abrdndiversified.co.uk
abrdn Diversified Income
and Growth plc
Annual Report 30 September 2024
For more information visit abrdndiversified.co.uk
abrdn.com
abrdn Diversified Income and Growth plc 109
Directors
Davina Walter (Chairman)
Tom Challenor (Senior Independent Director and Audit
Committee Chairman)
Trevor Bradley
Alistair Mackintosh
Company Secretary
abrdn Holdings Limited
Registered Office
1 George Street
Edinburgh EH2 2LL
Registered in Scotland under Company Number
SC003721
Website
abrdndiversified.co.uk
Points of Contact
The Chairman or Company Secretary at the
Registered Office of the Company
Email: diversified.income@abrdn.com
Twitter: @abrdnTrusts
LinkedIn: abrdn Investment Trusts
abrdn Social Media accounts
X (formerly Twitter) @abrdnTrusts
LinkedIn: abrdn Investment Trusts
United States Internal Revenue Service
FATCA Registration Number (“GIIN”)
E3M4K6.99999.SL.826
Legal Entity Identifier Number (“LEI”)
2138003QINEGCHYGW702
Alternative Investment Fund Manager
abrdn Fund Managers Limited
280 Bishopsgate
London EC2M 4AG
Authorised and regulated by the Financial
Conduct Authority
Investment Manager
abrdn Investments Limited
1 George Street
Edinburgh EH2 2LL
Authorised and regulated by the Financial
Conduct Authority
Registrar (for direct shareholders)
Computershare Investor Services PLC operates a secure
online website where shareholdings can be managed
quickly and easily, including changing address or
arranging to pay dividends directly into a bank account or
receive electronic communications:
investorcentre.co.uk
Alternatively, please contact the registrar:
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
E-mail is available via the above website
Telephone: 0330 303 1184
(UK calls cost 10p per minute plus network extras)
Lines are open 8.30 a.m. to 5.30 p.m. Monday to Friday,
excluding public holidays
Depositary
The Bank of New York Mellon (International) Limited
1 Canada Square
London E14 5AL
Independent Auditors
PricewaterhouseCoopers LLP
144 Morrison Street
Edinburgh EH3 8EB
Solicitors
Dickson Minto W.S.
Stockbrokers
Stifel Nicolaus Europe Limited
Contact Addresses
abrdn Diversified Income and Growth plc 1
Overview
Performance Highlights 2
Dividends and Highlights 3
Strategic Report
Chairman’s Statement 5
Overview of Strategy 7
Engagement with Shareholders 13
Performance and Results 15
Information about the Manager 16
Investment Manager’s Report 17
Portfolio
Private Equity 21
Infrastructure 23
Private Credit 25
Real Estate 26
Special Opportunities 27
Ten Largest Investments 28
Private Markets Investments 29
Listed Equities 31
Net Assets Summary 32
Governance
Board of Directors 34
Directors’ Report 36
Statement of Corporate Governance 43
Directors’ Remuneration Report 44
Report of the Audit Committee 48
Statement of Directors’ Responsibilities 51
Independent Auditors’ Report to the members of
abrdn Diversified Income and Growth plc 52
Financial Statements
Statement of Comprehensive Income 61
Statement of Financial Position 62
Statement of Changes in Equity 63
Statement of Cash Flows 64
Notes to the Financial Statements 65
Corporate Information
Investor Information 93
Glossary of Terms 96
AIFMD Disclosures (Unaudited) 98
Alternative Performance Measures 99
General
Notice of Annual General Meeting 103
Apportionment Ratio for B shares 107
Contact Addresses 109
Contents
2 abrdn Diversified Income and Growth plc
Return of capital per Ordinary share Dividends paid per Ordinary share
A
38.10
p
5.91
p
*
2023 N/A 2023 5.64p
* including a special dividend of 1.65p
Discount to net asset value (par basis)
B
34.1%
2023 25.8%
A
The dividends on Ordinary shares paid to shareholders are set out in more detail in note 8 on page 72, alongside those paid and proposed in respect of the financial year. 2024
includes a special dividend of 1.65p (2023 – nil).
B
Considered to be an Alternative Performance Measure (see page 99 for more information).
Net Asset Value Bridge
At 30 September
Performance Hi
g
hli
g
hts
abrdn Diversified Income and Growth plc 3
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Dividends Declared
Rate xd date Record date Payment date
First interim 2024 1.42p 7 March 2024 8 March 2024 27 March 2024
Second interim 2024 1.95p 26 September 2024 27 September 2024 24 October 2024
2024 3.37p
First interim 2023 1.42p 9 March 2023 10 March 2023 3 April 2023
Second interim 2023 1.42p 8 June 2023 9 June 2023 6 July 2023
Third interim 2023 1.42p 21 September 2023 22 September 2023 19 October 2023
Fourth interim 2023 1.42p 21 December 2023 22 December 2023 22 January 2024
Special 2023 1.65p 2 November 2023 3 November 2023 1 December 2023
2023 7.33p
2024 2023
Total dividends paid per Ordinary share in the financial year
A
5.91p 5.64p
Return of capital to shareholders per Ordinary share in financial year
B
38.10p –
A
2024 consists of a third interim 2023 of 1.42p, fourth interim dividend 2023 of 1.42p, special dividend 2023 of 1.65p and first interim dividend 2024 of 1.42p. 2023 consists of a third
interim dividend 2022 of 1.40p, fourth interim dividend 2022 of 1.40p, first interim dividend 2023 of 1.42p and second interim 2023 of 1.42p.
B
Return of capital by way of B share scheme, being £114,768,000 per the Statement of Changes in Equity on page 63 divided by the number of Ordinary shares in issue per note 15
on page 79.
Highlights
2024 2023 % change
Total assets less current liabilities (before deducting prior charges) £203,306,000 £355,264,000 –42.8
Total shareholders’ funds (Net Assets) £203,306,000 £339,534,000 –40.1
Ordinary share price (mid market) 44.50p 83.60p –46.8
Net asset value per Ordinary share (debt at par value)
A
67.48p 112.70p –40.1
Discount to net asset value on Ordinary shares (debt at par value)
B
34.1% 25.8%
Net (cash)/gearing (debt at par value)
B
(11.0)% (1.6)%
Ongoing charges ratio (including look-through costs)
B
2.36% 1.74%
A
See NAV bridge on page 2 for more detail on the components of the change during the year.
B
Considered to be an Alternative Performance Measure. Details of the calculation can be found on pages 99 and 100.
2024 2023 % change
Net revenue return after taxation £10,913,000 £13,252,000 –17.7
Revenue return per share 3.62p 4.35p –16.8
Dividends per Ordinary share 3.37p 7.33p
Further information on interim dividends, including those paid during the period, may be found under Note B in the above “Dividends Declared” table and in Note 8 to the Financial
Statements on page 72.
Dividends and Hi
g
hli
g
hts
4 abrdn Diversified Income and Growth plc
Strategic Report
abrdn Diversified Income and Growth plc 5
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Approval of the Managed Wind-Down
of the Company
Following an extensive review of the Company’s strategy
and discussions with shareholders, a circular was issued
by the Company in February 2024 setting out the Board’s
recommendation for a new investment objective and
policy as part of proposals for a Managed Wind-Down of
the Company. The necessary resolutions were approved
by shareholders at the General Meeting held on
27 February 2024.
New investment objective and policy
The Company’s new investment objective is to conduct an
orderly realisation of its assets in a manner that seeks to
optimise the value of its investments whilst progressively
returning cash to shareholders in a timely manner. Full
details of the policy may be found on page 7.
Initial return of capital to shareholders
The Board set out its proposals in a circular, on 17 June
2024, to return approximately £115 million, representing
approximately 38.1p per Ordinary share, to shareholders
(the “Initial Return of Capital”), pursuant to a bonus issue,
on a
pro rata
basis, of B shares to all shareholders,
followed by the redemption of such B shares (the “B Share
Scheme”). The circular, which may be viewed on the
Company’s website at abrdndiversified.co.uk, contained
the details of the Initial Return of Capital. This followed the
Court approval, obtained on 7 June 2024, for the
Company to reduce its share capital and cancel the
amounts standing to the credit of its share premium
account and capital redemption reserve. This process
allowed the Company to set up a special distributable
reserve and provided the Company with sufficient
flexibility and distributable reserves to deliver the Initial
Return of Capital as planned.
The introduction of the B Share Scheme was approved by
shareholders at a General Meeting held on 3 July 2024
and funds were sent on 10 July 2024 to uncertificated
shareholders through CREST, or via cheque or electronic
payment to certificated Shareholders. Ordinary
shareholders should note that no share certificates were
created in respect of the B shares which were issued and
almost immediately redeemed with no action required to
be taken by Shareholders.
Over the year ended 30 September 2024 shareholders
received 38.1p per Ordinary share by way of capital
return via the B Share Scheme, as described above,
together with dividends, as more fully set out below.
Dividends
Dividends received by shareholders during the year ended
30 September 2024 amounted to 5.91p per Ordinary
share, including a special dividend of 1.65p per share. In
relation to the financial year ended 30 September 2024,
two interim dividends were declared out of net income:
1.42p per share, paid to shareholders on 27 March 2024
and 1.95p per share, paid to shareholders on 24 October
2024. These are more fully explained in note 8 on page 72.
Following the June 2024 Court approval, and the payment
of the interim dividend in October 2024, it is likely that
dividends will be paid in smaller, less regular, amounts
principally for the purpose of maintaining the Company’s
investment trust status while capital will be returned
progressively to shareholders by the most tax-efficient
mechanism available, which may include further B
share issues.
The Board intends to continue to pay a sufficient level of
dividend to ensure that the Company will not retain more
than 15 per cent. of its income in an accounting period so
as to maintain the Company’s investment trust status
during the Managed Wind-Down to avoid incurring capital
gains within the closed ended structure. The Directors will
declare dividends based on the Company’s net income
but the quantum and timing of any dividends in future will
be at the sole discretion of the Board.
Revenue available to the Company has decreased
following the sale of the public markets assets and will
reduce further as the private markets assets are realised.
It is expected that, at a minimum, the Company will
declare a dividend each September, normally payable in
October, to maintain investment trust status.
Further returns of capital to shareholders
Having sold substantially all public market assets and
returned funds to shareholders, the Board anticipates
further returns of capital as value is realised from the
Company’s private markets portfolio, as follows:
· approximately £94 million of the Company’s private
markets portfolio (valued as at 30 September 2024) is
expected to mature between 2025 and 2027
(“Tranche 1”).
· the remaining, approximately £88 million of the private
markets portfolio (valued as at 30 September 2024) is
expected to mature between 2029 and 2033
(“Tranche 2”).
Chairman’s Statement
6 abrdn Diversified Income and Growth plc
It is intended that the proceeds from both Tranche 1 and
Tranche 2 will be returned to shareholders in a timely and
tax-efficient manner as investments mature or sales
opportunities arise, after taking account of undrawn
commitments to existing investments. Further information
on portfolio realisations may be found in the Investment
Manager’s Report on page 17 to 19.
Share Capital
Following the approval by the Court, on 7 June 2024, of the
reduction in the Company’s share capital, the nominal
value per Ordinary share was reduced from 25p to 1p.
This is an accounting mechanism and has no impact on
the share price of the Company.
No shares were bought back by the Company during the
year ended 30 September 2024, resulting in 301,265,952
Ordinary 1p shares with voting rights and another
22,485,854 Ordinary 1p shares held in treasury, as at
30 September 2024.
Further information on the apportionment ratio, which
relates to the tax treatment for Shareholders of the
proceeds arising from the redemption of the B shares,
may be found on page 107.
Gearing and 6.25% Bonds 2031 repayment
On 9 April 2024, the Company redeemed and cancelled
the remaining £16,096,000 of its 6.25% Bonds due 2031
(the “Bonds”). As announced on 8 March 2024, the
redemption price was 114.983%, which was calculated in
accordance with the terms of the trust deed of the Bonds.
The total cost of the redemption, including accrued
interest, was £18,587,000. As a result, the Company has no
further Bonds outstanding nor any other borrowings.
Board Structure
Following approval of the Managed Wind-Down, the
Board has reviewed the Board Structure and, mindful of
the operating costs of the Company, deems it appropriate
to maintain the number of Directors at four; this is more
fully set out in the Directors’ Report on page 37.
The Board aims to comply with the requirements of the
AIC Corporate Governance Code (the “AIC Code”) where
reasonable and practically possible but recognises that
the requirements of the AIC Code are not fully met with
regard to gender and diversity targets.
Further to the Managed Wind-Down, and recognising that
the portfolio consists solely of private markets
investments, the Board remains satisfied with this
assessment, reflecting the balance of skills and expertise
exhibited by the current Directors, and does not propose
any immediate changes to the composition of the Board.
Continuation vote
A circular was issued to shareholders on 5 December 2024
(which is available from the Company’s website at
abrdndiversified.co.uk) and, at a general meeting on 23
December 2024, shareholders approved the amendment
to the Company’s Articles of Association. This removed
the requirement for the Company to hold an annual
continuation vote as well as providing the Board with
authority to seek Court approval for the cancellation of
the Company’s capital redemption reserve which was
created as a result of the B Share Scheme in relation to the
Initial Return of Capital. The cancellation of this reserve will
create a distributable reserve to support the progressive
return of cash to shareholders in the form of capital.
Outlook
The focus of the Board and Investment Manager is on
seeking realisation of portfolio investments in a manner
that maximises value to shareholders and to return
capital to shareholders in the most timely and efficient
way possible.
Davina Walter
Chairman
20 January 2025
Chairman’s Statement
Continued
abrdn Diversified Income and Growth plc 7
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Managed Wind-Down of the Company
Following an extensive review of the Company’s strategy
and discussions with shareholders, a circular was issued
by the Company in February 2024 setting out the Board’s
recommendation for a new investment objective and
policy as part of proposals for a Managed Wind-Down
of the Company. These proposals were approved by
shareholders at a General Meeting held on
27 February 2024.
Investment Objective
With effect from 27 February 2024, the Company’s
investment objective is to conduct an orderly
realisation of its assets in a manner that seeks to
optimise the value of the Company’s investments
whilst progressively returning cash to shareholders in a
timely manner.
Prior to 27 February 2024, the Company’s investment
objective was to seek to provide income and capital
appreciation over the long term through investment in
a globally diversified multi-asset portfolio. Further
details of the former investment policy may be found
on pages 11 and 12 of the Company’s Annual Report
for the year ended 30 September 2023.
Investment Policy
With effect from 27 February 2024, the Company’s
investment policy is to effect an orderly realisation of its
assets in a manner that is consistent with the principles
of good investment management. This process might
include sales of individual assets or running off the
assets in accordance with their existing terms, or a
combination of both.
The Company will cease to make any new
investments or to undertake capital expenditure
except where, in the opinion of both the Board and the
investment manager:
· the investment is a follow-on investment made in
connection with an existing asset in order to comply with
the Company’s pre-existing obligations; or
· failure to make the follow-on investment may result in a
breach of contract or applicable law or regulation by
the Company; or
· the investment is considered necessary to protect or
enhance the value of any existing investments or to
facilitate orderly disposals.
Any cash received by the Company as part of the
realisation process prior to its distribution to
Shareholders will be held by the Company as cash on
deposit and/or in liquid cash equivalents securities
(including direct investment in treasuries and/or gilts,
funds holding such investments, money market or cash
funds and/or short-dated corporate bonds or funds
that invest in such bonds) pending its return to
shareholders.
No more than 15 per cent. of the Company’s total
assets may be invested (at the time of investment) in
any single cash-equivalent fund or instrument, other
than in treasuries or gilts (which shall be
unconstrained).
While the Company redeemed its 6.25% Bonds 2031 in
April 2024 and is currently ungeared, it may use
gearing, in the form of borrowings (including secured
bonds) during the Managed Wind-Down, as and
when required.
The Company’s articles of association contain a
borrowing limit equal to the value of its adjusted total of
capital and reserves and borrowings have not
normally been expected to exceed 20 per cent. of
shareholders’ funds. It is not anticipated that the
Company will take on any new borrowings, but this
remains possible for the efficient management of the
Company (such as through a revolving credit facility or
an overdraft).
The Company may use derivatives for efficient
portfolio management, that is, to reduce, transfer or
eliminate risk in its investments, including protection
against currency risks.
Management and Delivery of 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 to abrdn Fund Managers Limited (the
“Manager”). In turn, the investment management of the
Company has been delegated by the Manager to abrdn
Investments Limited (the “Investment Manager”). Both
companies are subsidiaries of abrdn plc.
Return of Capital to Shareholders
After careful consideration, the Board determined that the
fairest and most efficient way of returning substantial
amounts of cash to Shareholders was by means of a
bonus issue of redeemable B Shares which would then be
immediately redeemed by the Company in consideration
for a cash payment equal to the amount treated as paid
up on the issue of the B Shares.
Overview of Strate
g
y
8 abrdn Diversified Income and Growth plc
A circular was issued by the Company in June 2024 setting
out a B Share Scheme, under which cash would be
returned to Shareholders without any further action being
required by Shareholders.
Following approval of the B Share Scheme by
Shareholders at a General Meeting held on 3 July 2024,
the Company announced that the Board resolved to
return approximately £115m in aggregate to
Shareholders via an issue of B shares. B Shares of one
penny each were paid up from the Company's reserves
and issued to all Shareholders by way of a bonus issue on
the basis of 800 B Shares for every 21 Ordinary Shares
held at the Record Date of 4 July 2024. The B Shares were
issued on 5 July 2024 and immediately redeemed at one
penny per B Share. The proceeds from the redemption of
the B Shares, which were equivalent to 38.1 pence per
Ordinary Share, were sent on 10 July 2024 to
uncertificated Shareholders through CREST or via cheque
or electronic payment to certificated Shareholders. The
apportionment ratio, which relates to the tax treatment
for Shareholders of the proceeds arising from the
redemption of the B shares, may be found on page 107.
Further information on the Company’s remaining portfolio
may be found in the Investment Manager’s Report on
pages 17 to 19.
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 its progress in pursuing its investment policy. The primary KPIs are shown in the table below.
KPI Description
Return of Capital The quantum and timing of any future return(s) of capital to shareholders
under a B Share Scheme (if any), or alternative mechanism, will be at the
discretion of the Board and will be dependent on the realisation of the
Company’s investments and its liabilities, general working capital
requirements and the amount and nature (from a tax perspective) of its
distributable reserves from time to time.
Retention of investment trust status under section
1158 of Corporation Tax Act 2009
Continue to pay sufficient dividends to ensure the Company retains its
investment trust status.
