Dunedin Inc. Regulatory News (DIG)

DUNEDIN INCOME GROWTH INVESTMENT TRUST PLC

Legal Entity Identifier (LEI): 549300PPXLZPR5JTL763

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 JANUARY 2022

Investment Objective

The Company's objective is to achieve growth of income and capital from a portfolio invested mainly in companies listed or quoted in the United Kingdom that meet the Company's sustainable and responsible investing criteria as set by the Board.

Benchmark

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

Management

The Company's Manager is Aberdeen Standard Fund Managers Limited ("ASFML", the "AIFM" or the "Manager") which has delegated the investment management of the Company to Aberdeen Asset Managers Limited ("AAML" or the "Investment Manager"). Both companies are wholly owned subsidiaries of abrdn plc.

COMPANY OVERVIEW - FINANCIAL HIGHLIGHTS

For further information, please contact:

William Hemmings

Aberdeen Standard Fund Managers Limited

0207 463 6223

Luke Mason

Aberdeen Standard Fund Managers Limited

0207 463 5971

Financial Highlights

CHAIRMAN'S STATMENT

Performance

In the year ended 31 January 2022, your company delivered a positive absolute return but a weak relative outcome in what was a strong year for UK equities. The Company's net asset value ("NAV") increased by 8.1% on a total return basis, underperforming the FTSE All-Share Index which produced a total return of 18.9%. The share price total return for the year of 12.5% exceeded the NAV total return, reflecting a move from a discount to NAV to a small premium at the end of the year.

After a number of years of strong relative investment performance, this year, and particularly the second half of the financial year, brought a much more challenging investment environment for your Investment Manager's approach. Shareholders will recall that, at the interim stage, NAV performance was behind the benchmark but only by 1.5%. Since then, the changes in stock market trends have been marked. Large capitalisation companies whose share prices were viewed as standing at a discount to their underlying valuations, sometimes referred to as value stocks, benefitted from an increase in share prices as economies bounced back from the receding impact of the pandemic and from increasing interest rate expectations. This type of rotation in markets, as companies with certain characteristics move into favour having previously languished, is not uncommon, but was particularly significant this year. The types of companies that benefitted from this recent style rotation were precisely the types of companies the Investment Manager has made a very deliberate decision to not invest in over recent years.

While the total return performance this year is disappointing, it is important to note that the longer term performance remains sound. The NAV total return of the Company is ahead of our benchmark over three and five years and the Company's shares traded at a small premium to the NAV at the end of the year. Encouragingly, dividends from the portfolio holdings have rebounded more sharply than we expected, driving a significant uplift in the revenue return per share.

A major change during the reporting period was the change to the investment objective to formally incorporate sustainable and responsible investment principles which was approved by shareholders at the AGM in June. The required changes to the portfolio have been implemented and, on an underlying basis, the portfolio has continued to evolve over the year in line with our strategy to create a more active, better quality and higher growth investment proposition.

The Board believes that this continues to position your company to deliver both faster dividend growth and enhanced risk adjusted capital performance as well as providing greater differentiation from its peers and widening its investor base. The move to the Company's shares trading at a premium to the NAV during the year is, we believe, a continued recognition that the strategy we have pursued will benefit shareholders over the long term.

Earnings

Shareholders may recall that, in the previous financial year, our income declined by 10.6% relative to a fall in income from the companies within the FTSE All-Share Index of over 30%. It is pleasing therefore to report that the portfolio's income generation recovered strongly after falling much less than the market during the pandemic. Income increased by 17.3% during the year, reflecting a rebound in dividend distributions following the pandemic affected year of 2020/21, where a number of companies suspended or cut their dividends, as well as healthy underlying income growth from the portfolio and the receipt of special dividends. At the bottom line, the revenue return per share increased by a slightly higher amount, up by 18.1%, taking it back to above the pre-pandemic level and an all-time high of 12.87p.

Dividend

Having paid three quarterly dividends of 3.0p per share, we are proposing a final dividend of 3.9p per share. This will make a total dividend of 12.9p per share for the year, an increase of 0.8% on last year. This will be the 38th year out of the past 42 that the Company has grown its dividend, with the distribution maintained in the otherfour years.

Following payment of the final dividend, we will have utilised 0.03p of the Company's revenue reserves, meaning that 9.05p per share will be available to support future distributions, representing 70% of the current annual dividend cost.

