dunedinincomegrowth.co.uk
Dunedin Income Growth
Investment Trust PLC
Annual Report 31 January 2024
Targeting income and long-term growth from mainly UK companies
chosen for their quality and commitment to improving sustainability
Dunedin Income Growth Investment Trust PLC 1
“The NAV total return of 6.7% outperformed the
FTSE All-Share Index return of 1.9%, resulting in the
Company ranking top of the AIC UK Equity Income
sector by NAV total return for the year.”
David Barron, Chairman
“The portfolio remains highly differentiated
compared to both peers and its benchmark. It
remains the only UK Equity Income investment trust
with a formal sustainability approach.”
Ben Ritchie and Rebecca Maclean,
abrdn Investments Limited
2 Dunedin Income Growth Investment Trust PLC
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR
IMMEDIATE ATTENTION. If you are in any doubt about the
action you should take, you are recommended to seek
your own independent financial advice from your
stockbroker, bank manager, solicitor, accountant or other
financial adviser authorised under the Financial Services
and Markets Act 2000 (as amended by the Financial
Services Act 2012) if you are in the United Kingdom or,
if not, from another appropriately authorised
financial adviser.
If you have sold or otherwise transferred all your Ordinary
shares in Dunedin Income Growth Investment Trust PLC,
please forward this document, together with the
accompanying documents immediately to the purchaser
or transferee, or to the stockbroker, bank or agent through
whom the sale or transfer was effected for transmission to
the purchaser or transferee.
Overview
Company Summary 3
Performance Highlights 4
Financial Calendar 5
Financial Highlights 6
Strategic Report
Chairman’s Statement 8
Overview of Strategy 12
Promoting the Success of the Company 19
Performance 22
Investment Process 26
Investment Manager’s Review 34
Information About the Investment Manager 37
Portfolio
Ten Largest Investments 40
Portfolio 41
Portfolio Sector Breakdown 43
Sector Analysis 44
Investment Case Studies 46
Governance
Board of Directors 50
Directors’ Report 53
Directors’ Remuneration Report 61
Audit Committee’s Report 65
Financial Statements
Statement of Directors’ Responsibilities 70
Independent Auditor’s Report 71
Statement of Comprehensive Income 79
Statement of Financial Position 80
Statement of Changes in Equity 81
Statement of Cash Flows 82
Notes to the Financial Statements 83
Other Information
Investor Information 104
Glossary of Terms 106
Your Company’s History 109
Share Capital History 110
AIFMD Disclosures (Unaudited) 111
Alternative Performance Measures 112
General
Notice of Annual General Meeting 116
Contact Addresses 125
Contents
Dunedin Income Growth Investment Trust PLC 3
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Built to help your returns
keep pace with the
cost of living
Searching out the UK and
European companies
shaping a better future
Actively investing to bring
together what we believe
are the best opportunities
Long term growth Reliable quarterly income
To capture long-term growth, the Investment
Manager looks across the UK and Europe to find
companies, from major multi-nationals to dynamic
smaller companies, benefiting from major economic
trends such as energy transition, digitisation, shifting
demographics and changing consumer behaviour.
To keep delivering a reliable and growing quarterly
income, the team invests in well-managed, financially
healthy companies with robust earnings potential.
A sustainable focus Robust financial returns
By using a range of forward-looking tools to interrogate
Environmental, Social and Governance (“ESG”)
practices, theInvestment Manager looks to ensure
that every company it invests in is leading on
sustainability today or taking steps to
lead the way tomorrow.
By applying these stringent criteria, the Company
is dedicated to delivering robust financial returns
for investors – and helping to shape a better
future for everyone.
Company Summary
4 Dunedin Income Growth Investment Trust PLC
Net asset value total return
AB
Earnings per share (revenue)
+6.7% 13.5
p
2023 +2.4% 2023 13.0p
Ongoing charges
A
Share price total return
A
0.64%
(
1.6
)
%
2023 0.64% 2023 (0.9)%
Discount to net asset value
AB
Dividends per Ordinary share
10.7% 13.75
p
2023 2.9% 2023 13.10p
A
Alternative Performance Measure (see pages 112 to 114).
B
With debt at fair value, dividends reinvested (see page 94).
Net Asset Value per share
– debt at fair value
Share price Dividends per share
At 31 January – pence At 31 January – pence Year ended 31 January - pence
312.2
297.6
309.0
302.8
309.0
20 21 22 23 24
301.0
287.0
310.0
294.0
276.0
20 21 22 23 24
12.70
12.80
12.90
13.10
13.75
20 21 22 23 24
Performance Hi
g
hli
g
hts
Dunedin Income Growth Investment Trust PLC 5
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Calendar
Online shareholder presentation
7 May 2024
Annual General Meeting (London)
23 May 2024
Expected payment dates of quarterly dividends
31 May 2024
30 August 2024
29 November 2024
28 February 2025
Half year end
31 July 2024
Expected announcement of results for the
six months ending 31 July 2024
September 2024
Financial year end
31 January 2025
Expected announcement of results for the
year ending 31 January 2025
April 2025
Financial Calendar
6 Dunedin Income Growth Investment Trust PLC
31 January 2024 31 January 2023 % change
Total assets (£’000) (see page 108 for definition) 488,867 492,105 (0.66)
Equity shareholders’ funds (£’000) 445,815 448,605 (0.62)
Market capitalisation (£’000) 403,437 435,898 (7.45)
Net asset value per Ordinary share 304.99p 302.57p +0.80
Net asset value per Ordinary share with debt at fair value
A
308.98p 302.80p +2.04
Share price (mid) 276.00p 294.00p (6.12)
FTSE All-Share Index 4,173.06 4,255.72 (1.94)
Discount (difference between share price and net asset value)
Discount where borrowings are deducted at fair value
A
10.67% 2.91%
Gearing (see page 107 for definition)
Net gearing
A
6.79% 7.11%
Dividends and earnings
Total return per share 15.45p 1.92p
Revenue return per share 13.54p 13.02p +4.03
Total dividend per share for the year 13.75p 13.10p +4.96
Dividend cover
A
0.99 0.99
Revenue reserves
Prior to payment of third and final dividends
B
16.34p 16.07p
After payment of third and final dividends
BC
8.99p 8.97p
Operating costs
Ongoing charges
AD
0.64% 0.64%
A
Considered to be an Alternative Performance Measure as defined on pages 112 and 113.
B
Calculated by dividing the revenue reserve per the Statement of Financial Position on page 80 by the number of shares in issue at the reporting date per note 16 on page 93.
C
Third interim dividend for the year ended 31 January 2024 of 3.2p per share (2023 – 3.00p). Final dividend for the year ended 31 January 2024 of 3.83p per share (2023 – final
dividend of 4.10p). See note 16 on page 93 for further details.
D
Calculated in accordance with the latest AIC guidance issued in October 2020 to increase the scope of reporting the look-through costs of holdings in investment companies.
Financial Hi
g
hli
g
hts
Dunedin Income Growth Investment Trust PLC 7
Strategic Report
The Company is an investment
trust with a premium listing on the
London Stock Exchange.
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.
9.9% of the Company’s total assets are
invested in the Pharmaceuticals and
Biotechnology sub-sector.
8 Dunedin Income Growth Investment Trust PLC
I am pleased to present the Annual Report for Dunedin Income Growth Investment Trust for the year ended 31 January
2024 and to report that our Company’s net asset value (“NAV”) total return outperformed both the benchmark and
peers for the year.
· NAV total return of 6.7%, outperforming the FTSE All-Share Index return of 1.9%, resulting in the Company
ranking top of the AIC UK Equity Income sector by NAV total return for the year.
· Five year NAV total return of 43.8%, with the Company ranking 3rd out of 20 in the AIC UK Equity Income
sector by NAV total return.
· Record revenue return for the year of 13.54p per share, an increase of 4.0%.
· Total dividend for the year of 13.75p per share, an increase of 5.0% which compares to the CPI increase of 4.0%.
Performance
After the rapid tightening of monetary policy and
dramatic geopolitical and domestic political events of
2022, the reporting period this year provided a more
stable investment environment and one that provided
fewer headwinds to the Company’s investment strategy.
As a result, the portfolio’s total return exceeded that of the
FTSE All-Share Index and, in the process, delivered a
positive absolute return. Whilst performance of the
portfolio, which is highly active and differentiated from our
benchmark, should be considered over longer time
periods, this year’s performance represents a welcome
return to outperformance after two years in which the
Investment Manager’s strategic focus on high quality
companies with an emphasis on dividend growth and
sustainability had proven something of a challenge in a
market that had favoured more value orientated
investment styles and seen strong returns from
commodity related sectors.
Over the longer term, the Company has delivered a NAV
total return of 43.8% over five years compared to
the benchmark return of 30.4%, and over that period ranks
3rd 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, at the upper end of our original expectations
for the year.
The NAV total return of the Company remains ahead of
the benchmark and peers over both the short and longer
term. The main frustration in the period has been the
widening of the discount at which the Company’s shares
are trading to NAV. Particularly as this now represents
a wider discount than the average of the UK Equity
Income sector, despite stronger performance. Alongside
that, 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.
“The portfolio remains highly
differentiated to its peer group,
with a sustainability overlay that
remains unique within the sector
and rare within the wider investment
trust universe.”
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 the
Investment Manager, this is about both avoiding risks and
taking advantage of opportunities such as investing
behind the powerful demand trends stemming from
the climate transition.
Earnings and Dividend
Investment income increased by 4.6% during the year,
reflecting good progress in dividend distributions from
companies in the portfolio. The revenue return per
share increased by 4.0%, reaching an all-time high of
13.54p, growing slightly less than income due primarily to
higher finance costs given increases in interest rates.
Chairman’s Statement
Dunedin Income Growth Investment Trust PLC 9
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Having paid three quarterly dividends of 3.2p per
share, the Board is proposing a final dividend of 4.15p per
share, payable on 31 May 2024 to shareholders on the
register on 3 May 2024. This will make a total dividend of
13.75p per share for the year, an increase of 5.0% on last
year and ahead of the rate of inflation of 4.0% as
measured by CPI. This represents a welcome return to
dividend growth in real terms after two years of
exceptionally high inflation and will be the 40th year out of
the past 44 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 33 investment trusts that
have raised their dividend for 10 to 19 consecutive years.
“The revenue return per share
increased by 4.0%, reaching
an all-time high of 13.54p.”
Following payment of the final dividend, we will
have utilised 0.21p per share of the Company’s
revenue reserves to meet dividends declared for this
financial year, meaning that 9.0p per share will be
available to support future distributions. This represents
approximately 65% of the current annual dividend cost.
The net revenue earned during the financial year covers
98.5% of the proposed dividend cost for the year. The
Company has drawn 2.84p per share from revenue
reserves since January 2019, both through the strategic
transition away from higher yielding, lower growth
companies and, particularly in 2020/21, to support the
dividend through a period of extraordinary market
disruption when 1.9p per share was utilised from
revenue reserves following the impact of the Covid
pandemic on the portfolio. It is worth noting that, given its
long history, the Company is in a favourable position of
having the ability to pay dividends out of realised capital
reserves which exceeded £300 million at the year end,
forming a significant part of equity shareholders’ funds.
The increased dividend of 13.75p per share represents a
yield of 5.0% based on the share price of 276p at the end
of the year, compared to a notional yield of 4.0% from the
FTSE All-Share Index. Our distribution policy remains to
grow the dividend faster than inflation over the medium
term and, with the Company’s robust revenue and capital
reserves and the healthy underlying dividend and
earnings growth of the companies within the portfolio, we
believe that the policy remains very well supported.
“The increased dividend of 13.75p
per share represents a yield of 5.0%
based on the share price of 276p at
the end of the year.”
Comments on SDR
The Board notes the FCA’s recent regulation on
sustainability disclosures, including product labelling and
presentation of sustainable credentials by UK funds,
including investment trusts; the Sustainable Disclosure
Regime (‘SDR”). The Board is considering the implications
of this for the Company, which is one of the few UK
investment trusts to adopt a sustainable investment
approach. It is worth noting that the decision to formally
adopt the sustainable investment approach in 2021 was
very much an evolution of our investment approach which
focuses on quality companies capable of delivering
superior total returns with growing income, rather than a
response to heightened levels of investor interest. The
Board will continue to ensure that our approach and
process are described in terms that meet all facets of UK
regulation and we are confident that our successful,
differentiated investment approach will not have to
change in any material respect as a result of the
introduction of this regulation.
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 2024. A Sterling
equivalent of £13.3 million of the revolving credit facility
was drawn down at the year end. The loan notes bear a
fixed interest rate of 3.99% and the multi-currency facility
is at a variable rate, and thus the costs of borrowing have
increased compared to the prior year.
10 Dunedin Income Growth Investment Trust PLC
With debt valued at par, the Company’s net
gearing decreased from 7.1% to 6.8% during the year. This
decline was due to holding a higher cash balance at the
year end and a small reduction in borrowings due to the
impact of foreign exchange translation. 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 -1.6% was
significantly lower than the NAV total return, reflecting a
move in the discount from 2.9% at the end of last year
to 10.7% as at 31 January 2024 (on a cum-income basis
with borrowings stated at fair value). In response to this
widening during the year, 2.1 million shares were bought
back at an average price of £2.69, well below the NAV.
The Board believes a consistent rating of the
Company’s shares close to the underlying asset value is of
significant benefit to shareholders. As well as a strong
focus on execution of the investment strategy, the Board
continues to support efforts to attract new investors and
retain existing ones through clear messaging and regular
engagement with investors. We are confident that the
company’s strong performance, attractive dividend
profile and differentiated positioning are a good basis to
support a strong rating for the Company’s shares over the
medium term. We will continue to use the buyback facility
to provide liquidity and address the imbalances between
buyers and sellers. Continued good performance and a
renewal of broadly based interest in UK equity markets
will, we believe, place the Company’s shares back on a
rating that reflects its performance. 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 Thursday 23 May 2024
at the offices of abrdn, 18 Bishops Square, London E1 6EG.
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.
We recognise that many shareholders who previously
held the Company’s shares through the abrdn Savings
Schemes now hold their shares through the Interactive
Investor platform. Where we have contact details, abrdn
will keep you up to date with information relating to the
Company, including regarding the AGM. You can also
register for email alerts relating to the Company, including
links to videos and podcasts by the portfolio managers,
articles on the Company and notification of publication of
interim and annual results. You can register by scanning
the QR Code on the Contents Page of this Annual Report
or by registering here: www.dunedinincomegrowth.co.uk.
We would encourage all shareholders to register for
updates. In addition, the Association of Investment
Companies has included helpful information on its website
explaining how platform customers can attend and vote
at an AGM: www.theaic.co.uk/how-to-vote-your-shares.
Should you wish to receive any information directly from
the Company, or request to receive a hard copy of this
and future Annual Reports, please contact the Company
Secretary at CEF.CoSec@abrdn.com
The Notice of Meeting is contained on pages 116 to 121.
Online Shareholder Presentation
In order to encourage as much interaction as possible with
our shareholders, and especially for those who are unable
to attend the AGM, we will also be hosting an Online
Shareholder Presentation, which will be held at 10.00 am
on Tuesday 7 May 2024. 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-2024
Details are also contained on the Company’s website.
Board Succession
It is the Company’s stated policy that Directors should
stand down after nine years on the Board. Jasper Judd,
who is Chairman of the Audit Committee, and I, both
joined the Board in February 2016. Accordingly, we will
stand down from the Board at the conclusion of the
Company’s AGM in 2025. The Board will recruit a further
Director during the course of this financial year who, it is
intended, will take over from Jasper as Chairman of the
Audit Committee. The number of Directors will therefore
Chairman’s Statement
Continued
Dunedin Income Growth Investment Trust PLC 11
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
increase to six for a short period to allow for an orderly
handover and smooth succession. Howard Williams, who
has been a Director since April 2018, will succeed me as
Chair of the Company and it is the Board’s intention to
recruit a fifth Director in 2025 to bring the number of
Directors back to five.
Outlook
The Company has a clear focus on generating both total
return and dividend growth while formally incorporating
sustainability into its mandate. The Board believes that this
is the correct strategy to deliver capital outperformance
and dividend growth over the longer term. Having
weathered a volatile economic and political environment
over the past few years, we believe that there are now
reasons for cautious optimism for the Company’s relative
performance to continue to prove robust.
“The Board is confident that the
Company is well-positioned to
continue to deliver relative total
return outperformance over the
medium and long term. This,
combined with the return to
growing the dividend ahead of
inflation should enable the
Company’s shares to trade closer
to NAV.”
Inflationary pressures have eased substantially, paving the
way for the Bank of England to potentially cut interest
rates at some point in 2024. The global economy, while far
from booming, is continuing to prove relatively robust,
despite substantial tightening in monetary policy and very
subdued Chinese output. Sustainability is coming back
onto investors’ radars as environmental, social and
governance increasingly impact investment cases.
Meanwhile, the market valuations of UK and European
equities are extremely attractive on an absolute and
relative basis. This all potentially points to an environment
that can both support earnings delivery and an expansion
in equity multiples which could drive attractive total
returns to investors. While declining interest rates may also
help to narrow the discount at which your Company’s
shares trade.
We also believe that the Investment Manager’s focus on
sustainable companies means that the income growth of
the Company should be driven more by structural rather
than cyclical growth and that gives the Investment
Manager a higher degree of confidence on the likely path
of income generation. This should help to underpin
earnings delivery even in an environment where
economic growth remains modest, while the balance of
the portfolio means it is well set to navigate volatile
markets and demonstrate resilience in a range of
different market environments.
There are a number of reasons to be watchful. Elections at
home and abroad will generate plenty of speculation and
debate and, while inflationary pressures have eased, they
are still at elevated levels compared to central bank
targets. Likewise, geopolitical tensions continue to persist
across the Middle East, Russia continues with its invasion of
Ukraine and China’s relationship with Taiwan remains
tense. As a result, we think it is important to maintain a
relatively well-balanced portfolio and 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 with this strategy remains highly
creditable.
The Board is confident that the Company is well-
positioned to continue to deliver relative total return
outperformance over the medium and long term. This,
combined with the return to growing the dividend ahead
of inflation, should enable the Company’s shares to trade
closer to NAV.
David Barron
Chairman
3 April 2024
12 Dunedin Income Growth Investment Trust PLC
Business
The Company is an investment trust with a premium listing
on the London Stock Exchange.
Investment Objective
The Company’s objective is to achieve growth of income
and capital from a portfolio invested mainly in companies
listed or quoted in the United Kingdom that meet the
Company’s sustainable and responsible investing criteria
as set by the Board.
Investment Policy
In pursuit of its objective, the Company's investment policy
is to invest in high quality companies with strong income
potential and providing an above-average portfolio yield.
The Company may only make material changes to its
investment policy (including the level of gearing set by the
Board) with the approval of shareholders in the form of an
ordinary resolution.
Risk Diversification
The Company maintains a diversified portfolio consisting,
substantially, of equity or equity-related securities, and it
can invest in other financial instruments. The Company is
invested mainly in companies listed or quoted in the
United Kingdom and can invest up to 25% 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.
Investment Process
The Investment Process adopted by the Investment
Manager is contained on pages 26 to 33.
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 on pages 19 to 21 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.
Overview of Strate
g
y
Dunedin Income Growth Investment Trust PLC 13
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
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.
KPI Description
Performance of NAV against benchmark index
and comparable investment trusts
The Board measures the Company’s NAV total return performance against the total
return of the benchmark index – the FTSE All-Share Index. The figures for this year
and for the past three and five years, and a graph showing performance against the
benchmark index over the past five years are shown on page 22. The Board also
monitors performance relative to a peer group of investment trusts which have
similar objectives, policies and yield characteristics.
Revenue return per Ordinary share The Board monitors the Company’s net revenue return. The revenue returns per
Ordinary share for each of the past 10 years are set out on page 24.
Dividend per Ordinary share The Board monitors the Company’s annual dividends per Ordinary share. The
dividends per share for each of the past 10 years are set out on page 24.
Share price performance The Board monitors the performance of the Company’s share price on a total return
basis. The returns for this year and for the past three and five years, and a graph
showing the share price total return performance against the benchmark index
over the past five years are shown on page 22.
Premium/discount to NAV The premium/discount of the share price relative to the NAV per share is monitored
by the Board. The discount at the year end and at the end of the previous year are
disclosed on page 6.
Ongoing charges The Board monitors the Company’s operating costs carefully. Ongoing charges for
the year and the previous year are disclosed on page 6.
14 Dunedin Income Growth Investment Trust PLC
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.
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 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. In addition to those principal risks and uncertainties, the Board considers that
the development of Artificial Intelligence (“AI”) presents potential risks to businesses in almost every sector. The extent of
the risk presented by AI is extremely hard to assess at this point but the Board considers that it is an emerging risk and,
together with the Manager, will monitor developments in this area.
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. These include a number of existing geo-political risks. The Board is also
conscious of the impact of inflation and higher interest rates on financial markets.
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.
Risk Mitigating Action
Investment objectives - a lack of demand for
the Company’s shares could result in a
widening of the discount of the share price
to its underlying NAV and a fall in the value of
its shares.
Board review. The Board formally reviews the Company’s objectives and strategies
for achieving them on an annual basis, or more regularly if appropriate.
Shareholder communication. The Board is cognisant of the importance of regular
communication with shareholders. 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
including the opportunity for an interactive question and answer session. The Board
reviews shareholder correspondence and investor relations reports and also
receives feedback from the Company’s Stockbroker.
Discount monitoring. The Board, through the Manager, keeps the level of discount
under constant review. The Board is responsible for the Company’s share buy back
policy and is prepared to authorise the use of share buy backs to provide liquidity to
the market and try to limit any widening of the discount.
Investment strategies - the Company adopts
inappropriate investment strategies in pursuit
of its objectives which could result in investors
avoiding the Company’s shares, leading to
a widening of the discount and poor
investment performance.
Adherence to investment guidelines. The Board sets investment guidelines and
restrictions which the Manager follows, covering matters such as asset allocation,
diversification, gearing, currency exposure and use of derivatives, as well as the
Company’s sustainable and responsible investment criteria. These guidelines are
reviewed regularly and the Manager reports on compliance with them at
Board meetings.
Diversification. In order to ensure adequate diversification, the Board has set
absolute limits on maximum holdings and exposures in the portfolio at the time of
investment, which are in addition to the limits contained in the Company’s
investment policy, including the following:
· No more than 10% of gross assets to be invested in any single stock; and
· The top five holdings should not account for more than 40% of gross assets.
Continued
Overview of Strate
g
y
Dunedin Income Growth Investment Trust PLC 15
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Risk Mitigating Action
Investment performance - the appointment or
continuing appointment of an investment
manager with inadequate resources, skills or
expertise or which makes poor investment
decisions. This could result in poor investment
performance, a loss of value for shareholders
and a widening discount.
Monitoring of performance. The Board meets the Investment Manager on a regular
basis and keeps under close review (inter alia) its resources and adherence to
investment processes. The Board also keep under review the adequacy of risk
controls and investment performance.
Management Engagement Committee. A detailed formal appraisal of the Manager is
carried out annually by the Management Engagement Committee.
Income/dividends - the Company adopts an
unsustainable dividend policy resulting in cuts
to or suspension of dividends to shareholders,
or one which fails to meet investor demands.
Revenue forecasting and monitoring. The Manager presents detailed forecasts of
income and expenditure covering both the current and subsequent financial years
at Board meetings. Dividend income received is compared to forecasts and
variances analysed.
Use of reserves. The Company has built up revenue reserves which are available to
smooth dividend distributions to shareholders should there be a shortfall in revenue
returns. The Company also has the ability to fund dividend distributions from
realised capital reserves.
Financial/market - insufficient oversight
or controls over financial risks, including
market risk, foreign currency risk, liquidity
risk and credit risk could result in losses
to the Company.
Management controls. The Manager has a range of procedures and controls
relating to the Company’s financial instruments, including a review of investment
risk parameters by its Investment Risk department and a review of credit worthiness
of counterparties by its Counterparty Credit Risk team.
Foreign currency hedging. It is not the Company’s policy to hedge foreign currency
exposure but the Company may, from time to time, partially mitigate it by drawing
down borrowings in foreign currencies.
Board review. As stated above, the Board sets investment guidelines and restrictions
which are reviewed regularly and the Manager reports on compliance with them at
Board meetings.
Further details of the Company’s financial instruments and risk management are
included in note 19 to the financial statements.
Gearing - gearing accentuates the effect of
rises or falls in the market value of the
Company’s investment portfolio on its NAV.
An inappropriate level of gearing at a time of
falling values could result in a significant fall in
the value of the Company’s net assets and
share price. Such a fall in the value of the
Company’s net assets could result in a
breach of loan covenants and trigger
demands for early repayment or require
investments to be sold to meet any shortfall.
This could result in further losses.
Gearing restrictions. The Board sets gearing limits within which the Manager can
operate.
Monitoring. Both the limits and actual levels of gearing are monitored on an ongoing
basis by the Manager and at regular Board meetings. In the event of a possible
impending covenant breach, appropriate action would be taken to reduce
borrowing levels.
Scrutiny of loan agreements. The Board takes advice from the Manager and the
Company’s lawyers before approving details of loan agreements. Care is taken to
ensure that covenants are appropriate and unlikely to be breached.
Limits on derivative exposure. The Board has set limits on derivative exposures and
positions are monitored at regular Board meetings.