Ongoing charges The ongoing charges ratio has been calculated in accordance with guidance
issued by the Association of Investment Companies (the “AIC”) as the total of
investment management fees and administrative expenses and expressed
as a percentage of the average net asset values with debt at fair value
throughout the year. This includes the Company’s share of costs of holdings in
investment companies on a look-through basis. The Board reviews the
ongoing charges and monitors the expenses incurred by the Company. The
Company’s ongoing charges for the year, and the previous year, are
disclosed on page 3 while the basis of calculation is set out on page 100.
Overview of Strate
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y
Continued
abrdn Diversified Income and Growth plc 9
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Principal Risks and Uncertainties
The Board has in place a robust process to assess and
monitor the principal and emerging risks facing the
Company. A core element of this is the Company’s risk
controls self-assessment (“RCSA”), which identifies the
risks facing the Company and assesses the likelihood and
potential impact of each risk and the quality of the
controls in place to mitigate the risk. A residual risk rating is
then calculated for each risk based on the outcome of this
assessment and plotted on a risk heat-map. This
approach allows the effect of any mitigating procedures
to be reflected in the final assessment. The RCSA, its
method of preparation and the operation of the key
controls within the Manager’s and third party service
providers’ systems of internal control are reviewed on a
regular basis by the Audit Committee.
In order to gain a more comprehensive understanding of
the Manager’s and other third party service providers’ risk
management processes and how these apply to the
Company’s business, the Manager’s internal audit
department presents to the Audit Committee setting out
the results of testing performed in relation to the
Manager’s internal control processes. The Audit
Committee also periodically receives presentations from
the Manager’s risk and compliance and internal audit
teams and reviews ISAE3402 reports from the Manager
and from the Company’s Depositary (The Bank of New
York Mellon (International) Limited). The custodian is
appointed by the Company’s Depositary and does not
have a direct contractual relationship with the Company.
Further to the approval by shareholders of the Managed
Wind-Down of the Company, the Audit Committee has
undertaken a comprehensive review of the RCSA.
The Audit Committee carried out a robust assessment of
these revised risks, which include those that would threaten
its business model, future performance, solvency or liquidity.
The Board is confident that the procedures which the
Company has in place are sufficient to ensure that the
necessary monitoring of risks and controls has been carried
out during the year ended 30 September 2024.
The Board is monitoring the current heightened
geopolitical risks in the form of the Russian invasion of
Ukraine, conflicts in the Middle East and rising tension
between China and Taiwan.
The Board is also conscious of the elevated threat posed
by climate change and continues to monitor, through its
Investment Manager, the potential risk that its portfolio
investments may fail to adapt to the requirements
imposed by climate change further details of which may
be found under ‘Market Risk’.
Risk Mitigating Action
Performance risk (increased)
The Board is responsible for determining the investment policy to
fulfil the Company’s objectives and for monitoring the
performance of the Company’s Investment Manager and the
strategy adopted. Further to the Managed Wind-Down, the
Company invests in unlisted investments (such as private credit,
real estate, infrastructure, natural resources, private equity and
alternatives). These investments may be relatively illiquid and it
may be difficult for the Company to realise these investments
over a short time period.
To manage these risks, the Board reviews the progress made by
the Company with regards to Managed Wind-Down.
Regulatory risk (unchanged)
The Company operates as an investment trust in accordance
with Chapter 4 of Part 24 of the Corporation Tax Act 2010. As
such, the Company is exempt from capital gains tax on the profits
realised from the sale of its investments. Following authorisation
under the Alternative Investment Fund Managers Directive
(“AIFMD”), the Company and its appointed AIFM are subject to the
risk that the requirements of this Directive are not correctly
complied with.
The Investment Manager monitors investment movements,
the level and type of forecast income and expenditure and the
amount of proposed dividends, if any, to ensure that the
provisions of Chapter 4 of Part 24 of the Corporation Tax Act
2010 are not breached and the results are reported to the
Board at each meeting. The Board and the AIFM also monitor
changes in government policy and legislation which may have
an impact on the Company.
10 abrdn Diversified Income and Growth plc
Overview of Strate
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y
Continued
Risk Mitigating Action
Operational risk (unchanged)
In common with most other investment trust companies, the
Company has no employees. The Company therefore relies upon
the services provided by third parties and is dependent on the
control systems of the Manager and the Depositary.
The security of the Company’s assets, dealing procedures,
accounting records and maintenance of regulatory and legal
requirements depends on the effective operation of the
systems in place with third parties. These systems are regularly
tested and monitored throughout the year, including in relation
to cyber risk, through their industry-standard controls reports
which provide assurance on the effective operation of internal
controls. The controls reports are assessed independently by
their reporting accountants.
Market risk (unchanged)
Market risk arises from volatility in the prices or valuation of the
Company’s investments. It represents the potential loss the
Company might suffer through holding investments in the face of
negative market movements.
The Company invests in global assets across a range of countries
and changes in general economic and market conditions in
certain countries, such as interest rates, exchange rates, rates of
inflation, industry conditions, competition, political events and
trends, tax laws, national and international conflicts, economic
sanctions and other factors can also substantially and adversely
affect the securities and, as a consequence, the Company’s
prospects and share price.
Current heightened geopolitical risks are evident in the form of the
Russian invasion of Ukraine, conflicts in the Middle East and rising
tension between China and Taiwan.
The longer term emergence of the effects on investee
companies of climate change, and the regulatory environment
around this present a further risk.
The Board considers the diversification of the portfolio, asset
allocation, stock selection, unlisted investments and levels of
gearing on a regular basis and has set investment restrictions
and guidelines which are monitored and reported on by
the Investment Manager. The Board monitors the
implementation and results of the investment process
with the Investment Manager.
The Board assesses climate change as an emerging risk in
terms of how it develops, including how investor sentiment is
evolving towards climate change within investment portfolios,
and will consider how the Company may mitigate this risk, any
other emerging risks, if and when they become material.
Financial risks (increased)
The Company’s investment activities expose it to a variety of
financial risks which include foreign currency risk and interest
rate risk. Following the realisation of the listed alternative
investments, to fund the return of capital to shareholders in July
2024, the Board determined that the liquidity risk of the Company
had increased, reflecting the less liquid nature of the remaining
investment portfolio.
Further details are disclosed in note 18 to the financial
statements, together with a summary of the policies for
managing these risks.
The Board reviews cashflow forecasts prepared by the
Manager, at each meeting, to monitor the Company’s liquidity.
The Directors have discretion to vary any planned returns of
capital to ensure that the Company retains sufficient liquidity
to meet undrawn commitments due to investee companies.
The Board regularly reviews emerging risks facing the Company, which are identified by a variety of means, including
advice from the Company’s professional advisors, the AIC, and Directors’ knowledge of markets, changes and events. A
failure to have in place appropriate procedures to assist in identifying emerging risks may cause reactive actions and, in
the worst case, could cause the Company to become unviable or otherwise fail.
The principal risks associated with an investment in the Company’s shares can be found in the pre-investment disclosure
document (“PIDD”) published by the AIFM, which is available from the Company’s website: abrdndiversified.co.uk
abrdn Diversified Income and Growth plc 11
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Gearing
As at 30 September 2024, the Company had no structural
gearing in place (2023 – gearing of £16,096,000). On
9 April 2024, the Company repaid its £16,096,000 6.25%
Bonds 2031.
Board Diversity
The Board is fully supportive of all aspects of diversity and
the importance of having a range of skilled, experienced
individuals with relevant knowledge in order to allow it to
fulfil its obligations. Further information on Board Diversity
may be found in the Directors’ Report, on page 37.
Promoting the Company
The Board recognises the importance of promoting the
Company to investors both for improving liquidity and
enhancing the value and rating of the Company’s shares.
The Board has participated in a promotional programme
(the “Programme”) run by abrdn on behalf of a number of
investment trusts under its management. The Programme
has been modified by the Board in the context of the
Managed Wind-Down of the Company and the primary
focus now is ensuring effective communication with
existing shareholders.
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. The Company’s socially responsible
investment policy is set out below and the Board maintains
oversight and retains responsibility for the policy.
Socially Responsible Investment Policy
The Board reviews the Manager’s policy that encourages
companies in which investments are made to adhere to
best practice in the area of corporate governance and
socially responsible investing. They believe that this can
best be achieved by entering into a dialogue with
company management to encourage them, where
necessary, to improve their policies in both areas. The
Manager’s ultimate objective, however, is to deliver
superior investment returns for its clients. Accordingly,
whilst the Manager will seek to favour companies which
pursue best practice in these areas, this should not be to
the detriment of the return on the investment portfolio.
UK Stewardship Code and Proxy Voting as
an Institutional Shareholder
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 Manager’s response to the
FRC’s Stewardship Code may be found on its website at:
https://www.abrdn.com/en-gb/intermediary/sustainable-
investing/active-ownership
Modern Slavery Act
Due to the nature of the Company’s business, being an
investment company that does not offer goods and
services to customers, the Board considers that it is not
within the scope of the Modern Slavery Act 2015 because
it has no turnover. The Company is therefore not required
to make a slavery and human trafficking statement.
However, the Board maintains oversight of its third party
suppliers and considers that, as these comprise
predominantly professional advisers and service providers
in the financial services industry, the risk is likely to be low in
relation to this matter.
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. However, at the portfolio level, the
Manager engages on environmental issues with
underlying investments.
Viability Statement
In accordance with the provisions of the UKLA’s Listing
Rules and the FRC’s UK Corporate Governance Code, the
Directors have assessed the prospects of the Company
over a longer period than the 12 months required by the
“Going Concern” provision. The Board conducted this
review for the period up to the AGM in 2028, being a three
year period from the date of shareholders’ approval of this
Annual Report. The three year review period was selected
because it is aligned with the Board’s anticipated
timescale for the completion of the next phase of the
Managed Wind-Down of the Company. The Board
considers that this period reflects a balance between
looking out over a medium term horizon and the inherent
uncertainties of looking out further than three years, given
the profile of the Company’s private markets investments.
12 abrdn Diversified Income and Growth plc
In assessing the viability of the Company over the
review period, the Board has focused upon the
following factors:
· the principal risks and uncertainties detailed on pages 9
and 10 and the steps taken to mitigate these risks;
· the relevance of the Company’s investment objective
and investment policy;
· the return of capital to shareholders; and
· the level of demand for the Company’s shares.
The three-year review considers the Company’s cash
flow, involving both capital commitments and cash
distributions, as well as other key financial ratios over the
period. The three-year review also makes certain
assumptions about the normal level of expenditure likely
to occur and considers the impact on the financing
facilities of the Company. Whilst the financial statements
have been prepared on a going concern basis, the Board
considers that there is a material uncertainty in respect of
the Managed Wind-Down of the Company (see note 2 (a)
on page 65 for related basis of preparation disclosures).
In making this assessment, the Board has considered in
particular the potential longer term impact of a large
economic shock, a period of increased stock market
volatility and/or markets at depressed levels, a significant
reduction in the liquidity of the portfolio or changes in
investor sentiment or regulation, and how these factors
might affect the Company’s prospects and viability in the
future. The Board reviewed a cash flows analysis in
reaching its conclusions, but recognises that the
Company’s operating expenses are significantly lower
than its total income.
The Board has also considered a number of financial
metrics, including:
· the level of current and historic ongoing charges
incurred by the Company;
· the share price discount to NAV;
· the level of income generated by the Company;
· future income forecasts; and
· the liquidity of the Company’s portfolio and timing of
expected realisation of assets.
Considering the liquidity of the portfolio, arising from
realisation of assets, remaining capital commitments, and
the largely fixed overheads which comprise a small
percentage of net assets, the Board has concluded that,
even in exceptionally stressed operating conditions, the
Company would be able to meet its ongoing operating
costs as they fall due.
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 three years from
the date of this Report.
Future of the Company
The Board’s view of the future for the Company can be
found in the Chairman’s Statement on page 6 under
“Outlook” while the Investment Manager’s view on future
portfolio realisations may be found on page 19.
On behalf of the Board
Davina Walter
Chairman
20 January 2025
Overview of Strate
g
y
Continued
abrdn Diversified Income and Growth plc 13
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
The Board is required to report how it has discharged its
duties and responsibilities under section 172 of the
Companies Act 2006 during the year under review. Under
this requirement, the Directors have a duty to promote the
success of the Company for the benefit of its members
(shareholders) as a whole, taking into account the likely
long term consequences of decisions, the need to foster
relationships with the Company’s stakeholders, and the
impact of the Company’s operations on the environment.
In addition, the Directors must act fairly between
shareholders and be cognisant of maintaining the
reputation of the Company.
Following the Board’s decision to place the Company into
a Managed Wind-Down the nature of engagement has
changed from one of promotion to a focus on timely
communication with shareholders regarding delivery of
the strategy of asset realisation.
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 during the year comprised between four
and 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
treated with respect as well as 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
operates at its regular meetings and receives regular
reporting and feedback from the key service providers.
The Company’s main stakeholders are its shareholders,
the Manager, other service providers, as well as its
investee companies and funds.
How the Board Engages with Stakeholders
The Board considers its stakeholders at Board meetings and receives feedback on the Manager’s interactions with them
Stakeholder How the Board Engages
Shareholders Shareholders are key stakeholders and the Board places great importance on communication
with them, and meet, in the absence of the Manager, with current and prospective shareholders
to discuss performance and to receive shareholder feedback. The Board welcomes all
shareholders’ views.
Part of that engagement has been to evaluate the feedback from shareholders regarding the
Company’s share price and the persistent discount to NAV at which its shares trade, culminating in
effecting the proposals for a Managed Wind-Down of the Company in February 2024.
Regular updates are provided to shareholders through the Annual Report, Half Yearly Report,
Manager’s monthly factsheets, company announcements, including daily net asset value
announcements, and the Company’s website.
En
g
a
g
ement with Shareholders
14 abrdn Diversified Income and Growth plc
Manager The Investment Manager’s Report on pages 17 to 19 sets out the key investment decisions taken
during the year. The Investment Manager has continued to manage the Company’s assets in
accordance with the investment objective, as last amended and approved by shareholders on 27
February 2024, with the oversight of the Board.
The Board regularly reviews the Company’s performance against its investment objective. In
addition to an annual strategy session, the Board reviews in detail at each meeting the
implementation of that strategy to ensure that the Company is positioned well for the future
delivery of its objective for its stakeholders, in particular evaluating progress as regards the
Managed Wind-Down of the Company. The decision to place the Company in a Managed Wind-
Down was a direct result of the strategy review conducted in late 2023.
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 38.
Investee Companies and Funds Responsibility for actively monitoring the activities of investee companies and funds 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 Investment Manager to exercise voting
rights on resolutions proposed by the investee companies within the Company’s portfolio.
The Board and Manager are committed to investing in a responsible manner and the Investment
Manager integrates environmental, social and governance considerations into its research and
analysis as part of the investment decision-making process. Through engagement and exercising
voting rights, the Investment Manager actively works with companies to improve corporate
standards, transparency and accountability.
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 Audit 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
and providing value for money.
Specific Examples of Stakeholder Consideration During the Year
While the importance of giving due consideration to the Company’s stakeholders is not new, and is considered as part of
every Board decision, the Directors were particularly mindful of stakeholder considerations during the year ended 30
September 2024 in relation to the following -
· publication of the circular to shareholders in February 2024, further to feed-back received from shareholders,
proposing that the Company conduct an orderly realisation to its assets in a manner that sought to optimise the value
of the Company’s investments while progressively returning cash to shareholders; and
· publication of the circular to shareholders in June 2024 recommending to shareholders the adoption of a B Share
Scheme reflecting the Board’s belief that this represented the fairest and most efficient mechanism by which to return
substantial amounts of cash to shareholders.
En
g
a
g
ement with Shareholders
Continued
abrdn Diversified Income and Growth plc 15
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Performance (total return)
31 March 2017
B
– 31 December 2020
C
–
30 September 2024 30 September 2024 1 year 3 years 5 years
% return % return % return % return % return
Net asset value – debt at par
A
+13.3 +6.4 –2.3 –2.1 +3.3
Net asset value – debt at fair value
A
+21.6 +8.7 –2.2 –0.6 +10.9
Share price
A
+2.3 +6.4 +8.1 +2.0 +5.3
A
Considered to be an Alternative Performance Measure. Total return represents the capital return plus dividends reinvested. Further details can be found on page 101.
B
Change of Investment Objective and Investment Policy on 31 March 2017.
C
Change of Investment Objective and Investment Policy on 31 December 2020.
Source: abrdn, Morningstar and Lipper.
Ten Year Financial Record
Year to/As at 30 September 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Total revenue (£’000) 23,120 23,265 17,961 23,262 22,106 20,783 18,878 17,959 17,163 15,638
Per Ordinary share (p)
Net revenue return 7.1 7.6 5.3 6.2 5.7 5.6 5.1 5.0 4.4 3.6
Total return (4.5) 1.3 8.0 2.8 2.6 (1.4) 6.7 (0.2) (0.1) (1.2)
Net dividends payable 6.54 6.54 5.89 5.24 5.36 5.44 5.52 5.60 7.33 3.37
Net asset value per Ordinary share (p)
Debt at par value 136.6 131.6 132.7 130.3 128.1 121.7 123.5 117.8 112.7 67.5
Debt at fair value 131.0 123.6 126.4 124.2 119.9 113.4 121.7 117.6 112.6 N/A
Equity shareholders’ funds (£’000) 374,832 351,521 436,767 428,129 413,679 386,230 382,118 363,358 339,534 203,306
Performance and Results
16 abrdn Diversified Income and Growth plc
abrdn Fund Managers Limited
The Company’s Manager is abrdn Fund Managers Limited, a subsidiary of abrdn plc which manages a combined
£506 billion (as at 30 June 2024) in assets for a range of clients, including individuals and institutions, through mutual
and segregated funds.
The Investment Team
Nalaka De Silva
Head of Private
Markets Solutions
Nalaka has over 21 years’ experience in
developing, implementing and managing
strategies across the Public and Private
Markets spectrum. This includes
investments across Private Equity,
Infrastructure, Real Estate, Natural
Resources and Private Credit on a global
basis. Solutions based strategies are
designed around client outcomes
including growth, income and proactive
ESG strategies.
Nalaka joined abrdn in 2012. Prior to this,
Nalaka held senior roles at Australian and
European Investment management firms.
He has lead M&A activity, off-market
acquisitions and divestments of assets
together with offshore and onshore capital
raising in debt and equity markets. Nalaka
is a qualified Chartered Accountant and
holds a postgraduate degree in
Commercial Law and Accounting.