Over the past six years your Investment Manager has been reducing the Company's dependence on higher yielding, lower growth companies and enhancing the Company's longer term potential for both faster dividend growth and better capital performance. That strategic shift has been completed. The Company delivered a record level of earnings per share during the year and, although the rate of dividend increase for the year lags the rate of inflation, the increased dividend of 12.9p per share represents a yield of 4.2% based on the share price of 310.0p at the end of the year, compared to a notional yield of 3.0% from the FTSE All-Share Index. Our distribution policy remains to grow the dividend faster than inflation over the medium term and, with the Company's robust revenue reserves and the healthy underlying dividend growth of the companies within the portfolio, we believe that the policy remains well supported, although its delivery may prove more challenging if inflation remains persistently high.

Market Background

After the remarkable economic, market and social developments in 2020/21, 2021/22 proved to be a somewhat less turbulent year for markets and UK equities delivered a very strong return both in absolute terms and relative to other major markets. After a number of years of poor performance for the UK market, it is pleasing to see such a rebound in sentiment.

2021 saw a general global narrative of economic recovery combined with societies gradually re-opening from the pandemic. While the potential threat of vaccine immunity from the Omicron strain of Covid-19 temporarily roiled markets in November, fortunately its impact has been relatively less significant than some of the earlier waves of the virus and we may be hopeful that the worst of the pandemic is behind us.

Overall, though, it was a year of strong economic growth as economies benefitted from the annualisation effect from the year before, the residual impact of government stimulus and still loose monetary policy conditions.

As we moved through the period, sustained inflationary pressures, most notably in the United States, but developing across much of the global economy, started to shift the tone and actions from central banks. In the UK, in December, the Bank of England became the first G7 central bank to raise interest rates and the last two months of the financial year saw a significant increase in expectations for the level of short term interest rates across major economies. We also saw longer term real bond yields move sharply upwards. The combined effect of this was to trigger the very significant rotation of capital out of more highly valued companies in sectors such as Technology, Healthcare and Consumer Goods into cheaper sectors, particularly those deemed to be gaining additional earnings support from higher inflation and higher interest rates, such as Banks, Energy and Mining, as referred to earlier.

At the year-end, we had not yet seen the Russian invasion of Ukraine, above all a human tragedy, which has had a terrible impact on the people of that country. The impact on global economies and stock markets is likely to be felt for many years to come. In the immediate aftermath, commodity prices have soared and equities have fallen, with investors looking to add both classically defensive assets and also inflation hedges. At this early stage, the implications are unclear, but we can say with some certainty that inflation is now likely to be much higher and more sustained and that economic growth is likely to be more constrained, particularly in Europe, but exactly how substantial the impact on growth will be remains uncertain. How central banks react will also be key as will the actions on fiscal policy from governments. However, a year that many forecasters were expecting to be another one of strong global growth is certainly likely to be a good deal more volatile than had been expected.

While events in Ukraine and the growing energy crisis in Europe are seen by some commentators as a clear signal of the folly of focusing on environmental, social and governance ("ESG") factors, we believe that, in stark contrast, such events will actually intensify investor focus on all elements related to ESG. While many energy-related companies may continue to perform well in the short and perhaps medium term, and governments may face pressure to revisit their policies on addressing the energy transition, we believe that the war in Ukraine has highlighted a growing realisation that accelerating the provision of lower carbon energy sources, energy efficiency and energy security go hand in hand. Likewise, in terms of social elements, the pressure on companies to act in a way deemed socially, morally and politically responsible has been unprecedented. From a governance perspective, the importance of investors aligning with the right governments, regulators and owners again cannot be clearer. A clear appreciation of the risks to companies from poor management of ESG risks and an understanding of the potential opportunities has never been more important. As we stated at the time, we put the changes to our objective to shareholders, this focus on ESG risks was a longer-term development, which was both a natural evolution of our strategy, and an approach that would improve the risk-return characteristics of the portfolio, and its ability to deliver dependable dividends to shareholders.

Gearing

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

The Company currently employs two sources of gearing. The £30 million loan notes maturing in 2045, and a £30 million multi-currency revolving credit facility that was renegotiated during this financial year and expires in July 2023. Under the terms of the facility, the Company has the option to increase the level of the commitment from £30 million to £40 million at any time, subject to the lender's credit approval. A Sterling equivalent of £13.0 million was drawn down at the year end.

With debt valued at par, the Company's net gearing decreased from 8.8% to 8.4% during the year. The Board believes this remains a relatively conservative level of gearing and, with part of the revolving credit facility undrawn, this provides the Company with financial flexibility should opportunities to deploy additionalcapital arise.