16 Dunedin Income Growth Investment Trust PLC
Risk Mitigating Action
Regulatory - changes to, or failure to comply
with, relevant regulations (including the
Companies Act, The Financial Services and
Markets Act, The Alternative Investment Fund
Managers Directive, accounting standards,
investment trust regulations, the Packaged
Retail and Insurance-based Investment
Product Regulations, the Listing Rules,
Disclosure Guidance and Transparency Rules
and Prospectus Rules) could result in fines,
loss of reputation, reduced demand for the
Company’s shares and potentially loss of an
advantageous tax regime.
Board awareness. The Directors have an awareness of the more important
regulations and are provided with information on changes by the Association of
Investment Companies. In terms of day to day compliance with regulations, the
Board is reliant on the knowledge and expertise of the Manager. However, where
necessary, the Board engages the service of external advisers. In addition, all
Directors are encouraged to attend relevant training courses.
Management controls. The Manager’s company secretariat and accounting teams
use checklists to aid compliance and these are backed by the Manager’s
compliance monitoring programme and risk based internal audit investigations.
ESG Risks - failure of the Company to adhere
to its sustainable and responsible investment
criteria, or non-compliance with applicable
regulations, could lead to a loss of investor
confidence or accusations of greenwashing.
Adherence to restrictions. The Board sets restrictions relating to the Company’s
sustainable and responsible investment criteria, which the Investment Manager
follows. These restrictions are reviewed regularly and the Investment Manager
reports on compliance with them at Board meetings.
Awareness of regulations. Through the Regulatory risk controls stated above, the
Board is also aware of the relevant ESG regulations impacting the Company.
Operational (including cyber-crime) - the
Company is reliant on services provided by
third parties (in particular those of the
Manager and the Depositary) and any
control gaps and failures in their
operations could expose the Company
to loss or damage.
Agreements. Written agreements are in place defining the roles and responsibilities
of all third party service providers.
Internal control systems of the Manager. The Board receives reports on the
operation and efficacy of the Manager’s IT and control systems, including those
relating to cyber-crime, and its internal audit and compliance functions.
Safekeeping of assets. The Depositary is ultimately responsible for the safekeeping
of the Company’s assets and its records are reconciled to those of the Manager on
a regular basis. Through a delegation by the Depositary, the Company’s
investments and cash balances are held in segregated accounts by the Depositary.
Monitoring of other third party service providers. The Manager monitors closely the
control environments and quality of services provided by third parties, including
those of the Depositary. This includes controls relating to cyber-crime and is
conducted through service level agreements, regular meetings and key
performance indicators. The Directors review reports on the Manager’s monitoring
of third party service providers on a periodic basis.
Geo-political – the impact of current and
future geo-political events could result in
losses to the Company.
Board and Manager awareness. Geo-political events over which the Company has
no control are always a risk. The Investment Manager’s focus on quality companies,
the diversified nature of the portfolio and a managed level of gearing all serve to
provide a degree of protection in times of market volatility.
Geo-political risk is considered to have increased during the year as a result of heightened global tensions. The trend
of other principal risks has not changed during the year.
Overview of Strate
g
y
Continued
Dunedin Income Growth Investment Trust PLC 17
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
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 and prospective investors 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.
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.
Environmental, Social and Governance
(“ESG”) Matters
The Investment Manager’s Approach to ESG matters is
included within the Investment Process on pages 26 to 33.
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.
The carbon intensity of the portfolio is shown on page 29.
18 Dunedin Income Growth Investment Trust PLC
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 on pages
14 to 16 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 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
2024 (see Going Concern on page 58).
· 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
current and future geo-political events, 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 on page 11
whilst the Investment Manager’s views on the outlook for
the portfolio are included on page 36.
On behalf of the Board
David Barron
Chairman
3 April 2024
Overview of Strate
g
y
Continued
Dunedin Income Growth Investment Trust PLC 19
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
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 and Role
of the Board
The purpose of the Company is to act as a vehicle to
provide, over time, financial returns (both income and
capital) to its shareholders. Investment trusts, such as the
Company, are long-term investment vehicles and are
typically externally managed, have no employees, and are
overseen by an independent non-executive board of
directors.
The Board, which throughout 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.
Stakeholder How We Engage
Shareholders Shareholders are key stakeholders and the Board places great importance on communication with
them. The Board welcomes all shareholders’ views and aims to act fairly between all of them. The
Manager and Company’s Stockbroker meet regularly with current and prospective shareholders to
discuss performance and shareholder feedback is discussed by the Directors at Board meetings. In
addition, the Manager meets with analysts who cover the investment trust sector and the Directors
attend meetings with the Company’s largest shareholders and meet other shareholders at the
Annual General Meeting.
The Company subscribes to the Manager’s investor relations programme in order to maintain
communication channels, in particular, with the Company’s institutional shareholder base.
Regular updates are provided to shareholders through the Annual Report, Half Yearly Report,
monthly factsheets, Company announcements, including daily NAV announcements, and the
Company’s website.
The Company’s Annual General Meeting provides a forum, both formal and informal, for
shareholders to meet and discuss issues with the Directors and Manager. The Board encourages as
many shareholders as possible to attend the Company’s Annual General and to provide feedback on
Promotin
g
the Success of the Company
20 Dunedin Income Growth Investment Trust PLC
the Company. In addition to the Annual General Meeting, this year the Company will again hold an
interactive online shareholder presentation at which shareholders will receive updates from the
Chairman and Investment Manager and there will be the opportunity for an interactive question and
answer session. Further details are provided in the Chairman’s Statement.
Manager
(and Investment Manager)
The Investment Manager’s Review on pages 34 to 36 details the key investment decisions taken
during the year. The Investment Manager has continued to manage the Company’s assets in
accordance with the mandate provided by the Company, with the oversight of the Board.
The Board regularly reviews the Company’s performance against its investment objective and the
Board undertakes an annual strategy review meeting to ensure that the Company is positioned well
for the future delivery of its objective for its stakeholders.
The Board receives presentations from the Investment Manager at every Board meeting to help it to
exercise effective oversight of the Investment Manager and the Company’s strategy.
The Board, through the Management Engagement Committee, formally reviews the performance of
the Manager at least annually. More details are provided on page 57.
Service Providers The Board seeks to maintain constructive relationships with the Company’s suppliers either directly
or through the Manager, with regular communications and meetings.
The Management Engagement Committee conducts an annual review of the performance, terms
and conditions of the Company’s main service providers to ensure they are performing in line with
Board expectations, carrying out their responsibilities and providing value for money.
Investee Companies 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.
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.
Through engagement and exercising voting rights, the Investment Manager actively works with
companies to improve corporate standards, transparency and accountability. Further details are
provided on pages 26 to 33.
The Manager reports regularly to the Board on investment and engagement activity.
Debt Providers On behalf of the Board, the Manager maintains a positive working relationship with The Bank of Nova
Scotia, London Branch, the provider of the Company’s multi-currency loan facility, and provides
regular updates on business activity and compliance with its loan covenants.
The Manager also provides regular covenant compliance certificates to the holders of the
Company’s £30 million Loan Notes.
Environment and Community The Board and Manager are committed to investing in a sustainable and responsible manner and
the Investment Manager embeds Environmental, Social and Governance (“ESG”) considerations into
the research and analysis as part of the investment decision-making process. Further details are
provided within the Investment Process on pages 26 to 33.
Promotin
g
the Success of the Company
Continued
Dunedin Income Growth Investment Trust PLC 21
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
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 2024. 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, through the work of the Management
Engagement Committee, the Board 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
4.15p per Ordinary share, total dividends for the year will
amount to 13.75p per Ordinary share. This represents an
increase of 5.0% compared to the previous year. This will
be the 40th year out of the past 44 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.
Renewal of Bank Loan
During the year, the Board announced the renewal of the
Company’s £30 million multi-currency revolving credit
facility with Bank of Nova Scotia London Branch. The
facility replaced the expiring £30 million multi-currency
revolving credit facility and will expire on 11 July 2024.
Under the terms of the facility, the Company has the
option to increase the level of the commitment from £30
million to £40 million at any time, subject to the lender’s
credit approval.
The Board continues to believe that borrowings, in the
form of the Company’s Loan Notes 2045 and the multi-
currency revolving credit facility, are beneficial to long
term net asset value returns and is one of the benefits of
the closed ended investment trust structure.
Share Buy Backs
During the year, the Company bought back 2,091,781
Ordinary shares to be held in treasury, providing a small
accretion to the NAV per share and a degree of liquidity to
the market at times when the discount to the NAV per
share had widened in normal market conditions. It is the
view of the Board that this policy is in the interest of all
shareholders.
Shareholder Engagement
During the year, the Board met shareholders at the AGM
and the Chairman met directly with representatives of
some of the Company’s largest shareholders. The AGM
was held in Dundee in 2023 and will be held in London this
year.
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 10.00am on Tuesday 7 May 2024. 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 page 10.
The Board considers that it is very important to maintain
an ongoing dialogue with shareholders to properly
understand their views and to communicate the actions of
the Board.
On behalf of the Board
David Barron
Chairman
3 April 2024
22 Dunedin Income Growth Investment Trust PLC
Performance (total return)
1 year 3 year 5 year
% return % return % return
Total return (Capital return plus net dividends reinvested)
Net asset value
AB
+6.7% +18.0% +43.8%
Share price
B
(1.6)% +9.8% +41.4%
FTSE All-Share Index +1.9% +27.5% +30.4%
Capital return
Net asset value
A
+2.0% +3.8% +17.1%
Share price (6.1)% (3.8)% +14.1%
FTSE All-Share Index (1.9)% +14.6% +9.1%
A
Cum-income NAV with debt at fair value.
B
Considered to be an Alternative Performance Measure (see page 114)
Source: abrdn, Factset & Morningstar
Comparison of NAV and Share Price Total Return Performance to
FTSE All-Share Index (figures rebased to 100)
Five years to 31 January 2024
100
105
110
115
120
125
130
135
140
145
150
31/01/19 31/01/20 31/01/21 31/01/22 31/01/23 31/01/24
Source: abrdn & Morningstar
Share price total
return
NAV total return with
debt at fair value
FTSE All-Share Index
total return
Performance
Dunedin Income Growth Investment Trust PLC 23
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Comparison of NAV Total Return Performance to FTSE All-Share Index
Total Return for 5 years
22. 2%
-0.3%
8. 1%
2. 4%
6. 7%
43. 8%
10.7%
-7.5%
18. 9%
5. 2%
1. 9%
30. 4%
Year to
31/01/20
Year to
31/01/21
Year to
31/01/22
Year to
31/01/23
Year to
31/01/24
5 year total return
(cumulative)
Source: abrdn & Morningstar
NAV total
return with
debt at fai r
value
FTSE Al l-
Share Index
total return
Analysis of Total Return Performance for the year ended 31 January 2024
Gross assets total return 5.8
Total NAV return per share
A
6.7
Total return on FTSE All-Share Index 1.9
Relative performance 4.8
A
With debt at fair value.
Analysis of Performance for the year Relative to the FTSE All-Share Index
3.8
1.0
2.
8
1.5
-0.7
-0.1
0.3
4.8
Listed equities
- Stock selection^
- Sector allocation^
Borrowings & cash
Fees and expenses
Tax
Technical differences
Total
%
^ Further analysis of performance attributable to listed equities
- Stock selection^
- Sector allocation^
24 Dunedin Income Growth Investment Trust PLC
Ten Year Financial Record
Year ended 31 January 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Total revenue (£’000) 20,994 20,359 21,963 22,317 22,263 20,518 18,346 21,518 21,950 22,949
Per share (p)
Revenue return 11.90 12.11 12.55 12.64 12.68 12.08 10.90 12.87 13.02 13.54
Dividends paid/proposed 11.25 11.40 11.70 12.10 12.45 12.70 12.80 12.90 13.10 13.75
Revenue reserve
A
8.89 9.63 10.51 11.16 11.54 10.94 9.07 9.05 8.97 8.99
Net asset value
B
279.66 237.48 270.34 290.57 266.83 312.22 297.64 309.03 302.80 308.98
Total return
C
27.76 (28.94) 43.83 30.83 (11.95) 58.57 (1.81) 23.78 1.92 15.45
Shareholders’ funds (£’000) 428,702 368,041 415,810 442,384 401,731 469,806 448,293 464,579 448,605 445,815
A
After payment of third interim and final dividends (see note 16 on page 93 for further details).
B
With debt at fair value.
C
Per Statement of Comprehensive Income.
Comparison of Dividend Growth to Inflation
Five years ended 31 January 2024
2.0%
0.8%
0.8%
1.6%
5.0%
10.4%
1.8%
0.7%
5.4%
10.0%
4.0%
23.7%
Year to
31/01/20
Year to
31/01/21
Year to
31/01/22
Year to
31/01/23
Year to
31/01/24
5 years to
31/01/24
Source: abrdn, ONS & Factset
DIGIT
dividend
growth
Consumer
Price Index
Performance
Continued
Dunedin Income Growth Investment Trust PLC 25
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Dividends per Share – Pence
Year to 31 January
11.25
11.40
11.70
12.10
12.45
12.70
12.80
12.90
13.10
13.75
0
5
10
15
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Dividends per Share
Dividend per share Rate Ex dividend date Record date Payment date
Final dividend 2024 4.15p 2 May 2024 3 May 2024 31 May 2024
Third interim dividend 2024 3.20p 1 February 2024 2 February 2024 29 February 2024
Second interim dividend 2024 3.20p 2 November 2023 3 November 2023 24 November 2023
First interim dividend 2024 3.20p 3 August 2023 4 August 2023 25 August 2023
Total dividend 2023 13.75p
Dividend per share Rate Ex dividend date Record date Payment date
Final dividend 2023 4.10p 4 May 2023 5 May 2023 30 May 2023
Third interim dividend 2023 3.00p 2 February 2023 3 February 2023 24 February 2023
Second interim dividend 2023 3.00p 3 November 2022 4 November 2022 25 November 2022
First interim dividend 2023 3.00p 4 August 2022 5 August 2022 26 August 2022
Total dividend 2023 13.10p
26 Dunedin Income Growth Investment Trust PLC
Investment Philosophy and Style
The Investment Manager believes that building a
concentrated portfolio of high quality companies that
meet its sustainable and responsible investment criteria
will deliver both real income growth and attractive total
returns over the long-term.
The application of sustainable and responsible investing
principles enables the Investment Manager to reduce risks
in the portfolio by identifying and excluding companies
whose business models it considers face significant
threats from Environmental, Social and Governance
(“ESG”) factors. It also enables the Investment Manager to
identify positive opportunities for companies to benefit
from the same trends as well as giving the potential for
engagement to improve companies’ performance and
increase shareholder value.
A focus on high quality companies and sustainable and
responsible investing principles is therefore well aligned
with the generation of resilient and growing dividend
income, and a capital return profile that is both robust in
difficult market conditions and able to participate in
upside opportunities, enhancing risk adjusted returns.
Investment Process
The investment process has five stages:
1. Idea Generation
The Investment Manager’s teams of investment
analysts generate investment ideas from their
comprehensive coverage of the UK and European
equity markets. This involves them considering the
merits of over 1,000 listed UK and European
companies across the market cap spectrum.
2. Sustainability
Companies with excessive ESG risks are excluded
through a combination of pre-set screens and
quantitative and fundamental analysis. This removes
around a quarter of the companies monitored from
the Investment Manager’s consideration.
3. Quality
Businesses that don’t meet the analysts’ quality criteria
are then filtered out. Only around 20% of companies
will meet this hurdle and the Investment Manager
particularly emphasises allocation to companies that
are considered to be sustainable leaders.
4. Total Returns
Focus is then placed on those companies that the
analysts identify as having the most attractive total
return potential as well as those that have compelling
income generation characteristics.
5. Portfolio Construction
The Investment Manager then builds a concentrated
portfolio that can deliver the income and total return
requirements while matching the style and risk profile
and meeting the sustainable and responsible
investing principles.
Investment Process
Dunedin Income Growth Investment Trust PLC 27
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
A Highly Selective Strategy
Emphasis on sustainability, quality, total return and income
The Investment Manager’s Approach to ESG
Introduction
The Investment Manager believes that effective analysis
of, and engagement with, the ESG risks and opportunities
that companies face will enhance investors’ risk
adjusted returns. While sustainable and responsible
investing principles were formally incorporated into the
Company’s investment objective in 2021, a focus on ESG
factors has been a long standing part of the Investment
Manager’s process, making the transition a relatively
straightforward one.
Those sustainable and responsible investment principles
are integrated into the investment process through a
combination of exclusions, positive allocation and ongoing
corporate engagement. To deliver this, the Investment
Manager utilises binary screens, qualitative analytical
assessment, proprietary quantitative tools and ongoing
corporate access and voting policy.
The Investment Manager draws upon three resources to
assist it with the integration of ESG into the investment
process; there is a team of approximately 60 investment
professionals in the Developed Markets team and 30 in the
sustainability institute (“Central ESG capability”), and two
‘on-desk’ ESG specialists. Each plays an important yet
distinct role in implementation.
While deploying these resources, the ultimate
responsibility for stock selection and portfolio construction
lies with the Company’s portfolio managers.
28 Dunedin Income Growth Investment Trust PLC
Exclusions
The Investment Manager uses three different forms of exclusions. These are complementary in form with binary
exclusions providing assurance to shareholders that companies with certain types of business activities will not be
invested in. Additionally, the Investment Manager utilises both the judgement of its investment analysts and its own
proprietary quantitative tools to exclude companies with poorly managed ESG risks.
1. Binary exclusions – these screens focus on areas where the Investment Manager sees long-term risks arising from ESG
factors to companies’ business models and, as a result, it chooses not to invest. These will be subject to ongoing review to
ensure that they are consistent with industry best practice.
2. ESG House Score – this is a proprietary quantitative tool that scores the companies in the investment universe on
operational and governance risks. The Investment Manager excludes the bottom 10% of companies from consideration
for the portfolio.
3. ESG Quality Score – every company under research coverage is judged by the analysts on the quality of its
management of ESG risks. Companies deemed to be below average are excluded from consideration for the portfolio.
The effect of the above screening process is that the number of investible companies available to the Investment
Manager is reduced by approximately 20%.
Investment Process
Continued
Dunedin Income Growth Investment Trust PLC 29
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Carbon Intensity
The Company also commits to having a carbon intensity (Scope 1 & 2) of less than 80% of the FTSE All-Share Index,
which constrains investment in high carbon emitting companies.
Weighted Average Carbon Intensity (WACI)
In tonnes of CO2e / million USD revenue
Scope 1 & 2 Scope 1 Scope 2 Scope 3
Upstream
Scope 3
Downstream
Portfolio 48.25 36.11 12.14 164.68 823.30
Benchmark 86.40 62.47 23.94 174.95 1,325.00
Relative carbon intensity % 55.84 57.81 50.71 94.13 62.14
Total Emissions
(In tonnes of CO2e)
Scope 1 & 2 Scope 1 Scope 2 Scope 3
Upstream
Scope 3
Downstream
Portfolio 20,217 16,426 3,792 68,698 349,311
Benchmark 58,336 46,318 12,017 94,928 689,969
Relative carbon intensity % 34.66 35.46 31.55 72.37 50.63
Source: Trucost
The Company’s portfolio currently has a Carbon Intensity on Scope 1 and 2 emissions of 56% of the benchmark.
On a total emissions basis, the portfolio sits at 35% of the benchmark on Scope 1 and 2 emissions.
30 Dunedin Income Growth Investment Trust PLC
Positive Allocation
Companies that investment analysts score highly on the quality of their ESG risk management are designated as
sustainable leaders. Those sustainable leaders that have a high alignment of revenues or investment with the UN
sustainable development goals will additionally be designated as solutions providers. The majority of the Company’s
portfolio is invested into those two leadership categories and the Investment Manager will actively search for
opportunities where it believes these attributes to be undervalued.
Split of Sustainable Leaders, Solutions Providers and Improvers
Investment Process
Continued
Dunedin Income Growth Investment Trust PLC 31
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Engagement
Rather than taking a purely best-in-class approach, the
Investment Manager also invests in companies that are
taking real steps to improve their ESG performance.
Improvers are typically companies whose ESG potential is
being overlooked by the market and the Investment
Manager supports these companies through active
engagement. Clearly defined opportunities for
improvement are identified by the team of investment
analysts in conjunction with the Investment Manager’s on-
desk ESG analysts and central ESG team, and these are
closely monitored from initiation through to completion.
The Investment Manager believes that effective
engagement presents a significant opportunity to add
shareholder value over time.
During the year ended 31 January 2024, the Investment
Manager held 109 separate meetings with portfolio
companies where ESG topics were raised. Eight of these
were dedicated priority engagement meetings,
addressing areas of material improvement. By topic,
Corporate Governance was the area most discussed, but
there was also significant focus on Climate and
Corporate Behaviour and, increasingly, on Social Issues.
% of Meetings where Topic Discussed
32 Dunedin Income Growth Investment Trust PLC
Engagement Case Studies
National Grid (Solutions)
The Investment Manager engaged with the Group Director of Land Planning and External Affairs to discuss
sustainability-related risks and opportunities relevant to the investment case. Their engagement with the company
primarily focussed on two areas. First, National Grid's approach to securing public consent among those communities
that are likely to be affected by the construction of new transmission infrastructure. This investment is required to meet
the electricity needs of the economy, however it brings with it community impacts. In particular, there is current public
opposition to a National Grid project in East Anglia. Second, National Grid's plans for its natural gas distribution assets in
New York, where policymakers have set ambitious legal goals to transition away from gas. National Grid expressed
support for compensating communities hosting infrastructure. Public opposition and negotiations have the potential to
lead to project delays and the Investment Manager will continue to engage with the company on how it is addressing
these challenges.
Taylor Wimpey (Improver)
The Investment Manager participated in a presentation on Taylor Wimpey’s research and development efforts to meet
the Future Homes Standards. The Future Home Standards come into effect from 2025 and are designed to increase
energy efficiency and reduce greenhouse gas emissions in new build homes compared to prior regulations. This
upcoming regulation presents a significant change in the regulatory environment and requires both innovation and
execution to meet the standards and scale up. The standards will further enhance the energy efficiency attributes of
new homes compared to existing housing stock and the Investment Manager expects execution will impact customer
demand. The Investment Manager discussed with the company the installation and operating costs associated with
meeting the regulations and the potential financial burden on the industry and customers.
Taylor Wimpey has built five trail plots in Sudbury, with a combination of technology and fabric solutions using its existing
supply chain and is in the process of monitoring customer costs and engagement. The Investment Manager was
encouraged by the cross-disciplined approach being taken by the company to address the standards and its strategic
focus. The Investment Manager welcomes the efforts being undertaken and believes this will create divergence in the
industry, with those with superior resources better placed to navigate the regulations. The Investment Manager will
continue to monitor this development and its implications for both the housebuilders and the supply chain.
Investment Process
Continued
Dunedin Income Growth Investment Trust PLC 33
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Proxy Voting
Voting policy forms an important part of the Investment Manager’s corporate engagement approach. Every proxy is
voted and, where needed, input sought from the investment and ESG analysts in conjunction with the expertise of the
central voting team. Where direct engagement has not proven effective, the Investment Manager is very prepared to
vote against companies.
Metric Value
Number of meetings held 40
Number of meetings with at least one vote against management 13
Percentage of meetings with at least one vote against management 32.5%
Total number of voteable proposals 704
Number of votes against management 31
Votes against management as a percentage of voteable proposals 4.4%
Number of votes against ISS Policy 37
Votes against ISS Policy as a percentage of voteable proposals 5.3%
Number of votes against policy 23
Votes against policy as a percentage of voteable proposals 3.3%
The Investment Manager voted against management recommendations in 32.5% of the general meetings held by
portfolio companies during the year, which it thinks is the most useful metric for measuring the level of its constructive
engagement. It is important to bear in mind that the Investment Manager typically begins from a position of support for
the select group of companies it invests in.
There is an extensive ongoing programme which allows the Investment Manager to actively engage with investee
companies throughout the year beyond the voting season.
34 Dunedin Income Growth Investment Trust PLC
Introduction
For the year ended 31 January 2024, the Company’s net
asset value total return of 6.7% compared favourably to a
total return of 1.9% from the benchmark, the FTSE All-
Share Index. This encouraging outcome occurred despite
various challenges in the UK market, such as geopolitical
risks, concerns over the financial stability of the banking
sector, fears of persistent inflation, and the delayed
impact of tight monetary policy. Economies proved more
resilient than anticipated coming into the year. Consumer
confidence has benefited from real wage growth and a
moderating cost of living, meanwhile the UK faced a mild
technical recession in the latter half of the year. More
disappointingly, in the context of strong portfolio
outperformance, the share price of the Company
declined over the year by 1.6% in total return terms and
the discount widened. The revenue return hit a new
record level of 13.54p a share.
The global macro-economic outlook remains mixed, with
a high degree of uncertainty. While fears of a US recession
have lessened, the Chinese recovery has disappointed
and global growth is expected to slow. Recognising this
backdrop, we believe the Company is well-positioned to
navigate potential challenges in the market. Our focus on
higher-quality companies and investments that can
deliver both income and capital growth, while adhering to
the Company’s sustainable and responsible investing
approach, should help us manage any difficult market
conditions ahead.
“We are pleased with the Company’s
income progression in the year. The
revenue return hit a new record level
of 13.54p a share.”