Nic Baddeley
Investment Manager
Nic has over 10 years’ experience in
investment analysis and management
working across public and private asset
classes. He is responsible for the
management of private markets portfolios
undertaken by the Private Markets
Solutions desk, as well as the continual
development of investment processes,
portfolio management and risk
management techniques. Prior to joining
the current team, Nic worked as an analyst
with the global listed real estate team,
responsible for sector coverage of the
Chinese housebuilders, portfolio
construction, and risk measurement.
Nic joined abrdn in 2015, prior to which he
worked as a data scientist for a global data
consultancy, and as an investment analyst
at Mercer focussing on strategy analysis
and fund recommendations for institutional
investors. Nic graduated from the University
of Edinburgh with an MA (Hons) degree in
Psychology and is a CFA® charterholder.
Aretaios Chourdakis
Senior Investment Analyst
Aretaios is a Senior Investment Analyst
within the Private Market Solutions team,
where he is responsible for sourcing,
screening, analysing, and executing both
direct and indirect investment transactions
across a range of private market
strategies.
He joined abrdn in 2019 as part of the
Valuation & Complex Asset Pricing team,
undertaking valuations for a diverse
portfolio of illiquid assets across various
sectors and geographies. Subsequently, he
participated in a secondment with the
Small and Mid-Cap Equity Research team,
where he was responsible for drafting
research notes and presenting investment
recommendations. Prior to his current role,
Aretaios worked as an Associate at State
Street within the Fund Services division and
at Forocom, a Greek business consulting
firm. Aretaios holds a BSc in Business
Management from the University of Piraeus
and an MSc in Accounting and Finance
from the Athens University of Economics
and Business. He has also earned the
Investment Management Certificate (IMC),
the Financial Modelling & Valuation Analyst
Certification (FMVA) and the Commercial
Banking & Credit Certification (CBCA)
from the Corporate Finance Institute (CFI).
Information about the Mana
g
er
abrdn Diversified Income and Growth plc 17
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
The year ended 30 September 2024 witnessed a
considerable reorganisation of the Company’s investment
portfolio. Following the approval by shareholders, in
February 2024, for the Company to enter a Managed
Wind-Down, the Investment Manager partially liquidated
the portfolio over a three to five month period to allow
the Board to return approximately £115m at NAV on
10 July 2024.
As the Company moves into the next phase of the
Managed Wind-Down, the Investment Manager is taking
further steps to realise value for investors over the next
three years. The remaining investments are a broad range
of Alternative and Private Markets exposures ranging from
litigation finance, healthcare royalties, infrastructure, real
estate to private equity and private credit. Each
investment has a unique set of dynamics that will need to
be carefully managed over the wind-down period.
Market Dynamics
Monetary Policy
Monetary policy across the US, UK, and Europe has been
shaped by persistent inflationary pressures, delaying
anticipated rate cuts. The US Federal Reserve (“Fed”)
lowered rates by 25 basis points (“bps”) in December 2024,
bringing its target range to 4.25%-4.50%, marking the third
consecutive rate cut following similar reductions in
September and November. The Fed’s cautious approach
reflects ongoing concerns over a slowing labour market,
which remains a key focus. In the UK, the Bank of England
(“BoE”) reduced the bank rate by 25 bps to 4.75% in
November and left the rate unchanged in December. The
BoE Governor has cautioned against over-eager rate cuts
given the inflationary background. The next update is in
February 2025, with the BoE currently expecting inflation
to rise to 2.8% by the third quarter of 2025 before
gradually easing. Meanwhile, the European Central Bank
(“ECB”) lowered its key interest rates by 25 bps in
December 2024, bringing the deposit facility rate down to
3%. This marked the fourth rate cut of the calendar year
2024. The ECB anticipates Eurozone inflation returning to
its 2% target by early 2025 though growth remains
sluggish due to external political instability and other risks
such as the potential for a new US trade war.
Private Equity and Venture Capital
Private equity is cautiously moving towards more exits but
fundraising remains below historical standards. The trend
towards concentration continues with fewer but larger
funds being raised from investors. In the venture capital
space, the lack of distributions is a significant issue. The
market for initial public offerings and large mergers and
acquisitions (M&A) remains subdued, with only 14
companies going public in the third quarter for an
aggregate exit value of $10.4 billion, which is below the
long-term average.
Private Credit
In a higher interest rate environment, certain companies
are increasingly opting for payment-in-kind options
instead of cash interest payments. This trend has
intensified as the US Federal Reserve shifts towards rate
cuts. Private credit lenders are offering more flexible terms
to attract borrowers, foregoing more attractive cash-pay
interest to win deals.
Real Assets
In infrastructure, fundraising in the second quarter was
$18.4 billion, just 55% of the five-year average. The
number of funds closed was also below the five-year
average. Despite this, long-term allocations to
infrastructure are expected to grow, especially in the
energy transition and efficiency sectors. Investment
sentiment in real estate is improving globally, with
fundraising and deal value trending upwards. Europe, in
particular, saw real estate deal value more than double
from the previous quarter.
Performance
In aggregate, the majority of investments delivered
positive performance in local currency. The positive
contributors included Private Equity (+10bps), Private
Credit (+43bps), Royalties (+45bps). Litigation Finance
(+36bps), Global Private Markets (+22bps), Global
Infrastructure (+79bps), and Cash and Government Bonds
(+60bps), Detractors from performance included Real
Estate, which experienced a negative 220bps while FX
movements, related to the fall in the US Dollar against
Sterling over the year, returned negative 325bps. Overall,
the aggregate return of the portfolio was -138bps over
the year.
Investment Mana
g
er’s Report
18 abrdn Diversified Income and Growth plc
How did the portfolio produce returns
during the year?
Private Equity
Patria Secondaries Opportunities fund delivered +54bps.
Since the start of 2024, the improved momentum in the
secondary market seen in H2 2023 has continued and
accelerated with increased activity across a range of deal
types and sizes. The combination of a more stable
valuation backdrop and increased confidence from larger
secondary buyers to deploy capital should further reduce
the pricing gap between buyers and sellers, which will in
turn encourage more volume of deals to come to market.
With expectations of a constrained M&A market and slow
distribution pace in 2024, both limited partners (the
investors, including the Company, (“LPs”)) and general
partners (the manager of the fund, (“GPs”)) are expected
to proactively seek liquidity in the secondary market in
increasing numbers.
Bonaccord Capital Partners (“BCP”) delivered +86bps, BCP
buys equity stakes in alternative asset managers who
operate in the private equity, real estate, and private
credit space, mostly in the US. Given the rise in Private
Markets allocation and growth of the underlying
managers which BCP invests in, valuations have increased
in line with those for listed peers and growth of portfolios.
TrueNoord is an aircraft leasing business. The fleet is
currently sitting at 86 aircraft and reported that there
were a number of further portfolio trades in the market
that they were actively exploring. The valuation of the
portfolio was adjusted relative to listed market
comparable entities, with the Price-to-Book value revised
downwards by 130bps. However, ongoing performance of
the business remained on target.
Project Komodo (secondary private equity portfolio in
wind-down) detracted -19bps as the tail of the portfolio
continues to wind down.
Private Credit
Overall Private Credit has performed well with all
investments adding positive contribution to the portfolio,
attractive spreads were achieved compared with listed
markets.
PIMCO Private Credit fund invests in a diversified pool of
secured and unsecured credit including Asset-Backed
Securities, Residential Mortgage-Backed Securities, bridge
facilities across Commercial Real Estate, Residential Real
Estate, Corporate Debt, and Speciality Finance in the US
and Europe. The holding added +10bps before being fully
redeemed during the year.
Hark III provides investors with an opportunity to lend
capital on a NAV-financing basis to Private Equity backed
portfolio companies or investment vehicles that would
typically require dilutive equity capital. Since they
generally do not meet the stand-alone underwriting
criteria of the traditional lenders, such borrowers require
credit enhancement from financial sponsors giving rise to
higher spreads and greater security for lenders. Hark III
added +9bps to the portfolio.
Mount Row II involves the active management of a
diversified portfolio of senior secured debt European and
Global leveraged buyouts, with the focus being on the
largest and most liquid performing European senior
secured issuers. The strategy of the fund is to preserve
capital for shareholders, generate income and seek
capital appreciation when market opportunities arise,
through the careful management of specific loan books
and deleveraging of the overall portfolio. Mount Row II
added 24bps over the year.
Real Assets
Real assets (Real Estate and Infrastructure) detracted
from performance, returning -220bps over the year.
Real Estate assets have suffered from continued
underperformance due to a negative market
environment. Residential development investments are
particularly affected where the higher cost of borrowing
and delayed disposals have resulted in losses. Over the
year AEROF detracted 209bps while Aberdeen Property
Secondaries Fund detracted 17bps.
Offsetting this is the more stable contracted cashflow
exposure generated in the Global Infrastructure
investments programme. Overall this basket of
investments delivered +83bps. The portfolio management
team have exercised liquidity options where available and
we expect capital to be returned over the next three
years. There have been some specific asset capitalisation
in the SL Core infrastructure II programme, which will
result in slower distributions in the near term, however this
will be beneficial over the longer term.
Investment Mana
g
er’s Report
Continued
abrdn Diversified Income and Growth plc 19
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Diversifying Opportunities
Diversifying Opportunities investments contributed
positive 116bps to the performance of the Company over
the period. These assets are less sensitive to global macro
movements and provided stability to the portfolio.
Performance was broadly spread across several assets,
with positive returns from the private HealthCare Royalty
Partners IV (+45bps), Burford Litigation Finance (+36bps)
and the Global Private Markets Fund (+22bps). Residual
wind-down assets in Markel Catco returned a positive
+13bps over the year.
Defensive Assets
Our exposure to defensive assets, such as government
bonds and cash, increased in response to providing the
capacity to return capital to shareholders and cover
remaining unfunded positions in private markets. In
aggregate, these positions generated positive returns of
+60bps to the portfolio.
Future portfolio realisations
We anticipate returning capital regularly to shareholders,
subject to sufficient liquidity, as investments mature over
time and a strategy is put in place for longer dated assets.
There is a broad spectrum of asset classes and maturity
across the portfolio. The investment team are working on
a number of potential liquidity mechanisms and as these
options become tangible, we will continue to work with the
Board as to how best to execute this on behalf of
shareholders.
Nalaka De Silva,
Head of Private Markets Solutions
Nic Baddeley, Investment Manager,
Private Markets Solutions
Aretaios Chourdakis, Senior Investment Analyst,
Private Markets Solutions
abrdn Investments Limited
Investment Manager
20 January 2025
20 abrdn Diversified Income and Growth plc
Portfolio
abrdn Diversified Income and Growth plc 21
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Patria Secondary Opportunities Fund IV
The fund’s strategy is to acquire secondary interests in private markets investments, principally secondary interests in funds investing
in private equity investments. The fund targets investments in niche or less competitive areas of the secondary market and/or where
the Manager has an information or sourcing advantage. Such investments are likely to include direct private equity funds, complex or
opportunistic secondaries in private markets opportunities, and private equity fund of funds or secondary funds.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
abrdn Private Equity Europe 2020 $406m 14 years
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Secondary Fund-of Funds $25m USD 56% 27.2% £16.1m
TrueNoord
This is a co-invest in a regional aircraft leasing business based in Amsterdam. The business specialises in the leasing and lease
management of specific regional aircraft, such as ATR, Bombardier and Embraer, to a range of partners around the world. It currently
has 86 aircraft in its fleet.
Fund Information
Sponsor Asset Class Country/Region Vintage Company Size Term
Freshstream Private Equity Europe 2017 $414m Evergreen
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Co-invest $7m USD 100% 6.9% £7.1m
Bonaccord Capital Partners I
Bonaccord Capital Partners I (“BCP”) targets investment in equity stakes in alternative asset management companies (e.g. Private
Equity and Private Credit Managers). The team focus on managers who are at the growth stage, who have a core product with a
track record, and the potential to launch new products. As part owners of these managers, BCP receives a steady stream of income
returns from the fees managers charge their investors, with upside ‘lumpy’ yield potential from carried interest earnings. There is also
potential for long-term capital appreciation over and above profit distributions, driven by General Partner growth, de-risking, and
potential portfolio-level multiple arbitrage.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
Bonaccord Capital Partners Private Equity North America and Europe 2019 $739m 12 years
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Primary Fund $20m USD 80% 16.2% £18.1m
Private Equity
22 abrdn Diversified Income and Growth plc
Maj Invest Equity V
Maj Invest Equity V is a Private Equity fund focusing on a Buy-Out strategy investing in small and medium sized companies in Denmark
with typical revenues of €12m to €130m. The sector focus of Maj V is Industrials, Technology, MedTech and Trade.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
Maj Invest Equity A/S Private Equity Denmark 2016 DKK2,125m 10 years
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Primary Fund DKK25m DKK 95% -3.9% £2.1m
Harbourvest International Private Equity Partners VI
HIPEP VI is a Private Equity fund of funds, with North American, European, Asia Pacific and Emerging Market exposure.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
HarbourVest Private Equity Global 2009 €1,448m 13 years
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Secondary Fund-of Funds $3.6m EUR 95% 19.2% £1.2m
Other Private Equity
Project Komodo
The fund comprises six mature private equity investments totalling less than £700k in net asset value, and is not described further.
Maj Equity Fund IV
The fund is in liquidation with no assets left to sell, and under £500k of net asset value, and is not described further.
Private Equity
Continued
abrdn Diversified Income and Growth plc 23
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Andean Social Infrastructure Fund I LP
Andean Social Infrastructure Fund I invests in social and economic infrastructure projects undertaken through the award of
concessions by central or local government counterparties with strong credit quality (PPP), including all major sectors of social and
economic infrastructure in approved countries around the globe.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
abrdn Infrastructure Latin America 2017 $198m 10 years
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Primary Fund $25m USD 77% 9.2% £15.8m
Aberdeen Global Infrastructure Partners II
Aberdeen Global Infrastructure Partners II invests in concession and PPP infrastructure projects in Australia and the US. It has financed
and managed the development of these projects and all are now operational.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
abrdn Infrastructure North American and Australia 2014 AUD$172m 30 years (with
defined liquidity
window between
years 7 and 12)
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Primary Fund AUD$25m AUD 53% 29.3% £2.3m
SL Capital Infrastructure II
SL Capital Infrastructure II focuses on mid-market European core infrastructure projects and an emphasis on sustainability, with
significant ESG philosophy integration into the investment and asset management process.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
abrdn Infrastructure Europe 2019 €667m 12 years
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Fund €28.5m EUR 99% 5.4% £27.8m
Infrastructure
24 abrdn Diversified Income and Growth plc
Pan-European Infrastructure Fund
The Pan-European Infrastructure Fund (PEIF) specialises in European infrastructure investments. The opportunity was presented by
the abrdn Economic infrastructure team, who were already indirect investors in the fund, and wanted to increase their exposure
through an available secondary sale.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
DWS Infrastructure Europe 2005 €2,066m 10 years
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Secondary Fund €4.7m EUR 93% 14.8% £768,000
BlackRock Renewable Income UK
BlackRock Renewable Income (BRI) is a UK focused renewable energy fund. BRI is currently fully invested in 48 wind and solar projects
across the UK. 63% of current NAV is in the UK wind sector, and 37% is in the UK solar sector. 100% of the portfolio is operational and
unlevered, and the portfolio has a net average cash yield since inception of 8.2% as of 30 June 2024.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
BlackRock Infrastructure Europe 2015 £773m Evergreen
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Fund £8.5m GBP 100% 12.7% £6.7m
Infrastructure
Continued
abrdn Diversified Income and Growth plc 25
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Hark Capital Partners III
The Fund’s strategy relates to lending to private equity funds against the value of their assets and the uncalled commitments from
underlying investors. Hark III intends to provide investors with an opportunity to achieve attractive risk-adjusted returns of 11%-12% at
a compelling relative value.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
Hark Capital Partners Private Credit US 2022 $485m 7 years + 1
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Primary Fund $10m USD 50% 12.2% £4.1m
PIMCO Private Income Fund
PIMCO’s Private Income Fund, launched in April 2019, is primarily focused on income producing private assets. It seeks to deploy
capital fluidly across credit sectors and over economic cycles. It is housed in an evergreen fund structure, for investors seeking to
manage their exposure through time. The Investment opportunity has three core pillars to its strategy: a multi-sector approach to
private credit, integrated investment team and evergreen vehicle structure. The fund is a highly-diversified private lending fund that
leverages PIMCO’s position as a global fixed income leader with deep credit expertise. It seeks to provide attractive income-driven
returns by primarily investing in performing private credit across the residential, commercial, specialty finance, and corporate sectors.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
PIMCO Private Credit America and Europe 2021 $730m Open-ended
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Primary Fund $10m USD 100% 4.4% £6.7m
Mount Row Credit Fund II
Mount Row Credit Fund II, is an active managed diversified portfolio of senior debt European and Global leveraged buyouts with the
focus being on the largest and most liquid performing European senior secured issuers. Fund’s strategy is to preserve capital for
shareholders, generate current income and seek capital appreciated when market opportunities arise.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
Investcorp Private Credit Europe 2021 €221m 2.5 years
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Primary Fund $10m GBP 100% 4.5% £9.4m
Private Credit
26 abrdn Diversified Income and Growth plc
Aberdeen European Residential Opportunities Fund
AEROF is a residential development fund, converting brownfield sites with higher value as residential units and building residential
assets on greenfield sites both for sale and for rental in the build to rent, micro living and student accommodation sectors. The fund
was due to finish in 2023, but has entered its extension period, and is due to complete in Q2 2025.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
abrdn Real Estate Europe & UK 2017 €600m 6 years
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Primary Fund €15m EUR 100% -30.1% £2.6m
Aberdeen Property Secondary Partners II
The Fund’s strategy is to acquire attractive property fund across Europe and India. The portfolio has exposure across seven different
countries with three of those accounting for 88% of the portfolio (Spain, the UK, and India). From a sector perspective the largest
exposure (53% of NAV) is to offices, with a further 23% invested in the more resilient residential sector. The Fund term was due to
expire in December 2024 but has now been extended by a year to December 2025.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
abrdn Real Estate Europe and Asia 2017 €103m 7 years +1+1+1
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Secondary Fund-of Funds €22m EUR 94% 6.0% £7.8m
Cheyne Social Property Impact Fund
Cheyne Social Property Impact Fund invests in UK property for use by social sector organisations for disadvantaged groups. The fund
reached its maturity in 2021 and we granted its extension of 12 months in January 2021 and 18th months to September 2023. As the
fund is now past the end of its permitted life, the Company are not being charged any fees by the manager for this fund.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
Cheyne Real Estate UK 2016 £187m 7 years
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Primary Fund £6m GBP 100% -1.2% £3.3m
Real Estate
abrdn Diversified Income and Growth plc 27
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Burford Opportunity Fund
Burford Opportunity Fund invests in litigation finance, funding the legal costs of carefully selected commercial cases typically in return
for a percentage of the damages or awards paid to the claimant, should they be successful.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
Burford Capital Litigation Finance North America 2018 $300m 5 years
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Primary Fund $25m USD 75% 13.6% £16.1m
HealthCare Royalty Partners IV
HealthCare Royalty Partners IV (HCR IV) invests in royalty streams from life sciences companies and drug developers. Many life
science companies or developers want to raise funds to fund future research and development work, without diluting their interests or
giving away control. By selling a proportion of their future sales to funds such as HCRIV, they can raise this non-dilutive capital.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
Abrdn Healthcare Royalties Global, with a focus on North America 2018 $1,2bn 10 years
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Primary Fund $25m USD 98% 15.6% £12.3m
abrdn Global Private Markets Fund
The abrdn Global Private Markets Fund launched with existing exposure to North American and European private equity focused on
mid-market companies, along with economic infrastructure and energy assets in the UK and Europe. The Fund is currently building
out and diversifying its exposure. There is exploratory activity globally with particular attention on technology, demographics and
sustainability themes. The near-term focus will be to expand the portfolio into private credit and real asset strategies (Real Estate,
Infrastructure and Natural Resources) while diversifying the current private equity and infrastructure assets by sector and market.
