take advantage of potential opportunities and result in a loss of value to the Company's shares.	In order to manage the level of gearing, the Board has set a maximum gearing ratio of 20% of net assets. The Board receives regular updates from the Manager on the Company's net gearing levels and its compliance with loan covenants. As at 31 January 2024 the Company had £39.2 million of borrowings and net gearing was 4.1% at the year end. More details are provided in the Alternative Performance Measures.
Discount volatility Investment company shares can trade at discounts to their underlying net asset values (NAV), although they can also trade at premia.	The Company's share price, NAV and discount are monitored daily by the Manager. When there is a significant discount and it is deemed to be in the best interest of shareholders, the Manager will exercise discretion to undertake share buybacks, within authorities set by the Board. The Board monitors the discount level of the Company's shares and monitors the level of share buybacks, within shareholder authorities.
Derivatives The Company uses derivatives primarily to enhance the income generation of the Company.  Derivatives are difficult to value and exposed to counterparty risk.	The risks associated with derivatives contracts are managed within guidelines and limits set by the Board.
Potential Impact of Environmental, Social and Governance ("ESG") Investment Principles Applying ESG and sustainability criteria in the investment process may result in the exclusion of assets in which the Company might otherwise invest. The Manager also monitors and responds to ESG and sustainability risks at portfolio companies as they evolve over time. This may have a positive or negative impact on performance.	The Board supports and encourages the ESG analysis incorporated by the Manager as part of its investment decision making process and understands that over the short-term companies with weak ESG compliance may appear to perform strongly. Over the long-term the Board believes companies that carefully understand and proactively manage the ESG issues relevant to their businesses will prove more resilient and capture emerging opportunities for growth. The Manager also actively engages with investee companies in relation to ESG and sustainability issues that it deems material.

In addition to these risks, the Company is exposed to the impact of geopolitical tensions, such as Russia's invasion of Ukraine, conflict in the Middle East, ongoing tension between the US and China or other changes which could have an adverse impact on stock markets and the Company's portfolio.

The Board is also conscious of the elevated threat posed by climate change and continues to monitor, through reporting from the Investment Manager, the potential risk that the portfolio investments may fail to adapt to the requirements imposed by climate change. The investment portfolio primarily consists of listed equities and corporate bonds and the quoted market (being bid) price is expected to reflect market participants' view of climate change risk so the impact of climate change is not considered to be material to the financial statements. Further details relating to the Manager's Approach to ESG Integration in Equities, including consideration of the impact of climate change, can be found in the published Annual Report..

The Company's principal risks and uncertainties have not changed materially since the year end.

Promoting the Success of the Company

The Board is required to report on how it has discharged its duties and responsibilities under section 172 of the Companies Act 2006 (the "s172 Statement"). Under section 172, the Directors have a duty to promote the success of the Company for the benefit of its members as a whole, taking into account the likely long-term consequences of decisions, the need to foster relationships with the Company's stakeholders and the impact of the Company's operations on the environment.

The Board comprises five Directors at the time of writing this report and the Company has no employees or customers in the traditional sense. As the Company has no employees, the culture of the Company is embodied in the Board of Directors. The Board seeks to promote a culture of strong governance and to challenge, in a constructive and respectful way, the Company's advisers, third parties and other stakeholders.

The Board's principal concern has been, and continues to be, the interests of the Company's shareholders and potential investors. The Manager undertakes an annual programme of meetings with the largest shareholders and investors and reports back to the Board on issues raised at these meetings. The investment managers are based in abrdn's US offices and regularly present at these meetings either by video conference or in person when visiting the UK.

The Board encourages all shareholders to attend and participate in the Company's AGM and shareholders may contact the Directors via the Company Secretary. Shareholders and investors can obtain up-to-date information on the Company through its website and the Manager's information services and have direct access to the Company through the Manager's customer services team or the Company Secretary. The Chair offers to meet with shareholders on at least an annual basis. The Chair also held a live webinar ahead of the 2023 AGM, taking questions with the Investment Manager. This was made available on the Company's website for shareholders to access. 

As an investment trust, a number of the Company's functions are outsourced to third parties. The key outsourced function is the provision of investment management services to the Manager and other stakeholders support the Company by providing secretarial, administration, depositary, custodial, banking and audit services.

The Board undertakes a robust evaluation of the Manager to ensure that the Company's objective of providing sustainable income and capital growth for its investors is met. The Board typically visits the Manager's offices in the US on a periodic basis and last visited the Manager in May 2023. This enables the Board to conduct face to face review meetings with the fund management and research teams. The portfolio activities undertaken by the Investment Manager on behalf of the Company can be found below and details of the Board's relationship with the Manager and other third party providers, including oversight, is provided in the Directors' Report in the published Annual Report. 

Key decisions and actions during the year ended 31 January 2024, which required the Directors to have greater focus on stakeholders included:  

Directorate

The Board is mindful of the importance of having a well- considered and orderly succession plan for continuity of performance and delivery of the Company's strategy. There were no changes made to the Board composition during the financial year. However, as announced in the 2023 Interim Report, as part of the Board's orderly succession plan, Dame Susan Rice will retire from the Board at the conclusion of the 2024 AGM and will be succeeded by Charles Park, who has served on the Board since 2017. Patrick Edwardson will succeed Charles Park as Senior Independent Director. A search process will be conducted later this year for a new Director, which will have due regard to the benefits of diversity.

Marketing strategy

The Board continued to engage with investors directly this year. This included meeting with investors, along with the fund manager, and the Company's second webinar in May 2023, where shareholders had a chance to ask questions prior to exercising their proxy votes for the 2023 AGM.  In addition, the Board worked with the Manager on key performance indicators for marketing services and additional means for targeted promotion of the Company. 

Dividends paid to shareholders

During the year, the Board implemented the revised dividend payment policy approved by shareholders at the 2023 AGM. Accordingly, four interim dividends have been proposed for the financial year ending 31 January 2024 (see above for details) and paid at more even quarterly intervals throughout the year. The Board recognises the importance of dividends to shareholders and the importance of receiving a regular income over the long-term.

Share buybacks

During the year the Board bought back 2.9m Ordinary shares for cancellation. This provided a small accretion to the NAV and a degree of liquidity to the market in an effort to manage the discount to the NAV per share.

Management of the portfolio

As in previous years, the Board focused on the performance of the Manager in achieving the Company's investment objective within an appropriate risk framework and in the context of the wider market environment. As explained in more detail in the Strategic Report, during the year, the Board reviewed portfolio and NAV performance against a reference benchmark and other peers on a regular basis.

Duration

The Company does not have a fixed winding-up date; however, shareholders are given the opportunity to vote on the continuation of the Company every three years. The Company's next continuation vote is scheduled for the forthcoming AGM in June 2024.

Board Diversity

The Board recognises the importance of having a range of skilled, experienced individuals with appropriate knowledge in order to allow the Board to fulfil its obligations. 

Environmental, Social and Human Rights Issues

The Company has no employees as the Board has delegated day to day management and administrative functions to aFML. There are therefore no disclosures to be made in respect of employees.

Modern Slavery Act

Due to the nature of the Company's business, being a company that does not offer goods and services to customers, the Board considers that it is not within the scope of the Modern Slavery Act 2015 because it has no turnover. The Company is therefore not required to make a slavery and human trafficking statement. The Board also 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.

Global Greenhouse Gas Emissions and Streamlined Energy and Carbon Reporting ("SECR")

All of the Company's activities are outsourced to third parties. The Company therefore has no greenhouse gas emissions to report from the operations of its business other than directors' travel, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013. For the same reasons as set out above, the Company considers itself to be a low energy user under the SECR regulations and therefore is not required to disclose energy and carbon information.

The Investment Manager has access to a range of ESG tools. These tools allow it to look at the overall carbon footprint of its portfolios and compare with the reference index. It also allows them to identify the highest carbon emissions stocks across portfolios. Furthermore, the carbon footprint tool has been used to help further guide the Investment Manager's engagement with companies.

Task Force for Climate-Related Financial Disclosures ("TCFD")

Under Listing Rule 15.4.29(R), the Company, as a closed ended investment company, is exempt from complying with the TCFD. The Manager has, however, produced a product level report on the Company in accordance with the FCA's rules and guidance regarding the disclosure of climate-related financial information consistent with TCFD Recommendations and Recommended Disclosures. The product level report on the Company is available on the Manager's website at: invtrusts.co.uk.

Viability Statement

The Company does not have a formal fixed period strategic plan but the Board does formally consider risks and strategy on at least an annual basis. The Board considers the Company to be a long-term investment vehicle but for the purposes of this Viability Statement has decided that a period of three years is an appropriate period over which to report. 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 three years.

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

-      The ongoing relevance of the Company's investment objective in the current environment and recent feedback from the Company's brokers and shareholders, where available.

-      A resolution for the continuation of the Company to be put to shareholders at the AGM in June 2024. The Directors recommend that shareholders vote to approve the resolution, and that the Company should continue in existence.

-      The principal risks detailed in the strategic report and the steps taken to mitigate these risks. In particular, the Board has considered the operational ability of the Company to continue in the current environment, including the impact of geopolitical developments, and the ability of the key third party suppliers to continue to provide essential services to the Company. Third party services have continued to be provided effectively.

-      The Company is invested in readily realisable listed securities. Recent stress testing has confirmed that the portfolio can be easily liquidated, despite the more uncertain and volatile economic environment.

-      The level of revenue surplus generated by the Company and its ability to achieve the dividend policy. The Company has continued to deliver dividend growth whilst building up revenue reserves which can be used to top up the dividend in tougher times.

-      The level of gearing is closely monitored by the Board and the Manager. Covenants are actively reviewed and there is adequate headroom in place.