The portfolio remains highly differentiated compared to
both peers and its benchmark. It remains the only UK
Equity Income investment trust with a formal sustainability
approach. The active share of the portfolio is 76%, while
the number of holdings is a focussed group of 35. We see
attractive opportunities in innovative mid-sized UK
companies and have 25% of the Company’s assets in the
FTSE 250 Index and 50% in UK large companies. We utilise
the Company’s flexibility to invest overseas with an
allocation of up to 25% to high quality overseas
companies, offering diversification and unique exposures.
The Company offers an attractive 5.0% dividend yield
(based on the year end share price of 276p),
approximately 20% ahead of the FTSE All-Share Index.
The free cash flow performance of companies held in the
portfolio has been strong, with many growing their
dividends during the year. As a result, income generation
came in ahead of our initial expectations.
Performance
We are pleased with the Company’s income progression
in the year. The revenue earnings per share of 13.54p
exceeded our expectations and represents an increase of
4.0% over the previous year. Special dividends were paid
by Volvo and Softcat in the year. A number of holdings
delivered strong dividend growth, including Games
Workshop, Morgan Sindall, Novo-Nordisk, Relx, and Sirius
Real Estate. 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 Company’s sustainable
investment approach targets
investment in high-quality,
sustainable Leaders and Improvers
across the market.”
The UK market concluded the year with a modest
increase, despite experiencing some volatility throughout
the year. The Company benefited from positive sector
allocation given its underweight exposure to the basic
materials sector, which underperformed due to lower
commodity prices associated with weaker Chinese
activity. The portfolio's overweight position in the
technology sector, an area with numerous quality and
growth characteristics that we focus on, proved beneficial
to performance.
The Company’s sustainable investment approach targets
investment in high-quality, sustainable Leaders and
Improvers across the market and we continue to engage
with investee companies. Filters are applied to the
universe to reduce exposure to sectors and companies
facing the highest environmental and social risks. During
the year, the investable universe provided a tailwind to
relative performance, primarily due to its lower exposure
to basic materials. While the primary focus of the
Company is on selecting high-quality, sustainable
companies, we continue to monitor factor risks presented
by this approach and remain confident that it aligns with
positive outcomes for shareholders.
Investment Mana
g
er’s Review
Dunedin Income Growth Investment Trust PLC 35
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Encouragingly, fundamental analysis and stock picking
contributed positively, with the market rewarding
companies that demonstrated attractive growth and
improving fundamentals. In the healthcare sector, Novo-
Nordisk announced a series of trial data indicating that the
anti-obesity drug Wegovy not only leads to weight loss in
patients but also reduces the risk of cardiovascular events.
The drug targets a significant unmet need, obesity, with
attractive long-term supply/demand dynamics and the
shares responded very favourably. The accounting
software firm Sage exceeded expectations with
accelerating revenue growth, driven by its US cloud
accounting software product, Sage Intacct. Upon
purchasing shares in late 2022, we anticipated that the
company was at a growth and margin inflection point,
which has subsequently materialised. Sage's transition to
subscription contracts and product innovation form a
strong foundation for sustained growth in the medium
term. Relx is performing better than anticipated due to its
investment in data analytics and decision-making tools,
which enable customers to extract more value from its
platform. With the valuation at a discount to US peers,
mainly due to its UK listing, we continue to believe it is a
compelling opportunity.
“We are pleased with the Company’s
income progression in the year. A
number of holdings delivered strong
dividend growth.”
As addressed in last year's Annual Report, UK domestic
and mid-sized companies’ underperformance in 2022
resulted in heavily discounted valuations, but we
anticipated that long-term alpha generation from UK mid-
sized companies would return. This trend of
underperformance continued through to October 2023
due to concerns about sticky inflation, recession risk and
market liquidity headwinds, before sharply reversing in the
last quarter of the financial year. The holding in
Intermediate Capital rebounded strongly, while UK
construction company Morgan Sindall and large
housebuilder Taylor Wimpey saw share price recovery as
fears of a deep UK recession and house price deflation
moderated. Taylor Wimpey's unique dividend policy,
based on net asset value rather than earnings, ensured a
visible and healthy shareholder distribution.
Turning to the detractors to performance. The holding in
the Asian insurer Prudential underperformed on concerns
about the pace of recovery in China. We view this as a
temporary setback and believe that Prudential's long-
term structural growth potential, offered by its market
exposures, is not reflected in its discounted valuation. The
specialist UK lender Close Brothers faced news that the UK
financial regulator, the FCA, has opened an enquiry into
legacy motor finance commission structures in the
industry and whether customers are owed financial
redress. The quantum and timing of the amount to be paid
to customers is uncertain and patience will be required,
with a regulatory announcement anticipated in
September this year. Meanwhile the company cut its
dividend in order to conserve capital which was a
disappointing development.
Portfolio Activity
We introduced several new holdings this year. We initiated
a position in Telecom Plus, a retailer of utility, telecom and
insurance products, which operates in the UK under the
Utility Warehouse brand. The company has a capital-light
business model, strong balance sheet and attractive cost
advantage which means it is well placed to deliver long-
term customer growth, earnings progression and
shareholder distributions. We also introduced the UK’s
largest IT value added reseller Softcat to the portfolio. We
believe Softcat has significant potential for long-term
growth, coupled with a strong balance sheet and the
optionality for enhanced shareholder cash returns.
Alongside these additions, we purchased a new position in
German automotive manufacturer Mercedes-Benz which
is repositioning its strategy towards the luxury end of the
market and is well positioned from a technology
perspective to meet the challenges of the electric vehicle
transition and the gradual move to autonomous driving.
Finally, we introduced National Grid, which has been
owned by the Company in the past. The company aims to
deliver both asset value and earnings growth over the
medium term, driven by the investment required to
decarbonise the UK and US energy networks and is a
critical enabler of the energy transition. We part funded
this purchase with a reduction in the holding in SSE, which
benefits from similar drivers. National Grid has a superior
shareholder distribution return and so is helpful from an
income perspective.
36 Dunedin Income Growth Investment Trust PLC
To fund these new ideas we exited small holdings in lower
conviction names Direct Line Insurance, Ashmore and
Ubisoft. We also took the opportunity to exit Dechra
Pharmaceuticals after it received an all-cash offer from
private equity company EQT and the private equities
investment department of Abu Dhabi Investment
Authority. Finally, we exited Coca-Cola Hellenic Bottling
Company following strong share price recovery from the
negative reaction to the Russian invasion of Ukraine, and
resilient earnings.
Outlook
Signs are emerging that the actions taken by central
banks to manage the high levels of inflation in the UK and
Europe are having their desired effect. While inflation is
decelerating, geopolitical risk and wage growth remain
elevated, together making the path to monetary easing a
challenge to predict. Global growth is expected to slow
and the UK and Eurozone are already in recession-like
conditions. The US economy has remained more resilient
than many feared, however household savings and
corporate balance sheets are finite. Chinese growth has
stabilised amid easing but household confidence and the
real estate sector weigh on the economy. Despite this
backdrop, we remain positive on the potential long-term
returns available from the portfolio. Fundamental
company analysis supports our conviction in the high
quality businesses in the portfolio, and we see attractive
opportunities that are underappreciated by the market.
“We remain positive on the potential
long-term returns available from the
portfolio. Fundamental company
analysis supports our conviction in the
high quality businesses in the portfolio,
and we see attractive opportunities
that are underappreciated by
the market.”
There are reasons to be optimistic. The Company should
benefit from the focus on higher quality companies with
less reliance on the economic cycle, given our attention to
diversification, balance sheet strength, and resilience of
income. The UK equity market remains highly attractive in
terms of valuation, both on an absolute basis and relative
to global markets. This view is supported by the increased
frequency of mergers and acquisitions across the market
which, in our view, will act as a catalyst to address
the mispricing.
Overall, we will continue to maintain a balanced approach
to the positioning of the portfolio, giving it the potential to
perform in a range of market environments. Our primary
attention is on protecting capital, but we will continue to
look to participate in opportunities where share prices in
good companies with attractive long-term prospects
have been oversold. Simultaneously, we will concentrate
on those UK and overseas companies committed to
creating a more sustainable future.
Ben Ritchie and Rebecca Maclean,
abrdn Investments Limited
3 April 2024
Investment Mana
g
er’s Review
Continued
Dunedin Income Growth Investment Trust PLC 37
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
abrdn Investments Limited
The Company’s Investment Manager is abrdn
Investments Limited which is a wholly-owned subsidiary of
abrdn plc. The abrdn Group’s assets under management
and administration were £494.9 billion as at 31 December
2023, managed for a range of clients including 16 UK-
listed closed end investment companies.
The Investment Team Senior Managers
Ben Ritchie
Head of Developed Markets Equities
Ben Ritchie is Head of Developed Markets Equities at
abrdn. He originally joined abrdn in 2002 as a graduate
trainee and has been managing of the Company since
2012. Ben has a BA (Hons) in Modern History and Politics
from Pembroke College, University of Oxford, and is an
alumni of Harvard Business School. He is a certified
CFA Charterholder.
Rebecca Maclean
Investment Director, UK Equities
Rebecca Maclean is an Investment Director in the UK
Equities team at abrdn. She has worked in the responsible
investment industry since 2010 and joined abrdn in 2013
as a Responsible Investment Analyst. She moved to the UK
Equities team in 2016. Rebecca graduated with a BA in
Experimental Psychology from University of Oxford, holds
a MA in International Relations from King’s College London,
and is a CFA Charterholder.
Information About the Investment Mana
g
er
38 Dunedin Income Growth Investment Trust PLC
Portfolio
“Fundamental analysis and stock
picking contributed positively to
performance, with the market
rewarding companies that
demonstrated attractive growth and
improving fundamentals.”
6.8% of the Company’s total assets are invested in
the Technology sector.
Dunedin Income Growth Investment Trust PLC 39
40 Dunedin Income Growth Investment Trust PLC
As at 31 January 2024
AstraZeneca (Solutions)
Unilever (Leader)
AstraZeneca is a pharmaceutical
company that focuses on the research,
development and manufacture of
drugs in a range of therapeutic areas.
Unilever is a global consumer goods
company, with particularly strong
market positions in emerging markets
and operating in a number of product
areas including Beauty, Personal Care,
Home Care and Nutrition.
TotalEnergies (Improver)
Relx (Leader)
TotalEnergies is an energy company
producing and marketing fuels, natural
gas and electricity globally.
Relx is a global provider of information
and analytics for professionals and
businesses across a number of
industries including scientific, technical,
medical and law.
London Stock Exchange (Improver)
Diageo (Leader)
London Stock Exchange is a leading
financial information company that
also owns prominent pieces of market
infrastructure.
Diageo is a global leader in spirits and
liquers with a portfolio of world-
renowned brands.
National Grid (Solutions)
Intermediate Capital (Improver)
National Grid owns gas and electricity
transmission and distribution assets in
the UK and United States.
Intermediate Capital is a private
equity investment firm focused on
providing capital to help companies
grow through private and public
markets and provides a number of
strategies and funds aimed at
institutional investors.
Chesnara (Improver)
Taylor Wimpey (Improver)
Chesnara is an owner and manager of
primarily closed books of life assurance
assets in the UK, Sweden and Holland.
Taylor Wimpey is one of the
largest home construction companies
in the United Kingdom.
Ten Lar
g
est Investments
Dunedin Income Growth Investment Trust PLC 41
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Valuation Total Valuation
2024 assets 2023
Company Sector £’000 % £’000
AstraZeneca Pharmaceuticals and Biotechnology 32,517 6.7 38,221
Unilever Personal Care, Drug and Grocery Stores 28,205 5.8 35,175
TotalEnergies Oil, Gas and Coal 26,125 5.3 28,736
Relx Media 23,846 4.9 24,794
London Stock Exchange Finance and Credit Services 23,696 4.8 13,697
Diageo Beverages 22,711 4.6 25,344
National Grid Gas Water and Multi-utilities 17,956 3.7 –
Intermediate Capital Investment Banking and Brokerage Services 16,018 3.3 12,451
Chesnara Life Insurance 15,510 3.2 16,934
Taylor Wimpey Household Goods and Home Construction 15,075 3.1 11,926
Ten largest investments 221,659 45.4
SSE Electricity 13,876 2.8 20,814
ASML Technology Hardware and Equipment 13,067 2.7 10,202
Prudential Life Insurance 13,015 2.7 17,980
Sage Software and Computer Services 12,769 2.6 10,059
M&G Investment Banking and Brokerage Services 12,402 2.5 9,072
Games Workshop Leisure Goods 12,196 2.5 12,772
Volvo Industrial Transportation 11,466 2.3 14,667
Sirius Real Estate Real Estate Investment Trusts 11,433 2.3 4,112
Morgan Sindall Construction and Materials 11,166 2.3 8,085
Nordea Bank Banks 11,012 2.3 20,309
Twenty largest investments 344,061 70.4
Weir Group Industrial Engineering 10,471 2.1 11,653
Assura Real Estate Investment Trusts 10,061 2.1 13,327
Hiscox Non-life Insurance 10,043 2.1 10,869
Edenred Industrial Support Services 10,040 2.1 9,319
Mercedes-Benz Automobiles & Parts 9,893 2.0 –
Oxford Instruments Electronic and Electrical Equipment 9,228 1.9 80
Croda Chemicals 9,179 1.9 9,297
Novo-Nordisk Pharmaceuticals and Biotechnology 9,009 1.8 9,909
Telecom Plus Telecommunication Service Providers 8,970 1.8 –
Pets At Home Retailers 8,951 1.8 11,329
Thirty largest investments 439,906 90.0
Portfolio
42 Dunedin Income Growth Investment Trust PLC
Valuation Total Valuation
2024 assets 2023
Company Sector £’000 % £’000
Marshalls Construction and Materials 8,914 1.8 9,109
Softcat Software and Computer Services 7,269 1.5 –
Genus Pharmaceuticals and Biotechnology 6,865 1.4 6,020
Close Brothers Banks 6,170 1.3 11,001
Moonpig Retailers 4,963 1.0 3,551
Total investments 474,087 97.0
Net current assets
A
14,780 3.0
Total assets less current liabilities
A
488,867 100.0
A
Excluding bank loan of £13,307,000
Portfolio
Continued
Dunedin Income Growth Investment Trust PLC 43
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
0% 5% 10% 15% 20% 25% 30%
Financials
Consumer Discretionary
Industrials
Consumer Staples
Health Care
Technology
Utilities
Energy
Real Estate
Basic Materials
Telecommunications
2024
2023
Portfolio Sector Breakdown
44 Dunedin Income Growth Investment Trust PLC
As at 31 Januar
y
2024
FTSE All-Share Portfolio Portfolio
Index weighting weighting weighting
2024 2024 2023
% % %
Energy Oil, Gas and Coal 10.8 5.3 5.8
10.8 5.3 5.8
Basic Materials Industrial Metals And Mining 6.3 1.9 1.9
Precious Metals And Mining 0.2 – –
Chemicals 0.6 – –
7.1 1.9 1.9
Industrials Construction and Materials 0.4 4.1 3.5
Aerospace And Defence 3.3 – –
Electronic and Electrical Equipment 1.0 1.9 –
General Industrials 1.6 – –
Industrial Engineering 0.6 2.1 2.4
Industrial Support Services 3.6 2.1 1.9
Industrial Transportation 1.2 2.3 3.0
11.7 12.5 10.7
Consumer Discretionary Automobiles & Parts 0.1 2.0 –
Consumer Services 1.6 – –
Household Goods and Home Construction 1.3 3.1 2.5
Leisure Goods 0.1 2.5 3.0
Personal Goods 0.3 – –
Media 4.1 4.9 5.0
Retailers 1.5 2.9 3.0
Travel And Leisure 3.5 – –
12.5 15.4 13.6
Health Care Medical Equipment And Services 0.6 – –
Pharmaceuticals and Biotechnology 10.7 9.9 12.2
11.3 9.9 12.2
Consumer Staples Beverages 3.2 4.6 8.3
Food Producers 0.6 – –
Tobacco 3.0 – –
Personal Care, Drug and Grocery Stores 7.6 5.8 7.1
14.4 10.4
15.5
Sector Analysis
Dunedin Income Growth Investment Trust PLC 45
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
As at 31 Januar
y
2024
FTSE All-Share Portfolio Portfolio
Index weighting weighting weighting
2024 2024 2023
% % %
Real Estate Real Estate Investment and Services
0.4 –
3.5
Real Estate Investment Trusts
2.3 4.4
–
2.7 4.4
3.5
Utilities Electricity
0.9 2.8
4.2
Gas Water and Multi-utilities
2.8 3.7
–
3.7 6.5
4.2
Financials Banks
9.0 3.6
6.3
Finance and Credit Services
1.9 4.8
2.8
Investment Banking and Brokerage Services
2.9 5.8
5.5
Closed End Investments
6.3 –
–
Life Insurance
2.4 5.8
7.1
Non-life Insurance
0.8 2.1
4.1
23.3 22.1
25.7
Technology Software and Computer Services
1.4 4.1
2.0
Technology Hardware and Equipment
– 2.7
2.1
1.4 6.8
4.1
Telecommunications Telecommunication Service Providers
1.1 1.8
–
1.1 1.8
–
Total investments 100.0 97.0
97.3
Net current assets before borrowings
A
3.0
2.7
Total assets less current liabilities
A
100.0
100.0
A
Excluding bank loan of £13,307,000
46 Dunedin Income Growth Investment Trust PLC
National Grid (Solutions)
National Grid is a new holding in the portfolio this year. The
company’s primary business is the transmission and
distribution of electricity and gas across the UK and the
northeastern United States. Governments recognise the
investment required to upgrade aging electricity networks
in order to address energy security and the clean energy
transition. In the UK, the Government plans to increase
offshore wind capacity to 50GW by 2030. This will require
substantial expansion of the electricity transmission grid in
order to get the electricity from where it is generated, in
the north, to where it is consumed, in the south. In the US,
growth is underpinned by a long-dated pipe replacement
programme and capital expenditure to support
the transition.
National Grid intends to invest £42 billion in its UK and US
networks over the next five years, with £32 billion
dedicated to decarbonising the grid. National Grid is well
positioned to deliver strong asset growth for several years,
which will support visible returns and earnings growth. The
company is also committed to maintaining its credit rating
and offers an attractive dividend.
ASML (Solutions)
ASML is a leading global supplier of photolithography
systems used in the manufacturing of semiconductor
chips. These chips are found in a wide range of electronic
devices, data centres, automotive segments and
communications infrastructure. Growth is supported by
the increasing adoption of advanced technologies, such
as Artificial Intelligence, and demand for more powerful
and energy-efficient semiconductors. ASML’s strong
commitment to research and development and
technological innovation has driven its market leadership
and allows the company to maintain strong pricing power
and durable customer relationships. While there is a
degree of cyclicality in ASML's end market, the Investment
Manager anticipates a more positive outlook through
2024. As a long-term investor, the Investment Manager
acknowledges the underlying structural drivers of the
business and the implications for future returns.
ASML’s innovation is a key enabler of the semiconductor
industry. The company is investing in leading-edge
technologies that improves energy use and adoption of
semiconductor chips in a range of industries.
Investment Case Studies
Dunedin Income Growth Investment Trust PLC 47
Mercedes-Benz (Improver)
Mercedes-Benz has one of the most widely recognised
and valuable global brands. 2023 was a year full of
challenges for the automotive sector, including consumer
discretionary pressures, heightened competition, and
deceleration in demand for electric vehicles (“EVs”).
Mercedes Benz’ strategy ‘to build desirable cars’ supports
its leading market position. The company targets the
premium end of the automotive market and, in doing so, it
has better pricing power, robust margins and earnings
resilience compared to peers. This strategy, and a focus
on cost optimisation, has allowed it to invest in innovative
technology and development to progress in areas of
automation and the future electric powertrain. With a
strong net cash balance sheet and healthy returns,
Mercedes-Benz offer an attractive dividend in addition to
an appealing buyback.
The company’s commitment to plug-in hybrids and all
electric cars is highlighted by its ambitious targets. The
company spends 24% of its capital expenditure and 32%
of its operating expenditure on low carbon transport
technologies and offers an electric alternative in every
segment in which it competes. The company is planning to
install 10,000 Mercedes-Benz high-power chargers in
core markets. In addition, the company has made
progress to decarbonise its own production and that of its
supply chain. While Mercedes-Benz depends on
consumer, regulatory and infrastructure developments
to support its transition, the Investment Manager
believes the company is well placed to lead in this
dynamic environment.
48 Dunedin Income Growth Investment Trust PLC
Governance
Dunedin Income Growth Investment Trust PLC 49
The Company is committed to high
standards of corporate governance and
applies the principles identified in the UK
Corporate Governance Code and the AIC
Code of Corporate Governance.
The Directors, all of whom are non-
executive and independent of the
Manager, supervise the management
of the Company and represent the
interests of shareholders.
50 Dunedin Income Growth Investment Trust PLC
David Barron
Independent Non-Executive Chairman
Experience:
David Barron was Head of Investment Trusts at JP Morgan
Asset Management until 2013, Chief Executive of Miton
Group plc until 2019, and then a non-executive director of
Premier Miton Group plc until July 2023. He was also a
director of The Association of Investment Companies until
2014. He is also a non-executive director of Baillie Gifford
European Growth Trust plc, BlackRock Sustainable
American Income Trust plc and Fidelity Japan Trust plc.
Length of service:
8 years, appointed a Director on 1 February 2016 and
Chairman on 23 May 2017
Last re-elected to the Board:
16 May 2023
Committee membership:
Management Engagement Committee and Nomination
and Remuneration Committee
Contribution:
The Nomination and Remuneration Committee has
reviewed the contribution of David Barron in light of his
proposed re-election at the AGM and has concluded that
he has continued to Chair the Company expertly,
fostering a collaborative spirit between the Board and
Manager whilst ensuring that meetings remain focused on
the key areas of stakeholder relevance. In addition, he has
continued to provide significant investment trust expertise
to the Board.
Gay Collins
Independent Non-Executive Director
Experience:
Gay Collins has over 35 years of experience in the
financial services sector and has founded and grown
three PR companies, Montfort Communications, Penrose
Financial (which became MHP) and Ludgate
Communications, and has an executive role at Montfort
where she advises financial services companies on
communications. She is also a non-executive director of
the Association of Investment Companies.
Length of service:
2 years, appointed a Director on 1 July 2021
Last re-elected to the Board:
16 May 2023
Committee membership:
Audit Committee, Management Engagement
Committee and Nomination and Remuneration
Committee
Contribution:
The Nomination and Remuneration Committee has
reviewed the contribution of Gay Collins in light of her
proposed re-election at the AGM and has concluded that
she has continued to provide significant value to the Board
through her knowledge of the financial services sector,
and promotional activities in particular, and knowledge of
the investment trust sector.
Board of Directors
Dunedin Income Growth Investment Trust PLC 51
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Jasper Judd
Independent Non-Executive Director and Chairman of the
Audit Committee
Experience:
Jasper Judd worked for Brambles Limited, a listed
Australian multi-national, where he held a number of
senior executive roles including Global Head of Strategy.
He is also a non-executive director of JPMorgan Indian
Investment Trust plc, Brown Advisory US Smaller
Companies plc and Schroder Asian Total Return
Investment Company plc. He is a Chartered Accountant.
Length of service:
8 years, appointed a Director on 1 February 2016
Last re-elected to the Board:
16 May 2023
Committee membership:
Audit Committee (Chairman), Management Engagement
Committee and Nomination and Remuneration
Committee
Contribution:
The Nomination and Remuneration Committee has
reviewed the contribution of Jasper Judd in light of his
proposed re-election at the AGM and has concluded that
he has continued to chair the Audit Committee expertly
through the year and provide financial and business
insight to the Board and knowledge of the investment
trust sector.
Christine Montgomery
Independent Non-Executive Director and Chairman of the
Management Engagement Committee
Experience:
Christine Montgomery has over 30 years of investment
management experience, most recently as Head of
Global Equities at AustralianSuper in Melbourne from 2016
until 2019. She previously held roles as a global equities
portfolio manager at Fidelity Worldwide Investments,
Martin Currie and Edinburgh Partners. She is also a non-
executive director of The Scottish American Investment
Company plc.
Length of service:
4 years, appointed a Director on 1 February 2020
Last re-elected to the Board:
16 May 2023
Committee membership:
Audit Committee, Management Engagement Committee
(Chairman) and Nomination and Remuneration
Committee
Contribution:
The Nomination and Remuneration Committee has
reviewed the contribution of Christine Montgomery in light
of her proposed re-election at the AGM and has
concluded that she has continued to provide significant
investment insight to the Board and knowledge of the
investment management sector.
52 Dunedin Income Growth Investment Trust PLC
Howard Williams
Senior Independent Non-Executive Director
and Chairman of the Nomination and
Remuneration Committee
Experience:
Howard Williams has over 35 years’ of fund management
experience and was, until October 2017, Chief Investment
Officer and Head of the Global Equity Team at JPMorgan
Asset Management. Prior to joining JPMorgan Asset
Management in 1994, he held a number of senior positions
at Shell Pensions and Kleinwort Benson Asset
Management. He started his career at James Capel & Co.
He is also a non-executive director of Strategic Equity
Capital plc and Lifesight Limited and is Chairman of
Schroders Unit Trust Limited.
Length of service:
6 years, appointed a Director on 1 April 2018 and Senior
Independent Director on 16 July 2020
Last re-elected to the Board:
16 May 2023
Committee membership:
Audit Committee, Management Engagement Committee
and Nomination and Remuneration Committee
(Chairman)
Contribution:
The Nomination and Remuneration Committee has
reviewed the contribution of Howard Williams in light of
his proposed re-election at the AGM and has concluded
that he continues to provide significant investment insight
to the Board and knowledge of the investment
management sector.
