ABD.L Regulatory News (ABD)

ABRDN NEW DAWN INVESTMENT TRUST PLC

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 APRIL 2023

Legal Entity Identifier (LEI): 5493002K00AHWEME3J36

Investment Objective

To provide shareholders with a high level of capital growth through equity investment in the Asia Pacific countries ex Japan.

Benchmark

MSCI All Countries Asia Pacific ex Japan Index (Sterling adjusted).

Website

Up to date information can be found on the Company's website: www.newdawn-trust.co.uk 

For further information, please contact:

Stephanie Hocking

abrdn Fund Managers Limited

0207 463 6403

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.

Performance Highlights

Financial Highlights

Chairman's Statement

Introduction

Before setting out my usual statement on the Company's annual results, I must draw your attention to an important announcement made by the Company since the year end. On 21 July 2023 the Board announced that it had agreed heads of terms with the board of Asia Dragon Trust plc ("Asia Dragon") in respect of a proposed combination of the Company with Asia Dragon. The combination, if approved by each company's shareholders, will be effected by way of a scheme of reconstruction and winding up of the Company under section 110 of the Insolvency Act 1986 with the associated transfer of part of the assets and undertaking of the Company to Asia Dragon in exchange for the issue of new ordinary shares in Asia Dragon (the "Scheme"). Under the terms of the Scheme an up to 25% cash exit opportunity will be offered to the Company's shareholders to realise part of their investment in the Company at a 2% discount to the formula asset value ("FAV") (less the costs of realigning the portfolio).

abrdn Fund Managers Limited ("aFML"), will, following implementation of the Scheme, continue to manage the enlarged Asia Dragon. The Asia Dragon board will propose certain amendments to Asia Dragon's investment policy to its shareholders which will principally align Asia Dragon's policy with the Company's current investment policy in order to permit investment into Australasia and provide the Investment Manager with equivalent geographic flexibility. Asia Dragon's existing benchmark comparative index (MSCI AC Asia (ex-Japan) Index) will be retained. The portfolio managers of the enlarged Asia Dragon will be James Thom and Pruksa Iamthongthong, part of the same team that currently manages the Company's portfolio. aFML has agreed that the management fee payable by the enlarged Asia Dragon to aFML will be reduced to 0.75% (currently 0.85%) on the initial £350 million of Asia Dragon's net assets and 0.5% on Asia Dragon's net assets in excess of £350 million.

Asia Dragon offers a five-yearly performance-related conditional tender with the current performance period running from 1 September 2021 to 31 August 2026 ("2026 CTO"). It is proposed that, in the light of the proposals and conditional on the Scheme being implemented, the 2026 CTO will be amended such that, in the event Asia Dragon underperforms its benchmark over the performance period, Asia Dragon will offer shareholders the opportunity to tender up to a maximum of 15% of their shares; a reduction from the maximum of 25% previously proposed. This reflects the revised conditional tender being of broadly a similar size to that previously proposed for the 2026 CTO, given the greater scale of the enlarged Asia Dragon. In addition to this, Asia Dragon's shareholders will have the opportunity to vote on the continuation of Asia Dragon at every fifth AGM with the next continuation vote to be put forward at the AGM in December 2026.

Both the Company and Asia Dragon invest in the Asia Pacific (ex-Japan) region, and both are managed by aFML with a high level of commonality across their shareholder bases. In light of these similarities, the Board believes a combination of the companies will create an enlarged vehicle that offers similar investment exposure for each set of shareholders while offering shareholders in the enlarged Asia Dragon (and therefore to Shareholders who roll into Asia Dragon) benefits that include greater secondary liquidity in Asia Dragon shares and cost efficiencies, including as result of the reduction in the management fee as referred to above.

The Company and Asia Dragon have received irrevocable undertakings to support the proposals from shareholders representing 27.0% of the Company's issued share capital and 29.7% of Asia Dragon's issued share capital (as at20 July 2023).

A circular to shareholders of the Company, providing details of the Scheme and convening general meetings to approve the Scheme, together with a prospectus published by Asia Dragon in respect of the issue of New Asia Dragon Shares in connection with the Scheme are expected to be published in September 2023. If approved, the proposals are anticipated to become effective in October 2023. 

The Board believes that the proposals are in the best interests of shareholders as a whole. In the event that the Scheme does not go ahead, then the Company will make a separate announcement to shareholders in respect of the future of the Company. 

Overview of the Year

Over the 12 months to 30 April 2023, the performance of the Company reflected a challenging environment for both Asian and global equity markets. The net asset value ("NAV") declined by 6.8% on a total return basis, compared to a fall of 5.2% in the benchmark, the MSCI All Countries Asia Pacific ex Japan Index (in Sterling terms). The share price fell by 7.3% on a total return basis, while the discount of the share price to the NAV was 12.8% at the year end. 

Despite the underperformance for the year, it is worth noting that, over the longer term three and five year periods both the NAV and share price total returns have outperformed the benchmark index.