Discount

The price of the Company's shares relative to the NAV moved over the course of the year from a discount of 3.57% at the beginning of the year to a small premium of 0.31% as at 31 January 2022 (on an ex-income basis with borrowings stated at fair value).

During this time no shares were bought back or issued although, subsequent to the year-end, the Company has issued 100,000 shares from treasury at a premium to the NAV per share.

As stated above, the Board believes that the successful implementation by the Investment Manager of the investment strategy should enhance the Company's longer-term potential for improved performance. We have seen a re-rating of the shares and the Board believes a consistent rating of the Company's shares close to the underlying asset value is of significant benefit to shareholders.

As in previous years, we will seek shareholders' permission at the forthcoming AGM to buy back shares and issue new shares.

Annual General Meeting and Online Shareholder Presentation

AGM

The AGM will be held at 12 noon on 24 May 2022 at the offices of abrdn plc, Bow Bells House, 1 Bread Street, London EC4M 9HH. The meeting will include a presentation from the Investment Manager and will be followed by lunch.

Given the evolving nature of the Covid-19 pandemic, should circumstances change significantly, rendering an in-person AGM inadvisable or not permissible, we will notify shareholders of any changes to the arrangements by updating the Company's website, dunedinincomegrowth.co.uk, and through a stock exchange announcement, where appropriate, with as much notice as possible.

Online Shareholder Presentation

In order to encourage as much interaction as possible with our shareholders, and especially for those who are unable to attend the AGM, we will also be hosting an Online Shareholder Presentation, which will be held at 10.00 am on 16 May 2022. At this event you will receive a presentation from the Investment Manager and have the opportunity to ask live questions of the Chairman and the Investment Manager. The online presentation is being held ahead of the AGM to allow shareholders to submit their proxy votes prior to the meeting.

Full details on how to register for the online event can be found at: www.workcast.com/register?cpak=7925691640699593

Details are also contained on the Company's website.

Should you be unable to attend the online event, the Investment Manager's presentation will be made available on the Company's website shortly after the presentation.

Outlook

Over the past six years, the Company has undergone a significant shift in its portfolio to focus more on total return and dividend growth and adjusted its mandate to formally incorporate a greater focus on sustainability. While this financial year, and particularly the second half of it, has been a difficult period for relative performance, the Board believes that this is the right strategy to deliver earnings and dividend growth over the longer term. The volatile economic and political environment that has been unleashed by the conflict in Ukraine should further support a focus on resilience.

It is likely that continued outperformance from commodity-related sectors will prove to be a headwind to relative performance given the scale of those sectors within the UK equity market and the challenge of gaining exposure, given the Company's focus on both higher quality companies and sustainability. Against this very complex backdrop, the Investment Manager's focus on investing in companies with pricing power, strong balance sheets and with greater exposure to structural rather than cyclical growth should offer greater resilience in both capital and income generation. The Company's track record over the past five years adopting this strategy is very creditable.

We cannot predict when a semblance of normality will return to markets and economies, but the Board is confident that the Company is well-positioned to deliver relative total return outperformance over the medium and long term which, combined with the portfolio's income growth potential, should enable the Company's shares to continue to trade close to NAV.

David BarronChairman6 April 2022

Overview of Strategy

Business

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

Investment Objective

The Company's objective is to achieve growth of income and capital from a portfolio invested mainly in companies listed or quoted in the United Kingdom that meet the Company's sustainable and responsible investing criteria as set by the Board.

Investment Policy

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

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

Risk Diversification

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

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

Gearing

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

Delivering the Investment Objective

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

Benchmark

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

Promoting the Success of the Company

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

Key Performance Indicators ("KPIs")

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

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 risk was the continuing impact of the Covid-19 pandemic and its implications for the future economic outlook.

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

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

The principal risks and uncertainties facing the Company at the current time, together with a description of the mitigating actions the Board has taken, are set out in the table below.

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

Promotional Activities

The Board recognises the importance of promoting the Company to prospective investors both for improving liquidity and enhancing the rating of the Company's shares. The Board believes one effective way to achieve this is through subscription to, and participation in, the promotional programme run by abrdn on behalf of a number of investment trusts under its management. The Company's financial contribution to the programme is matched by the Manager. The Company also supports the Manager's investor relations programme which involves regional roadshows, promotional and public relations campaigns. During the Covid-19 pandemic, a number of events that are usually held physically were substituted with virtual events. The Manager's promotional and investor relations teams report to the Board on a quarterly basis giving analysis of the promotional activities as well as updates on the shareholder register and any changes in the make-up of that register.

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

Board Diversity Policy

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

At 31 January 2022, there were three male and two female Directors on the Board.