Board of Directors
Continued
Dunedin Income Growth Investment Trust PLC 53
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
The Directors present their report and the audited
financial statements for the year ended 31 January 2024.
Results and Dividends
The financial statements for the year ended 31 January
2024 are contained on pages 79 to 102. First, second and
third interim dividends, each of 3.20p per Ordinary share,
were paid on 25 August 2023, 24 November 2023 and 29
February 2024 respectively. The Directors recommend a
final dividend of 4.15p per Ordinary share, payable on 31
May 2024 to shareholders on the register on 3 May 2024.
The ex-dividend date is 2 May 2024. 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 2024 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 previous 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 £19,000 (2023: £16,000) 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 2024
consisted of 146,172,889 Ordinary shares of 25p and
7,505,046 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”), 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) 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 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.
Directors’ Report
54 Dunedin Income Growth Investment Trust PLC
Substantial Interests
Information provided to the Company by major
shareholders pursuant to the FCA’s Disclosure Guidance
and Transparency Rules is published by the Company via
a Regulatory Information Service.
The table below sets out the interests in 3% or more of the
issued share capital of the Company, of which the Board
was aware as at 31 January 2024.
Shareholder
Number of
shares held % held
Interactive Investor 37,572,556 25.7
Hargreaves Lansdown 17,857,977 12.2
EFG Harris Allday 6,942,544 4.7
A J Bell 6,328,721 4.3
W M Thomson 5,750,363 3.9
Charles Stanley 5,547,100 3.8
Rathbones 5,404,196 3.7
HSDL 5,044,283 3.4
Canaccord Genuity Wealth
Management
4,579,615 3.1
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 whom 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 2024 as
follows (with their eligibility to attend the relevant
meetings in brackets):
Board
Meetings
Audit
Committee
Meetings
Management
Engagement
Committee
Meetings
Nomination
and
Remuneration
Committee
Meetings
David Barron 6 (6) - (-)
A
1 (1) 1 (1)
Gay Collins 6 (6) 2 (2) 1 (1) 1 (1)
Jasper Judd 6 (6) 2 (2) 1 (1) 1 (1)
Christine
Montgomery
6 (6) 2 (2) 1 (1) 1 (1)
Howard Williams 6 (6) 2 (2) 1 (1) 1 (1)
A
David Barron is not a member of the Audit Committee but attends by invitation. He
attended all Audit Committee meetings during the year.
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
biographies of each of the Directors are shown on pages
50 to 52, setting out their range of skills and experience as
well as length of service and their contribution to the
Board during the year. 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.
Directors’ Report
Continued
Dunedin Income Growth Investment Trust PLC 55
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
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.
Board Diversity
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, including diversity of thought,
location and background. 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. In doing so, the Board will take account
of the targets set out in the FCA’s Listing Rules, which are
set out below.
The Board has resolved that the Company’s year end
date is the most appropriate date for disclosure purposes.
Table for reporting on gender as at 31 January 2024
Number of Board
members
Percentage of
the Board
Number of senior positions
on the Board (CEO, CFO,
Chair and SID)
Number in
executive
management
Percentage of
executive
management
Men 3 60%
n/a
(note 3)
n/a
(note 3)
n/a
(note 3)
Women 2 40% (note 1)
Not specified/prefer not to say - -
Table for reporting on ethnic background as at 31 January 2024
Number of Board
members
Percentage of
the Board
Number of senior positions
on the Board (CEO, CFO,
Chair and SID)
Number in
executive
management
Percentage of
executive
management
White British or other White
(including minority-white groups)
5 100%
n/a
(note 3)
n/a
(note 3)
n/a
(note 3)
Minority ethnic - - (note 2)
Not specified/prefer not to say - -
Notes:
1. Meets target that at least 40% of Directors are women as set out in LR 9.8.6R (9)(a)(i).
2. Does not meet target that at least one Director is from a minority ethnic background as set out in LR 9.8.6R (9)(a)(iii).
3. This column is not applicable as the Company is externally managed and does not have any executive staff. Specifically, it does not have either a CEO or CFO. The Company
considers that the roles of Chairman of the Board, Senior Independent Director and Chairs of the Audit Committee, Nomination and Remuneration Committee and
Management Engagement Committee are senior Board positions and, accordingly, that the Company meets in spirit the requirement that at least one of the senior Board
positions is held by a woman as set out in LR 9.8.6R (9)(a)(ii) .
As shown in the above table, the Company has not as yet met the target set out in LR 9.8.6R (9)(a)(iii) that at least one
Director is from a minority ethnic background. It is the Board’s intention that this target will be taken into account at the
time of the next appointment.
56 Dunedin Income Growth Investment Trust PLC
The Roles 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.
Directors’ Report
Continued
Dunedin Income Growth Investment Trust PLC 57
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
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);
· requirement of the chairman of a remuneration
committee to have served on a remuneration
committee for at least 12 months prior to appointment
(provision 32); and
· executive directors’ remuneration (provisions 33 and 36
to 40).
These provisions are not repeated in the AIC Code and the
Board therefore considers that they 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.
Board Committees
The Board has appointed a number of Committees, as set
out below. Copies of their terms of reference, which
clearly define the responsibilities and duties of each
Committee, are available on the Company’s website, or
upon request from the Company. The terms of reference
of each of the Committees are reviewed and re-assessed
by the Board for their adequacy on an ongoing basis.
Audit Committee
The Audit Committee’s Report is contained on pages
65 to 67.
Management Engagement Committee
The Management Engagement Committee consists of all
the Directors and is chaired by Christine Montgomery. The
terms and conditions of the Manager’s appointment,
including an evaluation of performance and fees, are
reviewed by the Committee on an annual basis. The
Committee also keeps the resources of the abrdn Group
under review, together with its commitment to the
Company and its investment trust business. In addition, the
Committee conducts an annual review of the
performance, terms and conditions of the Company’s
main third party suppliers.
The Board remains satisfied with the capability of the
abrdn Group to deliver satisfactory investment
performance, that its investment screening processes are
thorough and robust and that it employs a well-resourced
team of skilled and experienced fund managers. In
addition, the Board is satisfied that the abrdn Group has
the secretarial, administrative and promotional skills
required for the effective operation and administration of
the Company. Accordingly, the Board believes that the
continuing appointment of the Manager on the terms
agreed is in the interests of shareholders as a whole.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee consists of
all the Directors. The Committee is chaired by Howard
Williams who has relevant experience and understanding
of the Company. The Committee reviews the
effectiveness of the Board, succession planning, Board
appointments, appraisals and training, and determines
the Directors’ remuneration policy and level of
remuneration, including for the Chairman. The Committee
also considers the need to appoint an external
remuneration consultant. Further details of the
remuneration policy are provided in the Directors’
Remuneration Report on pages 61 to 64.
58 Dunedin Income Growth Investment Trust PLC
During the year, the Committee undertook an annual
appraisal of the Chairman of the Board, individual
Directors and the performance of Committees and the
Board as a whole. This process involved the completion of
questionnaires by each Director and follow-on discussions
between the Chairman and each Director. The appraisal
of the Chairman was undertaken by the Senior
Independent Director. The results of the process were
discussed by the Board following its completion, with
appropriate action points made.
Following the evaluation process, the Board believes that it
continues to operate in an efficient and effective manner
with each Director making a significant contribution to
the Board.
The intention is that the evaluation is externally facilitated
every three years, the next such review to be conducted
during the year ending 31 January 2025.
The Committee considers succession planning on at least
an annual basis. Potential new Directors are identified
against the requirements of the Company’s business and
the need to have a balance of skills, experience,
independence, diversity and knowledge of the Company
within the Board.
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 2024. 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
The respective responsibilities of the Directors and the
Auditor in connection with the financial statements
appear on pages 70, and 75.
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.
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’ Report
Continued
Dunedin Income Growth Investment Trust PLC 59
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
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
18 Bishops Square, London E1 6EG at 12 noon on
Thursday 23 May 2024.
The Notice of the Meeting is included on pages 116
to 121. Resolutions including the following business
will be proposed:
Allotment of Shares
Resolution 11 will be proposed as an ordinary resolution to
confer an authority on the Directors, in substitution for any
existing authority, to allot up to 33.33% of the issued
Ordinary share capital of the Company (excluding
treasury shares) as at the date of the passing of the
resolution (up to a maximum aggregate nominal amount
of £12,085,441 based on the number of Ordinary shares in
issue as at the date of this Report) in accordance with
Section 551 of the Companies Act 2006. The authority
conferred by this resolution will expire at the next Annual
General Meeting of the Company or on 31 July 2025,
whichever is earlier (unless previously revoked, varied or
extended by the Company in general meeting).
The Directors consider that the authority proposed to be
granted by resolution 11 is necessary to retain flexibility,
although they do not at the present time have any
intention of exercising such authority.
Limited Disapplication of Pre-emption Provisions
Resolution 12 will be proposed as a special resolution and
seeks to give the Directors power to allot Ordinary shares
and to sell Ordinary shares held in treasury (see below) (i)
by way of a rights issue (subject to certain exclusions); (ii)
by way of an open offer or other offer of securities (not
being a rights issue) in favour of existing shareholders in
proportion to their shareholdings (subject to certain
exclusions); and (iii) to persons other than existing
shareholders for cash up to a maximum aggregate
nominal amount representing 5% of the Company’s
issued Ordinary share capital as at the date of the passing
of the resolution (up to an aggregate nominal amount of
£1,812,997 based on the number of Ordinary shares in
issue as at the date of this Report), without first being
required to offer such shares to existing shareholders pro
rata to their existing shareholding.
This power will expire at the conclusion of the next Annual
General Meeting of the Company or on 31 July 2025,
whichever is earlier (unless previously revoked, varied or
extended by the Company in general meeting).
The Company may buy back and hold shares in treasury
and then sell them at a later date for cash rather than
cancelling them. Such sales are required to be on a pre-
emptive, pro rata basis to existing shareholders unless
shareholders agree by special resolution to disapply such
pre-emption rights. Accordingly, in addition to giving the
Directors power to allot unissued Ordinary share capital
on a non pre-emptive basis, resolution 12 will also give the
Directors power to sell Ordinary shares held in treasury on
a non pre-emptive basis, subject always in both cases to
the limitations noted above. Pursuant to this power,
Ordinary shares would only be issued for cash, and
treasury shares would only be sold for cash, at a price of
not less than the net asset value per share of the existing
Ordinary shares (calculated after the deduction of prior
charges at market value). Treasury shares are explained
in more detail under the heading “Market Purchase of the
Company’s own Ordinary Shares” below.
60 Dunedin Income Growth Investment Trust PLC
Market Purchase of the Company’s own Ordinary Shares
Resolution 13 will be proposed as a special resolution to
authorise the Company to make market purchases of its
own Ordinary shares. The Company may do either of the
following things in respect of its own Ordinary shares
which it buys back and does not immediately cancel but,
instead, holds in treasury:
· sell such shares (or any of them) for cash (or its
equivalent); or
· ultimately cancel the shares (or any of them).
Treasury shares may be re-sold quickly and cost
effectively. The Directors therefore intend to continue to
take advantage of this flexibility as they deem
appropriate. Treasury shares also enhance the Directors’
ability to manage the Company’s capital base.
No dividends will be paid on treasury shares and no voting
rights attach to them.
The maximum aggregate number of Ordinary shares
which may be purchased pursuant to the authority is
14.99% of the issued Ordinary share capital of the
Company as at the date of the passing of the resolution
(approximately 21.7 million Ordinary shares as at the date
of this Report). The minimum price which may be paid for
an Ordinary share is 25p (exclusive of expenses). The
maximum price (exclusive of expenses) which may be
paid for the shares is the higher of (a) 5% above the
average of the middle market quotations of the Ordinary
shares (as derived from the Daily Official List of the
London Stock Exchange) for the shares for the five
business days immediately preceding the date of
purchase; and (b) the higher of the price of the last
independent trade and the highest current independent
bid on the main market for the Ordinary shares.
This authority, if conferred, will expire at the conclusion of
the next Annual General Meeting of the Company or on
31 July 2025, whichever is earlier (unless previously
revoked, varied or extended by the Company in general
meeting), and will be exercised only if it would result in an
increase in net asset value per Ordinary share for the
remaining shareholders and if it is in the best interests of
shareholders as a whole.
Increase in Directors’ Fee Cap
The Company’s Articles of Association currently state that
the aggregate remuneration of the Directors may not
exceed £200,000 per annum. By way of ordinary
resolution 14, the Board seeks shareholder approval to
increase the aggregate amount to £250,000 per annum.
The higher limit is being sought so as to allow for increases
in Directors’ remuneration over a number of years and
also for a higher level of aggregate fees during years
when new Directors are appointed as part of the Board’s
secession planning.
Recommendation
The Directors consider that the resolutions to be proposed
at the Annual General Meeting are in the best interests of
the Company and its shareholders as a whole and
recommend that shareholders vote in favour of the
resolutions as they intend to do in respect of their own
beneficial shareholdings, amounting to 48,080 Ordinary
shares, representing 0.03% of the issued share capital as
at the date of this Report.
By order of the Board
abrdn Holdings Limited
Company Secretary
1 George Street
Edinburgh EH2 2LL
3 April 2024
Directors’ Report
Continued
Dunedin Income Growth Investment Trust PLC 61
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
This Directors’ Remuneration Report comprises
three parts:
1. a Remuneration Policy which is subject to a binding
shareholder vote every three years (or sooner if varied
during this interval) – most recently voted on at the
Annual General Meeting on 16 May 2023;
2. an Implementation Report which is subject to an
advisory vote on the level of remuneration paid during
the year; and
3. an Annual Statement.
Company law requires the Company’s Auditor to audit
certain of the disclosures provided in the Directors’
Remuneration Report. Where disclosures have been
audited, they are indicated as such. The Auditor’s report is
included on pages 71 to 78.
The Director’s Remuneration Policy and level of Directors’
remuneration are determined by the Nomination and
Remuneration Committee, which is chaired by Howard
Williams and comprises all of the Directors.
The Directors’ Remuneration Policy takes into
consideration the principles of the UK Corporate
Governance Code and the AIC’s recommendations
regarding the application of those principles to
investment companies.
No shareholder views have been sought in setting the
remuneration policy although any comments received
from shareholders are considered.
Remuneration Policy
The Board’s policy is that the remuneration of non-
executive Directors should be sufficient to attract
Directors of the quality required to run the Company
successfully. The remuneration should also reflect the
nature of the Directors’ duties, responsibilities, the value of
their time spent and be fair and comparable to that of
other investment trusts that are similar in size, and have
similar capital structures and similar investment objectives.
Appointment
· The Company only intends to appoint non-executive
Directors.
· All the Directors are non-executive and are appointed
under the terms of letters of appointment.
· 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.
· Any Director newly appointed to the Board will receive
the fee applicable to each of the other Directors at the
time of appointment together with any other fee then
currently payable in respect of a specific role which the
new Director is to undertake for the Company.
· No incentive or introductory fees will be paid to
encourage a person to become a Director.
· Directors are not eligible for bonuses, pension
benefits, share options, long term incentive schemes
or other benefits.
· Directors are entitled to re-imbursement of out-of-
pocket expenses incurred in connection with the
performance of their duties, including travel expenses.
· The Company indemnifies its Directors for all costs,
charges, losses, expenses and liabilities which may be
incurred in the discharge of duties as a Director of the
Company.
Performance, Service Contracts, Compensation
and Loss of Office
· Directors’ remuneration is not subject to any
performance related fee.
· No Director has a service contract.
· No Director was interested in contracts with the
Company during the period or subsequently.
· The terms of appointment provide that a Director may
be removed without notice.
· Compensation will not be due upon leaving office.
· No Director is entitled to any other monetary payment
or any assets of the Company.
Directors’ & Officers’ liability insurance cover is maintained
by the Company on behalf of the Directors.
There were no changes to the Directors’ Remuneration
Policy during the year nor are there any proposals for
changes in the foreseeable future.
Directors’ Remuneration Report
62 Dunedin Income Growth Investment Trust PLC
Approval of Remuneration Policy and Statement of Voting
at Annual General Meeting
The Remuneration Policy was last approved by
shareholders at the Annual General Meeting on 16 May
2023. 97.8% of proxy votes were in favour of the resolution
and 2.2% were against. There were abstentions in respect
of 712,258 shares.
The Remuneration policy is reviewed by the Board on an
annual basis and it is the Board’s intention that this
Remuneration Policy will apply for the three year period
ending 31 January 2026.
Implementation Report
Limit on Directors’ Fees
Directors’ fees are set within the limits of the Company’s
Articles of Association which limit the aggregate fees
payable to the Board of Directors per annum. The current
limit is £200,000 per annum and may only be increased by
shareholder resolution.
As explained in the Report of the Directors on page 60, an
ordinary resolution will be proposed at the Annual General
Meeting to seek shareholder approval to increase the
aggregate limit to £250,000 per annum. The higher limit is
being sought so as to allow for increases in Directors’
remuneration over a number of years and also for a
higher level of aggregate fees during years when new
Directors are appointed as part of the Board’s secession
planning.
Review of Directors’ Fees
The levels of fees at the year end are set out in the table
below. Fees are reviewed annually and were most
recently changed with effect from 1 February 2023.
31 January
2024
£
31 January
2023
£
Chairman 42,000 40,000
Chairman of Audit Committee 33,000 31,500
Director 28,000 26,500
An additional fee of £2,000 per annum is payable to the
Senior Independent Director.
The Nomination and Remuneration Committee carried
out a review of the level of Directors’ fees during the year,
which included consideration of fees paid by comparable
investment trusts and the sector as a whole. Following this
review, the Committee concluded that, with effect from 1
February 2024, fees should be increased to £44,000 for the
Chairman, £35,500 for the Audit Committee Chairman
and £29,500 for the other Directors. It was also agreed that
an additional fee of £2,000 per annum should continue to
be payable to the Senior Independent Director. There are
no further fees to disclose as the Company has no
employees, chief executive or executive directors.
Company Performance
The graph below shows the share price and NAV total
returns (assuming all dividends are reinvested) to
Ordinary shareholders compared to the total return from
the FTSE All-Share Index for the ten year period to 31
January 2024 (rebased to 100 at 31 January 2014). This
Index was chosen for comparison purposes as it is the
Company’s benchmark used for investment performance
measurement purposes.
80
100
120
140
160
180
200
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Share price total return
NAV total return with debt at market value
FTSE All-Share Index total return
Spend on Pay
As the Company has no employees, the Directors do not
consider it appropriate to present a table comparing
remuneration paid to employees with distributions to
shareholders. The total fees paid to Directors are
shown below.
Directors’ Remuneration Report
Continued
Dunedin Income Growth Investment Trust PLC 63
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Fees Payable (Audited Information)
The Directors who served during the year received the
following emoluments in the form of fees.
Director 2024
£
2023
£
David Barron 42,000 40,000
Gay Collins 28,000 26,500
Jasper Judd 33,000 31,500
Christine Montgomery 28,000 26,500
Howard Williams 30,000 28,500
Total 161,000 153,000
The above amounts exclude any employers’ national
insurance contributions. All fees are at a fixed rate and
there is no variable remuneration. Fees are pro-rated
where a change takes place during a financial year. There
were no payments to third parties included in the fees
referred to in the table above.
Annual Percentage Change in Directors’ Remuneration
The table below sets out the annual percentage change in
Directors’ fees for the past four years.
Year ended 31 January:
2024 2023 2022 2021
Director % % % %
David Barron 5.0 5.3 2.7 5.7
Gay Collins
A
5.7 n/a n/a n/a
Jasper Judd 4.8 6.8 3.5 5.6
Christine
Montgomery
B
5.7 7.1 3.1 n/a
Howard Williams
C
5.3 6.5 8.1 7.6
A
Appointed on 1 July 2021
B
Appointed on 1 February 2020
C
Appointed Senior Independent Director on 16 July 2020
Directors’ Interests in the Company
The Directors are not required to have a shareholding in
the Company. The Directors (including their connected
persons) at 31 January 2024 and 31 January 2023 had no
interest in the share capital of the Company other than
those interests, all of which are beneficial, shown in the
following table.
31 January
2024
31 January
2023
Ordinary
shares
Ordinary
shares
David Barron 21,977 21,977
Gay Collins 3,032 3,032
Jasper Judd 5,000 5,000
Christine Montgomery 5,000 5,000
Howard Williams 12,934 12,358
Since the year end Howard Williams has acquired an
additional 137 Ordinary shares through a dividend re-
investment plan. There have been no other changes to the
Directors’ interests in the share capital of the Company
since the year end up to the date of approval of
this Report.
Statement of Voting at Annual General Meeting
At the Company’s last Annual General Meeting, held on 16
May 2023, shareholders approved the Directors’
Remuneration Report (excluding the Directors’
Remuneration Policy) in respect of the year ended 31
January 2023. 98.6% of proxy votes were in favour of the
resolution and 1.4% were against. There were abstentions
in respect of 378,737 shares.
A resolution to receive, adopt and approve the Directors’
Remuneration Report (excluding the Directors’
Remuneration Policy) in respect of the year ended
31 January 2024 will be proposed at the Annual
General Meeting.
64 Dunedin Income Growth Investment Trust PLC
Annual Statement
On behalf of the Board and in accordance with Part 2 of
Schedule 8 of the Large and Medium-sized Companies
and Groups (Accounts and Reports) (Amendment)
Regulations 2013, it is confirmed that the above
Remuneration Report summarises, as applicable, for the
year to 31 January 2024:
· the major decisions on Directors’ remuneration;
· any substantial changes relating to Directors’
remuneration made during the year; and
· the context in which the changes occurred and
decisions have been taken.
On behalf of the Board
David Barron
Chairman
3 April 2024
Continued
Directors’ Remuneration Report
Dunedin Income Growth Investment Trust PLC 65
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
The Audit Committee presents its Report for the year
ended 31 January 2024.
Committee Composition
Throughout the year the Audit Committee consisted of all
the Directors except for the Chairman of the Board, David
Barron. The Committee is chaired by Jasper Judd who is a
Chartered Accountant and has recent and relevant
financial experience. The Board is satisfied that the
Committee as a whole has competence relevant to the
investment trust sector.
Functions of the Audit Committee
The principal role of the Audit Committee is to assist the
Board in relation to the reporting of financial information,
the review of financial controls and the management of
risk. The Committee has defined terms of reference which
are reviewed and re-assessed for their adequacy on at
least an annual basis. Copies of the terms of reference are
published on the Company’s website and are available
from the Company on request.
The Committee’s main functions are listed below:
· to review and monitor the internal control systems and
risk management systems (including review of non-
financial risks) on which the Company is reliant (the
Directors’ statement on the Company’s internal controls
and risk management is set out below);
· to consider whether there is a need for the Company to
have its own internal audit function;
· to monitor the integrity of the half-yearly and annual
financial statements of the Company by reviewing, and
challenging where necessary, the actions and
judgements of the Manager;
· to review, and report to the Board on, the significant
financial reporting issues and judgements made in
connection with the preparation of the Company’s
financial statements, half-yearly financial reports,
announcements and related formal statements;
· to review the content of the Annual Report and advise
the Board on whether, taken as a whole, it is fair,
balanced and understandable and provides the
information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy;
· to meet with the Auditor to review the proposed audit
programme of work and the findings of the Auditor. The
Committee shall also use this as an opportunity to
assess the effectiveness of the audit process;
· to develop and implement policy on the engagement of
the Auditor to supply non-audit services. Non-audit fees
paid to the Auditor during the year under review
amounted to £nil (2023: £7,000, representing the review
of the Half-Yearly Financial Report in the preceding
year). All non-audit services must be approved in
advance by the Audit Committee and will be reviewed in
the light of statutory requirements and the need to
maintain the Auditor’s independence;
· to review a statement from the abrdn Group detailing
the arrangements in place within the group whereby
staff may, in confidence, escalate concerns about
possible improprieties in matters of financial reporting or
other matters;
· to make recommendations in relation to the
appointment of the Auditor and to approve the
remuneration and terms of engagement of the
Auditor; and
· to monitor and review the Auditor’s independence,
objectivity, effectiveness, resources and qualification.
Activities During the Year
The Audit Committee met twice during the year when,
amongst other things, it considered the Annual Report and
the Half-Yearly Financial Report in detail. Representatives
of the abrdn Group’s internal audit, risk and compliance
departments reported to the Committee at these
meetings on matters such as internal control systems, risk
management and the conduct of the business in the
context of its regulatory environment.
Internal Controls and Risk Management
There is an ongoing process for identifying, evaluating and
managing the Company’s significant business and
operational risks, that has been in place for the year
ended 31 January 2024 and up to the date of approval of
the Annual Report, is regularly reviewed by the Board and
accords with the FRC’s guidance on internal controls.
The Board has overall responsibility for ensuring that there
is a system of internal controls in place and a process for
reviewing its effectiveness. Any system of internal control
is designed to manage rather than eliminate the risk of
failure to achieve business objectives and can only provide
reasonable and not absolute assurance against material
misstatement or loss.
Audit Committee’s Report
66 Dunedin Income Growth Investment Trust PLC
The design, implementation and maintenance of controls
and procedures to safeguard the assets of the Company
and to manage its affairs properly extends to operational
and compliance controls and risk management. The
Board, through the Audit Committee, has prepared its
own risk register which lists potential risks as set out in the
Strategic Report on pages 14 to 16. The Board considers
the potential cause and possible effect of these risks as
well as reviewing the controls in place to mitigate them.