-      The availability of long-term gearing facilities. The Company's gearing comprises $25 million of ten year loan notes (until December 2030) and $25 million of 15 year loan notes (until December 2035). 

Accordingly, taking into account the Company's current position and the potential impact of its principal risks and uncertainties, the Board has 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 three years from the date of this Report. In making this assessment, the Board has considered that matters such as significant economic or stock market volatility, a substantial reduction in the liquidity of the portfolio, or changes in investor sentiment could have an impact on its assessment of the Company's prospects and viability in the future.

Dame Susan Rice
Chair
4 April 2024

Results

Performance (total return)

	1 year return	3 year returnA	5 year returnA
Total return (Capital return plus dividends reinvested)	%	%	%
Share priceB	-0.9	+40.0	+30.4
Net asset value per shareB	-1.6	+35.6	+34.9
Russell 1000 Value Index (in sterling terms)	+2.6	+40.5	+61.0
S&P 500 Index (in sterling terms)	16.8	+47.4	+101.5
A Cumulative return
B Considered to be an Alternative Performance Measure.

Ten Year Financial Record

Year to 31 January	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024
Per share (p)
Net revenue returnA	6.54	7.15	7.98	8.42	10.04	11.42	11.79	10.28	12.21	11.95
DividendsA	6.00	6.60	7.20	7.80	8.50	9.50	10.00	10.30	11.00	11.70
As at 31 January
Net asset value per shareA (p)	187.8	187.1	264.7	275.5	280.4	288.9	262.5	318.8	337.2	317.8
Shareholders' funds (£'000)	309,273	280,644	379,101	391,649	398,657	413,948	375,416	448,463	472,891	436,479
A Comparative figures have been restated due to the sub-division of each existing Ordinary share of 25p into five Ordinary shares of 5p each on 10 June 2019.

Investment Manager's Review

Market review

US share prices, as measured by the Company's primary reference index, the Russell 1000 Value Index, rose in local-currency terms over the year to 31 January 2024 albeit by less in sterling terms as the pound strengthened against the US dollar by 3.4%.

Faced with a relatively resilient and robust economy, including a strong labour market, the US Federal Reserve (Fed) continued to tighten monetary policy through 2023. The Fed raised interest-rates by 25 basis points (bps) at each of its meetings between February and May, with the last increase in July 2023 taking the target range for the Fed funds rate to 5.25-5.50%, the highest level since 2001. At its January 2024 meeting, after eleven rate increases since March 2022, the Fed finally removed the tightening bias from its statement. That said, it aims to keep policy restrictive and proceed carefully for now, continuing with its data-dependent approach as it awaits more transparency over underlying macroeconomic trends. However, given the sustained fall in the Fed's targeted inflation measure, three rate cuts - as forecast by committee members in December's 'dot plot' - are still possible in 2024. There could also be further easing to come in 2025 and 2026.

US stock markets rose steadily over most of the period, even shaking off turmoil in the banking sector in March 2023, when two regional banks, Silicon Valley Bank and Signature Bank, collapsed. In particular, investor sentiment was helped by the long-awaited news in May of an agreement to raise the US debt ceiling. Investor concern that interest rates would stay higher for longer led to stocks weakening in August through to October. However, equities then rebounded notably towards the end of the year as these fears eased due to more encouraging inflation trends.

Over the year to 31 January 2024, growth-focused stocks performed relatively well. In particular, there was a strong performance from the technology sector, especially artificial intelligence-related companies, such as NVIDIA, Microsoft and Alphabet. During the year to 31 January 2024, the top seven (or "Magnificent Seven") technology stocks contributed nearly 65% of the total return of the S&P 500 Index. These stocks are more sensitive to the prospect of monetary tightening coming to an end, which will lower the discount rate applied to these long duration assets.

The communication services, technology and industrials sectors were the strongest performers within the Russell 1000 Value index, while the utilities, materials and energy sectors were the primary market laggards for the period.

Performance

The Company returned -1.6% per share on a net asset value basis in sterling terms for the year ended 31 January 2024, underperforming the 2.6% return of the Russell 1000 Value Index. The revenue account remained healthy, maintaining a level of cover established in prior years.

At a sector level, the main detractor from the Company's performance was the materials sector due to negative stock selection. The second-largest detractor was the industrials sector due to stock selection and, to a lesser extent, an underweight exposure.

The largest individual stock detractors from performance included:

-      agricultural sciences company, FMC Corporation, a producer of crop-protection chemicals, suffered from inventory destocking which forced management to materially reduce its guidance. The weakness was derived from farmers over-ordering crop inputs after being unable to procure supplies in 2022 due to supply-chain disruptions.

-      Pharmaceutical firm, Bristol-Myers Squibb ("Bristol-Myers"), underperformed due to a combination of new US government pricing measures affecting the pharmaceutical industry and a pipeline that has not yet received full approval for launching new drugs.

-      Drugstore chain CVS Health was another weak performer as it contended with rising patient utilisation in its managed care segment and investors debated the cost of its acquisition of Oak Street Health, a provider of value-based care to the Medicare population.

On the positive side, the two largest contributors to the Company's performance at the sector level were energy and technology due to stock selection.

At a stock level, the largest individual contributors included:

-      Semiconductor supplier Broadcom performed strongly, alongside other companies with artificial intelligence (AI) exposure, after reports indicated a significant increase in demand for AI solutions. Broadcom subsequently reported earnings that confirmed these improving demand trends.

-      Phillips 66, the oil refiner, discussed options to improve operational performance, along with various strategic alternatives, with activist investor Elliot Management ("Elliot"). Elliot established a $1 billion position in Phillips 66, will nominate two new board members, and publicly outlined a strategy to unlock shareholder value.

-      Comcast, the telecommunications conglomerate, also fared well after reporting earnings that were better
than expected. The company was able to offset the loss of broadband subscribers with higher pricing, while the theme parks division continues to experience robust growth.

The top five contributors and bottom five contributors over the year ended 31 January 2024 are detailed below

Top Five Stock Contributors	%*		Bottom Five Stock Contributors	%*
Broadcom Inc	1.6		FMC Corporation	-2.4
Philips66	1.1		Meta Platforms Inc. #	-1.4
Pfizer Inc	0.5		Bristol-Myers Squibb Company	-1.2
Comcast Corporation	0.4		CVS Health Corporation	-0.7
Merck & Co	0.4		Gaming and Leisure Properties Inc.	-0.5
*% relates to the percentage contribution to return relative to the Reference Index (Russell 1000 Value Index). # not owned by the Company.

Portfolio activity

The Company's investments continue to align with our high-quality stock selection process, which emphasises generating consistent cash flow. However, market volatility created opportunities to add quality companies into the portfolio at compelling prices.

We initiated positions in five companies during the year.

-      the leading renewable energy and utility company NextEra Energy: NextEra Energy owns Florida Power & Light Company, the US's largest regulated electric utility, serving more than 12 million people. The utility business is high quality due to the large backlog of growth projects combined with a constructive regulatory environment allowing for relatively high returns. The company also owns NextEra Energy Resources, which is the world's largest generator of renewable energy from wind and solar assets as well as a leader in battery storage. Altogether, NextEra Energy combines two excellent businesses that support peer-leading earnings growth, along with a secure dividend.

-      Genuine Parts Company, a leading global distributor of automotive and industrial replacement parts. The company has a track record of consistent execution and prudent capital allocation, which has driven its profitable growth. It has established itself as a premier supplier of automotive aftermarket parts, led by its flagship NAPA brand.

-      Beverage firm Keurig Dr Pepper has products in both the cold drinks segment (led by the flagship Dr Pepper brand) and, following the merger with Keurig, in coffee. Keurig is the dominant player in the single-serve coffee segment. Historically, the cold drinks business has grown in line with, or above, the market, benefiting from the company's strength in (non-cola) flavours and its status as a preferred distributor and acquiror of niche brands.

-      Essential Utilities, a diversified utility with two-thirds of its earnings from the water business and one-third from the gas business. In the short run, the gas business should grow faster given the infrastructure upgrades required. However, the water business should grow at a comparable pace over the intermediate term due to several small acquisition opportunities given that around 85% of the country is served by small, privately-run municipal operations.

-      The energy infrastructure company Enbridge, a premier midstream company that operates one of the most advantaged oil pipeline networks in North America, with a strong collection of natural gas infrastructure and utility assets and a growing renewable energy platform. The company's diversified asset portfolio generates predictable cash flows thanks to its regulated and long-term contracts with customers.

We sold out of five companies during the year.

-      Home Depot: as we believe higher interest rates, elevated inflation and the resumption of student loan payments will prove to be large headwinds for the consumer, pressuring earnings estimates over time. 

-      Clothing company, VF Corporation. Despite having a portfolio of well-admired brands like Vans, The North Face, Timberland, Supreme, and Dickies, the company has faced multiple setbacks due to its poor execution.

-      Hannon Armstrong Sustainable Infrastructure Capital, after concluding the stock would remain under pressure in a higher-for-longer interest-rate environment, with investors becoming increasingly concerned that higher funding costs would negatively affect the company's return profile.

-      CI Financial, given the company's management has become more aggressive from a capital deployment perspective, with an acceleration in buybacks and the rapid acquisition of US wealth management businesses. While strategically sound, these actions are raising leverage at a time of higher interest rates.

-      Energy infrastructure firm TC Energy, using the proceeds to fund our investment in competitor Enbridge. Factors primarily outside TC Energy's control have created delays on new projects and put upward pressure on costs, negatively affecting project-level returns.

Within the Company's corporate bond portfolio, we initiated several positions over the year to take advantage of more attractive valuations, as yields climbed higher due to further monetary tightening together with concerns over what an economic slowdown could mean for the instruments' credit quality. We exited some other positions as the valuation of these bonds traded above what we deemed to be their fair value. We continue to work closely with abrdn's fixed income specialists to monitor credits and market conditions for new opportunities and to manage downside risk.