Globally, concerns over the impact of monetary tightening, the threat of recession and the ongoing conflict in Ukraine weighed heavily on markets. The Company was not immune to this. But, while the Company's performance for the 12 months was challenging, it outperformed the more 'growth-centric' funds that were heavily impacted by the growth-to-value rotation, triggered by the abrupt shift in global monetary policy. This underlines the benefit of the Company's focus on quality, investing in companies with real competitive advantages, sound financial management and good corporate governance. It is these sorts of companies that tend to be more resilient in a tougher environment.

In the first half of the year, markets were unsettled by monetary tightening in response to high inflation, with several major central banks raising interest rates. Inflationary pressures in Asia have not been as acute as elsewhere, but investors are alert to the possibility of price increases in the region.

Market attention shifted to China in the second half of the year, with the country's sudden decision to reverse its strict Covid-19 restrictions towards the end of 2022. This move prompted hopes that a re-opening economy would stimulate domestic consumer demand and benefit export-oriented markets such as Taiwan and South Korea. Many Chinese stocks, including consumer discretionary and information technology companies, benefited. Yet, despite the pent-up domestic consumer demand, the potential positive effects have not yet fully translated into earnings growth for many companies. Other factors, such as worries over the health of the property sector and the regulatory crackdown on technology companies, have made China a tricky market for investors to navigate. Geopolitical tensions between the US and China have added to share-price volatility, especially for several Chinese technology and biotech companies. Against this backdrop, the Company's performance in China lagged the benchmark over the period. However, the Board is confident in the approach adopted by the Investment Manager, focusing on the long-term benefits of quality companies in China and other countries in the region.

Detailed information on performance and portfolio activity for the year is contained in the Investment Manager's Review.

Earnings and Dividend

Revenue earnings per share for the year were 4.82p (2022: 3.71p), an increase of 29.9% compared to the previous year. The Company benefited from a small number of special dividends from companies that had sustained strong earnings, as well as higher distributions from the large Australian miners, Rio Tinto and BHP following the spike in commodity prices.

A first interim dividend of 1.0p per share was paid on 10 February 2023. As explained below, it is anticipated that the Company will convene an AGM to be held in October at the same time as the first general meeting in relation to the Scheme. Because of this, and in order to ensure that the Company's normal dividend paying cycle is maintained, rather than proposing a final dividend as we have done in previous years, the Board decided to declare a second interim dividend. Accordingly, a second interim dividend of 3.3p per share was declared on 31 July 2023 (2022: final dividend of 3.3p), making a total dividend for the year of 4.3p per share, unchanged from the previous year. The second interim dividend will be paid on 8 September 2023 to shareholders on the register on 11 August 2023.

Gearing

At the end of the year, the Company's borrowing facilities amounted to £40 million, comprising a fixed rate loan of £20 million, which matures in December 2023 (with an interest rate of 2.626%), and a £20 million multi-currency revolving loan facility maturing in June 2024. An aggregate Sterling equivalent of £28.6 million was drawn down at the year-end and gearing (net of cash) was 8.5%, compared to 7.7% at the beginning of the year.

Share Buybacks

In common with other investment trusts, the Company has continued to buy back shares with the aim of providing a degree of liquidity to the market at times when the discount to the NAV has widened. It is the view of the Board that this policy is in the interests of all shareholders. The Board closely monitors the discount and reviews the operation of the share buy-back policy at each Board meeting.

During the year, the Company bought back 1.7 million shares, representing 1.6% of the issued share capital. These shares were bought back at a discount to NAV and were accretive to the Company, and are held in treasury. The Company's stated policy on treasury shares is that they can only be re-issued to the market at a premium to the NAV per share at that time.

Annual General Meeting ("AGM")

As a result of the proposal for the Company to merge with Asia Dragon, it is anticipated that the Company will convene an AGM to be held in October at the same time as the first general meeting in relation to the Scheme. The notice of the AGM will be contained in the Scheme circular.

For those shareholders who roll their holdings into Asia Dragon, the Directors of abrdn New Dawn who join the Board of Asia Dragon very much look forward to meeting you at Asia Dragon's AGM later this year.

Outlook

Growth forecasts in the Asia-Pacific region are ahead of many other parts of the world, as domestic demand has remained robust in a tighter global monetary environment. What lingers in investors' minds is whether these forecasts will hold, in an environment that is becoming increasingly uncertain, with rising geopolitical tensions, recessionary fears and higher interest rates slowly making more of an impact.

In times like these, where markets are volatile and unsettled, an investment process focused on quality can provide resilience. The benefits of an active investment approach can bring opportunities and enable investors to sidestep parts of the market that are most exposed to risks and uncertainties. The Company has maintained a diverse portfolio of high-quality investments, well positioned to navigate turbulent market conditions and take advantage of the strong structural secular trends across Asia.

These long-term regional drivers include the aspirations of a growing middle class, urbanisation, clean energy, and digitalisation, which are likely to reward patient investors in a region where individual countries typically have different outlooks. Despite short-term ebbs and flows, China and India, the two most populous nations worldwide, offer attractive long-term growth opportunities with the likelihood of positive effects on the other countries in Asia.

Many of the challenges in the market over the past year undoubtedly remain, but the Board continues to believe that the Investment Manager's focus on quality and seeking out companies with sound fundamentals is the best approach to ensure that the Company meets its stated investment objective, and that shareholders will continue to benefit from this approach under the merger proposals.