Clear lines of accountability have been established
between the Board and the Manager. The Board receives
regular reports covering key performance and risk
indicators and considers control and compliance issues
brought to its attention. In carrying out its review, the
Board has had regard to the activities of the abrdn Group,
including its internal audit and compliance functions, and
the Auditor.
The Board has reviewed the abrdn Group’s process for
identifying and evaluating the significant risks faced by the
Company and the policies and procedures by which these
risks are managed. The Board has also reviewed the
effectiveness of the abrdn Group’s system of internal
control including its annual internal controls report
prepared in accordance with the International Auditing
and Assurance Standards Board’s International Standard
on Assurances Engagements (“ISAE”) 3402, “Assurance
Reports on Controls at a Service Organization”.
Risks are identified and documented through a risk
management framework by each function within the
abrdn Group’s activities. Risk is considered in the context
of the FRC’s guidance on internal controls and includes
financial, regulatory, market, operational and reputational
risk. This helps the internal audit risk assessment model
identify those functions for review. Any weaknesses
identified are reported to the Board and timetables are
agreed for implementing improvements to systems. The
implementation of any remedial action required is
monitored and feedback provided to the Board.
The key components designed to provide effective
internal control are outlined below:
· written agreements are in place which specifically
define the roles and responsibilities of the Manager and
other third party service providers;
· the Board and Manager have agreed clearly defined
investment criteria, specified levels of authority and
exposure limits. Reports on these issues, including
performance statistics and investment valuations, are
regularly submitted to the Board;
· the Manager prepares forecasts and management
accounts which allow the Board to assess the
Company’s activities and review its performance; the
emphasis is on obtaining the relevant degree of
assurance and not merely reporting by exception;
· as a matter of course the abrdn Group’s compliance
department continually reviews the Company’s
operations; and
· at its meeting in March 2024, the Audit Committee
carried out an annual assessment of internal controls for
the year ended 31 January 2024 by considering
documentation from the abrdn Group, including the
internal audit and compliance functions and taking
account of events since 31 January 2024.
The Board has considered the need for an internal audit
function. However, the Company has no employees and
the day-to-day management of the Company’s assets
has been delegated to the abrdn Group which has its own
compliance and internal control systems. The Board has
therefore decided to place reliance on those systems
and internal audit procedures and has concluded that it is
not necessary for the Company to have its own internal
audit function.
Financial Statements and Significant Issues
During its review of the Company’s financial statements
for the year ended 31 January 2024, the Audit Committee
considered the following significant issues, in particular
those communicated by the Auditor during its planning
and reporting of the year-end audit:
Valuation and Existence of Investments
How the issue was addressed
- The Company’s
investments have been valued in accordance with the
accounting policies, as disclosed in note 2 c) to the
financial statements. All investments are in quoted
securities in active markets, are considered to be liquid
and have been categorised as Level 1 within the FRS102
fair value hierarchy. The portfolio holdings and their pricing
is reviewed and verified by the Manager on a regular basis
and management accounts, including a full portfolio
listing, are prepared for each Board meeting. The
Company uses the services of an independent Depositary
(The Bank of New York Mellon (International) Limited) to
hold the assets of the Company. The Depositary checks
the consistency of its records with those of the Manager
on a monthly basis and reports to the Board on an
annual basis.
Audit Committee’s Report
Continued
Dunedin Income Growth Investment Trust PLC 67
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Recognition of Investment Income
How the issue was addressed
- The recognition of
investment income is undertaken in accordance with the
stated accounting policies. In addition, the Directors
review the Company’s income, revenue forecasts and
dividend comparisons at each Board meeting.
Maintenance of Investment Trust Status
How the issue was addressed
- The Company has been
approved as an investment trust under Sections 1158 and
1159 of the Corporation Tax Act 2010. Ongoing
compliance with the eligibility criteria is monitored on a
regular basis by the Manager and reported at each
Board meeting.
Review of the Auditor
The Audit Committee has reviewed the effectiveness of
the Auditor, Deloitte LLP (“Deloitte”), including:
· Independence - the Auditor discusses with the Audit
Committee, at least annually, the steps it takes to ensure
its independence and objectivity and makes the
Committee aware of any potential issues, explaining all
relevant safeguards.
· Quality of audit work - including the ability to resolve
issues in a timely manner (identified issues are
satisfactorily and promptly resolved), its
communications/presentation of outputs (the
explanation of the audit plan, any deviations from it and
the subsequent audit findings are comprehensive and
comprehensible), and working relationship with
management (the Auditor has a constructive working
relationship with the Manager).
· Quality of people and service - including continuity and
succession plans (the audit team is made up of
sufficient, suitably experienced staff with provision
made for knowledge of the investment trust sector and
retention on rotation of the audit partner).
In reviewing the Auditor, the Committee also took
into account the FRC’s Audit Quality Inspection Report
for Deloitte.
Tenure of the Auditor
Deloitte was initially appointed as the Company’s Auditor
at the Annual General Meeting on 23 May 2017. In
accordance with present professional guidelines the audit
partner is rotated after no more than five years and the
year ended 31 January 2024 is the second year for which
the present audit partner, Michael Caullay, has served.
In compliance with the appropriate regulations, the next
audit tender of the Company is due to take place by 2027.
The Audit Committee is satisfied that Deloitte is
independent and therefore supports the
recommendation to the Board that the re-appointment of
Deloitte be put to shareholders for approval at the Annual
General Meeting.
Jasper Judd
Chairman of the Audit Committee
3 April 2024
68 Dunedin Income Growth Investment Trust PLC
Financial
Statements
The Company’s net asset value
(“NAV”) increased by 6.7% on a total
return basis, outperforming the FTSE
All-Share Index which produced a
total return of 1.9%.
2.1% of the Company’s total assets are invested in
the Industrial Engineering sub-sector.
Dunedin Income Growth Investment Trust PLC 69
70 Dunedin Income Growth Investment Trust PLC
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
3 April 2024
Statement of Directors’ Responsibilities
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Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Report on the Audit of the Financial Statements
1. Opinion
In our opinion the financial statements of Dunedin Income Growth Investment Trust PLC (the “Company”):
· give a true and fair view of the state of the Company’s affairs as at 31 January 2024 and of its return for the year
then ended;
· have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including
Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ and
the Statement of Recommended Practice issued by the Association of Investment Companies in July 2022 ‘Financial
Statements of Investment Trust Companies and Venture Capital Trusts’; and
· have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
· the Statement of Comprehensive Income;
· the Statement of Financial Position;
· the Statement of Changes in Equity;
· the Statement of Cash Flows; and
· the related notes 1 to 22.
The financial reporting framework that has been applied in their preparation is applicable law, United Kingdom
Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK
and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice)’ (“FRS 102”) and the Statement of
Recommended Practice issued by the Association of Investment Companies in July 2022 ‘Financial Statements of
Investment Trust Companies and Venture Capital Trusts’ (“SORP”).
2. Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Statements section of our report.
We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the Financial Reporting Council’s (the “FRC’s”) Ethical Standard as applied to
listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We confirm that we have not provided any non-audit services prohibited by the FRC’s Ethical Standard to
the Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
3. Summary of Our Audit Approach
Key audit matters The key audit matter that we identified in the current year was:
· Valuation and ownership of listed investments.
Materiality The materiality that we used in the current year was £4.5 million (2023: £4.5 million) which
was determined on the basis of 1% of net assets as at 31 January 2024.
Scoping Audit work to respond to the risks of material misstatement was performed directly by the
audit engagement team.
Significant changes in our approach There were no significant changes in our approach in the current year.
Independent Auditor’s Report to Dunedin
Income Growth Investment Trust PLC
72 Dunedin Income Growth Investment Trust PLC
4. Conclusions Relating to Going Concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going concern basis of
accounting included:
· obtaining an understanding of management’s process for evaluating the Company’s ability to continue as
a going concern;
· reviewing the output of management's assessment of the Company's ability to remain an investment trust;
· assessing the performance and position of the Company, including its strong cash position, dividend income and
management fee expenses;
· assessing whether the Company has complied with the covenant tests for its borrowings facilities in order to assess
the continued availability of those facilities;
· assessing the risks to the investment portfolio of market altering factors such as inflation and increased interest rates,
by looking at the Company’s operational impact and business continuity plans;
· assessing the Company’s ability to cover its expenses for the 12 month period from the date of signing the financial
statements, including the ability of the Company to exit underperforming investments, if needed; and
· assessing the appropriateness of the disclosures in the financial statements relating to going concern.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a
period of at least twelve months from when the financial statements are authorised for issue.
In relation to the reporting on how the Company has applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the
Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
5. Key Audit Matter
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the
overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
5.1 Valuation and Ownership of Listed Investments
Key audit matter
description
As an investment entity, the Company holds listed investments of £474.1 million as at 31 January 2024 (2023:
£478.9 million). These represent the most quantitatively significant financial statement line on the Statement
of Financial Position.
There is a risk that investments may not be valued correctly or may not represent the property of the
Company. This may result in a material misstatement within the investments held at fair value through profit
or loss and we consider that there is a potential area for fraud since investment return is a key performance
indicator for the Company.
Refer to note 2 c) to the financial statements for the accounting policy on investments and details of the
investments are disclosed in note 10 to the financial statements. The valuation and ownership of listed
investments is included in the Audit Committee’s Report as a significant reporting matter on page 66.
Independent Auditor’s Report to Dunedin
Income Growth Investment Trust PLC
Continued
Dunedin Income Growth Investment Trust PLC 73
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
How the scope of our
audit responded to
the key audit matter
We performed the following procedures to address the valuation and ownership of the listed
investment portfolio:
· we obtained an understanding of, and tested, relevant controls over the valuation and ownership of listed
investments; we relied on these controls in our audit approach to investment valuation;
· we independently valued 100% of the investment portfolio to the closing bid prices published by an
independent pricing source; and
· we confirmed the ownership of 100% of investments at the year-end date by obtaining independent
third-party confirmations directly from the Custodian.
Key observations Based on the work performed, we concluded that the valuation and ownership of listed investments
was appropriate.
6. Our Application of Materiality
6.1 Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the
economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in
planning the scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Materiality £4.5 million (2023: £4.5 million)
Basis for determining materiality 1% (2023: 1%) of net assets
Rationale for the benchmark applied Net assets has been chosen as it is considered the most relevant benchmark for
investors and is a key driver of shareholder value
Net assets: £445.8m
Materiality: £4.5m
Audit Committee reporting
threshold £0.2m
Net Assets Materiality
74 Dunedin Income Growth Investment Trust PLC
6.2 Performance Materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate,
uncorrected and undetected misstatements exceed the materiality for the financial statements as a whole.
Performance materiality was set at 70% of materiality for the 2024 audit (2023: 70%). In determining performance
materiality, we considered the following factors:
a) there have been no significant changes in the business structure and operations;
b) our experience from previous audits has indicated a low number of corrected and uncorrected misstatements
identified in prior periods; and
c) there were no significant changes in the Company’s operating environment caused by the uncertainty and volatility
brought about by inflation and increased interest rates.
6.3 Error Reporting Threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of
£0.2 million (2023: £0.2 million), as well as differences below that threshold that, in our view, warranted reporting on
qualitative grounds.
We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation
of the financial statements.
7. An Overview of the Scope of our Audit
7.1 Scoping
Our audit was scoped by obtaining an understanding of the Company and its environment, including internal control and
assessing the risks of material misstatement. Audit work to respond to the risks of material misstatement was performed
directly by the audit engagement team.
7.2 Our Consideration of the Control Environment
The Administrator of the Company, BNP Paribas, provides day to day administration of the Company and is also
responsible for the Company’s general administrative functions, including the calculation and publication of the net
asset value and maintenance of the Company’s accounting and statutory records.
In assessing the Company’s control environment, we considered controls in place at the Administrator. As part of this we
reviewed BNP Paribas’ Service Organisation Controls (SOC 1) Report and have taken a controls reliance approach in
respect of the controls relating to valuation and ownership of listed investments. We also reviewed the controls report of
the Administrator in respect of general IT controls. We obtained a bridging letter to cover the gap between the SOC 1
report and the Company’s year end date. Further, we performed understanding of relevant business processes and
controls that address the risk of material misstatement in financial reporting.
7.3 Our Consideration of Climate-Related Risks
In planning our audit, we have considered the potential impact of climate change on the Company’s business and its
financial statements. The Company continues to develop its assessment of the potential impacts of environmental,
social and governance (“ESG”) on the Company, including climate change, as outlined on page 17. As a part of our audit,
we held discussions with management to understand the process of identifying climate-related risks, management’s
determination of mitigating actions and the impact on the Company’s financial statements. We performed our own
qualitative risk assessment of the potential impact of climate change on the Company’s account balances and classes
of transactions. We have read the disclosures in relation to climate change made in the other information within the
Annual Report to ascertain whether the disclosures are materially consistent with the financial statements and our
knowledge from our audit.
Independent Auditor’s Report to Dunedin
Income Growth Investment Trust PLC
Continued
Dunedin Income Growth Investment Trust PLC 75
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
8. Other Information
The other information comprises the information included in the Annual Report, other than the financial statements and
our Auditor’s report thereon. The Directors are responsible for the other information contained within the Annual Report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to
be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether
this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
9. Responsibilities of the Directors
As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of
the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the
Directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a
going concern, disclosing as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic
alternative but to do so.
10. Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor’s report.
11. Extent to which the Audit was Considered Capable of Detecting Irregularities,
Including Fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
76 Dunedin Income Growth Investment Trust PLC
11.1 Identifying and Assessing Potential Risks Related to Irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-
compliance with laws and regulations, we considered the following:
· the nature of the industry and sector, control environment and business performance including the design of the
Company’s remuneration policies, key drivers for remuneration, bonus levels and performance targets;
· results of our enquiries of management, the Directors and the Audit Committee about their own identification and
assessment of the risks of irregularities, including those that are specific to the Company’s sector;
· any matters we identified having obtained and reviewed the Company’s documentation of its policies and procedures
relating to:
· identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of
non-compliance;
· detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or
alleged fraud;
· the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
· the matters discussed among the audit engagement team regarding how and where fraud might occur in the
financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for
fraud and identified the greatest potential for fraud in the following area: valuation and ownership of listed investments.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of
management override.
We also obtained an understanding of the legal and regulatory framework that the Company operates in, focusing on
provisions of those laws and regulations that had a direct effect on the determination of material amounts and
disclosures in the financial statements. The key laws and regulations we considered in this context included the UK
Companies Act, the Listing Rules and UK tax legislation and the SORP.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial
statements but compliance with which may be fundamental to the Company’s ability to operate or to avoid a material
penalty. This included the requirements of the United Kingdom’s Financial Conduct Authority (“FCA”), the Alternative
Investment Fund Managers Directive and the ESG Sourcebook.
11.2 Audit Response to Risks Identified
As a result of performing the above, we identified the valuation and ownership of listed investments as a key audit matter
related to the potential risk of fraud. The key audit matters section of our report explains the matter in more detail and
also describes the specific procedures we performed in response to that key audit matter.
In addition to the above, our procedures to respond to risks identified included the following:
· reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with
provisions of relevant laws and regulations described as having a direct effect on the financial statements;
· enquiring of management and the Audit Committee concerning actual and potential litigation and claims;
· performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of
material misstatement due to fraud;
· reading minutes of meetings of those charged with governance; and
· in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries
and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a
potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the
normal course of business.
Independent Auditor’s Report to Dunedin
Income Growth Investment Trust PLC
Continued
Dunedin Income Growth Investment Trust PLC 77
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team
members, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout
the audit.
Report on Other Legal and Regulatory Requirements
12. Opinions on Other Matters Prescribed by the Companies Act 2006
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
· the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit,
we have not identified any material misstatements in the Strategic Report or the Directors’ Report.
13. Corporate Governance Statement
The Listing Rules require us to review the Directors' statement in relation to going concern, longer-term viability and that
part of the Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK
Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the financial statements and our knowledge obtained
during the audit:
· the Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and
any material uncertainties identified set out on page 58;
· the Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and
why the period is appropriate set out on page 18;
· the Directors' statement on fair, balanced and understandable set out on page 70;
· the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on
page 14;
· the section of the Annual Report that describes the review of effectiveness of risk management and internal control
systems set out on pages 65 to 66; and
· the section describing the work of the Audit Committee set out on pages 65 to 67.
14. Matters on Which we are Required to Report by Exception
14.1 Adequacy of Explanations Received and Accounting Records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
· we have not received all the information and explanations we require for our audit; or
· adequate accounting records have not been kept, or returns adequate for our audit have not been received from
branches not visited by us; or
· the financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
78 Dunedin Income Growth Investment Trust PLC
14.2 Directors’ Remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of Directors’
remuneration have not been made or the part of the Directors’ Remuneration Report to be audited is not in agreement
with the accounting records and returns.
We have nothing to report in respect of these matters.
15. Other Matters Which we Are Required to Address
15.1 Auditor Tenure
Following the recommendation of the Audit Committee, we were appointed by shareholders at the Annual General
Meeting on 23 May 2017 to audit the financial statements for the period ending 31 January 2018 and subsequent
financial periods. The period of total uninterrupted engagement including previous renewals and reappointments of the
firm is seven years, covering the years ending 31 January 2018 to 31 January 2024.
15.2 Consistency of the Audit Report with the Additional Report to the Audit Committee
Our audit opinion is consistent with the additional report to the Audit Committee we are required to provide in
accordance with ISAs (UK).
16. Use of Our Report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as
a body, for our audit work, for this report, or for the opinions we have formed.
Michael Caullay (Senior Statutory Auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Glasgow
United Kingdom
3 April 2024
Independent Auditor’s Report to Dunedin
Income Growth Investment Trust PLC
Continued
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Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Year ended 31 January 2024 Year ended 31 January 2023
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Gains/(losses) on investments 10 – 4,712 4,712 – (13,996) (13,996)
Currency profit/(loss) – 267 267 – (558) (558)
Income 3 22,949 – 22,949 21,950 – 21,950
Investment management fee 4 (696) (1,044) (1,740) (682) (1,022) (1,704)
Administrative expenses 5 (1,072) – (1,072) (951) – (951)
Net return/(loss) before finance costs and taxation 21,181 3,935 25,116 20,317 (15,576) 4,741
Finance costs 6 (757) (1,116) (1,873) (597) (888) (1,485)
Return/(loss) before taxation 20,424 2,819 23,243 19,720 (16,464) 3,256
Taxation 7 (410) – (410) (412) – (412)
Return/(loss) after taxation 20,014 2,819 22,833 19,308 (16,464) 2,844
Return/(loss) per Ordinary share (pence) 9 13.54 1.91 15.45 13.02 (11.10) 1.92
The column of this statement headed “Total” represents the profit and loss account of the Company.
All revenue and capital items in the above statement derive from continuing operations.
The accompanying notes are an integral part of the financial statements.
Statement of Comprehensive Income
80 Dunedin Income Growth Investment Trust PLC
As at As at
31 January 2024 31 January 2023
Notes £’000 £’000
Non-current assets
Investments at fair value through profit or loss 10 474,087 478,895
Current assets
Debtors 11 2,925 2,452
Cash and cash equivalents 12,868 12,267
15,793 14,719
Creditors: amounts falling due within one year
Bank loan 12 (13,307) (13,762)
Other creditors 12 (1,013) (1,509)
(14,320) (15,271)
Net current assets/(liabilities) 1,473 (552)
Total assets less current liabilities 475,560 478,343
Creditors: amounts falling due after more than one year 13 (29,745) (29,738)
Net assets 445,815 448,605
Capital and reserves
Called-up share capital 14 38,419 38,419
Share premium account 4,908 4,908
Capital redemption reserve 1,606 1,606
Capital reserve 376,996 379,839
Revenue reserve 16 23,886 23,833
Equity shareholders’ funds 445,815 448,605
Net asset value per Ordinary share (pence) 17 304.99 302.57
The financial statements were approved and authorised for issue by the Board of Directors on 3 April 2024 and were signed on its
behalf by:
David Barron
Director
Company Number: SC000881
The accompanying notes are an integral part of the financial statements.
Statement of Financial Position
Dunedin Income Growth Investment Trust PLC 81
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
For the year ended 31 January 2024
Share Capital
Share premium redemption Capital Revenue
capital account reserve reserve reserve Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 January 2023 38,419 4,908 1,606 379,839 23,833 448,605
Return after taxation – – – 2,819 20,014 22,833
Repurchase of shares for Treasury – – (5,662) – (5,662)
Dividends paid 8 – – – – (19,961) (19,961)
Balance at 31 January 2024 38,419 4,908 1,606 376,996 23,886 445,815
For the year ended 31 January 2023
Share Capital
Share premium redemption Capital Revenue
capital account reserve reserve reserve Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 January 2022 38,419 4,619 1,606 396,303 23,632 464,579
(Loss)/return after taxation – – – (16,464) 19,308 2,844
Issue of shares from Treasury – 289 – – – 289
Dividends paid 8 – – – – (19,107) (19,107)
Balance at 31 January 2023 38,419 4,908 1,606 379,839 23,833 448,605
The Revenue reserve and the part of the Capital reserve represented by realised capital gains represent the amount of the
Company’s reserves distributable by way of dividend.
The accompanying notes are an integral part of the financial statements.
Statement of Chan
g
es in Equity
82 Dunedin Income Growth Investment Trust PLC
Year ended Year ended
31 January 2024 31 January 2023
Notes £’000 £’000
Operating activities
Net return before finance costs and taxation 25,116 4,741
Adjustment for:
(Gains)/losses on investments (4,712) 13,996
Currency (gains)/losses (267) 558
Decrease in accrued dividend income 196 18
Decrease/(increase) in other debtors excluding tax 15 (16)
Increase in other creditors 109 186
Overseas withholding tax (1,093) (1,052)
Net cash flow from operating activities 19,364 18,431
Investing activities
Purchases of investments (91,372) (109,784)
Sales of investments 100,244 120,822
Net cash from investing activities 8,872 11,038
Financing activities
Interest paid (1,916) (1,409)
Dividends paid 8 (19,961) (19,107)
Buyback of Ordinary shares for treasury (5,571) –
Issue of shares from treasury – 289
Net cash used in financing activities (27,448) (20,227)
Increase in cash and cash equivalents 788 9,242
Analysis of changes in cash and cash equivalents during the year
Opening balance 12,267 2,855
Effect of exchange rate fluctuations on cash held (187) 170
Increase in cash as above 788 9,242
Closing balance 12,868 12,267
The accompanying notes are an integral part of the financial statements. A reconciliation of the changes in net debt can be found in
note 18 on page 95.
Statement of Cash Flows
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Strategic Report Governance Overview General Portfolio Other Information Financial Statements
1. Principal activity
The Company is a closed-end investment company, registered in Scotland No. SC000881, with its Ordinary shares being listed
on the London Stock Exchange.
2. Accounting policies
(a) Basis of preparation and going concern. The financial statements have been prepared in accordance with Financial
Reporting Standard 102, the requirements of the Companies Act 2006 and with the AIC (“Association of Investment
Companies”) Statement of Recommended Practice ‘Financial Statements of Investment Trust Companies and Venture
Capital Trusts’ issued in July 2022. The financial statements are prepared in sterling which is the functional currency of
the Company and rounded to the nearest £’000. They have also been prepared on the assumption that approval as an
investment trust will continue to be granted.
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 2024.
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.
Critical accounting judgements and key sources of estimation uncertainty. The preparation of financial statements
requires the use of certain significant accounting judgements, estimates and assumptions which requires
management to exercise its judgement in the process of applying the accounting policies which are continually
evaluated. The Board considers that there are no accounting judgements, estimates and assumptions which would
significantly impact the financial statements.
(b) Revenue, expenses and interest payable. Income from equity investments (other than special dividends), including taxes
deducted at source, is included in revenue by reference to the date on which the investment is quoted ex-dividend.
Special dividends are credited to revenue or capital according to the circumstances. Foreign income is converted at
the exchange rate applicable at the time of receipt. Interest receivable on short term deposits and expenses are
accounted for on an accruals basis. Income from underwriting commission is recognised as earned. Interest payable is
calculated on an effective yield basis. Stock lending income is recognised on an accruals basis.
Underwriting commission is taken to revenue, unless any shares underwritten are required to be taken up, in which case
the proportionate commission received is deducted from the cost of the investment.
Expenses are charged to capital when they are incurred in connection with the maintenance or enhancement of the
value of investments. In this respect, the investment management fee and relevant finance costs, including the
amortisation of expenses, are allocated between revenue and capital in line with the Board’s expectation of returns
from the Company’s investments over the long-term of 40% to revenue and 60% to capital.
Notes to the Financial Statements
For the year ended 31 January 2024
84 Dunedin Income Growth Investment Trust PLC
(c) Investments. Investments have been designated upon initial recognition as fair value through profit or loss. Investments
are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require
delivery within the timeframe established by the market concerned, and are measured initially at fair value.
Subsequent to initial recognition, investments are recognised at fair value through profit or loss. For listed investments,
this is deemed to be bid market prices or closing prices for SETS stocks sourced from the London Stock Exchange. SETS
is the London Stock Exchange electronic trading service covering most of the market including all FTSE All-Share and
the most liquid AIM constituents. Gains or losses arising from changes in fair value are included in net profit or loss for
the period as a capital item in the Statement of Comprehensive Income.
(d) Dividends payable. Final dividends payable to equity shareholders are recognised in the financial statements when they
have been approved by Shareholders and become a liability of the Company. Interim dividends are recognised in the
financial statements in the period in which they are paid.