Dividend growth

The Company's holdings continued to build upon an established track record of dividend growth during the review period, with several companies announcing double-digit increases. Semiconductor suppliers Broadcom and Analog Devices boosted their payouts by 14% and 13%, respectively. Insurance provider AIG Group increased its dividend by 13%. Derivatives exchange operator CME Group, renewable energy company NextEra Energy, and healthcare provider CVS each raised their quarterly dividend payouts by 10%.

Additionally, two holdings in the portfolio announced special dividend payments to shareholders during the review period. Derivatives exchange operator CME Group declared an annual variable dividend of US$5.25 per share in December 2023. The company uses this approach to facilitate paying out all cash that it generates over the year beyond a minimum threshold. Gaming-focused REIT Gaming and Leisure Properties Inc. declared a special earnings and profits cash dividend of $0.25 per share.

Outlook

US economic growth has been resilient, benefiting from several factors such as unwinding supply-chain pressures, falling energy prices, and higher productivity growth. Despite tighter credit conditions and greatly reduced household savings, we believe the chances of a soft landing versus a mild recession are becoming more balanced as inflation subsides.

We believe the underlying companies in the portfolio are well positioned to manage through potential election year volatility and, equally important, we feel comfortable with the current valuations of these companies. The underlying cash flows and balance sheets remain strong and thus we expect continued dividend growth prospects for 2024.

The portfolio's sector exposure is modestly defensive and we continue to seek all-weather companies, where macro tailwinds are not needed for growth.

Fran Radano
 abrdn Inc.
4 April 2024

Ten Largest Investments

As at 31 January 2024

MetLife		CVS Health
MetLife provides individual insurance, employee benefits, and financial services with operations throughout the United States and the regions of Latin America, Europe, and Asia Pacific.		CVS Health provides health care and retail pharmacy services. The company offers prescription medications, beauty, personal care, cosmetics, and health care products as well as pharmacy benefit management, disease management and administrative services.
Medtronic		Merck & Co
Medtronic develops therapeutic and diagnostic medical products for a wide range of conditions, diseases and disorders.		Merck & Co. is a global health care company that delivers health solutions through its prescription medicines, vaccines, biological therapies, animal health, and consumer care products, which it markets directly and through its joint ventures. The company has operations in pharmaceutical, animal health, and consumer care.
Gaming & Leisure Properties		Baker Hughes
Gaming and Leisure Properties owns and leases casinos and other entertainment facilities.		Baker Hughes provides oilfield products and services. The company engages in surface logging, drilling, pipeline operations, petroleum engineering, and fertilizer solutions, as well as offers gas turbines, valves, actuators, pumps, flow meters, generators and motors. Baker Hughes serves oil and gas industries worldwide.
American International Group ("AIG")		L3 Harris Technologies
American International Group. is an international insurance organisation serving commercial, institutional and individual customers. AIG provides property-casualty insurance, life insurance, and retirement services.		L3 Harris Technologies is an aerospace and defence technology innovator. The company designs, develops, and manufactures radio communications products and systems, including single channel ground and airborne radio systems.
Citigroup		Comcast
Citigroup. is a diversified financial services holding company that provides a broad range of financial services to consumer and corporate customers. The company services include investment banking, retail brokerage, corporate banking, and cash management products and services. Citigroup serves customers globally.		Comcast provides media and television broadcasting services. The company offers video streaming, television programming, high-speed Internet, cable television and communication services. Comcast serves customers worldwide.

List of Investments

As at 31 January 2024
		Valuation	Total	Valuation
		2024	assets	2023
Company	Industry classification	£'000	%	£'000
MetLife	Insurance	21,774	4.6	20,166
CVS Health	Health Care Providers & Services	21,024	4.4	21,498
Medtronic	Health Care Equipment & Supplies	20,623	4.3	13,596
Merck & Co	Pharmaceuticals	19,917	4.2	20,939
Gaming & Leisure Properties	Specialised REITs	17,924	3.9	17,402
Baker Hughes	Energy Equipment & Services	17,904	3.8	23,204
American International Group  ("AIG")	Insurance	16,375	3.4	15,406
L3 Harris Technologies	Aerospace & Defence	16,366	3.4	13,959
Citigroup	Banks	15,438	3.2	14,846
Comcast	Media	14,619	3.1	19,178
Ten largest investments		181,964	38.3
Emerson Electric	Electrical Equipment	14,407	3.0	14,657
Philip Morris	Tobacco	14,268	3.0	16,935
Air Products & Chemicals	Chemicals	14,056	3.0	7,810
Broadcom	Semiconductors & Semiconductor Equipment	13,899	2.9	11,880
Phillips 66	Oil, Gas & Consumable Fuels	13,599	2.9	16,290
Bristol-Myers Squibb	Pharmaceuticals	13,432	2.8	20,654
Keurig Dr Pepper	Beverages	12,344	2.6	-
Restaurant Brands International	Hotels, Restaurants & Leisure	12,263	2.6	13,048
Cogent Communications	Diversified Telecommunication	12,125	2.5	13,924
Genuine Parts	Distributors	12,113	2.5	-
Twenty largest investments		314,470	66.1
JPMorgan Chase & Co.	Banks	11,638	2.4	7,958
Analog Devices	Semiconductors & Semiconductor Equipment	11,329	2.4	15,321
Omega Healthcare Investors	Health Care REITs	10,248	2.2	19,131
PNC Financial Services	Banks	9,499	2.0	13,438
Cisco Systems	Communications Equipment	9,457	2.0	13,837
Coca-Cola	Beverages	9,343	1.9	7,471
CMS Energy	Multi-Utilities	8,977	1.9	12,832
FMC	Chemicals	8,826	1.9	13,517
Enbridge	Oil, Gas & Consumable Fuels	8,363	1.8	-
CME Group	Capital Markets	7,274	1.5	7,892
Thirty largest investments		409,424	86.1
Essential Utilities	Water Utilities	7,040	1.5	-
Nextera Energy	Electric Utilities	6,906	1.5	-
Royal Bank of Canada	Banks	6,899	1.4	7,483
OneMain	Consumer Finance	5,981	1.3	8,760
AbbVie	Biotechnology	5,164	1.1	12,001
Texas Instruments	Semiconductors & Semiconductor Equipment	5,029	1.0	5,758
CCO Holdings 7.375% 03/03/31	Media	1,429	0.3	-
CCO Holdings 4.75% 01/02/32	Media	1,408	0.3	1,447
Venture Global Calcasie 8.375% 01/06/31	Oil, Gas & Consumable Fuels	1,389	0.3	-
NRG Energy 3.625% 15/02/1	Multi-Utilities	765	0.2	726
Forty largest investments		451,434	95.0
Venture Global Calcasie 6.25% 15/01/30	Oil, Gas & Consumable Fuels	708	0.2	746
Viatris 2.7% 22/06/30	Pharmaceuticals	708	0.1	706
NCL 5.875% 15/02/27	Consumer Discretionary	698	0.1	682
Venture Global Calcasie 3.875% 01/11/33	Oil, Gas & Consumable Fuels	693	0.1	717
Graphic Packaging 3.75% 01/02/30	Packaging & Containers	691	0.1	693
Total investments		454,932	95.6
Net current assets		20,745	4.4
Total assets		475,677	100.0

Geographical/Sector Analysis

Geographic Analysis

As at 31 January 2024
		2024			2023
	Equity	Fixed interest	Total	Equity	Fixed interest	Total
Country	%	%	%	%	%	%
Canada	6.1	-	6.1	8.4	-	8.4
USA	92.0	1.9	93.9	90.1	1.5	91.6
	98.1	1.9	100.0	98.5	1.5	100.0

Investment Case Studies

Phillips 66

Phillips 66 is a diversified energy company formed in 2012 after ConocoPhillips separated its upstream and downstream operations. The company's portfolio consists of Midstream, Refining, Chemicals, Renewable Fuels, and Retail businesses. More simply, Phillips 66 processes, transports, stores, and markets fuels and refined products globally via its twelve refiners, 72,000 miles of pipelines, and over 8,000 retail locations.

Over the past decade management has focused on optimising the company's portfolio by divesting non-core assets, investing in higher growth businesses, and improving operational efficiency. Together, these initiatives have better positioned the company competitively, including improving profitability, reducing earnings volatility, and allowing for greater shareholder returns. At this point, after years of investment and portfolio reshaping, the company has completed many of these initiatives and is now considered one of the largest and most integrated energy companies globally. This level of integration and scale is unique within the energy complex creating competitive advantages that are difficult to replicate. Despite the progress, Phillips 66 recently embarked on another iteration of continuous improvement that we believe will add shareholder value over the long-term.

While many view the energy transition as a risk, Phillips 66 has taken a proactive approach in addressing these concerns. The company has spent several billion dollars on environmental protection and alternative energy projects since 2015. This includes the "Rodeo Renewed" project in California which will convert a traditional refinery into one of the largest renewable fuel facilities in the world. At the same time, management has established long-term GHG emission reduction targets with interim goals to track the company's progress. There are several other partnerships, initiatives, and projects helping position the company for a lower carbon future, thereby increasing our confidence in the long-term sustainability of the company's business model.

JPMorgan Chase & Co

JPMorgan Chase & Co. ("JPMorgan") is a leading financial services firm with nearly $4 trillion in assets, over $300 billion of common equity, and more than 300,000 employees around the globe. In 2023, JPMorgan generated over $158 billion in net revenues and earned a 17% return on its common equity, translating into $50 billion of net income, an increase of 32% from 2022. JPMorgan has the largest retail deposit share in the United States, is the largest US credit card issuer, and is amongst the largest investment banks in the world.