Donald Workman Chairman16 August 2023

Overview of Strategy

Business Model

The business of the Company is that of an investment company which seeks to qualify as an investment trust for tax purposes. 

Investment Objective

The Company's investment objective is to provide shareholders with a high level of capital growth through equity investment in the Asia Pacific countries ex Japan.

Investment Policy

Asset Allocation

The Company's assets are invested in a diversified portfolio of securities in quoted companies spread across a range of industries and economies in the Asia Pacific region excluding Japan. Investments may also be made through collective investment schemes and in companies traded on stock markets outside the Asia Pacific region provided that over 75% of their consolidated revenue is earned from trading in the Asia Pacific region or they hold more than 75% of their consolidated net assets in the Asia Pacific region.

Gearing

The Board is responsible for determining the gearing strategy for the Company. Gearing is used selectively to leverage the Company's portfolio in order to enhance returns where and to the extent this is considered appropriate to do so. As at 30 April 2023, the Company had net gearing of 8.5% which compares with a current maximum limit set by the Board of 25%. Borrowings are short to medium term and particular care is taken to ensure that any bank covenants permit maximum flexibility of the investment policy.

Risk Diversification

It is the investment policy of the Company to invest no more than 15% of its gross assets in other listed investment companies (including investment trusts). As at 30 April 2023, 2.8% of the Company's gross assets were invested in listed investment companies.

The Company may invest in derivatives, financial instruments, money market instruments and currencies for the purposes of efficient portfolio management (i.e. for the purpose of reducing, transferring or eliminating investment risk in the Company's investments, including any technique or instrument used to provide protection against foreign exchange and credit risks).

The Company may only make material changes to its investment policy with the approval of shareholders in the form of an ordinary resolution. In addition, any material changes to the Company's investment policy will require the prior approval of the Financial Conduct Authority.

Delivering the Investment Policy

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

Board Investment Limits

In addition to the limits set out in the investment policy, the Investment Manager is authorised by the Board to invest up to 15% of the Company's gross assets in any single stock, calculated at the time an investment is made.

Benchmark

The Company compares its performance to the MSCI All Countries Asia Pacific ex Japan Index (Sterling adjusted). 

Promoting the Success of the Company

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

Principal Risks and Uncertainties

The Company's statement of principal risks and uncertainties forms part of the Strategic Report and is included beloe.

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, which are considered at each Board meeting, are shown in the table below and further commentary on the performance for the year is provided in the Chairman's Statement.

Promotional Activities

The Board recognises the importance of promoting the Company to prospective investors both for improving liquidity and enhancing the rating of the Company's shares. The Board believes one effective way to achieve this is through subscription to, and participation in, the promotional programme run by the abrdn Group on behalf of a number of investment trusts under its management. The Company's financial contribution to the programme is matched by the abrdn Group. The Company also supports the Manager's investments' investor relations programme which involves regional roadshows to existing and potential shareholders, promotional and public relations campaigns. The Manager's promotional and investor relations teams report to the Board on a quarterly basis giving analysis of the promotional activities as well as updates on the shareholder register and any changes in the make-up of that register.

The purpose of the promotional and investor relations programmes is both to communicate effectively with existing shareholders and to gain new shareholders, with the aim of improving liquidity and enhancing the value and rating of the Company's shares. Communicating the long-term attractions of the Company is key. The promotional programme includes commissioning independent paid for research on the Company, most recently from Marten & Co. A copy of the latest research note is available from the Company's website. 

Environmental, Social and Human Rights Issues

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

Modern Slavery Act

Due to the nature of its business, being a company that does not offer goods and services to customers, the Board considers that the Company is not within the scope of the Modern Slavery Act 2015. The Company is therefore not required to make a slavery and human trafficking statement. In any event, the Board considers the Company's supply chains, dealing predominantly with professional advisers and service providers in the financial services industry, to be low risk in relation to this matter.

The UK Stewardship Code and Proxy Voting

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

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

Global Greenhouse Gas Emissions

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

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

Duration

The Company does not have a fixed life. However, under its Articles of Association, if, in the 90 days preceding the Company's financial year end (30 April), the Ordinary shares have been trading, on average, at a discount in excess of 15% to the underlying NAV (including current year income, and with borrowings stated at market value) over the same period, notice will be given of an ordinary resolution to be proposed at the following Annual General Meeting to approve the continuation of the Company. If the resolution for the continuation of the Company is not passed at that Annual General Meeting or at any adjournment thereof, the Directors will convene a general meeting to be held not more than three months after the Annual General Meeting at which a special resolution for the winding-up of the Company will be proposed. In the 90 days to 30 April 2023 the average discount to the underlying NAV (including current year income, and with borrowings stated at market value) of the Ordinary shares was 12.6% and therefore no continuation resolution will be put to the Company's shareholders at this year's Annual General Meeting.