(e) Nature and purpose of reserves
Called-up share capital. The Ordinary share capital on the Statement of Financial Position relates to the number of
shares in issue and in treasury. Only when the shares are cancelled, either from treasury or directly, is a transfer made
to the capital redemption reserve.
Share premium account. The balance classified as share premium includes the premium above the nominal value from
the proceeds on issue of any equity share capital comprising Ordinary shares of 25p.
Capital redemption reserve. The capital redemption reserve is used to record the amount equivalent to the nominal
value of any of the Company’s own shares purchased and cancelled in order to maintain the Company’s capital.
Capital reserve. Gains or losses on the disposal of investments and changes in the fair values of investments are
transferred to the capital reserve. The capital element of the management fee and relevant finance costs are charged
to this reserve. Any associated tax relief is also credited to this reserve. Certain other items including gains or losses on
foreign currency and special dividends are also allocated to this reserve as appropriate. The part of this reserve
represented by realised capital gains is available for distribution by way of dividend.
The costs of share buybacks to be held in treasury are also deducted from this reserve.
Revenue reserve. Income and expenses which are recognised in the revenue column of the Statement of
Comprehensive Income are transferred to the revenue reserve. The revenue reserve is available for distribution by way
of dividend.
(f) Taxation. The charge for taxation is based on the profit for the year and takes into account taxation deferred because
of timing differences between the treatment of certain items for taxation and accounting purposes.
Owing to the Company’s status as an investment trust, and the intention to continue meeting the conditions required to
obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses
arising on the revaluation or disposal of investments.
(g) Foreign currency. Monetary assets and liabilities and non-monetary assets held at fair value denominated in foreign
currencies are converted into sterling at the rate of exchange ruling at the reporting date. Transactions during the year
involving foreign currencies are converted at the rate of exchange ruling at the transaction date. Gains or losses arising
from a change in exchange rates subsequent to the date of a transaction are included as a currency gain or loss in
revenue or capital in the Statement of Comprehensive Income, depending on whether the gain or loss is of a revenue
or capital nature. The Company receives a proportion of its investment income in foreign currency. These amounts are
translated at the rate ruling on the date of receipt.
Notes to the Financial Statements
Continued
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(h) Traded options. The Company may enter into certain derivative contracts (e.g. options). Option contracts are
accounted for as separate derivative contracts and are therefore shown in other assets or other liabilities at their fair
value. The initial fair value is based on the initial premium, which is recognised upfront. The premium received and fair
value changes in the open position which occur due to the movement in underlying securities are recognised in the
revenue column, losses realised on the exercise of the contracts are recorded in the capital column of the Statement
of Comprehensive Income.
In addition, the Company may enter into derivative contracts to manage market risk and gains or losses arising on
such contracts are recorded in the capital column of the Statement of Comprehensive Income.
(i) Borrowings. Borrowings are measured initially at the fair value of the consideration received, net of any issue expenses,
and subsequently at amortised cost using the effective interest method. The finance costs of such borrowings are
accounted for on an accruals basis using the effective interest rate method and are charged 40% to revenue and 60%
to capital in the Statement of Comprehensive Income to reflect the Company’s investment policy and prospective
income and capital growth.
(j) Treasury shares. When the Company purchases the Company’s equity share capital to be held as treasury shares, the
amount of the consideration paid, which includes directly attributable costs, is net of any tax effects, and is recognised
as a deduction from the capital reserve. When these shares are sold subsequently, the amount received is recognised
as an increase in equity, and any resulting surplus on the transaction is transferred to the share premium account and
any resulting deficit is transferred from the capital reserve.
3. Income
2024 2023
£’000 £’000
Income from investments
UK dividend income 14,970 13,643
Overseas dividends 5,843 6,262
20,813 19,905
Other income
Income on derivatives 2,060 2,007
Interest on tax reclaims 3 –
Interest received on withholding tax refunds 73 38
2,136 2,045
Total income 22,949 21,950
During the year, the Company earned premiums totalling £2,060,000 (2023 – £2,007,000) in exchange for entering into
derivative transactions. The Company had no open positions in derivative contracts at 31 January 2024 (2023 – no open
positions). Losses realised on the exercise of derivative transactions are disclosed in note 10.
86 Dunedin Income Growth Investment Trust PLC
4. Management fee
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Management fee 696 1,044 1,740 682 1,022 1,704
The Company has an agreement with abrdn Fund Managers Limited (“aFML”) for the provision of investment management,
risk management, accounting, administrative and secretarial services. The management fee is calculated and charged, on a
monthly basis, at 0.45% per annum on the first £225 million, 0.35% per annum on the next £200 million and 0.25% per annum
on amounts over £425 million of the net assets of the Company, with debt at par and excluding commonly managed funds.
The balance due at the year end was £289,000 (2023 – £286,000). The management fee is allocated 40% to revenue and 60%
to capital. There were no commonly managed funds held in the portfolio during the year to 31 January 2024 (2023 – none).
The management agreement may be terminated by either party on six months’ written notice.
5. Administrative expenses
2024 2023
£’000 £’000
Directors’ fees 161 153
Auditor’s remuneration (excluding VAT):
– fees payable to the Company’s Auditor for the audit of the
Company’s annual accounts
34 30
– fees payable to the Company’s Auditor for other services:
– interim review – 7
Irrecoverable VAT 64 61
Promotional activities 246 243
Registrar’s fees 46 43
Share plan fees 149 120
Printing and postage 104 65
Other expenses 268 229
1,072 951
Expenses of £246,000 (2023 – £243,000) were paid to aFML in respect of the promotional activities of the Company. The
balance outstanding at the year end was £79,000 (2023 – £81,000).
Notes to the Financial Statements
Continued
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6. Finance costs
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Bank loan 263 394 657 110 166 276
Loan Notes – repayable after more than five years 479 718 1,197 479 718 1,197
Amortised Loan Notes issue expenses 3 4 7 3 4 7
Bank overdraft 12 – 12 5 – 5
757 1,116 1,873 597 888 1,485
Finance costs (excluding bank overdraft interest) are allocated 40% to revenue and 60% to capital.
7. Taxation
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
(a) Analysis of charge for the year
Overseas tax suffered 1,203 – 1,203 1,154 – 1,154
Overseas tax reclaimable (793) – (793) (742) – (742)
Total tax charge for the year 410 – 410 412 – 412
88 Dunedin Income Growth Investment Trust PLC
(b) Factors affecting the tax charge for the year. The UK corporation tax rate is 25% (2023 – 19%). The tax assessed for the
year is lower than the rate of corporation tax. The differences are explained below:
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Return before taxation 20,424 2,819 23,243 19,720 (16,464) 3,256
Corporation tax at 24% (2023 – 19%) 4,902 677 5,579 3,747 (3,128) 619
Effects of: –
Non-taxable UK dividend income (3,406) – (3,406) (2,628) – (2,628)
Non-taxable stock dividends – – – – –
Capital (gains)/losses on investments
not taxable
– (1,123) (1,123) – 2,659 2,659
Expenses not deductible for tax purposes 1 – 1 1 – 1
Currency (gains)/losses not taxable – (73) (73) – 106 106
Overseas taxes 410 – 410 412 – 412
Non-taxable overseas dividends (1,402) – (1,402) (1,050) – (1,050)
Excess management expenses (95) 519 424 (70) 363 293
Total tax charge 410 – 410 412 – 412
(c) Factors that may affect future tax charges. At the year end, the Company has, for taxation purposes only, accumulated
unrelieved management expenses and loan relationship deficits of £135,671,000 (2023 – £133,906,000). A deferred tax
asset in respect of this has not been recognised and these unrelieved expenses will only be utilised if the Company has
profits chargeable to corporation tax in the future.
The UK corporation tax rate increased to 25% with effect from 1 April 2023. This impacted, where appropriate, the value
of UK deferred tax balances and the tax charged on future UK profits.
Notes to the Financial Statements
Continued
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8. Ordinary dividends on equity shares
2024 2023
£’000 £’000
Amounts recognised as distributions paid during the year:
Third interim dividend for 2023 – 3.00p (2022 – 3.00p) 4,448 4,445
Final dividend for 2023 – 4.10p (2022 – 3.90p) 6,079 5,782
First interim dividend for 2024 – 3.20p (2023 – 3.00p) 4,744 4,448
Second interim dividend for 2024 – 3.20p (2023 – 3.00p) 4,709 4,448
Return of unclaimed dividends
A
(19) (16)
19,961 19,107
A
Unclaimed dividends returned to the Company during the year ended 31 January 2024 have been donated to charity (see note 22).
A third interim dividend of 3.20p per Ordinary share was declared on 14 December 2023, payable on 29 February 2024 to
shareholders on the register on 2 February 2024 and has not been included as a liability in these financial statements. The final
dividend of 4.15p per Ordinary share was approved by the Board on 3 April 2024, payable on 31 May 2024 to shareholders on
the register on 3 May 2024 and has not been included as a liability in the financial statements.
The table below sets out the total dividends paid and proposed in respect of the financial year, which is the basis upon which
the requirements of Sections 1158–1159 of the Corporation Tax Act 2010 are considered. The net revenue available for
distribution by way of dividend for the year is £20,014,000 (2023 – £19,308,000).
2024 2023
£’000 £’000
First interim dividend for 2024 – 3.20p (2023 – 3.00p) 4,744 4,448
Second interim dividend for 2024 – 3.20p (2023 – 3.00p) 4,709 4,448
Third interim dividend for 2024 – 3.20p (2023 – 3.00p) 4,678 4,448
Final dividend for 2024 – 4.15p (2023 – 4.10p) 6,019 6,079
20,150 19,423
The final dividend is based on the latest share capital of 145,039,800 Ordinary shares excluding those held in treasury.
90 Dunedin Income Growth Investment Trust PLC
9. Return per Ordinary share
2024 2023
£’000 p £’000 p
Revenue return 20,014 13.54 19,308 13.02
Capital return/(loss) 2,819 1.91 (16,464) (11.10)
Total return 22,833 15.45 2,844 1.92
Weighted average number of Ordinary shares in issue 147,764,075 148,256,451
10. Investments at fair value through profit or loss
2024 2023
£’000 £’000
Opening book cost 424,815 428,488
Investment holdings gains 54,080 73,935
Opening fair value 478,895 502,423
Analysis of transactions made during the year
Purchases 90,723 110,433
Sales - proceeds (100,243) (119,965)
Gains/(losses) on investments 4,712 (13,996)
Closing fair value 474,087 478,895
Closing book cost 409,443 424,815
Closing investment holdings gains 64,644 54,080
Closing fair value 474,087 478,895
The Company received £100,243,000 (2023 - £119,965,000) from investments sold in the year. The book cost of these
investments when they were purchased was £105,411,000 (2023 - £114,106,000). These investments have been revalued
over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.
The realised gains figure above includes losses realised on the exercise of traded options of £1,251,000 (2023 - £625,000).
Premiums received of £2,060,000 (2023 - £2,007,000) are included within income per note 3.
Notes to the Financial Statements
Continued
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Transaction costs. During the year expenses were incurred in acquiring or disposing of investments classified as fair value
through profit or loss. These have been expensed through capital and are included within gains/(losses) on investments in the
Statement of Comprehensive Income. The total costs were as follows:
2024 2023
£’000 £’000
Purchases 333 506
Sales 55 76
388 582
The above transaction costs are calculated in line with the AIC SORP. The transaction costs in the Company’s Key Information
Document are calculated on a different basis and in line with the PRIIPs regulations.
11. Debtors: amounts falling due within one year
2024 2023
£’000 £’000
Net dividends and interest receivable 568 763
Tax recoverable 2,340 1,657
Other loans and receivables 17 32
2,925 2,452
12. Creditors: amounts falling due within one year
2024 2023
(a) Bank loan £’000 £’000
EUR 15,600,000 – 11 February 2023 – 13,762
EUR 15,600,000 – 11 February 2024 13,307 –
13,307 13,762
The Company has a £30,000,000 multi–currency revolving credit facility with The Bank of Nova Scotia, London Branch
committed until 11 July 2024. Under the terms of the facility, subject to the lender’s credit approval, the Company has
the option to increase the level of the facility from £30,000,000 to £40,000,000 at any time, should further investment
opportunities be identified. As at 31 January 2024 €15,600,000 had been drawn down at a rate of 5.130% (2023 –
€15,600,000 at a rate of 3.618%), which matured on 15 February 2024. At the date this Report was approved €15,600,000
had been drawn down at a rate of 5.109%, maturing on 15 April 2024. The terms of the loan facility contain covenants
that the adjusted asset coverage is not be less than 4.00 to 1.00 and that the minimum net assets of the Company are
£200 million.
92 Dunedin Income Growth Investment Trust PLC
2024 2023
(b) Other creditors £’000 £’000
Loan Notes and bank loan interest 209 257
Amount due to brokers 92 649
Sundry creditors 712 603
1,013 1,509
13. Creditors: amounts falling due after more than one year
2024 2023
£’000 £’000
3.99% Loan Notes 2045 30,000 30,000
Unamortised Loan Note issue expenses (255) (262)
29,745 29,738
The 3.99% Loan Notes were issued in December 2015 and are due to be redeemed at par on 8 December 2045. Interest is
payable in half-yearly instalments in June and December. The Loan Notes are secured by a floating charge over the whole of
the assets of the Company. The Company has complied with the Loan Note Trust Deed covenant that total net borrowings
(ie. after the deduction of cash balances) should not exceed 33% of the Company’s net asset value and that the Company’s
net asset value should not be less than £200 million.
The fair value of the Loan Notes as at 31 January 2024 was £23,916,000 (2023 – £29,393,000), the value stated in note 19. The
effect on the net asset value of deducting the Loan Notes at fair value rather than at par is disclosed in note 17.
14. Called-up share capital
2024 2023
£’000 £’000
Allotted, called up and fully paid:
146,172,889 (2023 – 148,264,670) Ordinary shares of 25p each – equity 36,543 37,066
Treasury shares:
7,505,046 (2023 – 5,413,265) Ordinary shares of 25p each – equity 1,876 1,353
38,419 38,419
The Ordinary share capital on the Statement of Financial Position relates to the number of shares in issue and in treasury. Only
when the shares are cancelled, either from treasury or directly, is a transfer made to the capital redemption reserve.
During the year the Company issued no Ordinary shares (2023 – 100,000 shares issued at a price of 290p per share). During
the year the Company repurchased 2,091,781 (2023 – nil) Ordinary shares at a cost of £5,662,000, including expenses. All of
the shares were placed in treasury. Subsequent to the year end the Company repurchased a further 1,133,089 Ordinary
shares at a total cost of £3,135,000.
Notes to the Financial Statements
Continued
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15. Analysis of changes in financing during the year
2024 2023
Equity Equity
share capital share capital
(including Loan (including Loan
premium) Notes premium) Notes
£’000 £’000 £’000 £’000
Opening balance at 31 January 2023 43,327 29,738 43,038 29,731
Issue of shares from Treasury - - 289 -
Movement in unamortised Loan Notes issue expenses - 7 - 7
Closing balance at 31 January 2024 43,327 29,745 43,327 29,738
16. Revenue reserve per share
The following information is presented supplemental to the financial statements to show the Companies Act position at the
year end.
2024 2023
Revenue reserve (£’000) 23,886 23,833
Number of Ordinary shares in issue at year end 146,172,889 148,264,670
Revenue reserve per Ordinary share (p) as
per the Companies Act
16.34 16.07
Less: – third interim dividend (p) (3.20) (3.00)
– final dividend (p) (4.15) (4.10)
Revenue reserve per Ordinary share (p) 8.99 8.97
94 Dunedin Income Growth Investment Trust PLC
17. Net asset value per share
Equity shareholders’ funds have been calculated in accordance with the provisions of FRS 102. The analysis of equity
shareholders’ funds on the face of the Statement of Financial Position does not reflect the rights under the Articles of
Association of the Ordinary shareholders on a return of assets. These rights are reflected in the net asset value and the net
asset value per share attributable to Ordinary shareholders at the year end, adjusted to reflect the deduction of the Loan
Notes at par. A reconciliation between the two sets of figures is as follows:
2024 2023
Net assets attributable (£’000) 445,815 448,605
Number of Ordinary shares in issue at year end
A
146,172,889 148,264,670
Net asset value per Ordinary share 304.99p 302.57p
A
Excluding shares held in treasury.
Adjusted net assets 2024 2023
Net assets attributable (£’000) as above 445,815 448,605
Unamortised Loan Note issue expenses (note 13) (255) (262)
Adjusted net assets attributable (£’000) 445,560 448,343
Number of Ordinary shares in issue at year end
A
146,172,889 148,264,670
Adjusted net asset value per Ordinary share 304.82p 302.39p
A
Excluding shares held in treasury.
Net assets - debt at fair value £’000 £’000
Net assets attributable 445,815 448,605
Amortised cost Loan Notes 29,745 29,738
Market value Loan Notes (23,916) (29,393)
Net assets attributable 451,644 448,950
Number of Ordinary shares in issue at the period end
A
146,172,889 148,264,670
Net asset value per Ordinary share (debt at fair value) 308.98p 302.80p
A
Excluding shares held in treasury.
Notes to the Financial Statements
Continued
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18. Analysis of changes in net debt
At Currency Non-cash At
31 January 2023 differences Cash flows movements 31 January 2024
£’000 £’000 £’000 £’000 £’000
Cash and cash equivalents 12,267 (187) 788 – 12,868
Debt due within one year (13,762) 455 – – (13,307)
Debt due after more than one year (29,738) – – (7) (29,745)
(31,233) 268 788 (7) (30,184)
At Currency Non-cash At
31 January 2022 differences Cash flows movements 31 January 2023
£’000 £’000 £’000 £’000 £’000
Cash and cash equivalents 2,855 170 9,242 – 12,267
Debt due within one year (13,034) (728) – – (13,762)
Debt due after more than one year (29,731) – – (7) (29,738)
(39,910) (558) 9,242 (7) (31,233)
A statement reconciling the movement in net funds to the net cash flow has not been presented as there are no differences
from the above analysis.
19. Financial instruments and risk management
The Company’s investment activities expose it to various types of financial risk associated with the financial instruments and
markets in which it invests. The Company’s financial instruments comprise securities and other investments, cash balances,
loans and debtors and creditors that arise directly from its operations; for example, in respect of sales and purchases
awaiting settlement, and debtors for accrued income. The Company also has the ability to enter into derivative transactions
in the form of option contracts for the purpose of generating income and futures/options for hedging market exposures.
During the year, the Company entered into certain options contracts for the purpose of generating income. Positions closed
during the year realised a loss of £1,251,000 (2023 - £625,000). As disclosed in note 3, the premium received and fair value
changes in respect of options written in the year was £2,060,000 (2023 - £2,007,000). The largest position in derivative
contracts held during the year at any given time was £905,000 (2023 - £889,000). The Company had no open positions in
derivative contracts at 31 January 2024 (2023 - none).
The Board relies on abrdn Fund Managers Limited (“aFML” or the “Manager”) for the provision of risk management activities
under the terms of its management agreement with aFML (further details of which are included under note 4). The Board
regularly reviews and agrees policies for managing each of the key financial risks identified with the Manager. The types of
risk and the Manager’s approach to the management of each type of risk, are summarised below. Such approach has been
applied throughout the year and has not changed since the previous accounting period. The numerical disclosures exclude
short-term debtors and creditors on the grounds that they are not considered to be material.
96 Dunedin Income Growth Investment Trust PLC
The Company’s Manager has an independent Investment Risk department for reviewing the investment risk parameters of
all core equity, fixed income and alternative asset classes on a regular basis. The department reports to the Manager’s
Performance Review Committee which is chaired by the Manager’s Chief Investment Officer. The department’s responsibility
is to review and monitor ex-ante (predicted) portfolio risk and style characteristics using best practice, industry standard
multi-factor models.
Risk management framework. The directors of aFML collectively assume responsibility for aFML’s obligations under the AIFMD
including reviewing investment performance and monitoring the Company’s risk profile during the year.
aFML is a fully integrated member of the abrdn Group (the “Group”) which provides a variety of services and support to aFML
in the conduct of its business activities, including in the oversight of the risk management framework for the Company. aFML
has delegated the day to day administration of the investment policy to abrdn Limited, which is responsible for ensuring that
the Company is managed within the terms of its investment guidelines and the limits set out in its pre-investment disclosures
to investors (details of which can be found on the Company’s website). aFML has retained responsibility for monitoring and
oversight of investment performance, product risk and regulatory and operational risk for the Company.
The Manager conducts its risk oversight function through the operation of the Group’s risk management processes and
systems which are embedded within the Group’s operations. The Group’s Risk Division supports management in the
identification and mitigation of risks and provides independent monitoring of the business. The Division includes Compliance,
Business Risk, Market Risk, Risk Management and Legal. The team is headed up by the Group’s Chief Risk Officer, who reports
to the Chief Executive Officers of the Group. The Risk Division achieves its objective through embedding the Risk Management
Framework throughout the organisation using the Group’s operational risk management system (“SHIELD”).
The Group’s Internal Audit Department is independent of the Risk Division and reports directly to the Group’s Chief Executive
Officers and to the Audit Committee of the Group’s Board of Directors. The Internal Audit Department is responsible for
providing an independent assessment of the Group’s control environment.
The Group’s corporate governance structure is supported by several committees to assist the board of directors of abrdn, its
subsidiaries and the Company to fulfil their roles and responsibilities. The Group’s Risk Division is represented on all
committees, with the exception of those committees that deal with investment recommendations. The specific goals and
guidelines on the functioning of those committees are described on the committees’ terms of reference.
Risk Management. The main risks the Company faces from its financial instruments are (i) market risk (comprising interest
rate risk, currency risk and other price risk), (ii) liquidity risk and (iii) credit risk.
The Board regularly reviews and agrees policies for managing each of these risks. The Group’s policies for managing these
risks are summarised below and have been applied throughout the year. The numerical disclosures exclude short-term
debtors and creditors, other than for currency disclosures.
(i) Market risk. Market risk comprises three elements - interest rate risk, currency risk and price risk.
(a) Interest rate risk. Interest rate movements may affect:
- the fair value of the investments in fixed interest rate securities;
- the level of income receivable on cash deposits; and
- interest payable on the Company’s variable rate borrowings.
Management of the risk. The possible effects on fair value and cash flows that could arise as a result of changes in
interest rates are taken into account when making investment and borrowing decisions.
Notes to the Financial Statements
Continued
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The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on
a regular basis. Borrowings comprise fixed rate, revolving, and uncommitted facilities. Details of borrowings at 31
January 2024 are shown in notes 12 and 13.
Interest risk profile. The interest rate risk profile of the portfolio of financial assets and liabilities at the Statement of
Financial Position date was as follows:
Weighted
average Weighted
period for average
which interest Fixed Floating
rate is fixed rate rate rate
At 31 January 2024 Years % £’000 £’000
Assets
Sterling - - - 12,868
Total assets - - - 12,868
Liabilities
Bank loans 0.08 5.13 (13,307) -
Loan Notes 21.87 3.99 (29,745) -
Total liabilities - - (43,052) -
Weighted
average Weighted
period for average
which interest Fixed Floating
rate is fixed rate rate rate
At 31 January 2023 Years % £’000 £’000
Assets
Sterling - - - 12,267
Total assets - - - 12,267
Liabilities
Bank loans 0.17 3.62 (13,762) -
Loan Notes 22.87 3.99 (29,738) -
Total liabilities - - (43,500) -
The weighted average interest rate is based on the current yield of each asset, weighted by its market value. The
weighted average interest rate on bank loans is based on the interest rate payable, weighted by the total value of the
loans. The maturity dates of the Company’s borrowings are shown in notes 12 and 13 to the financial statements.
98 Dunedin Income Growth Investment Trust PLC
The floating rate assets consist of cash deposits all earning interest at prevailing market rates.
The Company’s equity portfolio and short-term debtors and creditors (excluding bank loans) have been excluded from
the above tables. All financial liabilities are measured at amortised cost.
Interest rate sensitivity. Movements in interest rates would not significantly affect net assets attributable to the
Company’s shareholders and total profit.
(b) Foreign currency risk. A proportion of the Company’s investment portfolio is invested in overseas securities whose
values are subject to fluctuation due to changes in exchange rates. In addition, the impact of changes in foreign
exchange rates upon the profits of investee companies can result, indirectly, in changes in their valuations.
Consequently the Statement of Financial Position can be affected by movements in exchange rates.
Management of the risk. It is not the Company’s policy to hedge this risk on a continuing basis but the Company may,
from time to time, match specific overseas investment with foreign currency borrowings. A proportion of the
Company’s borrowings, as detailed in note 12, is in foreign currency as at 31 January 2024. The revenue account is
subject to currency fluctuations arising on dividends received in foreign currencies and, indirectly, due to the impact of
foreign exchange rates upon the profits of investee companies. The Company does not hedge this currency risk.
Foreign currency risk exposure by currency of denomination:
31 January 2024 31 January 2023
Net Total Net Total
monetary currency monetary currency
Investments assets exposure Investments assets exposure
£’000 £’000 £’000 £’000 £’000 £’000
Euro 57,491 (11,208) 46,283 44,258 (12,391) 31,867
Swiss Francs - 96 96 15,617 90 15,707
Danish Krone 9,009 109 9,118 9,909 114 10,023
Norwegian Krone 13,067 11 13,078 10,202 12 10,214
Swedish Krona 22,478 - 22,478 34,976 1 34,977
Sterling 372,042 (17,280) 354,762 363,933 (18,116) 345,817
Total 474,087 (28,272) 445,815 478,895 (30,290) 448,605
The asset allocation between specific markets can vary from time to time based on the Manager’s opinion of the
attractiveness of the individual stocks in these markets.