Between 2004 and 2022, a period that included the global financial crisis and COVID-19, JPMorgan grew its tangible book value per share at a compound annual growth rate of 9%, nearly twice the rate of its five largest peers, a testament to its diversified business model, fortress balance sheet, and best-in-class management team. In 2023, tangible book value per share grew an additional 18% driven by record high earnings, demonstrating JPMorgan's ability to navigate a complicated macro-economic environment and the conclusion of the Federal Reserves' aggressive interest rate tightening cycle.

In the spring of 2023, JPMorgan engineered a win-win rescue of First Republic Bank, partnering with the Federal Deposit Insurance Corporation to acquire the assets and deposits of the bank after the failure of Silicon Valley Bank sparked contagion in the regional banking industry as a result of rapidly rising interest rates. The acquisition helped stem the crisis and added a valuable franchise focused on affluent customers to the fold.

In 2021, JPMorgan unveiled its Sustainable Development Target goal to finance and facilitate $2.5 trillion to support sustainable development and address climate change through the end of 2030. The bank is off to a strong start, having achieved $482 billion through the end of 2022, including $176 billion in green initiatives, $204 billion in development finance in emerging economies, and $102 billion of community development in developed markets. In addition, JPMorgan utilises a Carbon Assessment Framework to include climate considerations in its business decision making in order to support the global goal of net-zero emissions by 2050.

Directors' Report

The Company, which was incorporated in 1902, is registered as a public limited company and is an investment company within the meaning of Section 833 of the Companies Act 2006. The Company's registration number is SC005218. 

The Company has been accepted by HM Revenue & Customs as an investment trust subject to the Company 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 2024 so as to enable it to comply with the ongoing requirements for investment trust status.

The Company has conducted its affairs so 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.

Results and Dividends

The audited financial statements for the year ended 31 January 2024 may be found below. Details of dividends for the year to 31 January 2024 can be found above.

Share Capital and Rights attaching to the Company's Shares

At 31 January 2024, the Company's capital structure consisted of 137,352,347 Ordinary shares of 5p each (2023 - 140, 234,749 Ordinary shares of 5p each). During the year to 31 January 2024, the Company bought back 2,882,402 Ordinary shares for cancellation. Since 1 February 2024, 1,187,253 Ordinary shares have been repurchased for cancellation.

The Ordinary shares carry a right to receive dividends which are declared from time to time by an ordinary resolution of the Company (up to the amount recommended by the Board) and to receive any interim dividends which the Company may resolve to pay. On a winding-up, after meeting the liabilities of the Company, the surplus assets will be paid to Ordinary shareholders in proportion to their shareholdings. On a show of hands, every shareholder present in person, or by proxy, has one vote and, on a poll, every Ordinary shareholder present in person has one vote for each share held and a proxy has one vote for every share represented. 

There are no restrictions concerning the holding or transfer of the Company's shares and there are no special rights attached to any of the shares. The Company is not aware of any agreements between shareholders which may result in restriction on the transfer of shares or the voting rights. The rules concerning amendments to the Articles of Association and powers to issue or buyback the Company's shares are contained in the Articles of Association of the Company and the Companies
Act 2006. 

Significant Agreements

The Company is not aware of any significant agreements to which it is a party that take effect, alter or terminate upon a change of control of the Company following a takeover and there are no agreements between the Company and its Directors concerning compensation for loss of office. Other than the management agreement with the Manager and the depositary agreement, further details of which are set out below, the Company is not aware of any contractual or other agreements which are essential to its business which ought to be disclosed in the Directors' Report.

Management Agreement

The Company has appointed abrdn Fund Managers Limited ("aFML" or the "Manager"), a wholly owned subsidiary of abrdn plc, as its alternative investment fund manager ("AIFM"). aFML has been appointed to provide the Company with investment management, risk management, administration, company secretarial services and promotional activities. The Company's portfolio is managed by abrdn Inc. (the "Investment Manager") by way of a delegation agreement in place between aFML and abrdn Inc. In addition, aFML has sub-delegated promotional activities to abrdn Investments Limited and administrative and secretarial services to abrdn Holdings Limited. Details of the management agreement, including notice period and fees paid during the year ended 31 January 2024 are shown in note 5.

Depositary Agreement

The Company has appointed BNP Paribas Trust Corporation UK Limited ("BNPP") as its depositary.

Loan Note Agreement

In December 2020, the Company entered into a long-term financing agreement for US$50 million with MetLife comprising two loans of US$25 million with terms of ten and 15 years at an all-in cost of 2.70% and 2.96% respectively, giving a blended rate for ten years of 2.83% (the "Long-Term Financing Agreement").

Directors

Details of the Directors of the Company who were in office during the year to 31 January 2024 and up to the date of this report are shown on the Company's website. Dame Susan Rice is the Chair and Charles Park is the Senior Independent Director.

No contract or arrangement existed during the period in which any of the Directors was materially interested. No Director has a service contract with the Company.

Directors' & Officers' Liability Insurance

The Company maintains insurance in respect of Directors' and Officers' liabilities in relation to their acts on behalf of the Company for the year to 31 January 2024 and up to the date of this report. Each Director of the Company shall be 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 in the execution of his duties in relation to the affairs of the Company. These rights are included in the Articles of Association of the Company.

Corporate Governance

The Statement of Corporate Governance, which forms part of the Directors' Report, is shown in the published Annual Report.

Substantial Interests

As at 31 January 2024 the Company had received notification or was aware of the following interests in its Ordinary shares:

Shareholder	Number of shares held	% held
Rathbone Brothers	15,650,873	11.4
Interactive Investor	13,549,192	9.9
RBC Brewin Dolphin	9,058,737	6.6
1607 Capital Partners	7,161,186	5.2
Hargreaves Lansdown	7,112,843	5.2
Canaccord Genuity Wealth Management	6,852,060	5.0
Allspring Global Investments	5,575,262	4.1
Charles Stanley	4,876,459	3.6
EFG Harris Allday	4,480,436	3.3
WM Thomson	4,379,920	3.2

In the period between 31 January 2024 and 4 April 2024, the Company was notified that Canaccord Genuity Wealth Management held 6,834,528 shares (5.0% of shares in issue) as at 15 March 2024 and 6,802,785 (5.0% of the shares in issue) as at 20 March 2024. There have been no other changes to the above interests in the Company's shares notified as at 4 April 2024.

Accountability and Audit

The Directors who held office at the date of approval of this Directors' Report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditor is unaware; and each Director has taken all the steps that he/she could reasonably be expected to have taken as a Director in order to make himself/herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

The Audit Committee has reviewed the services provided by the auditor during the year, together with the auditor's fees and procedures in connection with the provision of non-audit services. There were no non-audit service fees paid during the year. The Board remains satisfied that PricewaterhouseCoopers LLP's objectivity and independence is being safeguarded.

Going Concern

The Company's assets consist substantially of securities in companies listed on recognised stock exchanges and in normal circumstances are realisable within a short timescale and which can be sold to meet funding commitments if necessary. 

The Board has set gearing limits and regularly reviews actual exposures, cash flow projections and compliance with banking covenants.

The Company undertakes a continuation vote every three years. The last continuation vote was passed at the AGM held in June 2021 with 98.6% of votes in favour. Based on feedback from major shareholders, the Directors consider that it is reasonable to assume that the continuation vote will be passed at the AGM to be held in June 2024 and therefore that the Company will continue in existence.

The Board has considered the impact of geopolitical developments and believes that there will be a limited resulting financial impact on the Company's portfolio, its operational resources and existence. Given that the Company's portfolio comprises primarily "Level One" assets (listed on a recognisable exchange and realisable within a short timescale), and the Company's relatively low level of gearing, the Company has the ability to raise sufficient funds so as to remain within its debt covenants and pay expenses.  

Taking the above factors into consideration, the Directors have a reasonable expectation 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, the Board continues to adopt the going concern basis in preparing the financial statements.

Annual General Meeting

The Notice of General Meeting is included in the published Annual Report. Among the resolutions being put at the Annual General Meeting ("AGM") of the Company to be held on 21 June 2024 at 12.00 Noon, the following resolutions will be proposed as special business:

(i)  Aggregate fees payable to Directors

The Board carried out a review of the level of Directors' fees during the financial year. The resulting increases, which were effective from 1 February 2024, are detailed in the Directors' Remuneration Report in the published Annual Report.

In view of these increases in fees, and in order to ensure that the Board has ongoing flexibility to manage succession planning and attract candidates of appropriate expertise and calibre to the role, Resolution 3, an ordinary resolution, will seek shareholders' approval to increase the maximum aggregate limit of remuneration of the Directors each year in respect of their services as Directors from £175,000 to £250,000. Whilst the Board does not intend to rely on this increase, it is believed to be necessary and appropriate, in line with peer companies, and will be a more appropriate cap for the foreseeable future.

(ii)  Continuation of the Company

Resolution 10, which is an ordinary resolution, will, if approved, allow the Company to continue as an investment trust company.

(iii) Section 551 Authority to Allot Shares

Resolution 11, which is an ordinary resolution, seeks to renew the Directors' authority under section 551 of the Companies Act to allot shares (excluding treasury shares) up to an aggregate nominal amount of £2,246,724 or, if less, the number representing 33.33% of the issued Ordinary share capital of the Company as at the date of the passing of the resolution. This authority will expire on 31 July 2025 or, if earlier, at the conclusion of the AGM to be held in 2025 (unless previously revoked, varied or extended). The Directors will only exercise this authority if they believe it is advantageous and in the best interests of shareholders. There are no treasury shares in issue.

