Specific Examples of Stakeholder Consideration During the Year

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

Investment Objective and Portfolio

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

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

Dividend

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

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

Promotional Activities

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

Online Shareholder Presentation

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

On behalf of the Board
David Barron
Chairman
5 April 2023

Performance

Performance (total return)

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 Limited
5 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 the
financial statements.

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

Substantial Interests

As at 31 January 2023, the following interests in the issued Ordinary share capital of the Company had been disclosed in accordance with the requirements of the FCA's Disclosure Guidance and Transparency Rules:

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

Directors

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

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

The Board meets more frequently when business needs require. 

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

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

Board's Policy on Tenure

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

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

The Role of the Chairman and Senior Independent Director

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

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

Directors' and Officers' Liability Insurance

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

Management of Conflicts of Interest

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

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

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

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

Corporate Governance

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

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

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

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

The UK Code includes provisions relating to:

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

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

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

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

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

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

Going Concern

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

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

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

Accountability and Audit

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

Independent Auditor

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

Relations with Shareholders

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

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

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

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

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

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

Disclosures in Strategic Report

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

Annual General Meeting

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

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

Statement of Directors' Responsibilities

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

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

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

-       select suitable accounting policies and then apply them consistently; 

-       make judgments and estimates that are reasonable and prudent;

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

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

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

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

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

The Directors confirm that to the best of their knowledge:

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

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

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

On behalf of the Board
David Barron
Chairman
5 April 2023

Statement of Comprehensive Income

Statement of Financial Position