Foreign currency sensitivity. There is no sensitivity analysis included as the Board believes the amount exposed to foreign
currency denominated monetary assets to be immaterial. Where the Company’s equity investments (which are non-
monetary items) are priced in a foreign currency, they have been included within the other price risk sensitivity analysis
so as to show the overall level of exposure.
(c) Price risk. Price risks (i.e. changes in market prices other than those arising from interest rate or currency risk) may
affect the value of the quoted investments and traded options.
Notes to the Financial Statements
Continued
Dunedin Income Growth Investment Trust PLC 99
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Management of the risk. It is the Board’s policy to hold an appropriate spread of investments in the portfolio in order to
reduce the risk arising from factors specific to a particular company or sector. Both the allocation of assets and the
stock selection process, as detailed on page 26 to 33, act to reduce market risk. The Manager actively monitors market
prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. The
investments held by the Company are listed on various stock exchanges in the UK and Europe.
Price risk sensitivity. If market prices at the Statement of Financial Position date had been 10% higher while all other
variables remained constant, the return attributable to Ordinary shareholders for the year ended 31 January 2024
would have increased by £47,409,000 (2023 - increase of £47,890,000) and equity reserves would have increased by the
same amount. Had market prices been 10% lower the converse would apply.
(ii) Liquidity risk. This is the risk that the Company will encounter difficulty in meeting obligations associated with financial
liabilities as they fall due in line with the maturity profile analysed below.
More
Within Within Within Within Within than
1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years Total
At 31 January 2024 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Bank loans 13,307 – – – – – 13,307
Loan Notes – – – – – 30,000 30,000
Interest cash flows on bank loans and
loan notes
1,254 1,197 1,197 1,197 1,197 20,349 26,391
Cash flows on other creditors 804 – – – – – 804
15,365 1,197 1,197 1,197 1,197 50,349 70,502
More
Within Within Within Within Within than
1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years Total
At 31 January 2023 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Bank loans 13,762 – – – – – 13,762
Loan Notes – – – – – 30,000 30,000
Interest cash flows on bank loans and
loan notes
1,281 1,197 1,197 1,197 1,197 21,546 27,615
Cash flows on other creditors 1,252 – – – – – 1,252
16,295 1,197 1,197 1,197 1,197 51,546 72,629
Management of the risk. The Board imposes borrowing limits to ensure gearing levels are appropriate to market
conditions and reviews these on a regular basis. Borrowings comprise Loan Notes and a revolving facility. The Loan
Notes provide secure long-term funding while short term flexibility is achieved through the borrowing facility. It is the
Board’s policy to maintain a gearing level, measured on the most stringent basis of calculation after netting off cash
equivalents, of less than 30% at all times. Details of borrowings at 31 January 2024 are shown in notes 12 and 13.
100 Dunedin Income Growth Investment Trust PLC
Liquidity risk is not considered to be significant as the Company’s assets comprise mainly cash and listed securities,
which can normally be sold to meet funding commitments if necessary. Short-term flexibility is achieved through the use
of loan and overdraft facilities, details of which can be found in note 12. Under the terms of the loan facility, the Manager
provides the lender with loan covenant reports on a monthly basis, to provide the lender with assurance that the terms
of the facility are not being breached. The Manager will also review the credit rating of a lender on a regular basis.
Details of the Board’s policy on gearing are shown in the interest rate risk section of this note.
Liquidity risk exposure. At 31 January 2024 and 31 January 2023 the amortised cost of the Company’s Loan Notes was
£29,745,000 and £29,738,000 respectively. At 31 January 2024 and 31 January 2023 the Company’s bank loans
amounted to £13,307,000 and £13,762,000 respectively. The facility is committed until 11 July 2024.
(iii) Credit risk. This is failure of the counterparty to a transaction to discharge its obligations under that transaction that
could result in the Company suffering a loss.
Management of the risk. Investment transactions are carried out with a large number of brokers, whose credit standing
is reviewed periodically by the Manager, and limits are set on the amount that may be due from any one broker;
– the risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the review of
failed trade reports on a daily basis. In addition, both stock and cash reconciliations to the Custodians’ records are
performed on a daily basis to ensure discrepancies are investigated on a timely basis. The Group’s Compliance
department carries out periodic reviews of the custodian’s operations and reports its finding to the abrdn Group’s Risk
Management Committee. This review will also include checks on the maintenance and security of investments held;
– cash is held only with reputable banks whose credit ratings are monitored on a regular basis.
There are internal exposure limits to cash balances placed with counterparties. The credit worthiness of counterparties
is also reviewed on a regular basis.
None of the Company’s financial assets are secured by collateral or other credit enhancements.
Credit risk exposure. In summary, compared to the amounts in the Statement of Financial Position, the maximum
exposure to credit risk at 31 January was as follows:
2024 2023
Balance Maximum Balance Maximum
Sheet exposure Sheet exposure
£’000 £’000 £’000 £’000
Non-current assets
Investments at fair value through profit or loss 474,087 – 478,895 –
Current assets
Cash and short term deposits 12,868 12,868 12,267 12,267
486,955 12,868 491,162 12,267
Notes to the Financial Statements
Continued
Dunedin Income Growth Investment Trust PLC 101
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
None of the Company’s financial assets is past due or impaired.
Fair values of financial assets and financial liabilities. The fair value of borrowings has been calculated at £37,223,000 as at
31 January 2024 (2023 – £43,155,000) compared to an accounts value in the financial statements of £43,052,000 (2023
– £43,500,000) (notes 12 and 13). The fair value of each loan is determined by aggregating the expected future cash
flows for that loan discounted at a rate comprising the borrower’s margin plus an average of market rates applicable to
loans of a similar period of time and currency. All other assets and liabilities of the Company are included in the
Statement of Financial Position at fair value.
20. Fair value hierarchy
FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. The fair value hierarchy has the following classifications:
Level 1: unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the
measurement date.
Level 2: inputs other than quoted prices included within Level 1 that are observable (ie developed using market data) for the
asset or liability, either directly or indirectly.
Level 3: inputs are unobservable (ie for which market data is unavailable) for the asset or liability.
The financial assets and liabilities measured at fair value in the Statement of Financial Position are grouped into the fair value
hierarchy at the reporting date as follows:
Level 1 Level 2 Level 3 Total
As at 31 January 2024 Note £’000 £’000 £’000 £’000
Financial assets at fair value through profit or loss
Quoted equities a) 474,087 - - 474,087
Total 474,087 - - 474,087
Level 1 Level 2 Level 3 Total
As at 31 January 2023 £’000 £’000 £’000 £’000
Financial assets at fair value through profit or loss
Quoted equities a) 478,895 - - 478,895
Total 478,895 - - 478,895
a) Quoted equities. The fair value of the Company’s investments in quoted equities has been determined by reference to
their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on
recognised stock exchanges.
102 Dunedin Income Growth Investment Trust PLC
21. Capital management policies and procedures
The Company’s capital management objectives are:
- to ensure that the Company will be able to continue as a going concern; and
- to maximise the return to its equity shareholders through an appropriate balance of equity capital and debt.
The capital of the Company consists of equity, comprising issued capital, reserves and retained earnings.
The Board monitors and reviews the broad structure of the Company’s capital. This review includes the nature and planned
level of gearing, which takes account of the Manager’s views on future expected returns and the extent to which revenue in
excess of that which is required to be distributed should be retained. The Company is not subject to any externally imposed
capital requirements.
22. Related party transactions and transactions with the Manager
Directors’ fees and interests. Fees payable during the year to the Directors and their interests in the shares of the Company
are disclosed within the Directors’ Remuneration Report on page 63.
Transactions with the Manager. The Company has an agreement with the abrdn Group for the provision of management,
secretarial, accounting and administration services and also for the provision of promotional activities. Details of transactions
during the year and balances outstanding at the year end are disclosed in notes 4 and 5.
During the year, the Company received £19,000 in respect of returned, unclaimed dividends accumulated over a number of
years. The Board took the decision to donate these monies to the abrdn Charitable Foundation. 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.
Notes to the Financial Statements
Continued
Dunedin Income Growth Investment Trust PLC 103
Other Information
Investors can buy and sell shares
in the Company directly through a
stockbroker or other professional
adviser. Alternatively, for private
investors, there are a number of
online dealing platforms that
offer share dealing, ISAs and
other means to invest in the
Company.
104 Dunedin Income Growth Investment Trust PLC
Alternative Investment Fund Managers
Directive (“AIFMD”) and Pre-Investment
Disclosure Document (“PIDD”)
The Company has appointed abrdn Fund Managers
Limited as its alternative investment fund manager and
The Bank of New York Mellon (International) Limited as its
depositary under the AIFMD.
The AIFMD requires abrdn Fund Managers Limited, as the
Company’s AIFM, to make available to investors certain
information prior to such investors’ investment in the
Company. Details of the leverage and risk policies which
the Company is required to have in place under the AIFMD
are published in the Company’s PIDD which can be found
on its website: dunedinincomegrowth.co.uk. The periodic
disclosures required to be made by the AIFM under the
AIFMD are set out on page 111.
Investor Warning: Be alert to share
fraud and scams
abrdn has been contacted by investors informing it that it
has received telephone calls and emails from people who
have offered to buy their investment company shares,
purporting to work for abrdn or for third party firms. abrdn
has also been notified of emails claiming that certain
investment companies under its management have
issued claims in the courts against individuals. These may
be scams which attempt to gain your personal
information with which to commit identity fraud or could
be ‘boiler room’ scams where a payment from you is
required to release the supposed payment for your
shares. These callers/senders do not work for abrdn
and any third party making such offers/claims has no link
with abrdn.
abrdn does not ‘cold-call’ investors in this way. If you have
any doubt over the veracity of a caller, do not offer any
personal information and end the call.
The Financial Conduct Authority provides advice with
respect to share fraud and boiler room scams at:
fca.org.uk/consumers/scams
Shareholder Enquiries
For queries regarding shareholdings, lost certificates,
dividend payments, registered details and related
matters, shareholders holding their shares directly in the
Company are advised to contact the Registrar (see
Contact Addresses). Changes of address must be notified
to the Registrar in writing.
Any general queries about the Company should be
directed to the Company Secretary in writing (see
Contact Addresses) or by email to: CEF.CoSec@abrdn.com
Closure of the abrdn Investment Trust
Savings Plans (the “Plans”)
In June 2023, abrdn notified investors in the abrdn
Investment Trust ISA, Share Plan and Investment Plan for
Children that these plans would be closing in December
2023. All investors with a holding or cash balance at that
time transferred to interactive investor (“ii”). ii
communicated with investors in November to set up
account security to ensure that investors could continue
to access their holdings via ii following the closure of
the Plans.
Please contact ii for any ongoing support with your
account on 0345 646 1366, or +44 113 346 2309 if you are
calling from outside the UK. Lines are open 8.00am to
5.00pm Monday to Friday. Alternatively, you can access
the ii website at: www.ii.co.uk/abrdn-welcome
How to Invest
Investors can buy and sell shares in the Company directly
through a stockbroker or indirectly through a lawyer,
accountant or other professional adviser. Alternatively, for
private investors, there are a number of online dealing
platforms that offer share dealing, ISAs and other means
to invest in the Company. Real-time execution-only
stockbroking services allow you to trade online, manage
your portfolio and buy UK listed shares. These sites do not
give advice. Some comparison websites also look at
dealing rates and terms.
Discretionary Private Client Stockbrokers
If you have a large sum to invest, you may wish to contact
a discretionary private client stockbroker. They can
manage your entire portfolio of shares and will advise you
on your investments. To find a private client stockbroker
visit The Personal Investment Management and Financial
Advice Association at: pimfa.co.uk
Investor Information
Dunedin Income Growth Investment Trust PLC 105
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Financial Advisers
To find an adviser who recommends on investment trusts,
visit: unbiased.co.uk
Regulation of Stockbrokers
Before approaching a stockbroker, always check that
they are regulated by the Financial Conduct Authority at:
fca.org.uk/firms/financial-services-register
How to Attend and Vote at Company
Meetings
Investors who hold their shares through a platform or
share plan provider (for example Hargreaves Lansdown,
Interactive Investor or AJ Bell) and would like to attend and
vote at Company meetings (including AGMs) should
contact their platform or share plan provider directly to
make arrangements.
Investors who hold their shares through platforms and
have their shares held through platform nominees, may
not necessarily receive notification of general meetings
and are advised to keep themselves informed of
Company business by referring to the Company’s
website. Where voting is required, and the Board
encourages shareholders to vote at all general meetings
of the Company, shareholders with their holdings in
nominees will need to instruct the nominee to vote on their
behalf and should do so in good time before the meetings.
Keeping You Informed
Information about the Company can be found on its
website: dunedinincomegrowth.co.uk, including share price
and performance data as well as London Stock Exchange
announcements, current and historic Annual and Half-
Yearly Reports, and the latest monthly factsheet on the
Company issued by the Manager. Investors can receive
updates via email by registering on the home page of
the Company’s website.
The Company’s Ordinary share price appears under the
heading ‘Investment Companies’ in the Financial Times.
Details are also available at: invtrusts.co.uk
Twitter:
@abrdnTrusts
LinkedIn:
abrdn Investment Trusts
Key Information Document (“KID”)
The KID relating to the Company and published by the
Manager can be found on the Company’s website.
Suitable for Retail/NMPI Status
The Company’s shares are intended for investors,
primarily in the UK, including retail investors, professionally-
advised private clients and institutional investors who are
seeking growth of income and capital from a portfolio
invested mainly in companies listed or quoted in the United
Kingdom, and who understand and are willing to accept
the risks of exposure to equities.
Investors should consider consulting a financial adviser
who specialises in advising on the acquisition of shares
and other securities before acquiring shares. Investors
should be capable of evaluating the risks and merits of
such an investment and should have sufficient resources
to bear any loss that may result.
The Company currently conducts its affairs so that its
securities can be recommended by a financial adviser to
ordinary retail investors in accordance with the Financial
Conduct Authority’s rules in relation to non-mainstream
pooled investments (“NMPIs”) and intends to continue to
do so for the foreseeable future. The Company’s securities
are excluded from the Financial Conduct Authority’s
restrictions which apply to NMPIs because they are
securities issued by an investment trust.
Note
Please remember that past performance is not a guide to
the future. Stock market and currency movements may
cause the value of shares and the income from them to
fall as well as rise and investors may not get back the
amount they originally invested.
As with all equity investments, the value of investment
trust shares purchased will immediately be reduced by
the difference between the buying and selling prices of
the shares, known as the market maker’s spread.
Investors should further bear in mind that the value of
any tax relief will depend on the individual
circumstances of the investor and that tax rates and
reliefs, as well as the tax treatment of ISAs, may be
changed by future legislation.
The information on pages 104 to 105 has been approved
for the purposes of Section 21 of the Financial Services
and Markets Act 2000 (as amended by the Financial
Services Act 2012) by abrdn Investments Limited which is
authorised and regulated by the Financial Conduct
Authority in the United Kingdom.
106 Dunedin Income Growth Investment Trust PLC
abrdn Group or abrdn
The abrdn plc group of companies. abrdn is the brand of
abrdn plc.
AIC
The Association of Investment Companies.
AIFMD
The UK version of the Alternative Investment Fund
Managers Directive and all implementing and delegating
legislation thereunder, as it forms part of UK law following
the UK’s departure from the EU. The AIFMD was originally
European legislation which created a European-wide
framework for regulating managers of ‘alternative
investment funds’ (“AIFs”). It is designed to regulate any
fund which is not a UCITS fund and which is managed
and/or marketed in the EU (and, now separately, the UK).
The Company has been designated as an AIF.
Benchmark
This is a measure against which an Investment Trust’s
performance is compared. The Company’s benchmark is
the FTSE All-Share Index. The index averages the
performance of a defined selection of listed companies
over specific time periods.
Call Option
An option contract which gives the buyer the right, but not
the obligation, to purchase a specified amount of an asset
at the strike price by a future specified date.
Carbon Emissions
Carbon emissions is used as a generic term for the main
greenhouse gas (“GHG”) emissions (carbon dioxide,
methane, nitrous oxide, F-gases).
Carbon Emissions – Scope 1
Greenhouse gas emissions generated from burning fossil
fuels and production processes which are owned or
controlled by a company.
Carbon Emissions – Scope 2
Greenhouse gas emissions generated from the
consumption of purchased electricity, heat or steam
by a company.
Carbon Emissions – Scope 3
Other upstream and downstream indirect greenhouse
gas emissions such as the extraction and production of
purchased materials and fuels, transport-related activities
in vehicles not owned or controlled by a reporting entity,
electricity related activities (egT&D losses) not covered in
Scope 2.
Carbon Intensity
Carbon emissions relative to a specific activity. For
company carbon footprinting, the carbon intensity
reflects the CO2e emissions divided by revenue in million
US$. For countries, the standard intensity metric is the
ratio of greenhouse gas emissions produced to gross
domestic product.
Closed-End Fund
A collective investment scheme which has a fixed number
of shares which are not redeemable from the fund itself.
Unlike open-ended funds, new shares/units are not
created by managers to meet demand from investors;
instead, shares are purchased (or sold) only in the market.
Closed-end funds are normally listed on a recognised
stock exchange, such as the London Stock Exchange, and
shares can be bought and sold on that exchange.
Discount
The amount by which the market price per share of an
Investment Trust is lower than the Net Asset Value per
share. The discount is normally expressed as a
percentage of the Net Asset Value per share. Refer to
Alternative Performance Measures on pages 112 to 114.
Dividend Cover
Revenue return per share divided by the dividend per
share, expressed as a ratio. Refer to Alternative
Performance Measures on pages 112 to 114.
Dividend Yield
The annual dividend expressed as a percentage of the
share price.
FCA
Financial Conduct Authority.
Glossary of Terms
Dunedin Income Growth Investment Trust PLC 107
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Gearing
Net gearing is calculated by dividing total borrowings less
cash and cash equivalents by shareholders’ funds,
expressed as a percentage. Refer to Alternative
Performance Measures on pages 112 to 114.
Investment Manager
abrdn Investments Limited is a wholly owned subsidiary of
abrdn plc and acts as the Company’s investment
manager. It is authorised and regulated by the FCA.
Investment Trust
A type of Closed-End Fund which invests in other
securities, allowing shareholders to share the risks, and
returns, of collective investment.
Key Information Document or KID
The UK version of the Packaged Retail and Insurance-
based Investment Products (“PRIIPS”) Regulation (as it
forms part of UK law following the UK’s departure from the
EU) requires the Manager, as the Company’s PRIIP
‘manufacturer’, to prepare a Key Information Document
(“KID”) in respect of the Company. This KID must be made
available by the Manager to retail investors prior to them
making any investment decision and is available via the
Company’s website. The Company is not responsible for
the information contained in the KID and investors should
note that the procedures for calculating the risks, costs
and potential returns are prescribed by law. The figures in
the KID may not reflect the expected returns for the
Company and anticipated performance returns cannot
be guaranteed.
Leverage
For the purposes of the AIFMD, leverage is any method
which increases the Company’s exposure, including the
borrowing of cash and the use of derivatives. It is
expressed as a ratio between the Company’s exposure
and its Net Asset Value and can be calculated on a gross
and a commitment method. Under the gross method,
exposure represents the sum of the Company’s positions
after the deduction of sterling cash balances, without
taking into account any hedging and netting
arrangements. Under the commitment method, exposure
is calculated without the deduction of sterling cash
balances and after certain hedging and netting positions
are offset against each other.
Manager, AIFM or aFML
abrdn Fund Managers Limited is a wholly owned
subsidiary of abrdn plc and acts as the Company’s
Alternative Investment Fund Manager. It is authorised and
regulated by the FCA.
Net Asset Value or NAV
The value of total assets less liabilities. Liabilities for this
purpose include current and long-term liabilities. The Net
Asset Value divided by the number of shares in issue
produces the Net Asset Value per Ordinary share.
NAV with debt at fair value
The Net Asset Value with debt valued divided by the
number of shares in issue where the Company’s
borrowings are valued using the discounted cash
flow basis.
Ongoing Charges
Ratio of expenses as a percentage of average daily
shareholders’ funds calculated as per the AIC’s industry
standard method. Refer to Alternative Performance
Measures on pages 112 to 114.
Pre-Investment Disclosure Document
(“PIDD”)
The AIFM and the Company are required to make certain
disclosures available to investors in accordance with the
AIFMD. Those disclosures that are required to be made
pre-investment are included within a PIDD, which can be
found on the Company’s website.
Premium
The amount by which the market price per share of an
Investment Trust exceeds the Net Asset Value per share.
The premium is normally expressed as a percentage of
the Net Asset Value per share.
Price/Earnings Ratio
This is calculated by dividing the market price per share by
the earnings per share. The calculation assumes no
change in earnings but in practice the multiple reflects the
stock market’s view of a company’s prospects and profit
growth potential.
108 Dunedin Income Growth Investment Trust PLC
Prior Charges
The name given to all borrowings including debentures,
loans and overdrafts that are to be used for investment
purposes, reciprocal foreign currency loans, currency
facilities to the extent that they are drawn down, index-
linked securities, and all types of preference or preferred
capital, irrespective of the time until repayment.
Total Assets
Total assets less current liabilities (before deducting Prior
Charge as defined above), as per the Statement of
Financial Position.
Total Return
Total Return involves reinvesting the net dividend in the
month that the share price goes ex-dividend. The NAV
Total Return involves investing the same net dividend in the
NAV of the Company on the date to which that dividend
was earned. Refer to Alternative Performance Measures
on pages 112 to 114.
UN Global Compact
A global corporate sustainability initiative, calling on
companies, investors and other participants to align
their strategies and operations with universal principles
on human rights, labour, the environment and
anti-corruption.
UN Sustainable Development Goals
The Sustainable Development Goals (“SDGs”) or Global
Goals are a collection of 17 interlinked global goals
designed to be a "blueprint to achieve a better and more
sustainable future for all". The SDGs were set in 2015 by
the United Nations General Assembly and are intended to
be achieved by 2030.
Weighted Average Carbon Intensity
Average carbon intensity of the portfolio weighted by the
weight of the company in the portfolio.
Glossary of Terms
Continued
Dunedin Income Growth Investment Trust PLC 109
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
The provenance of Dunedin Income Growth Investment
Trust PLC goes back to 1873 and to the origins of the
investment trust industry in Scotland. In 1873, a 28 year old
Robert Fleming (sometimes dubbed the “father of the
investment trust industry”), persuaded a group of
Dundee’s wealthiest investors to back his idea of forming
“the first Association in Scotland for investments in
American railroad bonds, carefully selected and widely
distributed, and where investments would not exceed
one-tenth of the capital in any one security”. Fleming, who
was later founder of the merchant bank that bore this
name, showed extraordinary commercial acumen at a
very young age. He was born in modest circumstances in
Dundee and was first apprenticed as office boy at 13, then
rose to become, at 21, book-keeper with the exporting
arm of Dundee’s largest textile merchant, Edward
Baxter & Son.
In 1870, the elderly Mr Baxter sent Robert Fleming to the
United States to represent him on business. Fleming
returned enthused about the investment opportunities
offered by the States, despite the country still suffering
from the aftermath of the American Civil War. The
“association” proved to be an attractive means for
investors to pool their resources, spread risk and put their
investments under full-time management. The new fund,
then known as The Scottish American Investment Trust,
was launched on 1 February 1873. The Scottish American
Investment Trust was partly modelled on the Foreign &
Colonial Government Trust that was launched in 1868.
Unlike Foreign & Colonial, which purchased overseas
government stocks, the new trust would invest in “The
Bonds of States, cities, railroads and other corporations in
the US, but chiefly in the mortgage bonds of railroads”.
John Guild, one of the chairmen, reported “while in this
country you could not lend money on first-class railway
debentures at over 4% or 4.5%, in America you could get
7% with the best security of this description”. Coupled with
the fact that railway infrastructure development in the UK
had by then become relatively mature, it was for this
reason that the United States was an attractive
destination for Scottish funds.
The original prospectus described the intended issue of
£150,000 in certificates of £100 each, paying interest of 6%
per annum. Such was the level of demand that the original
prospectus was withdrawn and a new one was printed
with a capital issue of £300,000. The trust started out with
30 stocks, each comprising no more than 10% of the
portfolio. Confusingly, a similar sounding investment trust
company, launched in Edinburgh, The Scottish American
Investment Company was formed in April 1873, just a few
months after Fleming’s launch in February 1873. In
Dundee, two almost identical issues were made in the
following two years, described as the “Second Issue” and
“Third Issue”. The three issues became three separate
trust companies, under the Joint Stock Companies Act, in
1879 – the First, Second and Third Scottish American Trust
Companies Ltd, but merged into a single trust company in
1969 as The First Scottish American Trust Company Ltd.
In 1984, The First Scottish American Trust Company Ltd
became part of the Dunedin Fund Managers’ stable of
trusts and was subsequently renamed in 1990 as Dunedin
Income Growth Investment Trust. Dunedin Fund
Managers merged with Edinburgh Fund Managers in
1996, which was then acquired by Aberdeen Asset
Management in 2003. Aberdeen Asset Management
merged with Standard Life in 2017 to form what is now the
abrdn Group.
In 2023, the Company celebrated its 150
th
anniversary
and returned to Dundee for its AGM.