(iv) Dis-application of Pre-emption Provisions

Resolution 12, which is a special resolution, seeks to renew the dis-application of statutory pre-emption rights in relation to the issue of shares (or sale of shares out of treasury) up to an aggregate nominal amount of £680,825 or, if less, the number representing 10% of the issued Ordinary share capital of the Company as at the date of the passing of the resolution. This authority will expire on 31 July 2025 or, if earlier, at the conclusion of the AGM to be held in 2025. The Directors will only exercise this authority if they believe it is advantageous and in the best interests of shareholders. Ordinary shares would only be issued for cash at a price not less than the NAV per share.

(v) Share Repurchases

Resolution 13, which is a special resolution, seeks to renew the Company's authority for the Company to make market purchases of its own Ordinary shares, up to a maximum of 14.99% of the issued Ordinary share capital of the Company as at the date of the passing of the resolution. Shares so repurchased will be cancelled or held in treasury.

The principal reasons for share buybacks are:

-      to enhance net asset value for continuing shareholders by purchasing shares at a discount to the prevailing net asset value; and

-      to address any imbalance between the supply of and demand for the Company's shares that results in a discount of the quoted market price to the published NAV per share.

Recommendation

The Directors believe that the resolutions to be proposed at the AGM are in the best interests of the Company and its shareholders as a whole and recommend that shareholders vote in favour of the resolutions, as the Directors intend to do in respect of their own beneficial shareholdings totalling, in aggregate, 47,718 Ordinary shares, and representing 0.04% of the existing issued Ordinary share capital of the Company.

By order of the Board
abrdn Holdings Limited
Secretary, Edinburgh
4 April 2024

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report in accordance with applicable law and regulations. 

Company law requires the Directors to prepare financial statements for each financial year. Under that law they are required 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 its profit or loss for that period.  In preparing these financial statements, the Directors are required to: 

-      select suitable accounting policies and then apply them consistently; 

-      make judgements and accounting 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; 

-      assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

-      use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Act 2006.  They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and 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 Corporate Governance Statement that complies 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.  Legislation in the
UK governing the preparation and dissemination of financial statements may differ from legislation in
other jurisdictions.

Responsibility statement of the Directors in respect of the annual financial report

We confirm that to the best of our knowledge: 

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

-      the Strategic Report includes a fair review of the development and performance of the business and the position of the issuer, together with a description of the principal risks and uncertainties that they face. 

We consider this Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

For and on behalf of

The North American Income Trust plc
Dame Susan Rice
Chair
4 April 2024

Statement of Comprehensive Income

		Year ended 31 January 2024			Year ended 31 January 2023
		Revenue	Capital	Total	Revenue	Capital	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Net (losses)/gains on investments	11	-	(25,504)	(25,504)	-	28,105	28,105
Net currency gains/(losses)	3	-	1,375	1,375	-	(1,557)	(1,557)
Income	4	21,952	620	22,572	22,295	731	23,026
Investment management fee	5	(894)	(2,088)	(2,982)	(947)	(2,209)	(3,156)
Administrative expenses	7	(943)	-	(943)	(854)	-	(854)
Return before finance costs and taxation		20,115	(25,597)	(5,482)	20,494	25,070	45,564
Finance costs	6	(368)	(858)	(1,226)	(354)	(825)	(1,179)
Return before taxation		19,747	(26,455)	(6,708)	20,140	24,245	44,385
Taxation	8	(3,079)	614	(2,465)	(3,014)	447	(2,567)
Return after taxation		16,668	(25,841)	(9,173)	17,126	24,692	41,818
Return per Ordinary share (pence)	10	11.95	(18.53)	(6.58)	12.21	17.60	29.81
The total column of this statement 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 2024	31 January 2023
	Note	£'000	£'000
Fixed assets
Investments at fair value through profit or loss	11	454,932	486,940
Current assets
Prepayments and accrued income	12	846	784
Other debtors	12	105	1,891
Cash at bank and in hand		21,285	26,699
		22,236	29,374
Creditors: amounts falling due within one year
Other creditors	13	(1,491)	(2,880)
		(1,491)	(2,880)
Net current assets		20,745	26,494
Total assets less current liabilities		475,677	513,434
Creditors: amounts falling due after more than one year
Senior Loan Notes	14	(39,198)	(40,543)
Net assets		436,479	472,891
Capital and reserves
Called up share capital	15	6,868	7,012
Share premium account		51,806	51,806
Capital redemption reserve		15,748	15,604
Capital reserve		340,003	373,828
Revenue reserve		22,054	24,641
Total shareholders' funds		436,479	472,891
Net asset value per Ordinary share (pence)	16	317.78	337.21
The financial statements were approved and authorised for issue by the Board on 4 April 2024 and were signed on its behalf by:
Dame Susan Rice
Director
The accompanying notes are an integral part of the financial statements.

Statement of Changes in Equity

For the year ended 31 January 2024
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 February 2023	7,012	51,806	15,604	373,828	24,641	472,891
Buyback of Ordinary shares	(144)	-	144	(7,984)	-	(7,984)
Return after taxation	-	-	-	(25,841)	16,668	(9,173)
Dividends paid (see note 9)	-	-	-	-	(19,255)	(19,255)
Balance at 31 January 2024	6,868	51,806	15,748	340,003	22,054	436,479
For the year ended 31 January 2023
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 February 2022	7,034	51,806	15,582	350,388	23,653	448,463
Buyback of Ordinary shares	(22)	-	22	(1,252)	-	(1,252)
Return after taxation	-	-	-	24,692	17,126	41,818
Dividends paid (see note 9)	-	-	-	-	(16,138)	(16,138)
Balance at 31 January 2023	7,012	51,806	15,604	373,828	24,641	472,891
The accompanying notes are an integral part of the financial statements.

Statement of Cash Flows

		Year ended	Year ended
		31 January 2024	31 January 2023
	Note	£'000	£'000
Operating activities
Net return before taxation		(6,708)	44,385
Adjustments for:
Net losses/(gains) on investments	11	25,410	(27,997)
Net (gains)/losses on foreign exchange transactions		(1,375)	1,557
Decrease/(increase) in dividend income receivable	12	(60)	(54)
Increase in fixed interest income receivable	12	(2)	(134)
(Decrease)/increase in derivatives	13	(102)	240
Decrease/(increase) in other debtors	12	155	(146)
(Decrease)/increase in other creditors	13	(53)	129
Tax on overseas income	8	(2,465)	(2,567)
Amortisation of senior loan note expenses	6	-	5
Accretion of fixed income book cost	11	(94)	(1)
Net cash inflow from operating activities		14,706	15,417
Investing activities
Purchases of investments		(140,765)	(186,765)
Sales of investments		147,854	199,772
Net cash generated from investing activities		7,089	13,007
Financing activities
Equity dividends paid	9	(19,255)	(16,138)
Buyback of Ordinary shares		(7,984)	(1,252)
Net cash used in financing activities		(27,239)	(17,390)
(Decrease)/increase in cash and cash equivalents		(5,444)	11,034
Analysis of changes in cash and cash equivalents during the year
Opening balance		26,699	13,875
Effect of exchange rate fluctuation on cash held	3	30	1,790
(Decrease)/increase in cash as above		(5,444)	11,034
Closing balance		21,285	26,699
Represented by:
Cash at bank and in hand		21,285	26,699
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements

For the year ended 31 January 2024

1	Principal activity
	The Company is a closed-end investment company, registered in Scotland No.SC005218, with its Ordinary shares being listed on the London Stock Exchange.

2.	Accounting policies
	A summary of the principal accounting policies, all of which, unless otherwise stated, have been consistently applied throughout the year and the preceding year, is set out below.
	(a)	Basis of preparation and going concern. The financial statements have been prepared in accordance with Financial Reporting Standard 102, the Companies Act 2006 and with the 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 a going concern basis and on the assumption that approval as an investment trust will continue to be granted.
		Going concern. The Company's assets consist substantially of securities in companies listed on recognised stock exchanges and in normal circumstances are realisable within a short timescale and which can be sold to meet funding commitments if necessary.
		The Board has set gearing limits and regularly reviews actual exposures, cash flow projections and compliance with banking covenants.
		The Company undertakes a continuation vote every three years. The last continuation vote was passed at the AGM held in June 2021 with 98.6% of votes in favour. Based on feedback from major shareholders, the Directors consider that it is reasonable to assume that the continuation vote will be passed at the AGM to be held in June 2024 and therefore that the Company will continue in existence.
		The Board has considered the impact of geopolitical developments and believes that there will be a limited resulting financial impact on the Company's portfolio, its operational resources and existence. Given that the Company's portfolio comprises primarily "Level One" assets (listed on a recognisable exchange and realisable within a short timescale), and the Company's relatively low level of gearing, the Company has the ability to raise sufficient funds so as to remain within its debt covenants and pay expenses.
		Taking the above factors into consideration, the Directors have a reasonable expectation 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, the Board continues to adopt the going concern basis in preparing the financial statements.
		Significant estimates and judgements. Disclosure is required of judgements and estimates made by management in applying the accounting policies that have a significant effect on the financial statements. There are no significant estimates or judgements which impact these financial statements.
	(b)	Income. Income from investments, 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 capital or revenue, according to the circumstances. The fixed returns on debt instruments are recognised using the time apportioned accruals basis and the discount or premium on acquisition is amortised or accreted on a straight line basis.
		Interest receivable from cash and short-term deposits is recognised on the time apportioned accruals basis.
	(c)	Expenses. All expenses are accounted for on an accruals basis and are charged to the Statement of Comprehensive Income. Expenses are charged against revenue except as follows:
		- transaction costs on the acquisition or disposal of investments are charged to capital in the Statement of Comprehensive Income;
		- expenses are charged to capital where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect, the investment management fee is allocated 30% to revenue and 70% to capital to reflect the Company's investment policy and prospective income and capital growth.
	(d)	Taxation. The tax payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible (see note 8 for a more detailed explanation). The Company has no liability for current tax.
		Deferred taxation is provided on all timing differences, that have originated but not reversed at the Statement of Financial Position date, where transactions or events that result in an obligation to pay more or a right to pay less tax in future have occurred at the Statement of Financial Position date, measured on an undiscounted basis and based on enacted tax rates. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the financial statements which are capable of reversal in one or more subsequent periods.
		Owing to the Company's status as an investment trust company, and the intention to continue to meet the conditions required to obtain approval for the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.