Viability Statement

As set out in more detail in the Charman's Statement, it is proposed that the Company combines with Asia Dragon Trust plc ("Asia Dragon").  The combination, if approved by each company's shareholders, will be effected by way of a scheme of reconstruction and winding up of the Company under section 110 of the Insolvency Act 1986 and the associated transfer of part of the assets and undertaking of the Company to Asia Dragon in exchange for the issue of new ordinary shares in Asia Dragon (the "Scheme"). The outcome of the general meetings to make the Scheme effective represents a material uncertainty in the context of the preparation of these financial statements on a going concern basis.

Notwithstanding this material uncertainty, for the purposes of this viability statement, the Board has decided that 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 also focused upon the following factors:

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

- The role of the Audit and Risk Committee in reviewing and monitoring the Company's internal control and risk management systems.

- The ongoing relevance of the Company's investment objective.

- The liquidity of the Company's portfolio. All of the Company's investments are in quoted securities in active markets or in collective investment schemes, and are considered to be liquid.

- The closed-ended nature of the Company which means that it is not subject to redemptions.

- The use of the Company's share buy back and share issuance policies to help address any imbalance of supply and demand for the Company's shares.

- The current and maximum levels of gearing, compliance with loan covenants and level of headroom within the financial covenants (see note 12 to the financial statements for details of loan covenants).

- The ability of the Company to refinance its loan facilities, on or before maturity.

- The potential requirement of the Board to propose a resolution to approve the continuation of the Company at future Annual General Meetings. As explained above, this is dependent upon the level of discount in the 90 days preceding the Company's financial year end and there is no requirement for such a resolution to be proposed at the Annual General Meeting.

- Regulatory or market changes.

- The level of the Company's ongoing charges.

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

In making its assessment, the Board has considered that there are other matters that could have an impact on the Company's prospects or viability in the future, including the current conflict in Ukraine, economic shocks, significant stock market volatility, and changes in regulation or investor sentiment.

Outlook

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

On behalf of the BoardDonald Workman Chairman16 August 2023

Promoting the Success of the Company

Introduction

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

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

The Purpose of the Company and Role of the Board

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

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

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

The Company's main stakeholders are shareholders (who are also the Company's 'customers'), the Manager (and Investment Manager), service providers, investee companies, the debt provider and, more broadly, the environment and community. 

How the Board Engages with Stakeholders

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

Specific Examples of Stakeholder Consideration During the Year

While the importance of giving due consideration to the Company's stakeholders is not a new requirement, and is considered during every Board decision, the Directors were particularly mindful of stakeholder considerations during the following decisions undertaken during the year ended 30 April 2023. Each of these decisions was made after taking into account the short and long terms benefits for stakeholders.

Portfolio

The Investment Manager's Review details the key investment decisions taken during the year. In the opinion of the Board, the performance of the investment portfolio is the key factor in determining the long term success of the Company. Accordingly, at each Board meeting the Directors discuss performance in detail with the Investment Manager. In addition, the Board considers how the Investment Manager incorporates ESG issues into its research and analysis work that forms part of the investment decision process.

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

Dividend

Since the year end, the Board has declared a second interim dividend in respect of the year ended 30 April 2023, of 3.3p per Ordinary share. Following payment of the second interim dividend on 8 September 2023, total dividends for the year will amount to 4.3p per Ordinary share, unchanged compared to the previous year.

Share Buy Backs

During the year the Company bought back 1,706,000 Ordinary shares to be held in treasury, providing a small accretion to the NAV per share and a degree of liquidity to the market at times when the discount to the NAV per share had widened in normal market conditions. It is the view of the Board that this policy is in the interest of all shareholders. 

Proposed Combination with Asia Dragon plc

As set out in more detail in the Charman's Statement, following the year end, on 21 July 2023, the Company announced a proposal for the Company to combine with Asia Dragon Trust plc ("Asia Dragon").  The combination, if approved by each company's shareholders, will be effected by way of a scheme of reconstruction and winding up of the Company under section 110 of the Insolvency Act 1986 and the associated transfer of part of the assets and undertaking of the Company to Asia Dragon in exchange for the issue of new ordinary shares in Asia Dragon (the "Scheme").

The Board believes a combination of the companies will create an enlarged vehicle that offers similar investment exposure for each set of shareholders while offering shareholders in the enlarged Asia Dragon (and therefore to Shareholders who roll into Asia Dragon) benefits that include greater secondary liquidity in Asia Dragon shares and cost efficiencies.

On behalf of the BoardDonald Workman Chairman16 August 2023

Performance

Performance (total return)

Ten Year Financial Record

Dividends

Investment Manager's Review

Market and Portfolio Review

Asia Pacific equities declined over the 12 months to 30 April 2023, amid the uncertainty that weighed on markets globally. A combination of higher inflation, accelerated by the ongoing conflict in Ukraine, tightening monetary policies, rising input costs and recent banking sector events in the West have sparked fears of a global economic recession. Against this backdrop, the Company's net asset value ("NAV") and share price, both in total returns terms, declined 6.8% and 7.3%, respectively, and lagged the benchmark, which declined by 5.2%. However, over the past three and five years, the Company's NAV and share price total returns have done better than the benchmark, highlighting the support from our high-quality holdings.