Environmental, Social and Human Rights Issues

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

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.

Viability Statement

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

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

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

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

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

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

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

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

- Current and future market conditions caused by the Covid-19 pandemic, including implications for the operational activities of the Company and the ability of key third party suppliers to continue to provide essential services to the Company.

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

Outlook

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

On behalf of the BoardDavid BarronChairman6 April 2022

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 the likely long term consequences of decisions, the need to foster relationships with all stakeholders and the impact of the Company's operations on the environment.

The Purpose of the Company and Role of the Board

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

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

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

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

How the Board Engages with Stakeholders

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

Further details are included in the table below.

Specific Examples of Stakeholder Consideration During the Year

While the importance of giving due consideration to the Company's stakeholders is not a new requirement, and is considered during every Board decision, the Directors were particularly mindful of stakeholder considerations during the following decisions undertaken during the year ended 31 January 2022. Each of these decisions was made after taking into account the short and long term benefits for stakeholders.

Investment Objective and Portfolio

On 10 June 2021, shareholders voted at the Annual General Meeting to approve the change of investment objective "to achieve growth of income and capital from a portfolio invested mainly in companies listed or quoted in the United Kingdom that meet the Company's sustainable and responsible investing criteria as set by the Board". The Board believes very strongly that this change will allow the Company to continue its focus on generating both income and capital growth while being better prepared to meet the significant environmental and social challenges ahead, as well as further increasing its potential attraction to a wider audience of potential investors.

During the year, the Investment Manager continued to execute the Board's investment strategy of focussing on businesses of higher quality whilst balancing both income and capital growth potential. The portfolio continues to exhibit strong quality characteristics, while retaining a premium yield to, and superior dividend growth to, the market. At the same time, the Company's portfolio has high active share reflecting a differentiated approach to the wider index. Following the Annual General Meeting in June 2021, the process of implementing the changes to the portfolio consistent with the adoption of the Board's sustainable and responsible investment criteria was completed.

Dividend

Following the payment of the final dividend for the year, of 3.90p per Ordinary share, total dividends for the year will amount to 12.90p per Ordinary share. This represents an increase of 0.78% compared to the previous year and compares to the rate of inflation of 4.9% for the 12 month period to 31 January 2022 as measured by the Consumer Price Index. This will be the 38th year out of the past 42 that the Company has grown its dividend, with the distribution maintained in the other four years, and is in accordance with its policy to grow total annual dividends in real terms over the medium term.

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

Bank Borrowings

During the year, the Company entered in to a £30 million multi-currency revolving credit facility with The Bank of Nova Scotia, London Branch (with the option to increase the level of commitment to £40 million, subject to the lender's credit approval).

This facility replaced the expiring £15 million revolving credit facility with Scotiabank (Ireland) Designated Activity Company and is for a period of two years to 13 July 2023.

Following this change, the Company's committed borrowing facilities amount to £60 million in aggregate, comprising the £30 million multi-currency revolving credit facility and the £30 million loan notes maturing in 2045. The Board believes that the modest use of gearing by the Company is of long term benefit to shareholders.

Directorate

As explained in the Directors' Report, following a formal recruitment process, the Board decided to appoint Ms Gay Collins as an independent Director on 1 July 2021 following the retirement of Ms Elisabeth Scott from the Board at the Annual General Meeting on 10 June 2021. New appointments seek to achieve a good balance of skills, experience, gender and ethnicity, reflecting the objectives of the Company.

The Board believes that shareholders' interests are best served by ensuring a smooth and orderly refreshment of the Board which serves to provide continuity and maintain the Board's open and collegiate style.

Online Shareholder Presentation

To encourage and promote stronger interaction and engagement with the Company's shareholders, the Board will hold an interactive online shareholder presentation which will be held at 12 noon on Monday 16 May 2022. At the presentation, shareholders will receive updates from the Chairman and Investment Manager and there will be the opportunity for an interactive question and answer session. The online presentation is being held ahead of the Annual General Meeting to allow shareholders to submit their proxy votes prior to the meeting.