Geographically, we will focus on private equity and venture capital in North America, infrastructure in OECD markets, real estate in the
Europe and Asia, and private credit strategies in North America and Europe. Implementation will focus on secondary investments and
co-investments alongside Fund commitments.
Fund Information
Fund Manager Asset Class Country/Region Vintage Fund Size Term
abrdn Multi-asset private market Global 2018 £328m Open-ended
Key Information
Investment Commitment Currency % Drawn IRR NAV (GBP)
Primary/Secondary/Direct £15m GBP 100% 9.5% £20.7m
Special Opportunities
28 abrdn Diversified Income and Growth plc
As at 30 September 2024
At At
30 September 30 September
2024 2023
% of Total % of Total
investments investments
SL Capital Infrastructure II
AB
15.2 8.1
European economic infrastructure
Aberdeen Standard Global Private Markets Fund
AB
11.4 5.9
Multi-strategy private markets exposure
Bonaccord Capital Partners I-A
B
10.0 4.7
Investment in alternative asset management companies
Burford Opportunity Fund
B
8.9 5.1
Litigation finance investments initiated by Burford Capital
Patria Secondaries Opportunities Fund IV
B
8.8 3.8
Diversified Private Equity portfolio which invests through secondary transactions
Andean Social Infrastructure Fund I
AB
8.7 4.4
Infrastructure project investments in the Andean region of South America
Healthcare Royalty Partners IV
B
6.8 4.7
Healthcare royalty streams primarily in the US
Mount Row Credit Fund II
B
5.1 3.0
Diversified portfolio of senior debt European and Global leveraged buyouts
Aberdeen Property Secondaries Partners II
AB
4.3 2.8
Real estate value added portfolio of properties across United Kingdon and Europe
TrueNoord Co-Investment
B
3.9 2.6
Aircraft leasing company which specialises in regional aircraft
A
Denotes abrdn plc managed products
B
Unlisted holdings
Ten Lar
g
est Investments
abrdn Diversified Income and Growth plc 29
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
As at 30 September 2024
Valuation Total investments Valuation
2024 2024 2023
Company £’000 % £’000
Private Equity
Bonaccord Capital Partners I-A
B
18,130 10.0 16,091
Patria Secondaries Opportunities Fund IV
AB
16,057 8.8 12,940
TrueNoord Co-Investment
B
7,136 3.9 8,765
Maj Invest Equity V
B
2,095 1.1 2,432
HarbourVest International Private Equity VI
B
1,240 0.7 1,678
Mesirow Financial Private Equity IV
B
400 0.2 599
HarbourVest VIII Venture Fund
B
104 0.1 123
Mesirow Financial Private Equity III
B
80 – 117
Maj Invest Equity IV
B
24 – 1,205
HarbourVest VIII Buyout Fund
B
23 – 160
Top ten Private Equity holdings 45,289 24.8
Other holdings 9 –
Total Private Equity 45,298 24.8
Real Estate
Aberdeen Property Secondaries Partners II
AB
7,840 4.3 9,385
Cheyne Social Property Impact Fund
B
3,299 1.8 3,299
Aberdeen European Residential Opportunities Fund
AB
2,556 1.4 7,524
Total Real Estate 13,695 7.5
Infrastructure
SL Capital Infrastructure II
AB
27,792 15.2 27,419
Andean Social Infrastructure Fund I
AB
15,821 8.7 15,016
BlackRock Renewable Income – UK
B
6,657 3.7 8,199
Aberdeen Global Infrastructure Partners II (AUD)
AB
2,250 1.2 4,541
Pan European Infrastructure Fund
B
768 0.4 1,205
Total Infrastructure 53,288 29.2
Private Credit
Mount Row Credit Fund II
B
9,393 5.1 10,166
PIMCO Private Income Fund Offshore Feeder I LP
B
6,736 3.7 7,662
ASI Hark III
B
4,109 2.2 6,042
Total Private Credit 20,238 11.0
Private Markets Investments
30 abrdn Diversified Income and Growth plc
As at 30 September 2024
Valuation Total investments Valuation
2024 2024 2023
Company £’000 % £’000
Other
Aberdeen Standard Global Private Markets Fund
AB
20,730 11.4 19,934
Burford Opportunity Fund
B
16,120 8.9 17,272
Healthcare Royalty Partners IV
B
12,263 6.8 16,235
Markel CATCo Reinsurance Fund Ltd – LDAF 2018 SPI
B
572 0.3 333
Markel CATCo Reinsurance Fund Ltd – LDAF 2019 SPI
B
242 0.1 81
Total Other 49,927 27.5
Total Private Markets 182,446 100.0
A
Denotes abrdn plc managed products
B
Unlisted holdings
Private Markets Investments
Continued
abrdn Diversified Income and Growth plc 31
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
As at 30 September 2024
Valuation Valuation Valuation
2024 2024 2023
Company £’000 % £’000
Reinsurance Sub-Fund
CATCo Reinsurance Opportunities Fund 79 - 84
Total Reinsurance Sub-Fund 79 -
Total Equities 79 -
Listed Equities
32 abrdn Diversified Income and Growth plc
As at 30 September 2024
Valuation Net assets Valuation Net assets
2024 2024 2023 2023
£’000 % £’000 %
Total investments 182,525 89.8 339,972 100.1
Cash and cash equivalents
A
22,300 11.0 21,087 6.2
Forward contracts – – (5,615) (1.6)
6.25% Bonds 2031 – – (15,730) (4.6)
Other net liabilities (1,519) (0.8) (180) (0.1)
Net assets 203,306 100.0 339,534 100.0
Net Assets Summary
abrdn Diversified Income and Growth plc 33
Governance
34 abrdn Diversified Income and Growth plc
Davina Walter
Chairman
Experience:
Appointed a Director on 1 February 2019, Senior
Independent Director on 27 February 2019 and Chairman
on 26 February 2020, Davina Walter is an experienced
investment professional who has been actively involved
with investment trusts since 1985 when she joined
Henderson (now Janus Henderson) as a fund manager.
Having started her career at Cazenove & Co, ending up as
Head of US equity research, she then spent over 16 years
as an investment manager, most recently, as a Managing
Director at Deutsche Asset Management. She is a non-
executive director of Miton UK MicroCap Trust plc and
Fidelity European Trust plc.
Length of service:
5 years
Last re-elected to the Board:
2024
Committee membership:
Management Engagement Committee (Chairman) and
Nomination Committee (Chairman)
Contribution:
The Nomination Committee, chaired by the Senior
Independent Director, has reviewed the contribution of
Davina Walter in light of her proposed re-election at the
forthcoming AGM and has concluded that she continues
to chair the Company expertly, fostering a collaborative
spirit between the Board and Manager while ensuring that
meetings remain focussed on the key areas of
stakeholder relevance.
Tom Challenor
Senior Independent Non-Executive Director
and Chairman of the Audit Committee
Experience:
Appointed a Director on 6 April 2017 and Chairman of the
Audit Committee on 31 October 2018, Tom Challenor is a
non-executive director and Chair of the Audit Committee
of Vanguard Group (Ireland) Limited and its fund
companies, and is also a non-executive director of
Threadneedle India Fund Limited. Tom was formerly
Senior Independent Director of Euroclear UK &
International Limited, as well as a former non-executive
director of Aberdeen UK Tracker Trust plc, Cofunds
Limited, Xtrakter Limited and Threadneedle Lux (SICAV).
At Threadneedle Asset Management he was Director of
Strategy and Risk from 2005 to 2009 and Chief Financial
Officer from 1997 to 2005.
Length of service:
7 years
Last re-elected to the Board:
2024
Committee membership:
Audit Committee (Chairman), Management Engagement
Committee and Nomination Committee
Contribution:
The Nomination Committee has reviewed the contribution
of Tom Challenor in light of his proposed re-election at the
forthcoming AGM and has concluded that he continues to
occupy the roles of Senior Independent Director and
Chairman of the Audit Committee expertly, as well as
bringing to the Board his experience of internal controls
and risk management in an investment setting.
Board of Directors
abrdn Diversified Income and Growth plc 35
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Trevor Bradley
Independent Non-Executive Director
Experience:
Appointed a Director on 1 August 2019, Trevor Bradley
was a partner and member of the Management Board at
Ruffer LLP. He was responsible for growing and leading the
firm's institutional investment business and managed over
£1 billion of multi-asset portfolios for pension funds,
charities and other institutions. Prior to Ruffer, he was a
management consultant at McKinsey & Company and a
UK equity portfolio manager at Mercury Asset
Management. He is a Trustee Director of BBC Children in
Need and Chair of its Investment Committee.
Length of service:
5 years
Last re-elected to the Board:
2024
Committee membership:
Audit Committee, Management Engagement Committee
and Nomination Committee
Contribution:
The Nomination Committee has reviewed the contribution
of Trevor Bradley in light of his proposed re-election at
the forthcoming AGM and has concluded that he
continues to bring to the Board his knowledge of
investment management as well as experience in
investment companies.
Alistair Mackintosh
Independent Non-Executive Director
Experience:
Appointed a Director on 1 May 2021, Alistair Mackintosh
was a partner with Actis LLP, a leading investor in growth
markets across Africa, Asia and Latin America from its
inception in 2004 until 2018. He served as Chief Investment
Officer for twelve years, and chaired the Investment
Committees of Actis’ Private Equity, Infrastructure, Energy
and Real Estate funds. Previously, Alistair spent fifteen
years with PPM Capital Ltd (now Silverfleet Capital), the
mid-market private equity business of Prudential plc.
Length of service:
3 years
Re-elected to the Board:
2024
Committee membership:
Audit Committee, Management Engagement Committee
and Nomination Committee
Contribution
The Nomination Committee has reviewed the contribution
of Alistair Mackintosh in light of his proposed re-election at
the forthcoming AGM and has concluded that he brings to
the Board considerable expertise in Private Markets.
36 abrdn Diversified Income and Growth plc
The Directors present their audited Annual Report for the
year ended 30 September 2024.
Results
The financial statements for the year ended 30
September 2024 may be found on pages 61 to 91.
Return of capital to shareholders
The Company returned approximately 38.1p per Ordinary
share to shareholders on 10 July 2024 via a B Share
Scheme which was approved by shareholders at a
General Meeting held on 3 July 2024. Further detail may
be found in Overview of Strategy on page 8.
Dividends
Interim dividends of 1.42p per Ordinary share and 1.95p
per Ordinary share, were paid on 27 March 2024 and 24
October 2024, respectively, in respect of the year ended
30 September 2024.
In accordance with the circular to shareholders published
by the Company on 17 June 2024, the Board intends to
continue to pay a sufficient level of dividend to ensure that
the Company will not retain more than 15 per cent. of its
income in an accounting period so as to maintain the
Company’s investment trust status during the Managed
Wind-Down.
Revenue available to the Company will decrease as the
portfolio assets are realised and there can be no
guarantee as to the payment, quantum, or timing of
dividends during the Managed Wind-Down process.
However, it is expected that, at a minimum, the Company
will declare a dividend each September, normally payable
in October, to maintain investment trust status.
Further information on the Board’s intentions regarding
future dividends may be found in the Chairman’s
Statement on page 5 and, in relation to Resolution 3 to be
proposed at the AGM on 26 February 2025, on page 42.
Investment Trust Status
The Company is registered as a public limited company in
Scotland under number SC003721 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. The Directors are of the opinion that the
Company has conducted its affairs for the year ended 30
September 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.
Capital Structure and Voting rights
The issued Ordinary share capital at 30 September 2024
consisted of 301,265,952 Ordinary shares with nominal
value of 1p each (2023 - 301,265,952 Ordinary shares with
nominal value of 25p each) with voting rights and
22,485,854 Ordinary shares of 1p each (2023 – 22,485,854
Ordinary shares of 25p each) held in treasury. No Ordinary
shares were bought back into treasury during the year
ended 30 September 2024 (2023 – 7,181,362) and no
Ordinary shares were bought back into treasury between
1 October 2024 and the date of approval of this Annual
Report.
Each Ordinary share (excluding treasury shares) 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.
Following the approval by the Court of Session in
Edinburgh of the reduction in the Company’s share capital
on 7 June 2024, the nominal value per Ordinary share was
reduced from 25p to 1p.
There are no restrictions on the transfer of Ordinary
shares in the Company other than certain restrictions
which may from time to time be imposed by law.
Directors
As at 30 September 2024 and as the date of this Report,
the Board consisted of a non-executive Chairman and
three non-executive Directors, all of whom served as
Directors throughout the year ended 30 September 2024,
Anna Troup retired as a Director on 27 February 2024.
Tom Challenor was Senior Independent Director and
Chairman of the Audit Committee.
Directors’ Report
abrdn Diversified Income and Growth plc 37
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
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, and will give due regard to, the principle of
diversity in its recruitment of new Board members. The
Board will not display any bias for age, gender, race,
sexual orientation, socio-economic background, religion,
ethnic or national origins or disability in considering the
appointment of Directors. The Board will continue to
ensure that all appointments are made on the basis of
merit against the specification prepared for each
appointment. The Board will take account of the targets
set out in the FCA’s Listing Rules, which are set out below.
The Board voluntarily discloses the information, which has
been provided by each Director, in the tables below in
relation to its diversity. The Board has resolved that the
Company’s year end date be the most appropriate
reference date for disclosure purposes. There have been
no changes between 30 September 2024 and the date of
approval of this report.
The Board acknowledges that it does not meet the target
that at least 40% of Directors are women as set out in
UKLR 6.6.6R (9)(a)(i) nor the target that at least one
Director is from a minority ethnic background as set out in
UKLR 6.6.6R (9)(a)(iii). Further to the retirement of Anna
Troup and the approval of shareholders of the Company
entering a Managed Wind-Down, which both occurred on
27 February 2024, the Board considers that four Directors
is the appropriate number, taking account of the
responsibilities that require to be discharged and the need
to exercise control over the Company’s operating costs.
The Board does not expect to undertake a recruitment
exercise in the medium term, which would present an
opportunity to address diversity.
Table for reporting on gender as at 30 September 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 75% 1
n/a
(note 3)
n/a
(note 3)
Women 1
25%
(note 1)
1
Not specified/prefer not to say - - -
Table for reporting on ethnic background as at 30 September 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)
4 100% 1
n/a
(note 3)
n/a
(note 3)
Minority ethnic -
-
(note 2)
-
Not specified/prefer not to say - - -
Notes:
1. Does not meet the target that at least 40% of Directors are women as set out in UKLR 6.6.6R (9)(a)(i).
2. Does not meet the target that at least one Director is from a minority ethnic background as set out in UKLR 6.6.6R (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.
38 abrdn Diversified Income and Growth plc
The Role of the Chairman and Senior
Independent Director
The Chairman is responsible for providing effective
leadership to the Board, by setting the tone of the
Company, demonstrating objective judgement and
promoting a culture of openness and debate. The
Chairman facilitates the effective contribution, and
encourages active engagement, by each Director. In
conjunction with the Company Secretary, the Chairman
ensures that Directors receive accurate, timely and clear
information to assist them with effective decision-making.
The Chairman leads the evaluation of the Board and
individual Directors and acts upon the results of the
evaluation process by recognising strengths and
addressing any weaknesses. The Chairman also engages
with major shareholders and ensures that all Directors
understand shareholder views.
The Senior Independent Director acts as a sounding board
for the Chairman and acts as an intermediary for other
Directors, when necessary. Working closely with the
Nomination Committee, the Senior Independent Director
takes responsibility for an orderly succession process for
the Chairman, and leads the annual appraisal of the
Chairman’s performance. The Senior Independent
Director is also available to shareholders to discuss any
concerns they may have. Tom Challenor is the Senior
Independent Director.
Board Committees
The Board has appointed a number of Committees, as set
out below. Copies of their terms of reference, which 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
48 to 50.
Management Engagement Committee
The Management Engagement Committee consists of all
the Directors and was chaired by Davina Walter
throughout the year. 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 under
review the resources of abrdn plc, 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 key third party suppliers, by undertaking peer
comparisons and reviewing reports from the Manager
and the Depositary.
The Board conducts a formal annual evaluation of the
performance of, and contractual relationship with, the
Manager and those third parties appointed by the
Manager. The evaluation includes consideration of the
investment strategy and process of the Manager, noting
performance against the benchmark over the long term
and the quality of the support that the Company receives
from the Manager. The Board confirms that it is satisfied
that the continuing appointment of the Manager, on the
terms agreed, is in the interests of shareholders as
a whole.
Management Agreement
The Company has appointed the Manager, a wholly-
owned subsidiary of abrdn plc, as its alternative
investment fund manager.
The Manager has been appointed to provide investment
management, risk management, administration and
company secretarial services as well as promotional
activities. The Company's portfolio is managed by the
Investment Manager by way of a group delegation
agreement in place between the Manager and
Investment Manager. In addition, the Manager has sub-
delegated administrative and secretarial services to
abrdn Holdings Limited and promotional activities to
abrdn Investments Limited.
The Manager charges a monthly fee at the rate of one-
twelfth of 0.50% on the first £300 million of NAV and 0.45%
of NAV in excess of £300 million. The value of any
investments in Exchange Traded Funds, unit trusts, open
ended and closed ended investment companies and
investment trusts of which the Manager, or another
company within the abrdn plc group, is the operator,
manager or investment adviser, is deducted from net
assets. Details of the management fee charged during the
year are included in note 4 to the financial statements.