	(e)	Investments. The Company has chosen to apply the recognition and measurement provisions of IAS 39 Financial Instruments: Recognition and Measurement and investments have been designated upon initial recognition at 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 time frame established by the market concerned, and are initially measured at fair value. Subsequent to initial recognition, investments are measured at fair value. For listed investments, this is deemed to be closing bid market prices. Gains and losses arising from changes in fair value and disposals are included as a capital item in the Statement of Comprehensive Income and are ultimately recognised in the capital reserve.
	(f)	Borrowings. Monies borrowed to finance the investment objectives of the Company are stated at the amount of the net proceeds immediately after issue plus cumulative finance costs less cumulative payments made in respect of the debt. The finance costs of such borrowings are accounted for on an accruals basis using the effective interest rate method and are charged 30% to revenue and 70% to capital to reflect the Company's investment policy and prospective income and capital growth.
	(g)	Dividends payable. Interim and final dividends are recognised in the period in which they are paid.
	(h)	Nature and purpose of reserves
		Share premium account. The balance classified as share premium includes the premium above nominal value from the proceeds on issue of any equity capital comprising Ordinary shares of 5p. This reserve is not distributable.
		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. This reserve is not distributable.
		Capital reserve. This reserve reflects any gains or losses on realisation of investments in the period along with any changes in fair values of investments held that have been recognised in the Statement of Comprehensive Income. The costs of share buybacks for treasury are also deducted from this reserve. This reserve is distributable although the amount that is distributable is complex to determine and is not necessarily the full amount of the reserve as disclosed within these financial statements.
		Revenue reserve. This reserve reflects all income and costs which are recognised in the revenue column of the Statement of Comprehensive Income. The revenue reserve represents the amount of the Company's reserves distributable by way of dividend. The amount of the revenue reserve as at 31 January 2024 may not be available at the time of any future distribution due to movements between 31 January 2024 and the date of distribution.

	(i)	Foreign currency. Assets and liabilities in foreign currencies are translated at the rates of exchange ruling on the Statement of Financial Position date. Transactions involving foreign currencies are converted at the rate ruling on the date of the transaction. Gains and losses on the realisation of foreign currencies are recognised in the Statement of Comprehensive Income and are then transferred to the capital reserve.
	(j)	Traded options. The Company may enter into certain derivative contracts (e.g. writing traded 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 received/paid on inception. The premium is recognised in the revenue column over the life of the contract period. Losses on any movement in the fair value of open contracts at the year end realised and on the exercise of the contracts are recorded in the capital column of the Statement of Comprehensive Income. For written options, where exercised, losses are treated as a realised loss, including where it is a component of the cost paid to acquire underlying securities on a written contract.
		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.
	(k)	Cash and cash equivalents. Cash and cash equivalents comprise cash at bank.

3.	Net currency gains/(losses)
		2024	2023
		£'000	£'000
	Gains on cash held	30	1,790
	Gains/(losses) on Senior Loan Notes	1,345	(3,347)
		1,375	(1,557)

4.	Income
		2024	2023
		£'000	£'000
	Income from overseas listed investments
	Dividend income	14,879	15,570
	REIT income	2,817	2,816
	Interest income from investments	567	167
		18,263	18,553
	Other income from investment activity
	Traded option premiums	3,781	4,170
	Deposit interest	528	303
		4,309	4,473
	Total income	22,572	23,026
	During the year, the Company was entitled to premiums totalling £3,781,000 (2023 - £4,170,000) in exchange for entering into option contracts. At the year end there were 6 (2023 - 5) open positions, valued at a liability of £162,000 (2023 - liability of £264,000) as disclosed in note 13. Losses realised on the exercise of derivative transactions are disclosed in note 11.

5.	Investment management fee
		2024			2023
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
	Investment management fee	894	2,088	2,982	947	2,209	3,156
	Management services are provided by abrdn Fund Managers Limited ("aFML"). The management fee has been charged at 0.75% of net assets up to £250 million, 0.6% between £250 million and £500 million, and 0.5% over £500 million, payable quarterly. Net assets equals gross assets after deducting current liabilities and borrowings and excluding commonly managed funds. The balance due to aFML at the year end was £755,000 (2023 - £810,000). The fee is allocated 30% to revenue and 70% to capital (2023 - same).
	The management agreement between the Company and the Manager is terminable by either party on three months' notice. In the event of a resolution being passed at the AGM to wind up the Company the Manager shall be entitled to three months' notice from the date the resolution was passed. In the event of termination on not less than the agreed notice period, compensation is payable in lieu of the unexpired notice period.

6.	Finance costs
		2024			2023
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
	Bank interest paid	33	76	109	1	2	3
	Senior Loan Notes	333	778	1,111	351	819	1,170
	Amortised Senior Loan Note issue expenses	2	4	6	2	4	6
		368	858	1,226	354	825	1,179

7.	Administrative expenses
		2024	2023
		£'000	£'000
	Directors' fees	155	131
	Registrar's fees	85	104
	Custody and bank charges	25	25
	Secretarial fees	147	129
	Auditors' remuneration:
	- fees payable to the Company's auditor for the audit of the annual report	55	40
	Promotional activities	216	215
	Printing, postage and stationery	33	29
	Fees, subscriptions and publications	66	57
	Professional fees	45	37
	Depositary charges	44	46
	Other expenses	72	41
		943	854
	Secretarial and administration services are provided by abrdn Fund Managers Limited ("aFML") under an agreement which is terminable on three months' notice. The fee is payable monthly in advance and based on an index-linked annual amount of £147,000 (2023 - £129,000). The balance due at the year end was £12,000 (2023 - £22,000).
	During the year £216,000 (2023 - £215,000) was paid to aFML in respect of promotional activities for the Company and the balance due at the year end was £73,000 (2023 - £72,000).
	With the exception of Auditors' remuneration for the statutory audit, all of the expenses above include irrecoverable VAT where applicable. The Auditors' remuneration for the statutory audit excludes VAT amounting to £11,000 (2023 - £8,000).

8.	Taxation
			2024			2023
			Revenue	Capital	Total	Revenue	Capital	Total
			£'000	£'000	£'000	£'000	£'000	£'000
	(a)	Analysis of charge/(credit) for the year
		UK corporation tax	462	-	462	292	-	292
		Double tax relief	(330)	-	(330)	(292)	-	(292)
		Overseas tax suffered	2,240	93	2,333	2,458	109	2,567
		Tax relief to capital	707	(707)	-	556	(556)	-
		Total tax charge/(credit) for the year	3,079	(614)	2,465	3,014	(447)	2,567
	(b)	Factors affecting the tax charge/(credit) for the year. The UK corporation tax rate is 24% (2023 - 19%). The tax charge for the year is higher (2023 - lower) than the corporation tax rate. The differences are explained in the following table.
			2024			2023
			Revenue	Capital	Total	Revenue	Capital	Total
			£'000	£'000	£'000	£'000	£'000	£'000
		Net return before taxation	19,747	(26,455)	(6,708)	20,140	24,245	44,385
		Corporation tax at 24% (2023 - 19%)	4,739	(6,349)	(1,610)	3,827	4,607	8,434
		Effects of:
		Non-taxable overseas dividends	(3,571)	(149)	(3,720)	(2,958)	(139)	(3,097)
		Irrecoverable overseas withholding tax	2,240	93	2,333	2,458	109	2,567
		Expenses not deductible for tax purposes	1	-	1	-	-	-
		Double tax relief	(330)	-	(330)	(293)	-	(293)
		Excess management expenses	-	-	-	(20)	20	-
		Non-taxable losses/(gains) on investments	-	6,121	6,121	-	(5,340)	(5,340)
		Non-taxable currency gains/(losses)	-	(330)	(330)	-	296	296
		Total tax charge/(credit)	3,079	(614)	2,465	3,014	(447)	2,567
	(c)	Provision for deferred taxation
		At the year end there is no unrecognised deferred tax asset (2023 - £nil) in relation to surplus management expenses.

9.	Dividends
		2024	2023
		£'000	£'000
	Amounts recognised as distributions to equity holders in the year:
	3rd interim dividend for 2023 of 2.5p per share (2022 - 2.5p)	3,506	3,517
	Final dividend for 2023 of 3.5p per share (2022 - 4.0p)	4,902	5,609
	1st interim dividend for 2024 of 2.6p per share (2023 - 2.5p)	3,642	3,506
	2nd interim dividend for 2024 of 2.6p per share (2023 - 2.5p)	3,621	3,506
	3rd interim dividend for 2024 of 2.6p per share	3,584	-
		19,255	16,138
	The fourth interim dividend was unpaid at the year end. Accordingly, this has not been included as a liability in these financial statements.
	The table below sets out the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of Sections 1158-1159 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the year is £16,668,000 (2023 - £17,126,000).
		2024	2023
		£'000	£'000
	1st interim dividend for 2024 of 2.6p per share (2023 - 2.5p)	3,642	3,506
	2nd interim dividend for 2024 of 2.6p per share (2023 - 2.5p)	3,621	3,506
	3rd interim dividend for 2024 of 2.6p per share (2023 - 2.5p)	3,584	3,506
	4th interim dividend for 2024 of 3.9p per share (2023 - nil)	5,314	-
	Proposed final dividend for 2024 of nil per share (2023 - 3.5p)	-	4,902
		16,161	15,420
	The cost of the fourth interim dividend for 2024 is based on 136,243,680 Ordinary shares in issue, being the number of Ordinary shares in issue at the date of this report.