On behalf of the BoardDavid BarronChairman6 April 2022

Performance

Performance (total return)

Analysis of Total Return Performance for the year ended 31 January 2022

Ten Year Financial Record

Dividends per Share

Investment Manager's Review

Introduction

After several years of strong relative performance, it is disappointing to report that, for the year ended 31 January 2022, the Company's returns lagged the benchmark FTSE All-Share Index. The net asset value total return for the year of 8.1% compared to a total return of 18.9% from the benchmark. It was a year where our style and strategy faced a number of headwinds and several of our holdings found themselves out of favour with investors. Our strategy of building a concentrated portfolio and being willing to be different to both the benchmark and peers does mean that there can be periods where our returns may differ markedly from either. Most of the time, we would expect that difference to express itself in a positive way but, unfortunately, for the year under review, that was not the case. Importantly, though, we consider the portfolio to be in good shape with our focus on higher quality companies, an emphasis on investments that can deliver both income and capital growth, as well as the application of sustainable and responsible investing principles, positioning us to be able to cope with what may be difficult market conditions ahead.

Total return performance notwithstanding, it was a year where there were a number of important strategic and financial developments. The implementation of the sustainable and responsible investment criteria was completed, positioning the Company uniquely amongst its peer group, while maintaining the cadence of dividend receipts. The portfolio continued to focus on delivering growth of both capital and income in a differentiated fashion with active share standing at 81% and more than half the portfolio invested outside the FTSE 100 Index. As a result, income generation came in ahead of our expectations hitting record levels and the discount to net asset value at which the Company's shares have traded for many years moved to a modest premium.

Performance

Despite a challenging year for relative investment performance, the underlying profit and dividend generation from the companies we invest in has continued to be encouraging. This was reflected in the earnings per share more than recovering to the level achieved before the pandemic and indeed setting a new all-time high in the process. Whilst this outcome was somewhat flattered by the very substantial special dividend received from Rio Tinto, the underlying income generation was ahead of our expectations. It is worth noting that this rebound comes from a portfolio that had proven to be very resilient in the tough conditions of 2020/21 and therefore inherently offering less 'rebound' potential than others that took greater cuts to their income account. Indeed, the main performance challenge we faced for our holdings has been a reduction in the prices that the market is willing to pay for those businesses, as opposed to any aggregate impact on their cash flow, earnings and dividend generation capacity.

From a relative return perspective, this was very much a year of two halves. In the first half of the year we only slightly trailed what was a strongly rising market. But as the second half developed, particularly in the final quarter, the portfolio increasingly lagged the wider index. This was due to a combination of effects. Firstly, higher commodity prices saw oil and gas and mining stocks perform very strongly, areas to which we typically find it hard to gain direct exposure to given our focus on high quality businesses and the application of our sustainable investment criteria. Alongside this, the anticipation of rising interest rates was received very positively for the banking sector and in particular large UK and Asian retail banks with significant deposit funding bases. Once again, we have chosen to invest away from that area due to our preference for investments with a higher degree of visibility and stability and more dependable dividend distribution track records. Not owning the likes of large index constituents such as BP, Shell, HSBC, Lloyds, Barclays, Glencore and Anglo American all proved a significant relative headwind as those companies performed very strongly over the year. It is worth noting that all of these businesses suspended, cancelled or cut dividends in 2020.

The same effect of rising short term interest rates and longer term bond yields that supported the outperformance of the banks also provided a further headwind to our performance in that it catalysed a reduction in the valuation of a number of our holdings as investors shifted capital away from more expensive companies and allocated towards companies trading on lower valuations. This "rotation", as it is termed, was particularly strong given the improving earnings dynamics for those cheaper businesses in areas like commodities and banking. Companies such as Aveva and Edenred, which have been tremendous long-term investments for the Company, all underperformed as investor attention moved elsewhere, despite solid operational and financial delivery. We estimate that around three quarters of the underperformance of the portfolio was driven by these stylistic and strategy related elements.

Alongside these impacts there were some stock specific elements where companies, for a variety of reasons, faced more difficult trading conditions. Ubisoft, the French computer game developer, reduced its profit guidance over the year as it faced a series of delays to the launch of its new releases and a generally less buoyant environment as economies opened up and demand for its products faced tougher comparatives. While this has been disappointing, the elements in the investment case that we have been backing over the last three years remain very much intact with a transition to more recurring revenues at higher margins as the company sells more digital content and better monetises its game franchises and back catalogue. The industry backdrop has also developed favourably, with content becoming ever more important, followed by a wave of consolidation which we think underpins the value of its intellectual property.

UK housebuilder Persimmon faced headwinds following the threat of government intervention over the cost of remediating defective cladding for apartment blocks. We still think the company is well positioned to manage this given a significant focus on house building as opposed to the construction of flats. From an earnings perspective, we expect that it can grow volumes steadily at reasonable margins in a market that remains constrained from a supply perspective. Remediation should be more than manageable financially given the company's very strong balance sheet and we expect that it will continue to return excess cash flow to shareholders.