The management agreement has in place a six months’
notice period. 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
Continued
abrdn Diversified Income and Growth plc 39
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Nomination Committee
The Nomination Committee consists of all the Directors
and was chaired by Davina Walter throughout the year.
The Committee reviews the effectiveness of the Board,
succession planning, Board appointments, appraisals,
training and the remuneration policy. As stated in the
Directors’ Remuneration Report on pages 44 to 47, the
Nomination Committee determines the level of Directors’
fees and there is no separate remuneration committee.
The names and biographies of each of the current
Directors are shown on pages 34 and 35 and indicate
their range of skills and experience as well as their
length of service and individual contribution to the
governance of the Company.
Through the work of the Nomination Committee, the
Directors undertook a review of the Board, its Committees
and the performance of individual Directors. The process
involved the completion of questionnaires by each
Director with the results discussed by the Board thereafter,
with appropriate action points agreed. Following the
evaluation process, the Board concluded that it operates
effectively to promote the success of the Company and
that each Director makes a significant contribution to the
collective Board. The review of the Chairman was
undertaken by the Senior Independent Director. The
Board has assessed that, collectively, it had in place the
appropriate balance of skills, experience, length of service
and knowledge of the Company while recognising the
advantages of diversity.
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.
Each Director has the requisite high level and range of
business and financial experience which enables the
Board to provide clear and effective leadership and
proper governance of the Company.
The Directors attended scheduled meetings of the Board
and Board Committees during the year ended 30
September 2024 as set out in the table (with their eligibility
to attend the relevant meetings in brackets). The Directors
meet more regularly when business needs require, in
particular in relation to the strategic review. In addition,
there were ad hoc Committee meetings when not all
Directors were required to attend.
Director
Scheduled
Board
Meetings
Audit
Committee
Meetings
Management
Engagement
Committee
Meetings
Nomination
Committee
Meetings
Davina
Walter
A
4 (4) - (-) 2 (2) 2 (2)
Tom
Challenor
4 (4) 3 (3) 2 (2) 2 (2)
Trevor
Bradley
4 (4) 3 (3) 2 (2) 2 (2)
Anna
Troup
B
2 (2) 1 (1) 1 (1) 1 (1)
Alistair
Mackintosh
4 (4) 3 (3) 2 (2) 2 (2)
A
Davina Walter, as Chairman of the Board, is not a member of the Audit Committee
B
Retired as a Director on 27 February 2024
Further to the above, all Directors participated in
additional meetings in relation to both the strategic review
and B share scheme.
In line with best practice in corporate governance, all
Directors offer themselves for election or re-election at
the AGM. Davina Walter, Tom Challenor, Trevor Bradley
and Alistair Mackintosh each retire and, being eligible,
each submits themselves for re-election at the AGM. The
Board believes that all current Directors remain, and all
Directors during the year ended 30 September 2024 were,
and continue to be, 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. In
addition, the Board confirms that each Director
demonstrates commitment to the role and their
performance remains effective which supports their
individual contribution to the role.
The Board therefore recommends, for approval by
shareholders, the resolutions for the individual re-election
as Directors at the AGM of each of Davina Walter,
Tom Challenor, Trevor Bradley and Alistair Mackintosh.
40 abrdn Diversified Income and Growth plc
Directors’ and Officers’ Liability Insurance
The Company’s Articles of Association indemnify each of
the Directors out of the assets of the Company against
any liabilities incurred by them as a Director of the
Company in defending proceedings, or in connection with
any application to the court in which relief is granted. In
addition, the Directors have been granted qualifying
indemnity provisions by the Company which are currently
in force. Directors’ and Officers’ liability insurance cover
has been maintained throughout the year at the expense
of the Company.
Management of Conflicts of Interest
The Board has a procedure in place to deal with a
situation where a Director has an actual or potential
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 prevent or manage 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 their 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 Board takes a zero-tolerance approach to bribery
and has adopted appropriate procedures designed to
prevent bribery. The Manager also takes a zero-tolerance
approach and has its own detailed policy and procedures
in place to prevent bribery and corruption.
Corporate Governance
The Statement of Corporate Governance, which forms
part of the Directors’ Report, may be found on page 43.
Going Concern
The Financial Statements of the Company have been
prepared on a going concern basis. This conclusion is
consistent with the Company’s Viability Statement on
pages 11 and 12.
The Directors are mindful of the principal risks and
uncertainties disclosed on pages 9 and 10 and have
reviewed forecasts detailing revenue, liabilities and capital
commitments. The Directors are satisfied that: the
Company is able to meet all of its liabilities from its assets,
including its ongoing charges, so possesses sufficient
resources to continue in operational existence for the
foreseeable future and at least 12 months from the date
of approval of this Annual Report; the Company is
financially sound; and the Company’s key third party
service providers had in place appropriate business
continuity plans.
Further to a circular published on 5 December 2024, a
General Meeting of the Company was held on 23
December 2024 at which shareholders approved the
adoption of new Articles of Association which removed
the requirement for the Company to hold an annual
continuation vote.
Following the approval by shareholders of the Company,
on 27 February 2024, for the Company to pursue a
Managed Wind-Down, the Directors do not believe this
should automatically trigger the adoption of a basis other
than going concern in line with the Association of
Investment Companies (“AIC”) Statement of
Recommended Practice (“SORP”) which states that it is
usually appropriate to prepare financial statements on a
going concern basis.
Additionally, the SORP guidance sets out that it is
appropriate for the financial statements to be prepared
on a going concern basis whilst making a material
uncertainty disclosure as set out in accounting standards.
Whilst the financial statements for the year ended 30
September 2024 have been prepared on a going concern
basis, the Directors recognise that there is a material
uncertainty in respect of the Managed Wind-Down (see
note 2(a) for related basis of preparation disclosures).
Directors’ Report
Continued
abrdn Diversified Income and Growth plc 41
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Relations with Shareholders
The Directors place great importance on communication
with shareholders and regularly meet with current and
prospective shareholders to discuss performance,
including in the absence of the Manager. The Board
receives quarterly investor relations updates from the
Manager. Significant changes to the shareholder register,
as well as shareholder feedback, are discussed by the
Directors at each Board meeting.
Regular updates are provided to shareholders through the
Annual Report, Half Yearly Report, monthly factsheets and
daily net asset value announcements, all of which are
available through the Company’s website at:
abrdndiversified.co.uk. The Annual Report is also widely
distributed to other parties who have an interest in the
Company’s performance. Shareholders and investors
may obtain up-to-date information through its website or
by contacting the Company directly (see details on
page 93).
The Board’s policy is to communicate directly with
shareholders and their representative bodies without the
involvement of the management group (either the
Company Secretary or abrdn) in situations where direct
communication is required and representatives from the
Board offer to meet with major shareholders on an annual
basis in order to gauge their views. The Company
Secretary 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, as appropriate, on behalf of the Board.
In addition, in relation to institutional shareholders,
members of the Board may either accompany the
Manager or conduct meetings in the absence of
the Manager.
The Company’s Annual General Meeting ordinarily
provides a forum, both formal and informal, for
shareholders to meet and discuss issues with the Directors
and Investment Manager. The Notice of AGM included
within the Annual Report is normally sent out at least 20
working days in advance of the meeting.
Substantial Interests
As at 30 September 2024, the following interests over 3% in
the issued Ordinary share capital of the Company had
been disclosed in accordance with the requirements of
the FCA’s Disclosure Guidance and Transparency Rules:
Shareholder
Number of
shares held % held
B
Interactive Investor
A
50,472,885 16.8
Hargreaves Lansdown
A
28,365,225 9.4
City of London 21,134,901 7.0
Investec Wealth & Investment 11,139,438 3.7
Castellain Capital 9,700,933 3.2
A
Non-beneficial interest
B
Based on 301,265,952 Ordinary shares in issue (excluding treasury shares) as at 30
September 2024
The above interests at 30 September 2024 were
unchanged at the date of approval of this Report.
Criminal Finances Act 2017
The Criminal Finances Act 2017 introduced a corporate
criminal offence of “failing to take reasonable steps to
prevent the facilitation of tax evasion”. The Board has
confirmed that it is the Company’s policy to conduct all of
its business in an honest and ethical manner. The Board
takes a zero tolerance approach to facilitation of tax
evasion, whether under UK law or under the law of any
foreign country.
Accountability and Audit
The responsibilities of the Directors and the auditors in
connection with the financial statements appear on page
51 and pages 58 and 59.
Each Director confirms that, so far as they are aware,
there is no relevant audit information of which the
Company’s auditors are 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 auditors are aware of that information.
42 abrdn Diversified Income and Growth plc
Annual General Meeting
The Annual General Meeting will be held at 10.00 am on 26
February 2025 at 18 Bishops Square, London E1 6EG. The
Notice of the Meeting may be found on pages 103 to 106.
Resolutions including the following business will be
proposed at the Annual General Meeting:
Dividend policy (Resolution 3)
It is best practice in corporate governance for companies
to seek annual shareholder approval of a policy to pay
interim dividends where separate authority is not sought
for a final dividend.
Market Purchase of the Company’s own Ordinary Shares
(Resolution 10)
Resolution 10 will be proposed as a special resolution to
authorise the Company to make market purchases of its
own Ordinary shares.
The Board is seeking shareholders’ approval to authorise
the Company to buy back its own shares for holding in
treasury in order to provide flexibility as part of the
Managed Wind-Down. The Company is not seeking
separate authority to sell such shares (or any of them) for
cash (or its equivalent) and expects, ultimately, to cancel
the shares. No dividends will be paid on treasury shares
and no voting rights attach to them.
Resolution 10 gives the Company the authority to buy
Ordinary shares up to a maximum of 14.99% of the issued
Ordinary share capital of the Company (excluding
treasury shares) as at the date of the passing of the
resolution (approximately 45 million Ordinary shares). The
minimum price which may be paid for an Ordinary share
is 1p (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, if
earlier, on 31 March 2026 (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.
Holding General Meetings on not less than 14 days’ clear
notice (Resolution 11)
Under the Companies Act 2006, the notice period for all
general meetings of the Company is 21 clear days' notice.
Annual general meetings will always be held on at least 21
clear days' notice but shareholders can approve a shorter
notice period for other general meetings. Resolution 11,
which is a special resolution, seeks the authority from
shareholders for the Company to be able to hold general
meetings (other than Annual General Meetings) on not
less than 14 clear days' notice. The approval will be
effective until the Company's next Annual General
Meeting, when it is intended that a similar resolution will be
proposed. The Company will also need to meet the
requirements for electronic voting under the Companies
Act 2006 (as amended by the Shareholders’ Rights
Regulations) before it can call a general meeting on not
less than 14 days' clear notice.
The Board believes that it is in the best interests of
Shareholders to have the ability to call meetings on not
less than 14 clear days' notice should an urgent matter
arise. The Directors do not intend to hold a general
meeting on less than 21 clear days' notice unless
immediate action is required.
This power will expire at the conclusion of the next Annual
General Meeting of the Company or, if earlier, 31 March
2026 (unless previously revoked, varied or extended by
the Company in general meeting).
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 and recommend that
shareholders vote in favour of the resolutions as they
intend to do in respect of their own beneficial
shareholdings, amounting to 318,885 Ordinary shares,
representing 0.1% of the issued share capital (excluding
treasury shares).
On behalf of the Board
Davina Walter
Chairman
20 January 2025
Directors’ Report
Continued
abrdn Diversified Income and Growth plc 43
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
abrdn Diversified Income and Growth plc (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, and is applicable for the Company’s year ended
30 September 2024.
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
has complied with the principles and provisions of the AIC
Code and the relevant provisions of the UK Code, except
for those provisions relating to:
· the role and responsibility of the chief executive;
· executive directors’ remuneration; and
· the requirement for an internal audit function.
The Board considers that these provisions are not relevant
to the position of the Company being an externally
managed investment company. In particular, all of the
Company’s day-to-day management and administrative
functions are outsourced to third parties. As a result, the
Company has no executive directors, employees or
internal operations. The Company has therefore not
reported further in respect of these provisions.
Information on how the Company has applied the AIC
Code, the UK Code, the Companies Act 2006 and the
FCA’s DTR 7.2.6 is provided in the Directors’ Report and
Audit Committee’s Report as follows:
· the composition and operation of the Board and its
Committees are detailed on pages 38 and 39 and, in
respect of the Audit Committee, on page 48;
· the Board’s policy on diversity is on page 37;
· the Company’s approach to internal control and risk
management is detailed on pages 48 and 49;
· the contractual arrangements with, and annual
assessment of, the Manager are set out on page 38;
· the Company’s capital structure and voting rights are
summarised on page 36;
· the substantial interests disclosed in the Company’s
shares are listed on page 41;
· the rules concerning the appointment and replacement
of Directors are contained in the Company’s Articles of
Association and are summarised on page 44. There are
no agreements between the Company and its Directors
concerning compensation for loss of office; and
· the powers to issue or buy back the Company’s ordinary
shares, which are sought annually, and any
amendments to the Company’s Articles of Association,
require a special resolution (75% majority) to be passed
by shareholders and information on these resolutions
may be found on page 42.
On behalf of the Board
Davina Walter
Chairman
20 January 2025
Statement of Corporate Governance
44 abrdn Diversified Income and Growth plc
This Directors’ Remuneration Report comprises
three parts:
i. a Remuneration Policy, which is subject to a binding
shareholder vote every three years, or sooner if varied
during this interval; most recently approved by
shareholders in a poll at the AGM on 28 February 2023
where 91.4% of the votes were cast in favour of the
relevant resolution while 8.6% were cast against. The
Remuneration Policy will be put to shareholders at the
AGM in 2026;
ii. an Implementation Report which is subject to an
advisory vote on the level of remuneration paid during
the year; and
iii. an Annual Statement.
The law requires the Company’s auditors to audit certain
of the disclosures provided in the Directors’ Remuneration
Report. Where disclosures have been audited, they are
indicated as such. The auditors’ opinion is included in the
report on pages 52 to 59.
Remuneration Policy
The Directors’ Remuneration Policy is determined by the
full Board, chaired by Davina Walter, and a separate
Remuneration Committee has not been established.
The Board’s policy is that the remuneration of non-
executive Directors should be sufficient to attract and
retain the Directors needed to oversee the Company
properly and to reflect its specific circumstances. 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.
Fees paid to the directors of companies within the
Company’s peer group are also taken into account and
the Company Secretary provides the Directors with
relevant comparative information.
The policy also provides that the Chairman of the Board
and of each Committee may be paid a fee which is
proportionate to the additional responsibilities involved in
that position. In order to avoid conflicts of interest, each
Director absents themselves from the consideration of
their own fee. There were no changes to the Directors’
Remuneration Policy during the year nor are there any
proposals for any changes in the foreseeable future.
No communications were received from shareholders
regarding Directors’ remuneration during the year.
Limits on Directors’ Remuneration
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 £300,000 per annum which may only be increased
by an ordinary resolution of shareholders.
The level of fees for the years ended 30 September 2024 and
2023 is set out in the following table. Fees are reviewed
annually and increased, if considered appropriate.
30 September
2024
£
30 September
2023
£
Chairman 51,750 48,400
Chairman of Audit Committee 37,750 35,400
Senior Independent Director 34,250 32,100
Director 32,000 29,900
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.
· Directors must retire and be subject to election at the
first Annual General Meeting after their appointment,
and be subject to re-election at least every three years
thereafter. Notwithstanding this, the Board has agreed
that all Directors shall retire and, if eligible, stand for re-
election at each AGM.
· 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 reimbursement of out-of-
pocket expenses incurred in connection with the
performance of their duties, including travel expenses,
which are considered to be taxable 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.
Directors’ Remuneration Report
abrdn Diversified Income and Growth plc 45
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Performance, Service Contracts,
Compensation and Loss of Office
· The 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’ and Officers’ liability insurance cover is
maintained by the Company on behalf of the Directors.
It is the Board’s intention that this Remuneration
Policy applies for the three years to 30 September 2025.
Implementation Report
Review of Directors’ Fees
The level of Directors’ fees was last revised with effect
from 1 October 2023. The Board carried out a review of
Directors’ annual fees, by reference to inflation, as
measured by the increase in the Consumer Prices Index
for the year to 30 September 2024, and taking account of
peer group comparisons by sector and by market
capitalisation. Accordingly, it was concluded that
Directors’ fees would change, with effect from 1 October
2024, to the following rounded rates per annum: £55,000
(Chairman), £43,000 (Audit Committee Chairman/
Senior Independent Director) and £36,750 for each
other Director.
Company Performance
The following graph shows the share price return
(assuming all dividends are reinvested) to Ordinary
shareholders compared to the total return of the FTSE All-
share Index over the ten year period ended 30 September
2024 (rebased to 100 at 30 September 2014). This index
was chosen for comparative purposes only.
80
100
120
140
160
180
200
2014 2015 2016 2017 20 18 2019 2020 20 21 2022 2023 20 24
Share Pric e Total Retur n FTSE All-Share Index
Statement of Voting at General Meeting
At the Company’s last AGM, held on 27 February 2024,
shareholders approved, as Resolution 2, the Directors’
Remuneration Report (other than the Directors’
Remuneration Policy) in respect of the year ended
30 September 2023. The votes cast by poll on Resolution 2
are shown in the following table:
Resolution For Against Withheld
Receive and adopt the
Directors’ Remuneration Report
(excluding the Directors’
Remuneration Policy)
98.9m
(97.4%)
2.7m
(2.6%)
710,892
Spend on Pay
As the Company has no employees, the Directors do not
consider it appropriate to present a table comparing
remuneration paid to Directors with distributions to
shareholders. However, for ease of reference, the total
fees paid to Directors are shown in the table on page 46
while dividends paid to shareholders are set out in note 8
and capital distributions to shareholders are detailed in
note 15 .
46 abrdn Diversified Income and Growth plc
Audited Information
Directors’ Interests in the Company
The Directors are not required to have a shareholding in
the Company. The Directors’ shareholdings (including
their connected persons), all of which are beneficial, had
the following interest in the share capital of the Company
as at 30 September 2023 and 30 September 2024.
30 September 2024 30 September 2023
Ordinary shares Ordinary shares
Davina Walter 57,926 37,387
Tom Challenor 160,959 160,264
Trevor Bradley 75,000 50,000
Alistair Mackintosh
A
25,000 25,000
Anna Troup 5,000
B
5,000
A
Held via a family investment company
B
As at date of retirement on 27 February 2024
There have been no changes to the Directors’ interests in
the share capital of the Company since 30 September
2024, up to the date of approval of this Report.