In terms of performance, the portfolio's direct exposure to China was the main detractor, which was partly offset by the position in Hong Kong. Chinese authorities announced an unexpected U-turn from their "zero-Covid" policy to a complete re-opening in late 2022. However, the negative impacts from prolonged lockdowns and regulatory pressures, especially on the property sector, could not be quickly undone. While many of the holdings in the portfolio, especially in the technology and consumer discretionary sectors, stand to benefit from the re-opening, we have yet to see corporate earnings increase meaningfully. To this end, gaming company Sands China was a key performer, being a direct beneficiary of the re-opening and easing travel restrictions. Its recent quarterly results were ahead of the market's expectations. Insurer AIA Group and beer company Budweiser Brewing added to returns amid a recovery in the Hong Kong market. We view both as high-quality exposures to China's growth.

The exposure to Chinese renewable energy companies was not beneficial to performance, with poor share price performances from Yunnan Energy New Material and LONGi Green Energy Technology, partly as investors chased opportunities from the re-opening. Yunnan's shares were volatile after an announcement of a probe into its chairman and vice chairman. We subsequently sold the position as our conviction in the company diminished. Having said that, on a positive note, the holding in Sungrow Power Supply was beneficial following robust results, especially in the most recent quarter. China's strained relations with the US was another aspect over the period that affected investor sentiment. Pharmaceutical company Wuxi Biologics, a company that has fundamentally performed well, detracted due to a series of regulatory hurdles where two of its subsidiaries were temporarily added by the US to a trade restriction list before being removed by the end of December.

Meanwhile, the Chinese government announced further supportive measures to help the property sector recovery and appears to be easing its regulatory scrutiny into technology companies. These changes, together with investors moving towards value, benefited technology companies later in the financial year. However, while technology companies, including Tencent, have started to benefit from the re-opening, online retailer JD.com underperformed due to concerns around slowing growth and high competition.

In terms of portfolio positioning and strategy, we added more positions in China over the year as we remain confident in the holdings and the turnaround potential post the re-opening, especially in the technology sector. We therefore added to several internet and consumer holdings such as Tencent and Kweichow Moutai that should benefit from an increase in consumer confidence and spending. In the healthcare sector, we initiated Aier Eye Hospital, China's largest domestic private eyecare hospital chain. Its demand is supported by the ageing population, rising living standards, and government policies to improve the accessibility and standards of drugs and healthcare. We also bought Chinese food delivery and local services app company Meituan Dianping, which we regard as a long-term growth story which should benefit from China's shift towards a service-driven economy and increasing online penetration. Against these additions to the portfolio, we exited the industrial automation business Shenzhen Inovance Technology. It is a highly cyclical business and felt the impact of a sharp drop in property construction, while rising raw material and freight costs weighed on its margins.

The portfolio's exposure to India, through the Aberdeen Standard SICAV I - Indian Equity Fund, did not do well this year, as the market was dominated by one conglomerate throughout the period - Adani Group. The Indian Equity Fund does not hold any Adani companies as we consider the group to be low quality, but this event had an impact on the market as a whole. 

Elsewhere, in Vietnam, the holding in Mobile World lagged the benchmark. In South Korea, LG Chem performed well as markets expect increased demand for its petrochemical business after China's re-opening. We think the momentum of its electric vehicle batteries business is attractive. The Australian holdings also benefited performance as mining companies such as BHP performed well, benefiting from the spike in commodity prices. During the year, we also received shares in the oil and gas company Woodside Energy from a corporate action.

The Company's holdings in the information technology ("IT") sector weighed on performance, driven in part by the market's negative sentiment towards the sector. The portfolio's positions in Taiwan Semiconductor Manufacturing Company ("TSMC") and Samsung Electronics lagged the benchmark, while the holding in ASML was beneficial. While ASML's shares rose in value due to a gradual improvement of the macroeconomic outlook and better visibility of the semiconductor cycle, an escalation of US-China tensions partly weighed on the share price performance. Over the year, we responded to the looming fears of a global recession and soft demand outlook for IT by reducing exposure to internet companies. We remain optimistic for a sector-wide turnaround within the next financial year and continue to gradually add back to the semi-conductor and hardware positions. Elsewhere, the consumer discretionary sector also weighed on performance due to relative weakness in consumer confidence and spending. However, as mentioned above, we expect a turnaround in consumption, especially with the re-opening in China.

Meanwhile, in the banking sector, the collapse of two US regional banks and the takeover of Credit Suisse by UBS in Europe raised concerns of contagion effects. However, the Company's holdings in Asians banks were not directly impacted by these events and remain well insulated, with strong balance sheets, while also benefiting from increasing net interest margins. On that note, Indonesia's Bank Central Asia and Oversea-Chinese Banking Corporation and DBS Group Holdings in Singapore contributed positively to performance. Meanwhile, we maintain the overweight and well-diversified exposure to the healthcare sector as we expect a turnaround in consumer spending to benefit those holdings.

Environmental, Social and Governance ("ESG")

ESG remains a core focus area as we continue to invest in high-quality companies. We are convinced that companies with strong ESG practices are more resilient, especially during turbulent times. To that end, we have invested in our resources to ensure we continue to identify strong stewards of ESG. For instance, when investing in Woodside Energy, we considered the effect of its decarbonisation strategy.