Emerging market credit fund manager Ashmore found itself under pressure as rising interest rates pressured bond valuations, emerging markets remained out of favour and the company's own internal investment performance has been difficult. The business is anchored by a very strong balance sheet, an attractive dividend and a clear area of strategic expertise, but we do await signs of underlying operational improvement.

In a period of difficult performance, it is easy to overlook what were a number of very positive share price developments within the portfolio, rewarding companies for very strong operational delivery which will ultimately translate through into enhanced cash flows and dividends. Danish pharmaceutical company Novo-Nordisk performed extremely strongly as it benefitted from continued strong demand for its GLP1 diabetes products. The company also made a significant breakthrough in the treatment of obesity with its drug Wegovy, which for the first time gives the potential for major weight loss with a course of injections, avoiding the need for very expensive and intrusive surgical procedures and holding the hope of being able to make a real impact on the effects of co-morbidities such as heart disease and cancer. UK speciality chemicals business Croda performed well as it saw very fast uptake for its pharmaceutical products that form an integral part of the Pfizer Covid vaccine, providing a vital link in the provision of these critical medicines. The company also announced a sale of its more commoditised and lower margin industrial business which improves the business overall and provides capital for reinvestment into higher margin and faster growing areas. French energy giant TotalEnergies also performed well as it benefited from higher oil and gas prices, particularly from its leading LNG business, while continuing to grow its renewables portfolio and execute on cost and capital efficiency. These three strong share price performances were also accompanied with the delivery of dividend growth ahead of our expectations.

From a strategic perspective, it was pleasing to see a strong overall contribution to performance from our overseas holdings. It is also welcome that we saw strong returns from companies we deem to be sustainable solutions providers or sustainable leaders. Alongside Novo-Nordisk and Croda we also saw good outcomes from companies such as renewables and energy infrastructure developer and owner SSE, Dutch lithography machine manufacturer ASML and immunotherapy leader AstraZeneca. These examples show that positive allocation to companies with leadership in ESG risk management and those well aligned with the UN sustainable development goals can add value to investors prepared to back them.

Portfolio Activity

Activity during the year was concentrated on three discrete objectives. Firstly, positioning the portfolio to meet the new sustainable and responsible investing criteria, secondly enhancing the underlying income growth profile, and thirdly continuing to concentrate the portfolio around our favoured investments.

Following the approval in June from shareholders for the Company to adopt its sustainable and responsible investing criteria, positions in Rio Tinto, BHP Billiton, British American Tobacco, National Grid and Telecom Plus were sold. Rio Tinto and Telecom Plus failed on our assessment of their ESG risk management, BHP due to its thermal coal assets, British American Tobacco due to its tobacco exposure and National Grid due to the carbon intensity of its generation assets in North America. New holdings were established in Scandinavian bank Nordea, truck and construction equipment manufacturer Volvo and UK housebuilder Persimmon. We also substantially increased our holding in utility and renewables developer SSE and added to the position in Chesnara, the consolidator of closed life assurance assets. To help balance the impact on income generation, we also exited Countryside Properties, the UK housebuilder which had yet to resume dividend payments following the impact of the pandemic.

Later on in the financial year, we added additional capital to industrial software developer Aveva, animal pharmaceutical and biotech players Dechra Pharmaceuticals and Genus and the hobbyist platform Games Workshop on weakness, as investors sold out of more highly valued stocks. These are all strong businesses with modest dividend yields today but with attractive long-term growth prospects ahead of them and contribute to the Company's income growth prospects. We have also been continuing to concentrate the portfolio behind our very best ideas and, as a result, we made significant additions to existing holdings in Relx, Diageo and Assura as we looked to increase the capital invested in companies with resilience and higher visibility of earnings amidst an increasingly uncertain backdrop. To fund these investments, we exited Dutch brewer Heineken, travel and high street retailer WH Smith, Asian bank Standard Chartered and medical device manufacturer Smith & Nephew. These are all good businesses, but we preferred the prospects of our other existing holdings. One final exit was that of Jackson Financial, the very small spin-out holding we received from Prudential. This saw the number of companies held in the portfolio contract, to stand at 39 at the year end.

Unilever remains a holding very much in the spotlight, particularly following its failed acquisition of GlaxoSmithKline's consumer health business and continued middling financial performance. We added modestly to the position following the weakness in the share price and the more attractive valuation and it is one that we will continue to monitor. The holding balances some strong brands and provides attractive exposure to emerging markets with a less premium portfolio than some peers and greater exposure to the lower margin food segment.