Fees Payable
The Directors who served during the year received the
following fees, which exclude employers’ National
Insurance contributions. 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. All fees are at a fixed rate and there is no
variable remuneration. Taxable benefits refer to travel
costs associated with Directors’ attendance at Board and
Committee meetings.
Audited Information
Directors’ Remuneration
The Directors received the following remuneration in the form of fees and taxable expenses:
Year ended 30 September 2024 Year ended 30 September 2023
Fees
£
Taxable
Expenses
£
Total
£
Fees
£
Taxable
Expenses
£
Total
£
Davina Walter 51,750 276 52,026 48,400 135 48,535
Tom Challenor (see note below) 40,000 221 40,221 37,600 132 37,732
Trevor Bradley 32,000 452 32,452 29,900 255 30,155
Anna Troup 13,333 99 13,432 29,900 40 29,940
Alistair Mackintosh 32,000 162 32,162 29,900 372 30,272
Total 169,083 1,210 170,293 175,700 934 176,634
Taxable expenses refer to amounts claimed by Directors for travelling to attend meetings. The above amounts exclude
any employers’ national insurance contributions, if applicable. 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. No payments were made to third
parties. There are no other fees to disclose as the Company has no employees, chief executive or executive directors.
Tom Challenor is paid a composite annual fee, reflecting his position as Senior Independent Director and Chairman of
the Audit Committee; this was equivalent to an annual fee of £40,000 for the year ended 30 September 2024 (2023 -
£37,600). With effect from 1 October 2024, Tom Challenor’s composite annual fee is £43,000.
Directors’ Remuneration Report
Continued
abrdn Diversified Income and Growth plc 47
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Annual Percentage Change in Directors’ Remuneration
The table below sets out, for the Directors who served during the Year, the annual percentage change in Directors’ fees
for the past three years.
Year ended 30
September
2024
Year ended 30
September
2023
Year ended 30
September
2022
Year ended 30
September
2021
Year ended 30
September
2020
Fees
%
Fees
%
Fees
%
Fees
%
Fees
%
Davina Walter (appointed a Director on 1
February 2019, SID on 27 February 2019 and
Chairman on 26 February 2020)
6.9 8.5 1.9 16.6 102.8
Tom Challenor (appointed a Director on 6 April
2017 and SID on 4 June 2021)
6.4 8.4 6.3 3.6 6.1
Trevor Bradley (appointed a Director on 1
August 2019)
7.0 8.7 1.9 1.9 511.6
Alistair Mackintosh (appointed a Director on 1
May 2021)
7.0 8.7 144.4 0.0 0.0
Anna Troup (appointed a Director on 1 August
2019); retired on 27 February 2024
-55.4 8.7 1.9 1.9 511.6
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 ended 30 September 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, including management of
any potential conflicts of interest arising and reflected
any feedback from shareholders.
On behalf of the Board
Davina Walter
Chairman
20 January 2025
48 abrdn Diversified Income and Growth plc
The Audit Committee presents its Report for the year
ended 30 September 2024.
Committee Composition
An Audit Committee has been established which was
chaired by Tom Challenor throughout the year and
consisted of the whole Board with the exception of Davina
Walter. In compliance with July 2018 UK Code on
Corporate Governance (the “Code”), the Chairman of the
Board is not a member of the Committee but attends the
Audit Committee by invitation of the Chairman.
The Directors have satisfied themselves that at least one
of the Committee’s members has recent and relevant
financial experience - Tom Challenor is a Fellow of the
Institute of Chartered Accountants in England & Wales –
and that, collectively, the Audit Committee possesses
competence appropriate for the investment trust sector.
Role 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 Secretary 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 auditors to review the proposed audit
programme of work and the findings of the auditors. 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 auditors to supply non-audit services;
· to review a statement from the Manager detailing the
arrangements in place within the Manager 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 auditors and to approve the
remuneration and terms of engagement of the auditors;
and
· to monitor and review the auditors’ independence,
objectivity, effectiveness, resources and qualification.
Activities During the Year
The Audit Committee met on three occasions during the
year when, amongst other matters, it considered the
Annual Report and the Half-Yearly Financial Report.
Representatives of the Manager’s internal audit
department and risk and compliance department
reported to the Committee on matters such as internal
control systems, risk and the conduct of the business in the
context of its regulatory environment.
Internal Control
There is an ongoing process, for identifying, evaluating
and managing the Company’s significant business and
operational risks, which has been in place for the year
ended 30 September 2024 and up to the date of approval
of the Annual Report, which is regularly reviewed by the
Committee and complies with the FRC’s guidance on
internal controls.
The Committee 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.
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 Audit
Report of the Audit Committee
abrdn Diversified Income and Growth plc 49
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Committee has prepared its own risk controls self-
assessment which lists potential risks relating to strategy;
shareholders; Board; investment management;
promotional activities; company secretarial; depositary;
third party service providers and other external factors.
The Committee considers the potential cause and
possible effect of these risks as well as reviewing the
controls in place to mitigate these potential risks.
Clear lines of accountability have been established
between the Committee and the Manager. The
Committee receives six-monthly reports from the
Manager’s risk and compliance and internal audit teams
covering key performance and risk indicators and
considers control and compliance issues brought to its
attention. In carrying out its review, the Committee has
had regard to the activities of the Manager, including
its internal audit and compliance functions, and of
the auditors.
The Committee has reviewed the Manager’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 Committee has also reviewed the
effectiveness of the Manager’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 Organisation”.
Risks are identified and documented through a risk
management framework by each function within the
Manager’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 Committee and timetables are agreed for
implementing improvements to systems. The
implementation of any remedial action required is
monitored and feedback provided to the Committee.
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 Committee 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 Manager’s compliance
department continually reviews its operations; and
· at its meeting in November 2024, the Committee carried
out an annual assessment of internal controls for the
year ended 30 September 2024 by considering
documentation from the Manager, including the internal
audit and compliance functions, and taking account of
events since 30 September 2024.
The Committee 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 Manager which has its own compliance and
internal control systems. The Committee 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 Risks
During its review of the Company’s financial statements
for the year ended 30 September 2024, the Audit
Committee considered, through review of reports and
other documentation, the following significant issues, in
particular those communicated by the auditors 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(e) to the
financial statements, which are consistent with the
International Private Equity and Venture Capital Valuation
Guidelines – Edition 2022. Within the FRS 102 Fair Value
hierarchy, as set out in Note 19, investments are
categorised as either Level 1, totalling £79,000 (2023 -
£90.3m) or Level 3, totalling £182.4m (2023 - £198.5m).
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 Audit Committee
rigorously challenges the assumptions underlying
valuation of unlisted investments. The Company engages
the services of an independent Depositary 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 Committee on an
annual basis.
50 abrdn Diversified Income and Growth plc
Recognition of Investment Income
How the issue was addressed - the recognition of
investment income is undertaken in accordance with
accounting policy note 2(b) to the financial statements.
Special dividends are allocated to the capital or revenue
accounts according to the nature of the payment and the
intention of the underlying company. The Directors also
review, at each meeting, the Company’s income,
including income received, revenue forecasts and
dividend comparisons.
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
Committee meeting.
Allocation of finance costs and
investment management fees
The Company’s finance costs and investment
management fees were charged 50% to capital and 50%
to revenue during the year ended 30 September 2024.
With effect from 1 October 2024, management fees will
be charged 90% to capital and 10% to revenue, reflecting
the Committee’s currently anticipated split of future
investment returns during the Managed Wind-Down of
the Company.
Review of Auditors
The Audit Committee has reviewed the effectiveness of
the auditors, PricewaterhouseCoopers LLP including:
· Independence - the auditors discuss 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 its working relationship with
management (the auditors 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 director).
In reviewing the auditors, the Committee also took into
account the FRC’s latest Audit Quality Inspection Report
for PricewaterhouseCoopers LLP.
Audit Tender
This year’s audit of the Company’s Annual Report is the
fifth performed by PricewaterhouseCoopers LLP since
their appointment following an audit tender process held
by the Company in 2019 and is therefore the fifth year for
which the senior statutory auditor, Shujaat Khan, has
served. The Committee anticipates that the Company will
undertake an audit tender process not later than the year
ended 30 September 2029.
Shareholders will have the opportunity to vote on the re-
appointment of PricewaterhouseCoopers LLP as auditors,
and their remuneration, as Resolutions 8 and 9 at the
forthcoming AGM.
Provision of Non-Audit Services
The Committee has established a policy on the supply of
non-audit services provided by the auditors. Such services
are considered on an individual basis and may only be
provided if the service is at a reasonable and competitive
cost and does not constitute a conflict of interest or
potential conflict of interest or prevent the auditors from
remaining objective and independent. In addition, non-
audit services will only be approved by the Committee if in
compliance with the Financial Reporting Council's and UK
Public Interest Entity’s independence requirements. All
non-audit services require the pre-approval of the
Committee. There were no non-audit fees paid to the
auditors during the year under review (2023 – total of
£17,225, comprising £12,000 for the review of the Half-
Yearly Financial Report and £5,225 in relation to covenant
compliance requirements for the 6.25% Bonds 2031).
Tom Challenor
Chairman of the Audit Committee
20 January 2025
Report of the Audit Committee
Continued
abrdn Diversified Income and Growth plc 51
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
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’ and applicable law.
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 also responsible for keeping adequate
accounting records that are sufficient to show and explain
the company’s transactions and disclose with reasonable
accuracy at any time the financial position of the
company and enable them to ensure that the financial
statements and the Directors’ Remuneration Report
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 any
information 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.
Each of the directors, whose names and functions are
listed in Board of 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 of the Company;
· in the opinion of the Directors, 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,
Davina Walter
Chairman
20 January 2025
Statement of Directors’ Responsibilities
52 abrdn Diversified Income and Growth plc
Report on the audit of the
financial statements
Opinion
In our opinion, abrdn Diversified Income and Growth plc’s
financial statements:
· give a true and fair view of the state of the Company’s
affairs as at 30 September 2024 and of its loss and cash
flows for the year then ended;
· have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, including FRS
102 “The Financial Reporting Standard applicable in the
UK and Republic of Ireland”, and applicable law); and
· have been prepared in accordance with the
requirements of the Companies Act 2006.
We have audited the financial statements, included within
the Annual Report, which comprise: the Statement of
Financial Position as at 30 September 2024; the Statement
of Comprehensive Income; the Statement of Changes in
Equity and the Statement of Cash Flows for the year then
ended; and the notes to the financial statements, which
include a description of the significant accounting policies.
Our opinion is consistent with our reporting to the
Audit Committee.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable
law. Our responsibilities under ISAs (UK) are further
described in the Auditors’ responsibilities for the audit of
the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the Company in
accordance with the ethical requirements that are
relevant to our audit of the financial statements in the
UK, which includes the FRC’s Ethical Standard, as
applicable to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance
with these requirements.
To the best of our knowledge and belief, we declare that
non-audit services prohibited by the FRC’s Ethical
Standard were not provided.
We have provided no non-audit services to the Company
in the period under audit.
Material uncertainty related to
going concern
In forming our opinion on the financial statements, which is
not modified, we have considered the adequacy of the
disclosure made in note 2 to the financial statements
concerning the Company’s ability to continue as a going
concern. The timing of the realisation of the Company's
private market investments, as part of its Managed Wind
Down, remains uncertain. These conditions, along with the
other matters explained in note 2 to the financial
statements, indicate the existence of a material
uncertainty which may cast significant doubt about the
Company's ability to continue as a going concern. The
financial statements do not include the adjustments that
would result if the Company were unable to continue as a
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 and evaluating the Directors' going concern
assessment.
· reviewing meetings minutes of the Board of Directors.
· assessing the disclosures presented in the Annual
Report, including the Viability Statement and the Going
Concern statement, and assessing their consistency
with the Financial Statements and the evidence we
obtained in our audit.
· assessing the adequacy of the Directors' cash flow
assessment with a focus on available liquid resources
and outflows expected.
In relation to the directors’ reporting on how they have
applied the UK Corporate Governance Code, other than
the material uncertainty identified in note 2 to the financial
statements, 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, or in respect of the directors’
identification in the financial statements of any other
material uncertainties to the Company’s ability to
continue to do so over a period of at least twelve months
from the date of approval of the financial statements.
Independent Auditors’ Report to the members of abrdn
Diversified Income and Growth plc
abrdn Diversified Income and Growth plc 53
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the
relevant sections of this report.
Our audit approach
Overview
Audit scope
· We conducted our audit of the financial statements
using information from the Alternative Investment Fund
Manager (AIFM) to whom the Directors have delegated
the provision of all administrative functions.
· We tailored the scope of our audit taking into account
the types of investments within the Company, the
involvement of the third party referred to above, the
accounting processes and controls, and the industry in
which the Company operates.
· We obtained an understanding of the control
environment in place at both the AIFM and the
Administrator, and adopted a fully substantive testing
approach using reports obtained from the AIFM.
Key Audit Matters
· Material uncertainty related to going concern
· Valuation and existence of investments
· Income from investments
Materiality
· Overall materiality: £2.03m (2023: £3.4m) based on
approximately 1% of Net Assets
· Performance materiality: £1.52m (2023: £2.54m)
The scope of our audit
As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’
professional judgement, were of most significance in the
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) identified by
the auditors, including 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, and any comments we make on the
results of our procedures thereon, 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.
In addition to going concern, described in the Material
uncertainty related to going concern section above, we
determined the matters described below to be the key
audit matters to be communicated in our report. This is not
a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter How our audit addressed the key audit matter
Valuation and existence of investments
Refer to the Report of the Audit
Committee, the Accounting Policies and
the Notes to the Financial Statements.
Level 1 and 2 investments at the year end
are valued at £0.079m. Level 3
investments at year end were valued at
£182m.
We focused on the valuation and
existence of investments because they
represent the principal element of the net
asset value of the Company as disclosed
on the Statement of Financial Position. In
addition, the valuation of Level 3
Investments for which a market price is not readily available (Level 3)
We understood and evaluated the valuation methodology applied by the Directors, in
consultation with the AIFM, by reference to the International Private Equity and
Venture Capital Valuation guidelines (IPEV) and the requirements of UK GAAP.
Furthermore, our testing of Level 3 investments included:
Obtaining a reconciliation of the investments that summarised year on year
movements including any drawdowns and distributions in the period;
Checking that the valuations used in the financial statements were consistent with the
Company’s accounting records including the reconciliation of investments;
Checking the accuracy of the valuations recorded by the client to underlying
investment manager valuation reports;
We obtained independent confirmation from underlying investment managers to
confirm ownership and existence of investments as at 30 September 2024;
54 abrdn Diversified Income and Growth plc
Independent Auditors’ Report to the members of abrdn
Diversified Income and Growth plc
Continued
Key audit matter How our audit addressed the key audit matter
investments requires judgement to be
applied by the Directors in considering the
reliability and valuation basis of underlying
investment manager valuation
statements.
We considered the methodology and valuation approach applied by investment
managers to check that it was in line with the requirements of IPEV;
In addition, for certain investments, we engaged our internal valuation experts to
consider whether the year to year movement in valuations were considered to be
appropriate and whether any publicly available evidence contradicted the valuations
recorded.
No material misstatements were identified.
Income from investments
Refer to the Report of the Audit
Committee, the Notes to the Financial
Statements and to the Accounting
Policies.
ISAs (UK) presume there is a risk of fraud in
income recognition because of the
pressure management may feel to
achieve a certain objective. In this
instance, we consider that ‘income’ refers
to all the Company’s income streams,
both revenue and capital (including gains
and losses on investments).
Income from investments comprised
dividend income, fixed interest income,
distributions from Level 3 investments, and
gains and losses on investments.
We focused on the accuracy,
completeness and occurrence of
investment income recognition as
incomplete or inaccurate income could
have a material impact on the Company’s
net asset value and return for the year.
We also focused on the accounting policy
for investment income recognition and
the presentation of investment income in
the Income Statement for compliance
with the requirements of The Association
of Investment Companies Statement of
Recommended Practice (the “AIC SORP”),
as incorrect application could indicate a
misstatement in income recognition.
We assessed the revenue recognition accounting policy applied for compliance with
UK GAAP and the AIC SORP and performed testing to check that income had been
accounted for in accordance with this stated accounting policy.
Dividend Income
We tested the accuracy of dividend receipts by agreeing the dividend rates from
investments to independent market data for all investments for which distribution
information was publicly available.
To test for completeness, we tested that the appropriate dividends had been received
in the year by reference to independent data of dividends for all listed investments
during the year, and no unrecorded dividends were found.
To test the occurrence assertion, we tested that all dividends recorded in the year had
been declared in the market by investment holdings, and we traced a sample of
dividends received to bank statements.
We also tested the allocation and presentation of dividend income between the
revenue and capital return columns of the Income Statement in line with the
requirements set out in the AIC SORP by determining reasons behind dividend
distributions.
No material misstatements were identified.
Fixed Interest income
We tested fixed interest income for a sample of investments by recalculating the
expected coupon interest and amortisation, using the opening and closing portfolios
and coupon rates and maturity dates obtained from independent third-party sources.
No material misstatements were identified.
abrdn Diversified Income and Growth plc 55
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Key audit matter How our audit addressed the key audit matter
Unquoted Limited Partnership income
For a sample of distributions from unlisted investments recorded in the period we
tested the accuracy and occurrence of the amounts by agreeing the amounts to
distribution notices and bank statements.
No material misstatements were identified.
Gains and losses on investments
The gains and losses on investments held at fair value comprise realised and
unrealised gains and losses. We tested the valuation of the Level 3 investments at the
year-end (see above) as part of our work over unrealised gains and losses, together
with testing the reconciliation of opening and closing investments. Additionally, for any
realised gains and losses, we tested a sample of disposal proceeds by agreeing the
proceeds to bank statements and we re-performed the calculation of a sample of
realised gains and losses.
No material misstatements were identified.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the structure of the Company, the accounting processes and
controls, and the industry in which it operates.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk
on the Company's financial statements, and we remained alert when performing our audit procedures for any
indicators of the impact of climate risk. Our procedures did not identify any material impact as a result of climate risk on
the Company’s financial statements.
56 abrdn Diversified Income and Growth plc
Independent Auditors’ Report to the members of abrdn
Diversified Income and Growth plc
Continued
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in
evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall Company materiality £2.03m (2023: £3.4m)
How we determined it approximately 1% of Net Assets.
Rationale for benchmark applied We believe that net assets is the primary measure used by the shareholders in
assessing the performance of the entity, and is a generally accepted auditing
benchmark. This benchmark provides an appropriate and consistent year on year
basis for our audit.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in
determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions
and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2023: 75%) of overall
materiality, amounting to £1.52m (2023: £2.54m) for the Company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of
our normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above
£101,000 (2023: £169,000) as well as misstatements below that amount that, in our view, warranted reporting for
qualitative reasons.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent
otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, 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 audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency
or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement
of the financial statements or a material misstatement of the other information. 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 based on these responsibilities.