We frequently engage with investee companies to review their progress in ESG matters and ensure they meet our standards. For example, during the year we engaged with Tencent to better understand its policies and progresses around data security and privacy. Tencent provided a comprehensive multi-vector analysis of its data security and privacy management and noted the limited instances where data might be shared with the government and its protection policies around this process. Subsequently, we noted it had published several privacy and data security policies on its website, following our suggestions to improve disclosure. Tencent had also applied to become a United Nations Global Compact signatory, highlighting its commitment to ESG. Furthermore, it has removed the mandate to re-issue repurchased shares and reduced its general issuance mandate from 20% to 10%. It is also committed to achieving 30% female representation on its board by 2030, which we are monitoring.

Meanwhile, we continued our long-standing engagement with Samsung Electronics by attending its annual general meeting ("AGM") in person in Suwon, South Korea. While we had a one-to-one discussion with management ahead of the AGM to engage on agenda items and enhanced disclosures, the AGM provided an opportunity to meet the directors and show our support for the company's ongoing efforts to make progress on governance and disclosure.

Outlook

Investors continue to navigate uncertain times due to global macroeconomic challenges and geopolitical volatility. That said, inflation is more benign in Asia, especially in China, providing support to the region's economic health. Furthermore, Asian banks have not had any direct impact from the banking sector events in the US and Europe. While China remains a challenging market, we expect its re-opening to increase consumer confidence and consumption, as well as support Southeast Asian economies.

The technology sector would benefit from re-opening tailwinds and an increase in consumer spending. We think the technology cycle will bottom out in the near future and see the potential for a meaningful recovery in this calendar year. While there has been a lag of re-opening tailwinds translating into earnings growth, markets expect technology companies to produce higher earnings in the next financial year. Therefore, we are confident of the portfolio's sizable exposure to the sector and continue to add to companies with strong fundamentals and potential for outperformance. Elsewhere, we are optimistic that a surge in consumption would support the holdings in the consumer discretionary and healthcare sectors.

Within India, we expect the holdings in the commodities and financials sectors to benefit from cyclical tailwinds and policy support. In Australia, the inflationary effects on commodity prices should continue to help mining and energy companies, despite a challenging macroeconomic backdrop.

Amid the ongoing uncertainty, we believe our focus on investing in quality companies with solid fundamentals will prove beneficial over the long term and help your Company navigate challenging market conditions.

James Thom and Xin-Yao Ng abrdn Asia Limited16 August 2023

Principal Risks and Uncertainties

The Board carries out a regular review of the risk environment in which the Company operates, changes to the environment and individual risks. The Board also considers emerging risks which might affect the Company. During the year, the most significant emerging risks were inflation and rising interest rates and the resultant volatility that these factors created in global stock markets. In addition, the conflict in Ukraine and continued tensions between China and the USA have created geo-political uncertainties which have further increased market risk and volatility (see exogenous risks below). 

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

The principal and emerging risks and uncertainties faced by the Company are reviewed by the Audit and Risk Committee in the form of risk matrices. The principal risks and uncertainties facing the Company at the current time, together with a description of the mitigating actions the Board has taken, are set out in the table below.

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

Investment Portfolio

Changes in Asset Distribution

Directors' Report (extract)

The Directors present their report and the audited financial statements for the year ended 30 April 2023.

Results and Dividends

The financial statements for the year ended 30 April 2023 are contained below. A first interim dividend of 1.0p per Ordinary share was paid on 10 February 2023 and the Board has declared a second interim dividend in respect of the year ended 30 April 2023, of 3.3p per Ordinary share, payable on 8 September 2023 to shareholders on the register on 11 August 2023. The relevant ex-dividend date is 10 August 2023.

Investment Trust Status

The Company is registered as a public limited company (registered in England and Wales No. 02377879) and is an investment company within the meaning of Section 833 of the Companies Act 2006. The Company has been approved by HM Revenue & Customs as an investment trust subject to it continuing to meet the relevant eligibility conditions of Section 1158 of the Corporation Tax Act 2010 and the ongoing requirements of Part 2 Chapter 3 Statutory Instrument 2011/2999 for all financial years commencing on or after 1 May 2012. The Directors are of the opinion that the Company has conducted its affairs for the year ended 30 April 2023 so as to enable it to comply with the ongoing requirements for investment trust status.

Individual Savings Accounts

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

Capital Structure

The issued Ordinary share capital at 30 April 2023 consisted of 104,991,348 Ordinary shares of 5p and 7,874,351 shares held in treasury. During the year the Company purchased 1,706,000 Ordinary shares to be held in treasury and it cancelled 4,233,350 treasury shares. Since the end of the year, the Company has purchased a further 420,000 Ordinary shares to be held in treasury. At the date of approval of this Report there were 104,571,348 Ordinary shares of 5p in issue and 8,294,351 shares held in treasury.

Voting Rights

Each Ordinary shareholder is entitled to one vote on a show of hands at a general meeting of the Company and, on a poll, to one vote for every share held. The Ordinary shares, excluding treasury shares, carry a right to receive dividends. On a winding up or other return of capital, after meeting the liabilities of the Company, the surplus assets will be paid to Ordinary shareholders in proportion to their shareholdings.