Outlook

We have had a cautious outlook for some time and events in Ukraine do little to dissuade us from that position. The environment of high inflation, slowing growth and tightening monetary policy is likely to prove a challenging one. At the company level, profitability is being pressured by supply chain disruptions and higher costs, while weakening demand may make for a harder environment to pass on prices. This makes for a complex situation to navigate with both valuations and earnings potentially under pressure. We believe that our focus on holding high quality businesses with robust market positions, good growth prospects and strong balance sheets along with leading ESG risk management capabilities is the right one for these uncertain conditions. Giving us the best prospects of protecting capital on the downside, allowing participation in any upside that may develop and supporting the delivery of a growing dividend over time.

Ben Ritchie, Rebecca Maclean and Samantha Brownlee,Aberdeen Asset Managers Limited6 April 2022

Ten Largest Investments

As at 31 January 2022

Portfolio

Sector Analysis

Investment Case Studies

Sustainable Leader: Croda

Croda is a British speciality chemicals company, known as a world leader in the supply of active ingredients into the personal care and life sciences markets. It operates in niche segments, providing significant value to its customers which, combined with a culture of continuous innovation and entrenched client relationships, delivers attractive financial returns and has enabled a long track record of strong profit, cash flow and dividend growth. An example of a recent success has been its excipients, which are inactive substances that act as the vehicle for a drug or other active substance and have played a key role in the deployment of the Pfizer BioNTech Covid-19 vaccine.

Sustainability is integral to the company's strategy. It has in place a dedicated senior management team to drive its programme which, along with innovation, makes up one of the two key strategic priorities of the business. The company's ambition is to be the world's most sustainable supplier of innovative ingredients and it has externally verified 1.5c Science Based Targets for its decarbonisation roadmap which is to be achieved by 2030. This approach gives it a critical edge and aligns its sustainability and commercial agendas, exemplified by its new bio-based surfactant plant in Atlas Point, Delaware which is the first of its kind in the United States and allows the substitution of oil based ingredients with natural alternatives

Solutions Provider: Novo-Nordisk

Novo-Nordisk is a global healthcare company with a world leading position in diabetes treatment that is expanding into obesity care as well as biopharma and other serious chronic diseases with high unmet needs. Nearly 500 million people worldwide are estimated to have diabetes, and eight out of ten live in low-and middle-income countries, less than half of which are treated. The high social and human costs have made diabetes a key government focus and Novo-Nordisk has a critical role to play in both broadening access to treatment and in innovating to provide better treatments for the management of diabetes, as well as tackling root causes and associated medical conditions.

Control by the Novo Foundation ensures a long term perspective and the company traces its history right back to the beginning of the production of insulin in the 1920's. It has consistently led in the discovery of innovative new medicines. Most recently initiating the GLP1 class of treatments, developing tablet solutions to replace some injectables and discovering truly ground breaking obesity treatments in the form of Wegovy. Improving access to medicine is an explicit part of the corporate strategy and Novo-Nordisk represents a good example of a company with a commercial strategy that is clearly aligned with providing solutions to one the most significant global health challenges that we face, allowing it to generate strong profit growth over the long-term while at the same time building a sustainable business.

Sustainable Improver: TotalEnergies

TotalEnergies is a leading energy company listed on the French stock market. Most oil & gas companies do not make it through our screening process given their mix of business is deemed unsustainable. However, TotalEnergies is a business adapting to the energy transition and already making enough progress on lower carbon energy sources and renewables to allow us to consider the merits of its investment case. Over half the volume and around 40% of the value of its upstream production is from natural gas. Alongside this, they have one of the world's leading Liquid Natural Gas ("LNG") operations, responsible for sourcing and shipping what is an important transition fuel. Its renewable energy portfolio is also of a substantial size with over 10 GW/h of electricity generating assets, primarily from solar power with plans to more than triple that by 2025. Importantly, the company also has minimal unconventional production, such as shale, and has committed to no further investment in these areas.

An independent group, the Transition Pathway Initiative, assesses that TotalEnergies' emissions intensity reduction target is aligned with a 1.5 degree scenario, putting it in a very select group of energy companies expecting to meet that goal. TotalEnergies isn't perfect, which is why we deem it an improver, but we see enough evidence that it is making strong efforts to transition to be able to consider it as an investment. We are engaging with the company directly and through industry groups, such as Climate Action 100+, to encourage it to accelerate its transformation and enhance its reporting. If the company can deliver its future plans for a sustainable, lower carbon energy company, then we see an attractive investment case. This is a company growing strongly in LNG, renewable energy generation and in new molecules such as biofuels, bio gas and green hydrogen, generating both cash flow for investment and for the payment of a steadily growing dividend.