With respect to the Strategic Report and Directors’ Report, we also considered whether the disclosures required by the
UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic Report and Directors’ Report
In our opinion, based on our work undertaken in the course of the audit, the information given in the Strategic Report and
Directors’ Report for the year ended 30 September 2024 is consistent with the financial statements and has been
prepared in accordance with applicable legal requirements.
abrdn Diversified Income and Growth plc 57
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
In light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we
did not identify any material misstatements in the Strategic report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance
with the Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements 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. Our additional responsibilities with respect to the corporate
governance statement as other information are described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
corporate governance statement, included within the Statement of Corporate Governance is materially consistent with
the financial statements and our knowledge obtained during the audit, and, except for the matters reported in the
section headed ‘Material uncertainty related to going concern’, we have nothing material to add or draw attention to in
relation to:
· The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
· The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify
emerging risks and an explanation of how these are being managed or mitigated;
· The directors’ statement in the financial statements about whether they considered it appropriate to adopt the
going concern basis of accounting in preparing them, and their identification of any material uncertainties to the
Company’s ability to continue to do so over a period of at least twelve months from the date of approval of the
financial statements;
· The directors’ explanation as to their assessment of the Company’s prospects, the period this assessment covers and
why the period is appropriate; and
· The directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue
in operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures
drawing attention to any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the Company was substantially less in
scope than an audit and only consisted of making inquiries and considering the directors’ process supporting their
statement; checking that the statement is in alignment with the relevant provisions of the UK Corporate Governance
Code; and considering whether the statement is consistent with the financial statements and our knowledge and
understanding of the Company and its environment obtained in the course of the audit.
In addition, 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 that they consider the Annual Report, taken as a whole, is fair, balanced and understandable,
and provides the information necessary for the members to assess the Company's position, performance, business
model and strategy;
· The section of the Annual Report that describes the review of effectiveness of risk management and internal control
systems; and
· The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the
Company’s compliance with the Code does not properly disclose a departure from a relevant provision of the Code
specified under the Listing Rules for review by the auditors.
58 abrdn Diversified Income and Growth plc
Independent Auditors’ Report to the members of abrdn
Diversified Income and Growth plc
Continued
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for the preparation of
the financial statements in accordance with the applicable framework and for being satisfied that they give a true and
fair view. The directors are also responsible for such internal control as they determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
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.
Auditors’ 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 auditors’ 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.
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.
Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with
laws and regulations related to breaches of section 1158 of the Corporation Tax Act 2010 and we considered the extent
to which non-compliance might have a material effect on the financial statements. We also considered those laws and
regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated
management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of
override of controls), and determined that the principal risks were related to posting inappropriate journal entries to
increase revenue (investment income and capital gains) or to increase net asset value, and management bias in
accounting estimates. Audit procedures performed by the engagement team included:
· consideration of known or suspected instances of non-compliance with laws and regulation and fraud
where applicable;
· reviewing relevant meeting minutes, including those of the Board and the Audit Committee;
· assessment of the Company's compliance with the requirements of section 1158 of the Corporation Tax Act 2010;
· challenging assumptions and judgements made by management in their significant accounting estimates, in
particular in relation to the valuation of Level 3 investments;
· identifying and testing journal entries, in particular a sample of manual year end journal entries posted during the
preparation of the financial statements; and
· designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances
of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the
financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In
other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample
is selected.
abrdn Diversified Income and Growth plc 59
Strategic Report Governance Overview General Portfolio Corporate Information 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 auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these
opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or
into whose hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
· we have not obtained all the information and explanations we require for our audit; or
· adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been
received from branches not visited by us; or
· certain disclosures of Directors’ remuneration specified by law are not made; or
· the financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with
the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the members on 26 February 2020 to
audit the financial statements for the year ended 30 September 2020 and subsequent financial periods. The period of
total uninterrupted engagement is 5 years, covering the years ended 30 September 2020 to 30 September 2024.
Shujaat Khan (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Edinburgh
20 January 2025
60 abrdn Diversified Income and Growth plc
Financial
Statements
abrdn Diversified Income and Growth plc 61
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Year ended 30 September 2024 Year ended 30 September 2023
Revenue Capital Total Revenue Capital Total
Note £’000 £’000 £’000 £’000 £’000 £’000
Losses on investments 10 – (16,112) (16,112) – (24,549) (24,549)
Foreign exchange gains – 5,601 5,601 – 13,297 13,297
Income 3 15,638 – 15,638 17,163 – 17,163
Investment management fees 4 (474) (474) (948) (563) (563) (1,126)
Administrative expenses 5 (1,006) (503) (1,509) (1,146) (38) (1,184)
Net return/(loss) before finance costs and taxation 14,158 (11,488) 2,670 15,454 (11,853) 3,601
Finance costs 6 (284) (3,043) (3,327) (524) (524) (1,048)
Net return/(loss) before taxation 13,874 (14,531) (657) 14,930 (12,377) 2,553
Taxation 7 (2,961) (37) (2,998) (1,678) (1,174) (2,852)
Return/(loss) attributable to equity shareholders 10,913 (14,568) (3,655) 13,252 (13,551) (299)
Return/(loss) per Ordinary share (pence) 9 3.62 (4.83) (1.21) 4.35 (4.45) (0.10)
The total column of the Statement of Comprehensive Income is the profit and loss account of the Company. There has been no other
comprehensive income during the year, accordingly, the return/(loss) attributable to equity shareholders is equivalent to the total
comprehensive income/(loss) for the year.
All revenue and capital items in the above statement derive from continuing operations.
The accompanying notes are an integral part of these financial statements.
Statement of Comprehensive Income
62 abrdn Diversified Income and Growth plc
As at As at
30 September 2024 30 September 2023
Note £’000 £’000
Non-current assets
Investments at fair value through profit or loss 10 182,525 339,972
182,525 339,972
Current assets
Other debtors and receivables 11 633 1,549
Derivative financial instruments – 87
Cash and cash equivalents 12 22,300 21,025
22,933 22,661
Creditors: amounts falling due within one year
Derivative financial instruments – (5,702)
Other payables 13 (2,152) (1,667)
(2,152) (7,369)
Net current assets 20,781 15,292
Total assets less current liabilities 203,306 355,264
Non-current liabilities
Creditors: amounts falling due after more than one year
6.25% Bonds 2031 14 – (15,730)
Net assets 203,306 339,534
Capital and reserves
Called up share capital 15 3,238 80,938
Share premium account – 116,556
Capital redemption reserve 114,768 37,043
Special distributable reserve 1,763 –
Capital reserve 16 55,149 69,717
Revenue reserve 28,388 35,280
Total shareholders’ funds 203,306 339,534
Net asset value per Ordinary share (pence) 17 67.48 112.70
The financial statements on pages 61 to 91 were approved by the Board of Directors and authorised for issue on 20 January 2025 and
were signed on its behalf by:
Davina Walter, Chairman
The accompanying notes are an integral part of these financial statements.
Statement of Financial Position
abrdn Diversified Income and Growth plc 63
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
For the year ended 30 September 2024
Ordinary Share Capital Special
Share B share premium redemption distributable Capital Revenue
capital capital account reserve reserve reserve reserve Total
Note £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 October 2023 80,938 – 116,556 37,043 – 69,717 35,280 339,534
Return/(loss) after taxation – – – – – (14,568) 10,913 (3,655)
B shares issued during the year 15 – 114,768 – – – – – 114,768
B shares redeemed during the year 15 – (114,768) – 114,768 (114,768) – – (114,768)
Return of capital to B shareholders 15 – – – – (114,768) – – (114,768)
Cancellation and reduction of
Ordinary shares
15 (77,700) – (116,556) (37,043) 231,299 – – –
Dividends paid 8 – – – – – – (17,805) (17,805)
Balance at 30 September 2024 3,238 – – 114,768 1,763 55,149 28,388 203,306
For the year ended 30 September 2023
Ordinary Share Capital Special
Share B share premium redemption distributable Capital Revenue
capital capital account reserve reserve reserve reserve Total
Note £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 October 2022 (*restated)
A
84,438 – 116,556 33,543 – 89,560 39,261 363,358
Return/(loss) after taxation – – – – – (13,551) 13,252 (299)
Ordinary shares purchased for treasury 15 – – – – – (6,292) – (6,292)
Ordinary shares cancelled from treasury 15 (3,500) – – 3,500 – – – –
Dividends paid 8 – – – – – – (17,233) (17,233)
Balance at 30 September 2023 80,938 – 116,556 37,043 – 69,717 35,280 339,534
A
Restated in the financial statements for the year ended 30 September 2024 to reflect a transfer of £6,914,000 from called up share capital to the capital redemption reserve
following the cancellation of 27,659,068 Ordinary shares of 25p from treasury on 31 March 2021.
The accompanying notes are an integral part of these financial statements.
Statement of Chan
g
es in Equity
64 abrdn Diversified Income and Growth plc
Year ended Year ended
30 September 2024 30 September 2023
Note £’000 £’000
Operating activities
Net return before finance costs and taxation 2,670 3,601
Adjustments for:
Dividend income (3,306) (7,341)
Distribution income (8,935) (6,815)
Fixed interest income (1,074) (2,643)
Treasury bill income (1,140) –
Interest income (1,177) (344)
Other income (6) (20)
Dividends received 3,434 7,349
Distributions received 8,914 6,815
Fixed interest income received 1,652 2,540
Treasury bill income received 1,140 –
Interest received 1,145 294
Other income received 6 20
(Gains)/losses on forward contracts (5,615) 693
Foreign exchange losses 154 88
Losses on investments 16,166 24,549
(Increase)/decrease in other debtors (7) 23
(Decrease)/increase in accruals (482) 204
Corporation tax paid (1,923) (1,110)
Taxation released/(withheld) 120 (550)
Net cash flow from operating activities 11,736 27,353
Investing activities
Purchases of investments (182,809) (102,128)
Sales of investments 324,187 113,246
Net cash flow from investing activities 141,378 11,118
Financing activities
Redemption of B shares (114,768) –
Redemption of 6.25% Bond (18,508) –
Purchase of own shares to treasury – (6,292)
Interest paid (604) (1,012)
Equity dividends paid 8 (17,805) (17,233)
Net cash flow used in financing activities (151,685) (24,537)
Increase in cash and cash equivalents 1,429 13,934
Analysis of changes in cash and cash equivalents during the year
Opening balance 21,025 7,179
Foreign exchange (154) (88)
Increase in cash and cash equivalents as above 1,429 13,934
Closing balance 22,300 21,025
Represented by:
Money market funds 20,516 12,450
Cash at bank and in hand 1,784 8,575
22,300 21,025
The accompanying notes are an integral part of these financial statements.
Statement of Cash Flows
abrdn Diversified Income and Growth plc 65
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
1. Principal activity
The Company is a closed-end investment company, registered in Scotland No SC003721, with its Ordinary shares having a
listing on the London Stock Exchange.
2. Accountin
g
p
olicies
(a) Basis of preparation. The financial statements have been prepared in accordance with Financial Reporting Standard
102 – the Financial Reporting Standard applicable in the UK and Republic of Ireland (“FRS 102”), the Companies Act 2006
and the Association of Investment Companies (‘AIC’) Statement of Recommended Practice ‘Financial Statements of
Investment Trust Companies and Venture Capital Trusts’ (the ‘SORP’) issued in July 2022. They have also been prepared
on a going concern basis and on the assumption that approval as an investment trust will continue to be granted.
The financial statements are presented in sterling (rounded to the nearest £’000), which is the Company’s functional
and presentation currency. The Company’s performance is evaluated and its liquidity is managed in sterling. Therefore
sterling is considered as the currency that most faithfully represents the economic effects of the underlying
transactions, events and conditions.
Going concern. During the year, the shareholders of the Company voted in favour of the Directors’ proposals for a
Managed Wind-Down of the Company. Further to a circular published on 5 December 2024, a General Meeting of the
Company was held on 23 December 2024 at which shareholders approved the adoption of new Articles of Association
which removed the requirement for the Company to hold an annual continuation vote.
The Directors are mindful of the principal risks and uncertainties disclosed on pages 9 and 10 and have reviewed
forecasts detailing revenue, liabilities and timing of capital commitments. The Directors are satisfied that: the Company
is able to meet all of its liabilities from its assets, including its ongoing charges, so possesses sufficient resources to
continue in operational existence for the foreseeable future and at least 12 months from the date of approval of this
Annual Report; the Company is financially sound; and the Company’s key third party service providers had in place
appropriate business continuity plans.
Therefore, the financial statements of the Company have been prepared on a going concern basis. This conclusion is
consistent with the Company’s Viability Statement on pages 11 and 12. The timing, however, of the realisation of the
Company’s private markets investments, as part of its Managed Wind Down, remains uncertain.
In accordance with the SORP guidance, the Directors note that these conditions indicate the existence of a material
uncertainty which may cast significant doubt about the Company’s ability to continue as a going concern. The
Company’s financial statements do not include the adjustments that would result if the Company was unable to
continue as a going concern, such as a liquidation provision or potential adjustments to carrying values of investments
relating to their realisation in due course.
Significant accounting judgements, estimates and assumptions. The preparation of financial statements requires the
use of certain significant accounting judgements, estimates and assumptions which require Directors to exercise
judgement in the process of applying the accounting policies. The areas where judgements, estimates and assumptions
have the most significant effect on the amounts recognised in the financial statements are the determination of the fair
value of unlisted investments, as disclosed in note 2(e).
(b) Income. Dividend income receivable on equity shares is recognised on the ex-dividend date. Dividend income on equity
shares where no ex-dividend date is quoted is brought into account when the Company’s right to receive payment is
established. Where the Company has elected to receive dividends in the form of additional shares rather than in cash
the amount of the cash dividend foregone is recognised as income. Special dividends are credited to capital or revenue
according to their circumstances. Dividend income is presented gross of any non-recoverable withholding taxes, which
are disclosed separately in the Statement of Comprehensive Income.
Notes to the Financial Statements
For the year ended 30 September 2024
66 abrdn Diversified Income and Growth plc
Distributions of non-recallable capital received from unlisted holdings during their investment phase, which have been
funded through profits being generated, are allocated to revenue in alignment with the nature of the underlying source
of income and in accordance with guidance in the AIC SORP.
The fixed returns on debt instruments are recognised using the time apportioned accruals basis and the discount or
premium on acquisition is amortised or accreted on a straight line basis. Interest income is accounted for on an accruals
basis. Underwriting commission is recognised when the issue underwritten closes.
(c) Expenses. All expenses are recognised on an accruals basis. Expenses are charged through the revenue column of the
Statement of Comprehensive Income except as follows:
– expenses which are incidental to the acquisition or disposal of an investment are treated as capital and separately
identified and disclosed in note 10;
– the Company charges 50% of investment management fees and finance costs to capital, in accordance with the
Board’s view at that time of the expected long term return in the form of capital gains and income respectively from the
investment portfolio of the Company. With effect from 1 October 2024, management fees will be charged 90% to
capital and 10% to revenue, reflecting the currently anticipated split of future investment returns during the Managed
Wind-Down of the Company.
In accordance with the investment management agreement, where applicable, an amount equivalent to the
management fee received by the Manager on the underlying holding which is managed by the Group in the normal
course of business, is either removed from or offset against the management fee payable by the Company to ensure
that no double counting occurs.
(d) Taxation. The tax expense represents the sum of tax currently payable and deferred tax. Any tax payable is based on
the taxable profit for the year. Taxable profit differs from net profit as reported in the Statement of Comprehensive
Income because it excludes items of income or expense that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates
that were applicable at the Statement of Financial Position date.
Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the
Statement of Financial Position date, where transactions or events that result in an obligation to pay more tax in the
future or right to pay less tax in the future have occurred at the Statement of Financial Position date. This is subject to
deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from
which the future reversal of the underlying timing differences can be deducted. Timing differences are differences
arising between the Company’s taxable profits and its results as stated in the financial statements which are capable of
reversal in one or more subsequent periods. Deferred tax is measured on a non-discounted basis at the tax rates that
are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws
enacted or substantively enacted at the Statement of Financial Position date.
The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue within
the Statement of Comprehensive Income on the same basis as the particular item to which it relates using the
Company’s effective rate of tax for the year. The SORP recommends that the benefit of that tax relief should be
allocated to capital and a corresponding charge made to revenue. The Company does not apply the marginal method
of allocation of tax relief as any allocation of tax relief between capital and revenue would have no impact on
shareholders’ funds. Had this allocation been made, the charge to revenue and corresponding credit to capital for the
year ended 30 September 2024 would have been £190,000 (2023 – £1,122,000).
Notes to the Financial Statements
Continued
abrdn Diversified Income and Growth plc 67
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
(e) Investments. The Company has chosen to apply the recognition and measurement provisions of IAS 39 Financial
Instruments: Recognition and Measurement and investments have been designated upon initial recognition at fair value
through profit or loss. This is done because all investments are considered to form part of a group of financial assets
which is evaluated on a fair value basis, in accordance with the Company’s documented investment strategy, and
information about the grouping is provided internally on that basis.
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 valued at fair value through profit or loss. For listed investments,
this is deemed to be bid market prices or closing prices for SETS (London Stock Exchange’s electronic trading service)
stocks sourced from the London Stock Exchange.
Unlisted investments, including those in Limited Partnerships (‘LPs’) are valued by the Directors at fair value using
International Private Equity and Venture Capital Valuation Guidelines – Edition 2022.
The Company’s investments in LPs are subject to the terms and conditions of the respective investee’s offering
documentation. The investments in LPs are valued based on the reported Net Asset Value (‘NAV’) of such assets as
determined by the administrator or General Partner of the LP and adjusted by the Directors in consultation with the
Manager to take account of concerns such as liquidity so as to ensure that investments held at fair value through profit
or loss are carried at fair value. The reported NAV is net of applicable fees and expenses including carried interest
amounts of the investees and the underlying investments held by each LP are accounted for, as defined in the
respective investee’s offering documentation. While the underlying fund managers may utilise various model-based
approaches to value their investment portfolios, on which the Company’s valuations are based, no such models are
used directly in the preparation of fair values of the investments. The NAV of LPs reported by the administrators may
subsequently be adjusted when such results are subject to audit and audit adjustments may be material to the
Company.
Gains and losses arising from changes in fair value are treated in net profit or loss for the period as a capital item in the
Statement of Comprehensive Income and are ultimately recognised in the capital reserve.