10.	Return per Ordinary share
		2024		2023
		£'000	p	£'000	p
	Based on the following figures:
	Revenue return	16,668	11.95	17,126	12.21
	Capital return	(25,841)	(18.53)	24,692	17.60
	Total return	(9,173)	(6.58)	41,818	29.81
	Weighted average number of Ordinary shares in issue		139,474,109		140,284,541

11.	Investments at fair value through profit or loss
		2024	2023
		£'000	£'000
	Investments at fair value through profit or loss
	Opening book cost	438,891	425,863
	Opening investment holdings gains	48,049	45,111
	Opening fair value	486,940	470,974
	Analysis of transactions made during the year
	Purchases at cost	139,531	184,369
	Sales proceeds received	(146,223)	(196,401)
	(Losses)/gains on investmentsA	(25,410)	27,997
	Accretion of fixed income book cost	94	1
	Closing fair value	454,932	486,940
	Closing book cost	432,315	438,891
	Closing investment holdings gains	22,617	48,049
	Closing fair value	454,932	486,940
	Listed on overseas stock exchanges	454,932	486,940
	Net (losses)/gains on investments
	(Losses)/gains on investmentsA	(25,410)	27,997
	Investment holding (losses)/gains on traded optionsB	(94)	108
		(25,504)	28,105
	A Includes losses realised on the exercise of traded options of £3,204,000 (2023 - £6,511,000) which are reflected in the capital column of the Statement of Comprehensive Income in accordance with accounting policy 2(j). Premiums received from traded options totalled £3,781,000 (2023 - £4,170,000) per note 4.
	B Options associated are derivative liabilities at the year end.
	The Company received £146,223,000 (2023 - £196,401,000) from investments sold in the year. The book cost of these investments when they were purchased was £146,201,000 (2023 - £171,343,000). 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.
	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 net (losses)/gains on investments in the Statement of Comprehensive Income. The total costs were as follows:
		2024	2023
		£'000	£'000
	Purchases	65	44
	Sales	107	140
		172	184
	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.

12.	Debtors: amounts falling due within one year
		2024	2023
		£'000	£'000
	Accrued income	829	769
	Prepayments	17	15
	Other debtors	76	231
	Amounts due from brokers	29	1,660
		951	2,675

13.	Creditors: amounts falling due within one year
		2024	2023
		£'000	£'000
	Amounts due to brokers	210	1,444
	Investment management fee payable	755	810
	Traded option contracts	162	264
	Interest payable	127	131
	Other creditors	237	231
		1,491	2,880

14.	Senior Loan Notes
	Creditors: amounts falling due after more than one year
		2024	2023
		£'000	£'000
	2.70% Senior Loan Notes - 10 years	19,632	20,307
	2.96% Senior Loan Notes - 15 years	19,632	20,307
	Unamortised Loan Note issue expenses	(66)	(71)
		39,198	40,543
	On 21 December 2020 the Company issued  a US$25 million 10 years Senior Loan Note at an annualised interest rate of 2.70% and a US$25 million 15 years Senior Loan Note at an annualised interest rate of 2.96%. The Loan Notes are unsecured and unlisted. Interest is payable in half yearly instalments in June and December and the Loan Notes are due to be redeemed at par on 21 December 2030 and 21 December 2035. The Company has complied with the Senior Loan Note Purchase Agreement covenant throughout the period since issue that the ratio of net assets to gross borrowings must be greater than 3.5:1, that net assets will not be less than £200,000,000, and that the total number of Listed Assets is to be more than 35.
	The total fair value of the Senior Loan Notes at 31 January 2024 was £36,256,000 (2023 - £38,579,000) comprising £18,277,000 (2023 - £19,278,000) in respect of the 10 years 2.70%  Senior Loan Note and £17,979,000 (2023 - £19,301,000) in respect of the 15 years 2.96% Senior Loan Note. The fair value of the Senior Loan Notes has been 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.

15.	Called up share capital
		2024	2023
		£'000	£'000
	Allotted, called-up and fully paid:
	Opening balance	7,012	7,034
	Ordinary shares bought back in the year	(144)	(22)
	137,352,347 (2023 - 140,234,749) Ordinary shares of 5p each	6,868	7,012
	During the year 2,882,402 (2023 - 441,185) Ordinary shares of 5p each were repurchased by the Company at a total cost, including transaction costs, of £7,984,000 (2023 - £1,252,000).
	Subsequent to the year end, 1,108,667 Ordinary shares of 5p each have been repurchased by the Company at a total cost of £3,206,000.

16.	Net asset value per Ordinary share
	The net asset value per share and the net assets attributable to the Ordinary shareholders at the year end were as follows:
		2024	2023
	Net assets attributable	£436,479,000	£472,891,000
	Number of Ordinary shares in issueA	137,352,347	140,234,749
	Net asset value per share	317.78p	337.21p
	A 2024 Includes 72,747 Ordinary shares bought back prior to the year end which had not yet settled.

17.	Analysis of changes in net debt
		At				At
		1 February	Currency	Non-cash	Cash	31 January
		2023	differences	movement	flows	2024
		£'000	£'000	£'000	£'000	£'000
	Cash and short term deposits	26,699	30	-	(5,444)	21,285
	Debt due after more than one year	(40,543)	1,345	-	-	(39,198)
		(13,844)	1,375	-	(5,444)	(17,913)
		At				At
		1 February	Currency	Non-cash	Cash	31 January
		2022	differences	movement	flows	2023
		£'000	£'000	£'000	£'000	£'000
	Cash and short term deposits	13,875	1,790	-	11,034	26,699
	Debt due after more than one year	(37,191)	(3,347)	(5)	-	(40,543)
		(23,316)	(1,557)	(5)	11,034	(13,844)
	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.

18.	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, other than derivatives, 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.
	Subject to Board approval, the Company also has the ability to enter into derivative transactions, in the form of traded options, for the purpose of enhancing income returns and portfolio management. During the year, the Company entered into certain derivative contracts. As disclosed in note 4, the premium received in respect of options written in the year was £3,781,000 (2023 - £4,170,000). Positions closed during the year realised a loss of £3,204,000 (2023 - £6,511,000). The largest position in derivative contracts held during the year at any given time was £454,000 (2023 - £542,000). The Company had 6 (2023 - 5) open positions in derivative contracts at 31 January 2024 valued at a liability of £162,000 (2023 - £264,000) as disclosed in note 13.
	The Board has delegated the risk management function to the Manager under the terms of its management agreement with aFML (further details which are included under note 5). 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 an 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.
	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 plc group of companies (referred to as "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. The AIFM has delegated the day to day administration of the investment policy to abrdn Inc., which is responsible for ensuring that the Company is managed within the terms of its investment guidelines and the limits set out in FUND 3.2.2R (details of which can be found on the Company's website). The AIFM has retained responsibility for monitoring and oversight of investment performance, product risk and regulatory and operational risk for the Company.
	The AIFM 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 Officer 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 Officer and 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 plc, 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 price risk), (ii) liquidity risk and (iii) credit risk.
	The Board regularly reviews and agrees policies for managing each of these risks. The Manager'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. The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - interest rate risk, currency risk and other price risk.
		Interest rate risk. Interest rate movements may affect:
		- the fair value of the investments in fixed interest rate securities;
		- the level of income receivable on cash deposits;
		- 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 reviews on a regular basis the values of the fixed interest rate securities.
		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 2024 are shown in note 14 to the financial statements.

		Interest risk profile. The interest rate risk profile of the portfolio of financial instruments at the Statement of Financial Position date was as follows:
			Weighted
			average
			period for	Weighted			Non-
			which	average	Fixed	Floating	interest
			rate is fixed	interest rate	rate	rate	bearing
		At 31 January 2024	Years	%	£'000	£'000	£'000
		Assets
		Sterling	-	-	-	4,892	-
		US Dollar	6.93	5.59	8,489	16,392	418,918
		Canadian Dollar	-	-	-	1	27,525
		Total assets			8,489	21,285	446,443
		Liabilities
		Loan Notes 21/12/30 - US$25,000,000	6.89	2.70	19,599	-	-
		Loan Notes 21/12/35 - US$25,000,000	11.89	2.96	19,599	-	-
		Total liabilities			39,198	-	-
			Weighted
			average
			period for	Weighted			Non-
			which	average	Fixed	Floating	interest
			rate is fixed	interest rate	rate	rate	bearing
		At 31 January 2023	Years	%	£'000	£'000	£'000
		Assets
		Sterling	-	-	-	4,599	-
		US Dollar	7.50	4.36	7,141	22,221	439,091
		Canadian Dollar	-	-	-	(121)	40,708
		Total assets			7,141	26,699	479,799
		Liabilities
		Loan Notes 21/12/30 - US$25,000,000	7.89	2.70	20,272	-	-
		Loan Notes 21/12/35 - US$25,000,000	12.90	2.96	20,271	-	-
		Total liabilities			40,543	-	-
		The weighted average interest rate is based on the current yield of each asset, weighted by its market value.
		The floating rate assets consist of cash deposits at prevailing market rates.
		The non-interest bearing assets represent the equity element of the portfolio.
		Short-term debtors and creditors have been excluded from the above tables.
		Financial Liabilities. The company has fixed rate borrowings by way of its senior loan notes, details of which can be found in note 14.

