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 2023

Investment Objective

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

Benchmark

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

Management

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

For further information, please contact:

William Hemmings

abrdn Fund Managers Limited

0207 463 6223

Luke Mason

abrdn Fund Managers Limited 

0207 463 5971

Performance Highlights

Calendar and Financial Highlights

Calendar

Financial Highlights

Strategic Report

Chairman's Statement

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

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

Performance

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

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

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

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

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

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

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

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

Earnings

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

Dividend

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

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

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

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

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

Gearing

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

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

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

Discount

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

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

As stated above, the Board believes that the successful implementation by the Investment Manager of the investment strategy should enhance the Company's longer-term potential for improved performance. In recent years, we have seen a re-rating of the shares and the Board believes a consistent rating of the Company's shares close to the underlying asset value is of significant benefit to shareholders. As in previous years, we will seek shareholders' permission at the forthcoming AGM to buy back shares and issue new shares. 

Annual General Meeting and Online Shareholder Presentation

AGM

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

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

Online Shareholder Presentation

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

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

Details are also contained on the Company's website.

Amendment to Investment Policy (Overseas Exposure)

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

Outlook

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

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

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

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

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

David BarronChairman5 April 2023

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 theUnited Kingdom and can invest up to 20% of its gross assets overseas.

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

Gearing

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

Delivering the Investment Objective

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

Benchmark

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

Promoting the Success of the Company

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

Key Performance Indicators ("KPIs")

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

Principal Risks and Uncertainties

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

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

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

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

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

Promotional Activities

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

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

Board Diversity Policy

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

At 31 January 2023, there were three male and two female Directors on the Board.

Environmental, Social and Human Rights Issues

The Company 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.

Viability Statement

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

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

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

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

- The relevance of the Company's investment objective.

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

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

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

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

- The level of ongoing charges.

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

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

Outlook

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

On behalf of the BoardDavid BarronChairman5 April 2023

Promoting the Success of the Company

Introduction

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

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

The Purpose of the Company andRole 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 2023. Each of these decisions was made after taking into account the short and long term benefits for stakeholders.

Investment Objective and Portfolio

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

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

Dividend

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

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

Promotional Activities

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

Online Shareholder Presentation

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

On behalf of the BoardDavid BarronChairman5 April 2023

Performance

Performance (total return)

Ten Year Financial Record

Investment Manager's Review

Introduction

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

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

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

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

Performance

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

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

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

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

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

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

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

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

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

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

Portfolio Activity

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

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

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

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

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

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

Outlook

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

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

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

Ben Ritchie and Rebecca Maclean,abrdn Investments Limited5 April 2023 Portfolio

Sector Analysis

Directors' Report (extract)

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

Results and Dividends

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

Principal Activity and Status

The Company is registered as a public limited company (registered in Scotland No. SC000881) and is an investment company within the meaning of Section 833 of the Companies Act 2006. The Company has been approved by HM Revenue & Customs as an investment trust subject to it continuing to meet the relevant eligibility conditions of Section 1158 of the Corporation Tax Act 2010 and the ongoing requirements of Part 2 Chapter 3 Statutory Instrument 2011/2999 for all financial years commencing on or after 1 February 2012. The Directors are of the opinion that the Company has conducted its affairs for the year ended 31 January 2023 so as to enable it to comply with the ongoing requirements for investment trust status.

Individual Savings Accounts

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

Donations to Charity

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

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

Capital Structure and Voting Rights

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

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

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

Management Agreement

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

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

Directors

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

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

The Board meets more frequently when business needs require. 

Under the terms of the Company's Articles of Association, Directors are subject to election at the first Annual General Meeting after their appointment and are required to retire and be subject to re-election at least every three years thereafter. However, the Board has decided that all Directors will retire annually. Accordingly, Gay Collins, Jasper Judd, Howard Williams, Christine Montgomery and David Barron will retire at the Annual General Meeting and, being eligible, offer themselves for re-election. 

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

Board's Policy on Tenure

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

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

The Role of the Chairman and Senior Independent Director

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

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

Directors' and Officers' Liability Insurance

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

Management of Conflicts of Interest

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

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

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

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

Corporate Governance

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

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

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

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

The UK Code includes provisions relating to:

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

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

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

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

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

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

Going Concern

The Company's assets consist mainly of equity shares in companies listed on the London Stock Exchange and in most circumstances are considered to be realisable within a short timescale. The Board has set limits for borrowing and derivative contract positions and regularly reviews actual exposures, cash flow projections and compliance with loan covenants. The Directors have considered the fact that Company's investments comprise readily realisable securities which can be sold to meet funding requirements if necessary. The Directors have also performed stress testing on the portfolio and the loan financial covenants.

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

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

Accountability and Audit

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

Independent Auditor

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

Relations with Shareholders

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

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

abrdn Holdings Limited has been appointed Company Secretary to the Company. Whilst abrdn Holdings Limited is a wholly owned subsidiary of the abrdn Group, there is a clear separation of roles between the Manager and Company Secretary with different board compositions and different reporting lines in place. The Company Secretary only acts on behalf of the Board, not the Manager, and there is no filtering of communication.

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

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

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

Disclosures in Strategic Report

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

Annual General Meeting

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

By order of the Boardabrdn Holdings Limited Company Secretary1 George StreetEdinburgh EH2 2LL5 April 2023

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with UK Accounting Standards, including FRS 102 'The Financial Reporting Standard Applicable in the UK and 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 the profit or loss of the Company forthat 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 inother 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 BarronChairman5 April 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 31 January 2023