The book entitled “The History of Dunedin Income
Growth Investment Trust PLC” is available on the
Company’s website.
Your Company’s History
110 Dunedin Income Growth Investment Trust PLC
Issued Share Capital at 31 January 2024
146,172,889 Ordinary shares of 25p (153,677,935 including treasury shares)
Treasury Shares at 31 January 2024
7,505,046 Ordinary shares
Name Change
April 1990 Company name changed from “The First Scottish American Trust PLC” to Dunedin Income
Growth Investment Trust PLC
Share Capital History
April 1997 Capitalisation issue of four Ordinary shares of 25p issued for each existing Ordinary share
April 1999 Reduction of share capital by way of repayment of £840,000 of 3 ½% Preference stock
Year ended 31 January 2004 50,000 Ordinary shares purchased for cancellation
Year ended 31 January 2005 1,950,000 Ordinary shares purchased for cancellation
Year ended 31 January 2006 450,000 Ordinary shares purchased for cancellation and 450,000 Ordinary shares
purchased to hold in treasury
Year ended 31 January 2007 3,231,101 Ordinary shares purchased to hold in treasury
Year ended 31 January 2008 2,237,440 Ordinary shares purchased to hold in treasury, 1,972,800 treasury shares cancelled
Year ended 31 January 2009 1,026,007 Ordinary shares purchased to hold in treasury, 2,000,000 treasury shares cancelled
Year ended 31 January 2010 No shares purchased, cancelled or issued
Year ended 31 January 2011 No shares purchased, cancelled or issued
Year ended 31 January 2012 No shares purchased, cancelled or issued
Year ended 31 January 2013 No shares purchased, cancelled or issued
Year ended 31 January 2014 300,000 Ordinary shares sold from treasury
Year ended 31 January 2015 No shares purchased, cancelled or issued
Year ended 31 January 2016 No shares purchased, cancelled or issued
Year ended 31 January 2017 493,500 Ordinary shares purchased to hold in treasury
Year ended 31 January 2018 833,000 Ordinary shares purchased to hold in treasury
Year ended 31 January 2019 1,387,018 Ordinary shares purchased to hold in treasury
Year ended 31 January 2020 105,550 Ordinary shares purchased to hold in treasury
Year ended 31 January 2021 22,449 Ordinary shares purchased to hold in treasury
Year ended 31 January 2022 No shares purchased, cancelled or issued
Year ended 31 January 2023 100,000 Ordinary shares sold from treasury
Year ended 31 January 2024 2,091,781 Ordinary shares purchased to hold in treasury
Share Capital History
Dunedin Income Growth Investment Trust PLC 111
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
abrdn Fund Managers Limited and the Company are required to make certain disclosures available to investors in
accordance with the Alternative Investment Fund Managers Directive (“AIFMD”). Those disclosures that are required to
be made pre-investment are included within a pre-investment disclosure document (“PIDD”) which can be found on the
Company’s website.
There have been no material changes to the disclosures contained within the PIDD since its most recent update
in April 2023.
The periodic disclosures as required under the AIFMD to investors are made below:
· information on the investment strategy, geographic and sector investment focus and principal stock exposures is
included in the Strategic Report;
· none of the Company’s assets are subject to special arrangements arising from their illiquid nature;
· the Strategic Report, note 19 to the financial statements and the PIDD together set out the risk profile and risk
management systems in place. There have been no changes to the risk management systems in place in the period
under review and no breaches of any of the risk limits set, with no breach expected;
· there are no new arrangements for managing the liquidity of the Company or any material changes to the liquidity
management systems and procedures employed by aFML; and
· all authorised Alternative Investment Fund Managers are required to comply with the AIFMD Remuneration Code. In
accordance with the Remuneration Code, the AIFM’s remuneration policy is available from the Company Secretary,
abrdn Holdings Limited, on request, and the remuneration disclosures in respect of the AIFM’s reporting period for the
year ended 31 December 2023 are available on the Company’s website.
Leverage
The table below sets out the current maximum permitted limit and actual level of leverage for the Company:
Gross Method Commitment Method
Maximum level of leverage 2.50 2.00
Actual level at 31 January 2024 1.16 1.19
There have been no breaches of the maximum level during the period and no changes to the maximum level of
leverage employed by the Company. There have been no changes to the circumstances in which the Company may
be required to post assets as collateral and no guarantees granted under the leveraging arrangement. Changes to the
information contained either within this Annual Report or the PIDD in relation to any special arrangements in place, the
maximum level of leverage which aFML may employ on behalf of the Company, the right of use of collateral or any
guarantee granted under any leveraging arrangement, or any change to the position in relation to any discharge of
liability by the Depositary will be notified via a regulatory news service without undue delay in accordance with
the AIFMD.
The information on this page has been approved for the purposes of Section 21 of the Financial Services and Markets Act
2000 (as amended by the Financial Services Act 2012) by abrdn Fund Managers Limited which is authorised and
regulated by the Financial Conduct Authority in the United Kingdom.
AIFMD Disclosures
(
Unaudited
)
112 Dunedin Income Growth Investment Trust PLC
Alternative performance measures are numerical measures of the Company’s current, historical or future performance, financial
position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company’s
applicable financial framework includes FRS 102 and the AIC SORP. The Directors assess the Company’s performance against a
range of criteria which are viewed as particularly relevant for closed-end investment companies.
Dividend cover
Dividend cover measures the revenue return per share divided by total dividends per share, expressed as a ratio.
2024 2023
Revenue return per share a 13.54p 13.02p
Dividends per share b 13.75p 13.10p
Dividend cover a/b 0.98 0.99
Net gearing
Net gearing measures total borrowings less cash and cash equivalents divided by shareholders’ funds, expressed as a percentage.
Under AIC reporting guidance cash and cash equivalents includes net amounts due to and from brokers at the period end as well as
cash and short term deposits.
2024 2023
Borrowings (£’000) a 43,052 43,500
Cash (£’000) b 12,868 12,267
Amounts due to brokers (£’000) c 92 649
Amounts due from brokers (£’000) d – –
Shareholders’ funds (£’000) e 445,815 448,605
Net gearing (a-b+c-d)/e 6.79% 7.11%
Alternative Performance Measures
Dunedin Income Growth Investment Trust PLC 113
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Discount to net asset value per share with debt at fair value
The discount is the amount by which the share price is lower than the net asset value per share with debt at fair value, expressed as a
percentage of the net asset value with debt at fair value.
2024 2023
NAV per Ordinary share (p) (see note 17) a 308.98p 302.80p
Share price (p) b 276.00p 294.00p
Discount (a-b)/b 10.67% 2.91%
Ongoing charges
The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of investment
management fees and administrative expenses less non-recurring charges, expressed as a percentage of the average net asset
values with debt at fair value throughout the year.
2024 2023
Investment management fees (£’000) 1,740 1,704
Administrative expenses (£’000) 1,073 951
Less: non-recurring charges (£’000) (17) –
Ongoing charges (£’000) 2,796 2,655
Average net assets (£’000) 448,512 430,038
Ongoing charges ratio (excluding look-through costs) 0.62% 0.62%
Look-through costs
A
0.02% 0.02%
Ongoing charges ratio (including look-through costs) 0.64% 0.64%
A
Calculated in accordance with AIC guidance issued in October 2020 to include the Company’s share of costs of holdings in investment companies on a look-through basis.
The ongoing charges ratio provided in the Company’s Key Information Document is calculated in line with the PRIIPs regulations which
amongst other things, includes the cost of borrowings and transaction costs.
114 Dunedin Income Growth Investment Trust PLC
Total return
NAV and share price total returns show how the NAV and share price has performed over a period of time in percentage terms, taking
into account both capital returns and dividends paid to shareholders. Share price and NAV total returns are monitored against open-
ended and closed-ended competitors, and the Reference Index, respectively.
Share
Year ended 31 January 2024 NAV Price
Opening at 1 February 2023 a 302.8p 294.0p
Closing at 31 January 2024 b 309.0p 276.0p
Price movements c=(b/a)-1 2.0% –6.1%
Dividend reinvestment
A
d 4.7% 4.5%
Total return c+d +6.7% (1.6)%
Share
Year ended 31 January 2023 NAV Price
Opening at 1 February 2022 a 309.0p 310.0p
Closing at 31 January 2023 b 302.8p 294.0p
Price movements c=(b/a)-1 (2.0)% (5.2)%
Dividend reinvestment
A
d 4.4% 4.3%
Total return c+d +2.4% –0.9%
A
NAV total return involves investing the net dividend in the NAV of the Company with debt at fair value on the date on which that dividend goes ex-dividend. Share price total return
involves reinvesting the net dividend in the share price of the Company on the date on which that dividend goes ex-dividend.
Alternative Performance Measures
Continued
Dunedin Income Growth Investment Trust PLC 115
General
The Annual General Meeting will be held at
18 Bishops Square, London E1 6EG at 12 noon
on Thursday 23 May 2024.
The Company will also be hosting an online
shareholder presentation, which will be held at
10.00am on Tuesday 7 May 2024. Full details on how
to register for the event can be found at:
https://bit.ly/abrdn-Dunedin-Income-2024
116 Dunedin Income Growth Investment Trust PLC
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Dunedin Income Growth Investment Trust PLC
(the “Company”) will be held at 18 Bishops Square, London E1 6EG at 12 noon on Thursday 23 May 2024 for the following
purposes:
Ordinary Business
To consider and, if thought fit, pass resolutions 1 to 11 (inclusive) as ordinary resolutions:
1. To receive and adopt the audited financial statements of the Company for the financial year ended
31 January 2024 and the reports of the Directors and the Auditor on those financial statements.
2. To receive, adopt and approve the Directors’ Remuneration Report (excluding the Directors’ Remuneration Policy)
for the financial year ended 31 January 2024 which appears on pages 61 to 64 of the Annual Report and Accounts.
3. To approve a final dividend of 4.15p per Ordinary share in respect of the financial year ended 31 January 2024,
payable on 31 May 2024 to holders of Ordinary shares on the register of members as at the close of business on 3
May 2024.
4. To re-elect Mr Jasper Judd as a Director of the Company.
5. To re-elect Mr Howard Williams as a Director of the Company.
6. To re-elect Mr David Barron as a Director of the Company.
7. To re-elect Ms Christine Montgomery as a Director of the Company.
8. To re-elect Ms Gay Collins as a Director of the Company.
9. To re-appoint Deloitte LLP as Auditor of the Company, to hold office from the conclusion of the Annual General
Meeting until the conclusion of the next Annual General Meeting of the Company.
10. To authorise the Directors to determine the remuneration of the Company’s Auditor.
11. That, in substitution for any existing authority under Section 551 of the Companies Act 2006 (the “Act”), but without
prejudice to the exercise of any such authority prior to the passing of this resolution, the directors of the Company
(the “Directors”) be and are hereby generally and unconditionally authorised, pursuant to and in accordance with
Section 551 of the Act, to exercise all the powers of the Company to allot shares in the Company (“Shares”) and to
grant rights to subscribe for or to convert any security into Shares in the Company (“Rights”) up to an aggregate
nominal amount of £12,085,441 or, if less, the number representing 33.33% of the issued Ordinary share capital of
the Company (excluding treasury shares) as at the date of the passing of this resolution on such terms as the
Directors may determine, provided that such authorisation expires (unless previously renewed, varied or revoked by
the Company in general meeting) at the conclusion of the next Annual General Meeting of the Company held after
the passing of this resolution or on 31 July 2025 (whichever is earlier) save that the Company may, at any time prior
to the expiry of such authority, make offers or enter into agreements which would or might require Shares to be
allotted or Rights to be granted after such expiry and the Directors may allot Shares or grant Rights in pursuance of
any such offers or agreements as if the authority conferred by this resolution had not expired.
To consider and, if thought fit, pass resolutions 12 and 13 as special resolutions:
12. That in substitution for any existing power under Sections 570 and 573 of the Companies Act 2006 (the “Act”) (but
without prejudice to the exercise of any such authority prior to the passing of this resolution), and subject to the
passing of Resolution 11 set out in the notice of the 2024 Annual General Meeting ("Resolution 11"), the directors of
the Company (the “Directors”) be and are hereby generally empowered, pursuant to Sections 570 and 573 of the
Act, to allot or make offers or agreements to allot equity securities (as defined in Section 560 of the Act) for cash
pursuant to the authority conferred by Resolution 11 and/or by way o
f a sale of treasury shares for cash (within the
meaning of Section 560(3) of the Act), as if Section 561(1) of the Act did not apply to any such allotment or sale
provided that this power shall be limited to:
Notice of Annual General Meetin
g
Dunedin Income Growth Investment Trust PLC 117
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
i. the allotment of equity securities and the sale of treasury shares (otherwise than pursuant to sub-paragraph (ii)
below) up to an aggregate nominal amount of £1,812,997 or, if less, the number representing 5% of the issued
Ordinary share capital of the Company (excluding treasury shares) as at the date of the passing of this
resolution, at a price of not less than the net asset value per share of the existing Ordinary shares at allotment or
sale, as determined by the Directors; and
ii. the allotment of equity securities by way of rights issue, open offer or other pre-emptive offer in favour of all
holders of Ordinary shares where the equity securities respectively attributable to the interests of all such
holders are either proportionate (as nearly as may be) to the respective number of Ordinary shares held by
them on a record date fixed by the Directors (subject to such exclusions, limitations, restrictions or other
arrangements as the Directors consider necessary or appropriate to deal with treasury shares, fractional
entitlements, record dates, legal, regulatory or practical problems in or under the laws of, or requirements of,
any regulatory body or any stock exchange in any territory or otherwise howsoever);
and shall expire (unless previously renewed, varied or revoked by the Company in general meeting) at the
conclusion of the next Annual General Meeting of the Company held after the passing of this resolution or on 31 July
2025 (whichever is earlier), save that the Company may, at any time prior to the expiry of such authority, make
offers or enter into agreements which would or might require equity securities to be allotted or treasury shares to
be sold after such expiry and the Directors may allot equity securities or sell treasury shares in pursuance of such
offers or agreements as if the power conferred by this resolution had not expired.
13. That, in substitution for any existing authority under Section 701 of the Companies Act 2006 (the “Act”), but without
prejudice to the exercise of any such authority prior to the passing of this resolution, the Company be and is hereby
generally and unconditionally authorised, for the purposes of Section 701 of the Act, to make one or more market
purchases (within the meaning of Section 693(4) of the Act) of fully paid Ordinary shares of 25p each in the capital
of the Company (“Ordinary shares”) on such terms and in such manner as the directors of the Company may from
time to time determine (either for cancellation or for retention as treasury shares for future re-issue, resale, transfer
or cancellation) provided that:
i. the maximum aggregate number of Ordinary shares hereby authorised to be purchased is 21,741,466 Ordinary
shares or, if less, the number representing 14.99% of the issued Ordinary share capital of the Company
(excluding treasury shares) immediately prior to the passing of this resolution;
ii. the minimum price (exclusive of expenses) which may be paid for an Ordinary share purchased pursuant to this
authority shall be 25p (being the nominal value of an Ordinary share);
iii. the maximum price (exclusive of expenses) which may be paid for an Ordinary share purchased pursuant to
this authority shall be the higher of:
a. 5% above the average of the middle market quotations of the Ordinary shares (as derived from the Daily
Official List of the London Stock Exchange) for the five business days immediately preceding the date of
purchase; and
b. the higher of the price of the last independent trade in O
rdinary shares and the highest current
independent bid for Ordinary shares on the London Stock Exchange at the time the purchase is carried out;
and
iv. unless previously varied, revoked or renewed by the Company in a general meeting, the authority hereby
conferred shall expire at the conclusion of the next Annual General Meeting of the Company held after the
passing of this resolution or on 31 July 2025 (whichever is the earlier) save that the Company may at any time
prior to such expiry, enter into a contract or arrangement to purchase Ordinary shares under this authority
which will or may be completed or executed wholly or partly after the expiration of this authority and may make
a purchase of shares pursuant to any such contract or arrangement.
118 Dunedin Income Growth Investment Trust PLC
Special Business
To consider and, if thought fit, pass resolution 14 as an ordinary resolution:
14. That the maximum aggregate value of fees payable to the directors of the Company be increased from £200,000
per annum to £250,000 per annum.
By order of the Board Registered Office:
abrdn Holdings Limited 1 George Street
Company Secretary Edinburgh EH2 2LL
3 April 2024
Notice of Annual General Meetin
g
Continued
Dunedin Income Growth Investment Trust PLC 119
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Notes
i. A member entitled to attend and vote at the meeting may appoint a proxy or proxies to exercise all or any of his/her
rights to attend, speak and vote on his/her behalf at the meeting. A proxy need not be a member of the Company.
A member may appoint more than one proxy provided each proxy is appointed to exercise rights attached to
different shares. A member may not appoint more than one proxy to exercise the rights attached to any one share.
If you wish your proxy to speak on your behalf at the meeting you will need to appoint your own choice of proxy (not
the Chairman of the meeting) and give your instructions directly to them. A proxy form which may be used to make
such appointment and give proxy instructions accompanies this notice. If you do not have a proxy form and believe
that you should have one, or if you require additional forms or would like to appoint more than one proxy, please
contact the Company's Registrar, Equiniti Limited on +44 (0)371 384 2441. Charges for calling this number are
determined by the caller’s service provider. Lines open 8.30 a.m. to 5.30 p.m., Monday to Friday, excluding bank
holidays in England and Wales. If calling from overseas, please ensure the country code is used. In the case of joint
holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by
the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders
appear in the Company's Register of Members in respect of the joint holding (the first-named being the most
senior). A member present in person or by proxy shall have one vote on a show of hands and on a poll every
member present in person or by proxy shall have one vote for every Ordinary share of which he/she is the holder.
ii. A form of proxy is enclosed. To be valid, any proxy form or other instrument of proxy and any power of attorney or
other authority, if any, under which they are signed or a notarially certified copy of that power of attorney or
authority should be sent to the Company’s Registrar, Equiniti Limited, Aspect House, Spencer Road, Lancing, West
Sussex BN99 6DA so as to arrive not less than 48 hours (excluding non-working days) before the time fixed for
the meeting.
iii. The return of a completed proxy form or other such instrument of proxy will not prevent a member attending the
Annual General Meeting and voting in person if he/she wishes to do so.
iv. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service
may do so for the meeting and any adjournment(s) thereof by using the procedures described in the CREST Manual
and by logging on to the website euroclear.com. CREST personal members or other CREST sponsored members,
and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or
voting service provider(s), who will be able to take the appropriate action on their behalf.
v. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST
message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK &
International Limited’s specifications, and must contain the information required for such instruction, as described in
the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an
amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as
to be received by the Company’s Registrar (ID RA19) no later than 48 hours (excluding non-working days) before
the time of the meeting or any adjournment. For this purpose, the time of receipt will be taken to be the time (as
determined by the timestamp applied to the message by the CREST Application Host) from which the Company’s
Registrar is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any
change of instructions to proxies appointed through CRE
ST should be communicated to the appointee through
other means.
vi. CREST members and, where applicable, their CREST sponsors, or voting service providers should note that
Euroclear UK & International Limited does not make available special procedures in CREST for any particular
message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST
personal member, or sponsored member, or has appointed a voting service provider(s), to procure that his CREST
sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is
transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where
applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the
CREST Manual concerning practical limitations of the CREST system and timings.
120 Dunedin Income Growth Investment Trust PLC
vii. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of
the Uncertificated Securities Regulations 2001.
viii. If you are an institutional investor you may be able to appoint a proxy electronically via the Proxymity platform, a
process which has been agreed by the Company and approved by the Registrar. For further information regarding
Proxymity, please go to www.proxymity.io. Your proxy must be lodged by 12 noon on 21 May 2024 in order to be
considered valid. Before you can appoint a proxy via this process you will need to have agreed to Proxymity’s
associated terms and conditions. It is important that you read these carefully as you will be bound by them and they
will govern the electronic appointment of your proxy.
ix. The “vote withheld” option on the proxy form is provided to enable a member to abstain on any particular resolution.
It should be noted that an abstention is not a vote in law and will not be counted in the calculation of the proportion
of votes “for” or “against” a particular resolution.
x. The right to vote at the meeting is determined by reference to the Company’s register of members as at 6.30 p.m.
on 21 May 2024 or, if the meeting is adjourned, at 6.30 p.m. on the day which is two days (excluding non-working
days) prior to the adjourned meeting. Changes to entries on that register after that time shall be disregarded in
determining the rights of any member to attend and vote at the meeting.
xi. As at 3 April 2024 (being the latest practicable date prior to the publication of this document) the Company’s issued
share capital comprised 145,039,800 Ordinary shares of 25p each and 8,638,135 treasury shares. Each Ordinary
share carries the right to one vote at a general meeting of the Company and, therefore, the total number of voting
rights in the Company as at 3 April 2024 was 145,039,800.
xii. Any person holding 3% or more of the total voting rights of the Company who appoints a person other than the
Chairman of the meeting as his/her proxy will need to ensure that both he/she and his/her proxy complies with their
respective disclosure obligations under the UK Disclosure Guidance and Transparency Rules.
xiii. A person to whom this notice is sent who is a person nominated under Section 146 of the Companies Act 2006 to
enjoy information rights (a “Nominated Person”) may, under an agreement between him/her and the shareholder
by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for
the meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may,
under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
The statements of the rights of members in relation to the appointment of proxies in notes (i) to (iii) above do not
apply to a Nominated Person. The rights described in those notes can only be exercised by registered members of
the Company.
xiv. Biographical details of the Directors standing for re-election are set out on pages 50 to 52 of the Annual Report and
financial statements of the Company for the financial year ended 31 January 2024.
xv. Members who have general queries about the Annual General Meeting should contact the Company Secretary in
writing. Members are advised that any telephone number, website or email address which may be set out in this
notice of Annual General Meeting or in any related documents (including the proxy form) is not to be used for the
purposes of serving information or documents on, or otherwise communicating with, the Company for any
purposes other than those expressly stated.
Continued
Notice of Annual General Meetin
g
Dunedin Income Growth Investment Trust PLC 121
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
xvi. Members should note that, it is possible that, pursuant to requests made by members of the Company under
Section 527 of the Companies Act 2006, the Company may be required to publish on a website a statement setting
out any matter relating to the audit of the Company’s accounts (including the Auditor’s report and the conduct of
the audit) that are to be laid before the meeting or any circumstances connected with an auditor of the Company
ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance
with Section 437 of the Companies Act 2006. The Company may not require the members requesting any such
website publication to pay its expenses in complying with Sections 527 or 528 of the Companies Act 2006. Where
the Company is required to place a statement on a website under Section 527 of the Companies Act 2006, it must
forward the statement to the Company’s Auditor no later than the time when it makes the statement available on
the website. The business which may be dealt with at the meeting includes any statement that the Company has
been required under Section 527 of the Companies Act 2006 to publish on a website.
xvii. No Director has a service contract with the Company. Copies of the Directors’ letters of appointment are available
for inspection on any day (except Saturdays, Sundays and public holidays in England and Wales) from the date of
this notice until the date of the meeting during usual business hours at the Company’s registered office and for 15
minutes prior to, and at, the meeting.
xviii. Further information regarding the meeting which the Company is required by section 311A of the Companies Act
2006 to publish on a website in advance of the meeting (including this notice) is available from the Company’s
website: dunedinincomegrowth.co.uk
xix. Members have a right under section 319A of the Companies Act 2006 to require the Company to answer any
question raised by a member at the Annual General Meeting, which relates to the business being dealt with at the
meeting, although no answer need be given: (a) if to do so would interfere unduly with the preparation of the
meeting or involve disclosure of confidential information; (b) if the answer has already been given on the
Company’s website; or (c) it is undesirable in the best interests of the Company or the good order of the meeting.
122 Dunedin Income Growth Investment Trust PLC
Dunedin Income Growth Investment Trust PLC 123
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
124 Dunedin Income Growth Investment Trust PLC
Dunedin Income Growth Investment Trust PLC 125
Directors
David Barron (Chairman)
Gay Collins
Jasper Judd
Christine Montgomery
Howard Williams
Registered Office & Company Secretary
abrdn Holdings Limited
1 George Street
Edinburgh EH2 2LL
Email: CEF.CoSec@abrdn.com
Alternative Investment Fund Manager
abrdn Fund Managers Limited
280 Bishopsgate
London EC2M 4AG
Investment Manager
abrdn Investments Limited
1 George Street
Edinburgh EH2 2LL
Company Registration Number
SC000881 (Scotland)
United States Internal Revenue Service
FATCA Registration Number (“GIIN”)
CJ1DH9.99999.SL.826
Legal Entity Identifier (“LEI”)
549300PPXLZPR5JTL763
Website
dunedinincomegrowth.co.uk
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Shareholder help can be found at shareview.co.uk.
Alternatively, you can contact the Shareholder Helpline:
+44 (0)371 384 2441*
(*Lines open 8.30 a.m. to 5.30 p.m., Monday to Friday
excluding public holidays in England and Wales. Charges
for calling telephone numbers starting with ‘03’ are
determined by the caller’s service provider.)
If calling from overseas, please ensure the country code
is used.
Depositary
The Bank of New York Mellon (International) Limited
160 Queen Victoria Street
London EC4V 4LA
Stockbroker
JPMorgan Cazenove
25 Bank Street
Canary Wharf
London E14 5JP
Auditor
Deloitte LLP
110 Queen Street
Glasgow G1 3BX
Contact Addresses
For more information visit dunedinincomegrowth.co.uk
abrdn.com