		Interest rate sensitivity. The sensitivity analyses below have been determined based on the exposure to interest rates for both derivative and non-derivative instruments at the Statement of Financial Position date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have floating rates.
		If interest rates had been 100 basis points higher or lower (based on current parameter used by Manager's Investment Risk Department on risk assessment) and all other variables were held constant, the Company's revenue return for the year ended 31 January 2024 would increase/decrease by £213,000 (2023 - decrease/increase by £267,000). This is mainly attributable to the Company's exposure to interest rates on its floating rate cash balances.
		In the opinion of the Directors, the above sensitivity analyses are not representative of the year as a whole, since the level of exposure changes frequently as part of the interest rate risk management process used to meet the Company's objectives. The risk parameters used will also fluctuate depending on the current market perception.
		Foreign currency risk. The Company's portfolio is invested mainly in US quoted securities and the Statement of Financial Position can be significantly affected by movements in foreign 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 significant proportion of the Company's borrowings, as detailed in note 14, are denominated in foreign currency. Foreign currency risk exposure by currency denomination is detailed under Interest Risk Profile.
		The revenue account is subject to currency fluctuation arising on overseas income. The Company does not hedge this currency risk.
		Foreign currency sensitivity. There is no sensitivity analysis included as the Company's significant foreign currency financial instruments are in the form of equity investments, and they have been included within the other price risk sensitivity analysis so as to show the overall level of exposure.
		Price risk. Price risks (ie changes in market prices other than those arising from interest rate or currency risk) may affect the value of the quoted investments.
		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 country or sector. The allocation of assets to international markets and the stock selection process both act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. The investments held by the Company are listed on various stock exchanges.
		Price risk sensitivity. If market prices at the Statement of Financial Position date had been 10% higher or lower while all other variables remained constant, the return attributable to Ordinary shareholders for the year ended 31 January 2024 would have increased/decreased by £45,493,000 (2023 - increase/decrease of £48,694,000) and equity reserves would have increased/decreased by the same amount.

	(ii)	Liquidity risk. This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.
		Management of the risk. Liquidity risk is not considered to be significant as the Company's assets comprise mainly readily realisable securities, which can be sold to meet funding commitments if necessary.
	(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
		- where the Manager makes an investment in a bond, corporate or otherwise, the credit ratings of the issuer are taken into account so as to manage the risk to the Company of default;
		- investments in quoted bonds are made across a variety of industry sectors so as to avoid concentrations of credit risk;
		- transactions involving derivatives are entered into only with investment banks, the credit rating of which is taken into account so as to minimise the risk to the Company of default;
		- investment transactions are carried out with a 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 custodian's records are performed on a daily basis to ensure discrepancies are investigated on a timely basis. The Manager's Compliance department carries out periodic reviews of the custodian's operations and reports its finding to the Manager's Risk Management Committee;
		- cash is held only with reputable banks with acceptable credit quality. It is the Manager's policy to trade only with A- and above (Long Term rated) and A-1/P-1 (Short Term rated) counterparties.
		Credit risk exposure. In summary, compared to the amounts in the Statement of Financial Position, the exposure to credit risk at 31 January 2024 was as follows:
				2024		2023
				Statement of		Statement of
				Financial	Maximum	Financial	Maximum
				Position	exposure	Position	exposure
				£'000	£'000	£'000	£'000
		Non-current assets
		Quoted bonds		8,489	8,489	7,141	7,141
		Current assets
		Amount due from brokers		29	29	1,660	1,660
		Dividends receivable		829	829	603	603
		Interest receivable		17	17	166	166
		Other debtors and prepayments		76	76	246	246
		Cash and short-term deposits		21,285	21,285	26,699	26,699
				30,725	30,725	36,515	36,515
		None of the Company's financial assets are secured by collateral or other credit enhancements.
		Credit ratings. The table below provides a credit rating profile using Standard and Poors credit ratings for the quoted bonds at 31 January 2024 and 31 January 2023:
						2024	2023
						£'000	£'000
		B+				708	682
		BB+				1,401	2,898
		BB				2,845	693
		BB-				2,837	2,162
		BBB-				698	706
						8,489	7,141
		Fair values of financial assets and financial liabilities. The book value of cash at bank and bank loans and overdrafts included in these financial statements approximate to fair value because of their short-term maturity. Investments held as dealing investments are valued at fair value. The carrying values of fixed asset investments are stated at their fair values, which have been determined with reference to quoted market prices. For all other short-term debtors and creditors, their book values approximate to fair values because of their short-term maturity.

19.	Capital management policies and procedures
	The investment objective of the Company is to provide investors with above average dividend income and long term capital growth through active management of a portfolio consisting predominately of S&P 500 US equities.
	The capital of the Company consists of bank borrowings and equity comprising issued capital, reserves and retained earnings. The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance.
	The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes:
	- the planned level of gearing which takes into account the Investment Manager's views on the market;
	- the level of equity shares in issue; and
	- the extent to which revenue in excess of that which is required to be distributed should be retained.
	The Company's objectives, policies and processes for managing capital are unchanged from the preceding accounting period.
	Details of the Company's gearing facilities and financial covenants are detailed in note 14 of the financial statements.

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 2024			Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities			a)	446,443	-	-	446,443
	Quoted bonds			b)	-	8,489	-	8,489
					446,443	8,489	-	454,932
	Financial liabilities at fair value through profit or loss
	Derivatives			c)	-	(162)	-	(162)
	Net fair value				446,443	8,327	-	454,770
					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)	479,799	-	-	479,799
	Quoted bonds			b)	-	7,141	-	7,141
					479,799	7,141	-	486,940
	Financial liabilities at fair value through profit or loss
	Derivatives			c)	-	(264)	-	(264)
	Net fair value				479,799	6,877	-	486,676
	a)	Quoted equities. The fair value of the Company's investments in quoted equities has been determined by reference to their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on recognised stock exchanges.
	b)	Quoted bonds. The fair value of the Company's investments in quoted bonds has been determined by reference to their quoted bid prices at the reporting date. Investments categorised as Level 2 are not considered to trade in active markets.
	c)	Derivatives. The Company's investment in exchange traded options have been fair valued using quoted prices and have been classified as Level 2 as they are not considered to trade in active markets.
	The fair value of the senior loan notes has been calculated as £36,256,000 (2023 - £38,579,000), 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, compared to carrying amortised cost of £39,198,000 (2023 - £40,543,000).

21.	Related party transactions
	Directors' fees and interests. Fees payable during the year to the Directors and their interests in shares of the Company are disclosed within the Directors' Remuneration Report in the published Annual Report.
	Transactions with the Manager. The Company has an agreement with the Manager for the provision of investment management, secretarial, accounting and administration and promotional activity services.
	Details of transactions during the year and balances outstanding at the year end are disclosed in notes 5 and 7.

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.
Discount to net asset value
The discount is the amount by which the share price is 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.
		2024	2023
NAV per Ordinary share	a	317.78p	337.21p
Share price	b	289.00p	306.00p
Discount	(a-b)/a	9.1%	9.3%
Dividend cover
Dividend cover measures the revenue return per share divided by total dividends per share, expressed as a ratio.
		2024	2023
Revenue return per share	a	11.95p	12.21p
Dividends per share	b	11.70p	11.00p
Dividend cover	a/b	1.02	1.11
Dividend yield
Dividend yield is calculated using the Company's annual dividend per Ordinary share divided by the share price, expressed as a percentage.
		2024	2023
Annual dividend per Ordinary share	a	11.70p	11.00p
Share price	b	289.00p	306.00p
Dividend yield	a/b	4.0%	3.6%
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.
		2024	2023
Borrowings (£'000)	a	39,198	40,543
Cash (£'000)	b	21,285	26,699
Amounts due to brokers (£'000)	c	210	1,444
Amounts due from brokers (£'000)	d	29	1,660
Shareholders' funds (£'000)	e	436,479	472,891
Net gearing	(a-b+c-d)/e	4.1%	2.9%
Ongoing charges ratio
Ongoing charges ratio is considered to be an alternative performance measure. The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC which is defined as the total of investment management fees and administrative expenses and expressed as a percentage of the average daily net asset values with debt at fair value published throughout the year.
		2024	2023
Investment management fees (£'000)		2,982	3,156
Administrative expenses (£'000)		943	854
Less: non recurring charges A (£'000)		-	(8)
Ongoing charges (£'000)		3,925	4,002
Average net assets (£'000)		439,152	458,929
Ongoing charges ratio (excluding look-through costs)		0.89%	0.87%
Look-through costsB		0.10%	0.06%
Ongoing charges ratio (including look-through costs)		0.99%	0.93%
A Professional services considered unlikely to recur.
B Calculated 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 includes finance costs and transaction charges.
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 2024		NAV	Price
Opening at 1 February 2023	a	337.2p	306.0p
Closing at 31 January 2024	b	317.8p	289.0p
Price movements	c=(b/a)-1	-5.8%	-5.6%
Dividend reinvestmentA	d	4.2%	4.7%
Total return	c+d	-1.6%	-0.9%
			Share
Year ended 31 January 2023		NAV	Price
Opening at 1 February 2022	a	318.8p	283.0p
Closing at 31 January 2023	b	337.2p	306.0p
Price movements	c=(b/a)-1	5.8%	8.1%
Dividend reinvestmentA	d	3.8%	4.3%
Total return	c+d	+9.6%	+12.4%
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 THE ANNUAL FINANCIAL REPORT

This Annual Financial Report is not the Company's statutory accounts for the year ended 31 January 2024. The statutory accounts for the year ended 31 January 2023 received an audit report which was unqualified. The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 January 2024 or 31 January 2023 but is derived from those accounts.

Statutory accounts for 31 January 2023 have been delivered to the registrar of companies, and those for 31 January 2024 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The statutory accounts for the financial year ended 31 January 2024 were approved by the Directors on 4 April 2024.

The Company's Annual General Meeting will be held at 12 Noon on 21 June 2024 in the offices of abrdn plc, 1 George Street, Edinburgh EH2 2LL.

The Annual Report will be posted to shareholders in April 2024 and will be available from the Company's website: www.northamericanincome.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.

For The North American Income Trust plc

abrdn Holdings Limited

Secretaries

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