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

Management Agreement

The Company has appointed abrdn Fund Managers Limited ("aFML"), a wholly owned subsidiary of abrdn plc, as its alternative investment fund manager. aFML has been appointed to provide investment management, risk management, administration and company secretarial services and promotional activities to the Company. The Company's portfolio is managed by abrdn Asia Limited ("abrdn Asia") by way of a group delegation agreement in place between aFML and abrdn Asia. In addition, aFML has sub-delegated promotional activities to abrdn Investments Limited and administration and company secretarial services to abrdn Holdings Limited. Details of the management fee during the year and fees payable for promotional activities are shown in notes 4 and 5 to the financial statements.

The management agreement is terminable on not less than 12 months' notice. In the event of termination by the Company on less than the agreed notice period, compensation is payable to the Manager in lieu of the unexpired notice period.

Substantial Interests

At 30 April 2023 the following interests in the issued Ordinary share capital of the Company had been disclosed in accordance with the requirements of the FCA's Disclosure Guidance and Transparency Rules.

A Non-beneficial interest

B Based on 104,991,348 Ordinary shares in issue as at 30 April 2023

Since the end of the year, City of London Investment Management Company Limited has notified the Company of a holding of 28,258,791 Ordinary shares (27.0%). There have been no other changes notified to the Company as at the date of approval of this Report.

Corporate Governance

The Company is committed to high standards of corporate governance. The Board is accountable to the Company's shareholders for good governance and this statement describes how the Company has applied the principles identified in the UK Corporate Governance Code as published in July 2018 (the "UK Code"), which is available on the Financial Reporting Council's (the "FRC") website: frc.org.uk.

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

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

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

The UK Code includes provisions relating to:

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

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

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

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

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

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

Directors

Throughout the year, the Board comprised five Directors, consisting of a non-executive Chairman and four non-executive Directors. All Directors, with the exception of Mr Young, are considered by the Board to be independent and free of any material relationship with the abrdn Group. Mr Young is a director of various entities connected with, or within, the abrdn Group and, as such, is not considered to be independent.

The Directors attended scheduled Board and Committee meetings during the year ended 30 April 2023 as shown in the table below (with their eligibility to attend the relevant meeting in brackets).

The Board meets more frequently when business needs require. There were four such additional Board and Board Committee meetings held during the year.

The Company's Articles of Association require that Directors must retire and be subject to election at the first Annual General Meeting after their appointment, and that one third of the Directors retire by rotation at each Annual General Meeting, and that any Director who was not elected or re-elected at one of the preceding two Annual General Meetings also retires by rotation at the Annual General Meeting. However, the Board has decided that, notwithstanding the provisions of the Articles of Association, all Directors will retire at each Annual General Meeting and, if eligible, may seek re-election.

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

Mr Young was appointed as a Director in May 1989 and, as stated above, is not independent due to his involvement with various entities within the abrdn Group. Mr Young has significant experience of markets in the Asia Pacific region and provides invaluable input to Board discussions.

Board's Policy on Tenure

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

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

The Role of the Chairman and Senior Independent Director

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

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

Directors' and Officers' Liability Insurance

The Company's Articles of Association indemnify each of the Directors out of the assets of the Company against any liabilities incurred by them as a Director of the Company in defending proceedings, or in connection with any application to the Court in which relief is granted. In addition, the Company has entered into separate deeds of indemnity with each of the Directors, reflecting the scope of the indemnity in the Articles. Directors' and Officers' liability insurance cover has been maintained throughout the year at the expense of the Company.

Management of Conflicts of Interest

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

No Director has a service contract with the Company although all Directors are issued with letters of appointment. Other than Mr Young, and the deeds of indemnity referred to above, there were no contracts during, or at the end of the year, in which any Director was interested.

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

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

Board Diversity

The Board recognises the importance of having a range of skilled and experienced individuals with the right knowledge represented on the Board in order to allow it to fulfil its obligations. The Board also recognises the benefits and is supportive of the principle of diversity in its recruitment of new Board members. The Board will not display any bias for age, gender, race, sexual orientation, socio-economic background, religion, ethnic or national origins or disability in considering the appointment of its Directors. In view of its size, the Board will continue to ensure that all appointments are made on the basis of merit against the specification prepared for each appointment. In doing so, the Board will take account of the targets set out in the FCA's Listing Rules, which are set out in the tables below.

The Board has resolved that the Company's year end date is the most appropriate date for disclosure purposes. The following information has been provided by each Director through the completion of questionnaires. There have been no changes since the year end.

Board Gender as at 30 April 2023

Board Ethnic Background as at 30 April 2023

Notes:

1. Meets target of at least 40% as set out in LR 9.8.6R (9)(a)(i)

2. Meets target of at least 1 as set out in LR 9.8.6R (9)(a)(iii)

3. This column is inapplicable as the Company is externally managed and does not have executive management functions, specifically it does not have a CEO or CFO. The Company considers that the role of Chairman, Senior Independent Director ("SID"), and the chairmen of the Audit and Risk Committee, Nomination Committee and Management Engagement Committee are senior positions. Of these five senior roles, four are performed by men and one by a women, and all five are held by Directors classified as 'White British or other White (including minority-white groups)'.