Directors' Report (Extract)

The Directors present their report and the audited financial statements for the year ended 31 January 2022.

Results and Dividends

The financial statements for the year ended 31 January 2022 are contained below. First, second and third interim dividends, each of 3.00p per Ordinary share, were paid on 27 August 2021, 26 November 2021 and 25 February 2022 respectively. The Directors now recommend a final dividend of 3.90p per Ordinary share payable on 27 May 2022 to shareholders on the register on 6 May 2022. The ex-dividend date is 5 May 2022. A resolution to approve the final dividend will be proposed at the Annual General Meeting.

Principal Activity and Status

The Company is registered as a public limited company (registered in Scotland No. SC000881) and is an investment company within the meaning of Section 833 of the Companies Act 2006. The Company has been approved by HM Revenue & Customs as an investment trust subject to it continuing to meet the relevant eligibility conditions of Section 1158 of the Corporation Tax Act 2010 and the ongoing requirements of Part 2 Chapter 3 Statutory Instrument 2011/2999 for all financial years commencing on or after 1 February 2012. The Directors are of the opinion that the Company has conducted its affairs for the year ended 31 January 2022 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 and Voting Rights

The issued Ordinary share capital at 31 January 2022 consisted of 148,164,670 Ordinary shares of 25p and 5,513,265 Ordinary shares held in treasury.

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

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

Management Agreement

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

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

Substantial Interests

As at 31 January 2022, 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:

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

Directors

At the end of the year, the Board comprised five non-executive Directors, each of which is considered by the Board to be independent of the Company and the Manager. David Barron is the Chairman and Howard Williams is the Senior Independent Director.

Elisabeth Scott retired as a Director on 10 June 2021 and Gay Collins was appointed as an independent non-executive Director on 1 July 2021.

The Directors attended scheduled Board and Committee meetings during the year ended 31 January 2022 as follows (with their eligibility to attend the relevant meetings in brackets):

A Appointed on 1 July 2021

B Retired on 10 June 2021

The Board meets more frequently when business needs require. Four additional Board meetings and one additional Nomination and Remuneration Committee meeting were held during the year, at which all Directors were present.

Under the terms of the Company's Articles of Association, Directors are subject to election at the first Annual General Meeting after their appointment and are required to retire and be subject to re-election at least every three years thereafter. However, the Board has decided that all Directors will retire annually.

Board's Policy on Tenure

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

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

The Role of the Chairman and Senior Independent Director

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

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

Directors' and Officers' Liability Insurance

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

Management of Conflicts of Interest

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

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

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

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

Corporate Governance

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

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

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

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

The UK Code includes provisions relating to:

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

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

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

- executive directors' remuneration (provisions 33 and 36 to 41).

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

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

Going Concern

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

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

Accountability and Audit

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

Independent Auditor

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

Relations with Shareholders

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

The Board's policy is to communicate directly with shareholders and their representative bodies without the involvement of the management group (including the Company Secretary or the Manager) in situations where direct communication is required, and representatives from the Board and Manager meet with major shareholders on at least an annual basis in order to gauge their views. 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.

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

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

Disclosures in Strategic Report

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

Annual General Meeting and Online Shareholder Presentation

The Annual General Meeting will be held at Bow Bells House, 1 Bread Street, London EC4M 9HH on Tuesday 24 May 2022 at 12 noon.

Given the evolving nature of the Covid-19 pandemic, should circumstances change significantly before the time of the Annual General Meeting, the Company will notify shareholders of any changes to the arrangements by updating the Company's website and through an RIS announcement, where appropriate, as early as is possible before the date of the meeting. Shareholders should note that if law or Government guidance so requires at the time of the meeting, the Chairman of the meeting will limit, in his or her sole discretion, the number of individuals in attendance at the meeting and may be required to impose entry restrictions on certain persons wishing to attend the meeting in order to ensure the safety of those attending.

By order of the BoardAberdeen Asset Management PLCCompany Secretary1 George StreetEdinburgh EH2 2LL6 April 2022

Statement of Directors' Responsibilities

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

Under Company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

In preparing these financial statements, the Directors are required to:

- select suitable accounting policies and then apply them consistently;

- make judgments and estimates that are reasonable and prudent;

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

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

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

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

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

The Directors confirm that to the best of their knowledge:

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

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

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

On behalf of the BoardDavid BarronChairman6 April 2022

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 31 January 2022