Going Concern

As set out in more detail in the Charman's Statement, it is proposed that the Company combines with Asia Dragon Trust plc ("Asia Dragon").  The combination, if approved by each company's shareholders, will be effected by way of a scheme of reconstruction and winding up of the Company under section 110 of the Insolvency Act 1986 and the associated transfer of part of the assets and undertaking of the Company to Asia Dragon in exchange for the issue of new ordinary shares in Asia Dragon (the "Scheme"). The outcome of the general meetings to make the Scheme effective represents a material uncertainty which may cast significant doubt on the Company's ability to continue as a going concern.

Notwithstanding this material uncertainty, the Board has concluded that it remains appropriate to continue to prepare the financial statements on a going concern basis. In reaching this conclusion, the Board has come to the view that, as the Scheme is contingent on shareholder approval and the Company is considered solvent in all other regards, there is no irrevocable path to liquidation and thus going concern remains the most appropriate basis for preparation. In reaching this conclusion, the Board has also given due consideration to the risks associated with the Scheme.

The Board has also given consideration to the liquidity of the investment portfolio. The Company's assets consist substantially of equity shares in companies listed on recognised stock exchanges and in most circumstances are realisable within a short timescale. The Board regularly reviews income and expenditure projections and has set limits for borrowing and reviews compliance with banking covenants, including the headroom available.

At the year end, the Company's borrowing facilities amounted to £40 million, comprising a fixed rate loan of £20 million, which matures in December 2023, and a £20 million multi-currency revolving loan facility maturing in June 2024. In the event of the Company being unable to renew the facilities on their maturity, it is anticipated that they would be repaid from proceeds of investment sales.

In considering the going concern basis of accounting, the Directors have also taken into account the potential requirement of the Board to propose a resolution to approve the continuation of the Company at future Annual General Meetings. As explained under "Duration" above, this is dependent upon the level of discount in the 90 days preceding the Company's financial year end and there is no requirement for such a resolution to be proposed at the Annual General Meeting . 

Accountability and Audit

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

Financial Instruments

The financial risk management objectives and policies arising from financial instruments and the exposure of the Company to risk are disclosed in note 17 to the financial statements.

Relations with Shareholders

The Directors place a great deal of importance on communication with shareholders. Shareholders and investors may obtain up to date information on the Company through its website and the Manager's Customer Services Department (see Contact Addresses). 

The Board's policy is to communicate directly with shareholders and their representative bodies without the involvement of the management group (including the Company Secretary or the Manager) in situations where direct communication is required, and representatives from the Board and Manager meet with major shareholders on at least an annual basis in order to gauge their views. In addition, the Company Secretary only acts on behalf of the Board, not the Manager, and there is no filtering of communication.

At each Board meeting the Board receives full details of any communication from shareholders to which the Chairman responds personally as appropriate.

The Company has adopted a nominee code which ensures that, when shares in the Company are held in the name of nominee companies and notification has been received in advance, nominee companies will be provided with copies of shareholder communications for distribution to their investors. Nominee investors may attend and speak at general meetings.

Participants in the abrdn Investment Plan for Children, Investment Trust Share Plan and Investment Trust ISA, whose shares are held in the nominee name of the plan administrator, are given the opportunity to vote at general meetings of the Company by means of a Letter of Direction provided to them. When forwarded to the plan administrator, the voting instructions given in the Letter of Direction will in turn be reflected in the proxy votes lodged by the plan administrator.

Share Buy Backs

The Company bought back 1,706,000 Ordinary shares during the year ended 30 April 2023, representing 1.6% of the issued share capital, with the aim of providing a degree of liquidity to the market at times when the discount to the net asset value per share has widened in normal market conditions. It is the view of the Board that the Company's share buy back policy is in the interests of all shareholders. The Board closely monitors the discount and reviews the operation of the share buy back policy at each Board meeting as well as considering other options for managing the discount.

Treasury Shares

As part of its liquidity management policy, the Company currently has powers to buy back its own shares at a discount to the net asset value per share and to hold them in treasury (instead of cancelling them) as well as to sell treasury shares at a premium to the net asset valueper share. 

It is the Company's policy that, in the event that the number of treasury shares represents more than 10% of the Company's issued share capital (excluding treasury shares) at the end of any financial year, the Company will cancel a proportion of its treasury shares such that the remaining balance will equal 7.5% of the issued share capital (excluding treasury shares). Accordingly, 4,233,350 treasury shares were cancelled on 30 April 2023. Shares remaining in treasury may be held indefinitely. No dividends will be paid on treasury shares, and no voting rights attach to them. No treasury shares were cancelled during the year.

By order of the Boardabrdn Holdings Limited Company Secretary16 August 2023

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors 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 Republicof 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 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 the 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 Statement of Corporate Governance that comply with that law and those regulations. 

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

The Board confirms that to the best of its 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;

- the Strategic Report and Directors' Report include a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces; and 

- the Annual Report and financial statements 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.

On behalf of the BoardDonald Workman Chairman16 August 2023

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

For the year ended 30 April 2023