(f) 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 rate method. The finance costs of such borrowings are
accounted for on an accruals basis using the effective interest rate method and have been charged 50% to revenue
and 50% to capital in the Statement of Comprehensive Income up to 30 September 2024 to reflect the Company’s
investment policy and prospective income and capital growth. With effect from 1 October 2024, management fees will
be charged 90% to capital and 10% to revenue, reflecting the currently anticipated split of future investment returns
during the Managed Wind-Down of the Company.
(g) Nature and purpose of reserves
Called up share capital. The Ordinary and B 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. This reserve is not distributable.
Share premium account. The balance classified as share premium includes the premium above nominal value from the
proceeds on issue of any equity share capital comprising Ordinary shares. This reserve was cancelled during the year.
Capital redemption reserve. The capital redemption reserve is used to record the amount equivalent to the nominal
value of any of the Company’s Ordinary and B shares purchased and cancelled in order to maintain the Company’s
capital. This reserve is not distributable.
68 abrdn Diversified Income and Growth plc
Special distributable reserve. On 7 June 2024 the Court approved the creation of a Special distributable reserve by way
of cancelling the £116,556,000 share premium account, the £37,043,000 capital redemption reserve and reducing the
nominal value of each of its ordinary shares from 25p to 1p. This reserve is available for the Company to return capital to
shareholders and the redemption of B shares.
Capital reserve. This reserve reflects any gains or losses on investments realised in the period along with any movement
in the fair value of investments held that have been recognised in the Statement of Comprehensive Income. These
include gains and losses from foreign currency exchange differences. Additionally, expenses, including finance costs,
are charged to this reserve in accordance with (c) and (f) above. The capital reserve is distributable to the extent
unrealised gains/losses arising from unlisted investments are excluded.
Revenue reserve. This reserve reflects all income and costs which are recognised in the revenue column of the
Statement of Comprehensive Income. The revenue reserve represents the amount of the Company’s reserves
distributable by way of dividend.
When making a distribution to shareholders, the Directors determine profits available for distribution by reference to
‘Guidance on realised and distributable profits under the Companies Act 2006’ issued by the Institute of Chartered
Accountants in England and Wales and the Institute of Chartered Accountants of Scotland in April 2017. The availability
of distributable reserves in the Company is dependent on those dividends meeting the definition of qualifying
consideration within the guidance and on available cash resources of the company and other accessible sources of
funds. The distributable reserves are therefore subject to any future restrictions or limitations at the time such
distribution is made.
(h) Valuation of derivative financial instruments. Derivatives are classified at fair value through profit or loss – held for trading.
Derivatives are initially accounted and measured at fair value on the date the derivative contract is entered into and
subsequently measured at fair value. The gain or loss on re-measurement is taken to the Statement of Comprehensive
Income. The sources of the return under the derivative contract are allocated to the revenue and capital column of the
Statement of Comprehensive Income in alignment with the nature of the underlying source of income and in
accordance with guidance in the AIC SORP.
(i) Dividends payable. 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.
(j) 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.
(k) 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.
(l) Cash and cash equivalents. Cash comprises cash at bank. Cash equivalents are short-term, highly liquid investments that
are readily convertible to known amounts of cash and that are subject to insignificant risk of change in value.
(m) Segmental reporting. The Directors are of the opinion that the Company is engaged in a single segment of business
activity, being investment business. Consequently, no business segmental analysis is provided.
Notes to the Financial Statements
Continued
abrdn Diversified Income and Growth plc 69
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
3. Income
2024 2023
£’000 £’000
Income from investments
UK listed dividends 436 1,988
Overseas listed dividends 2,870 5,353
Unquoted Limited Partnership income 8,935 6,815
Treasury bill income 1,140 –
Fixed interest income 1,074 2,643
14,455 16,799
Other income
Deposit interest 108 216
Interest from money market funds 1,069 128
Other income 6 20
1,183 364
Total income 15,638 17,163
4. Investment management fees
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Investment management fee 474 474 948 563 563 1,126
The investment management fee has been levied by abrdn Fund Managers Limited (“aFML”) at the following tiered levels:
- 0.50% per annum in respect of the first £300 million of the net asset value (with the 6.25% Bonds 2031 at fair value); and
- 0.45% per annum in respect of the balance of the net asset value (with the 6.25% Bonds 2031 at fair value).
The Company also receives rebates in respect of underlying investments in other funds managed by the Group (where an
investment management fee is charged by the Group on that fund) in the normal course of business to ensure that no double
counting occurs. Any investments made in funds managed by the Manager which themselves invest directly into alternative
investments including, but not limited to, infrastructure and property are charged at the Manager’s lowest institutional fee rate.
To avoid double charging, such investments are excluded from the overall management fee calculation.
At the year end, an amount of £90,000 (2023 - £179,000) was outstanding in respect of management fees due by
the Company.
70 abrdn Diversified Income and Growth plc
5. Administrative expenses
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Directors’ remuneration 169 - 169 176 - 176
Custody fees 25 - 25 28 - 28
Depositary fees 42 - 42 43 - 43
Shareholders’ services
A
141 - 141 388 - 388
Registrar’s fees 63 - 63 63 - 63
Transaction costs - 3 3 - 38 38
Legal and professional fees 126 500 626 109 - 109
Printing and postage 55 - 55 54 - 54
Irrecoverable VAT 137 - 137 38 - 38
Auditor’s remuneration:
- statutory audit 131 - 131 125 - 125
- other non-audit services
report in respect of Bond covenant compliance - - - 5 - 5
review of Half-yearly Report - - - 12 - 12
Other expenses 117 - 117 105 - 105
1,006 503 1,509 1,146 38 1,184
A
Includes registration, savings scheme and other wrapper administration and promotional expenses, of which £141,000 (2023 - £388,000) was payable to aFML to cover
promotional activities during the year. There was £121,000 (2023 - £337,000) due to aFML in respect of these promotional activities at the year end.
6. Finance costs
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
6.25% Bonds 2031 282 282 564 521 521 1,042
Loss on early repayment (note 14) – 2,759 2,759 – – –
Bank interest 2 2 4 3 3 6
284 3,043 3,327 524 524 1,048
Notes to the Financial Statements
Continued
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7. Taxation
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
(a) Analysis of charge for the year
Current UK tax 2,983 – 2,983 1,656 – 1,656
Double taxation relief (10) – (10) (32) – (32)
Overseas tax suffered (12) 37 25 54 7 61
Current tax charge for the year 2,961 37 2,998 1,678 7 1,685
Movement in deferred tax asset – – – – 1,167 1,167
Total tax charge for the year 2,961 37 2,998 1,678 1,174 2,852
(b) Factors affecting the tax charge for the year. The tax assessed for the year is lower than the standard rate of corporation
tax of 25% (2023 – effective rate 22%). The differences are explained as follows:
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Net return/(loss) before taxation 13,874 (14,531) (657) 14,930 (12,377) 2,553
Net return/(loss) before taxation multiplied by
the standard rate of corporation tax of 25.0%
(2023 – 22.0%)
3,469 (3,633) (164) 3,285 (2,723) 562
Effects of:
Non taxable losses on investments held at fair
value through profit or loss
– 4,028 4,028 – 5,401 5,401
Exchange gains not taxable – (1,400) (1,400) – (2,926) (2,926)
Non taxable UK dividend income (147) – (147) (157) – (157)
Non taxable overseas dividend income (149) – (149) (350) – (350)
Disallowable expenses – 815 815 – – –
Overseas tax suffered (12) 37 25 54 7 61
Double taxation relief (10) – (10) (32) – (32)
Utilisation of excess management expenses – – – – (874) (874)
Effect of not applying the marginal method of
allocation of tax relief
(190) 190 – (1,122) 1,122 –
Movement in deferred tax asset – – – – 1,167 1,167
2,961 37 2,998 1,678 1,174 2,852
72 abrdn Diversified Income and Growth plc
(c) Factors that may affect future tax charges. At the year end, after offset against income taxable on receipt, there is a
potential deferred tax asset of £nil (2023 – £nil) in relation to surplus management expenses. It is unlikely that the fund will
generate sufficient taxable profits in the future to utilise these amounts and therefore no deferred tax asset has been
recognised.
8. Ordinary dividends on equity shares
2024 2023
£’000 £’000
Third interim dividend for 2023 – 1.42p (2022 – 1.40p) 4,278 4,319
Special dividend for 2023 – 1.65p (2022 -nil) 4,971 –
Fourth interim dividend for 2023 – 1.42p (2022 – 1.40p) 4,278 4,314
First interim dividend for 2024 – 1.42p (2023 – 1.42p) 4,278 4,322
Second interim dividend for 2024 – 1.95p (2023 – 1.42p) – 4,278
17,805 17,233
Set out below are the total dividends paid and proposed in respect of the financial year, which is the basis on which the
requirements of Sections 1158 and 1159 of the Corporation Tax Act 2010 are considered. The revenue available for
distribution by way of dividend for the year is £10,913,000 (2023 – £13,252,000).
2024 2023
£’000 £’000
First interim dividend for 2024 – 1.42p (2023 – 1.42p) 4,278 4,322
Second interim dividend for 2024 – 1.95p (2023 – 1.42p) 5,875 4,278
Third interim dividend for 2024 – n/a (2023 – 1.42p) – 4,278
Fourth interim dividend for 2024 – n/a (2023 – 1.42p) – 4,278
Special dividend for 2024 – n/a (2023 -1.65p) – 4,971
10,153 22,127
Notes to the Financial Statements
Continued
abrdn Diversified Income and Growth plc 73
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9. Return per Ordinary share
2024 2023
p p
Revenue return 3.62 4.35
Capital return (4.83) (4.45)
Total loss (1.21) (0.10)
The figures above are based on the following:
2024 2023
£’000 £’000
Revenue return 10,913 13,252
Capital return (14,568) (13,551)
Total loss (3,655) (299)
Weighted average number of shares in issue
A
301,265,952 304,340,151
A
Calculated excluding shares held in treasury.
10. Investments
2024 2023
£’000 £’000
Held at fair value through profit or loss
Opening valuation 339,972 373,732
Opening investment holdings gains (10,772) (31,812)
Opening book cost 329,200 341,920
Movements during the year:
Purchases at cost 182,809 102,128
Sales – proceeds (324,162) (111,509)
Sales – losses (8,195) (3,509)
Dilution of fixed income book cost 18 170
Closing book cost 179,670 329,200
Closing investment holdings gains 2,855 10,772
Closing valuation of investments 182,525 339,972
74 abrdn Diversified Income and Growth plc
2024 2023
The portfolio valuation
A
£’000 £’000
UK equities – 91,499
Overseas equities 79 18,125
Fixed interest – 29,619
Loan investments – 2,279
Unlisted holdings 182,446 198,450
182,525 339,972
A
The portfolio valuation includes pooled investment vehicles and collective investment schemes.
2024 2023
Losses on investments £’000 £’000
Realised losses (8,195) (3,509)
Net movement in investment holdings losses (7,917) (21,040)
(16,112) (24,549)
The Company received £324,162,000 (2023 – £111,509,000) from investments sold in the period. The book cost of these
investments when they were purchased was £332,357,000 (2023 – £115,018,000). These investments have been revalued
over time and until they were sold any unrealised gains/losses were included in the fair value of investments.
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 losses on investments in the
Statement of Comprehensive Income. The total costs were as follows:
2024 2023
£’000 £’000
Purchases 6 68
Sales 69 43
75 111
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.
Substantial holdings. At the year end the Company held more than 3% of a share class in the following investees:
% of
Investee Class Class
Aberdeen Global Infrastructure Partners II AUD 11
Aberdeen European Residential Opportunities Fund B 84
Aberdeen Property Secondaries Partners II A-1 21
Aberdeen Standard Global Private Markets Fund GBP Acc 6
Andean Social Infrastructure Fund I USD 13
Bonaccord Capital Partners I-A USD 7
Cheyne Social Property Impact Fund GBP 3
Maj Equity Fund IV DKK 3
Mount Row Credit Fund III A9 100
Patria Secondaries Opportunities Fund IV USD 9
SL Capital Infrastructure II EUR 4
76 abrdn Diversified Income and Growth plc
Significant holdings disclosure requirements – AIC SORP
Details are disclosed below in accordance with the requirements of paragraph 82 of the AIC Statement of Recommended
Practice ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’ (updated in July 2022) in relation to
unlisted investments included in the ten largest holdings disclosed on page 28. As required, this disclosure includes turnover,
pre-tax profits and net assets attributable to investors as reported within the most recently audited financial statements of the
investee companies, where possible.
Income
recognised
Proportion from Net assets
Latest of capital Book Market holding in Pre-tax attributable to
As at 30 September 2024 Financial owned cost value the period Turnover profit/(loss) shareholders
Name Statements % £’000 £’000 £’000 (‘000) (‘000) (‘000)
SL Capital Infrastructure II n/a 4 25,374 27,792 Information not publicly available
Aberdeen Standard Global
Private Markets Fund
n/a 6 15,044 20,730 Information not publicly available
Bonaccord Capital Partners
I-A
n/a 7 13,584 18,130 Information not publicly available
Burford Opportunity Fund n/a 8 13,789 16,120 Information not publicly available
Patria Secondaries
Opportunities Fund IV
n/a 9 10,734 16,057 Information not publicly available
Andean Social Infrastructure
Fund I
n/a 13 13,459 15,821 Information not publicly available
Healthcare Royalty Partners
IV
n/a 2 17,187 12,263 Information not publicly available
Mount Row Credit Fund II n/a 5 9,943 9,393 Information not publicly available
Aberdeen Property
Secondaries Partners II
n/a 21 8,783 7,840 Information not publicly available
TrueNoord Co-Investment n/a 2 4,550 7,136 Information not publicly available
Notes to the Financial Statements
Continued
abrdn Diversified Income and Growth plc 77
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Income
recognised
Proportion from Net assets
Latest of capital Book Market holding in Pre-tax attributable to
As at 30 September 2023 Financial owned cost value the period Turnover profit/(loss) shareholders
Name Statements % £’000 £’000 £’000 (‘000) (‘000) (‘000)
SL Capital Infrastructure II n/a 5 22,386 27,419 Information not publicly available
Aberdeen Standard Global
Private Markets Fund
n/a 6 15,044 19,934 Information not publicly available
Burford Opportunity Fund n/a 8 13,818 17,272 Information not publicly available
Healthcare Royalty Partners
IV
n/a 2 18,397 16,235 Information not publicly available
Bonaccord Capital Partners
I-A
n/a 7 11,823 16,091 Information not publicly available
Andean Social Infrastructure
Fund I
n/a 13 14,311 15,016 Information not publicly available
Patria Secondaries
Opportunities Fund IV
n/a 6 8,080 12,940 Information not publicly available
11. Other debtors and receivables
2024 2023
£’000 £’000
Amounts due from brokers – 62
Prepayments and accrued income 163 903
Taxation recoverable 470 584
633 1,549
12. Cash and cash equivalents
2024 2023
£’000 £’000
Cash at bank and in hand 1,784 8,575
Money market funds 20,516 12,450
22,300 21,025
78 abrdn Diversified Income and Growth plc
13. Other payables
2024 2023
£’000 £’000
Interest on 6.25% Bonds 2031 – 55
Corporation tax payable 1,800 756
Other payables 352 856
2,152 1,667
14. Creditors: amounts falling due after more than one year
2024 2023
£’000 £’000
6.25% Bonds 2031
A
Balance at beginning of year 15,730 15,694
Amortisation of discount and issue expenses 19 36
Loss on early repayment 2,759 –
Repayment (18,508) –
Balance at end of year – 15,730
A
At the prior year end the fair value of the 6.25% Bonds using the last available quoted offer price from the London Stock Exchange as at 30 September 2023 was
99.8297p, a total of £16,069,000.
On 9 April 2024, the 6.25% Bonds were repaid early at a price of 114.983%, resulting in a total cost of £18,587,000, including
accrued interest of £79,000 thereon.
At the year end the Company had in issue £nil (2023 – £16,096,000) Bonds 2031 which were issued at 99.343%. The Bonds have
been accounted for in accordance with FRS 102, which require any discount or issue costs to be amortised over the life of the
Bonds. The Bonds were secured by a floating charge over all of the assets of the Company.
Under the covenants relating to the Bonds, the Company is required to ensure that, at all times, the aggregate principal amount
outstanding in respect of monies borrowed by the Company does not exceed an amount equal to its share capital and
reserves. All covenants were met during the year.
Notes to the Financial Statements
Continued
abrdn Diversified Income and Growth plc 79
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15. Called up share capital
Ordinary Treasury B Total
shares shares shares shares
(number) (number) (number) (number) £’000
Allotted, called up and fully paid
Ordinary shares of 25p each
Ordinary shares of 25p each at 1 October
2023
301,265,952 22,485,854 – 323,751,806 80,938
B shares issued during the year – – 11,476,796,243 11,476,796,243 114,768
B shares redeemed during the year – – (11,476,796,243) (11,476,796,243) (114,768)
Reduction in nominal value of shares from 25p
to 1p
– – – – (77,700)
Ordinary shares of 1p at 30 September 2024 301,265,952 22,485,854 – 323,751,806 3,238
On 7 June 2024, the Company received Court approval for a reduction in the nominal value of its ordinary shares from
25p to 1p.
On 5 July 2024, the Company returned capital to shareholders by way of a bonus issue of 800 B shares per 21 ordinary
shares. The B shares, held by Ordinary shareholders, were issued and immediately redeemed at 1p per B share at a cost
of £114,768,000.
During the year no ordinary shares were purchased (2023 – 7,181,362 to be held in treasury at a cost of £6,292,000).
There were no Ordinary shares of 25p issued from treasury during the year (2023 – nil).
16. Capital reserve
2024 2023
£’000 £’000
At 1 October 69,717 89,560
Movement in investment holding gains (7,917) (21,040)
Losses on realisation of investments at fair value (8,195) (3,509)
Foreign exchange gains 5,601 13,297
Transaction and other costs (503) (38)
Finance costs (3,043) (524)
Purchase of own shares to treasury – (6,292)
Investment management fees (474) (563)
Overseas tax suffered (37) (7)
Deferred tax – (1,167)
At 30 September 55,149 69,717
80 abrdn Diversified Income and Growth plc
17. Net asset value per Ordinary share
The net asset value per Ordinary share and the net asset value attributable to the Ordinary shares at the year end were as
follows:
Debt at par 2024 2023
Net asset value attributable (£’000) 203,306 339,534
Number of Ordinary shares in issue excluding treasury (note 15) 301,265,952 301,265,952
Net asset value per share (p) 67.48 112.70
Debt at fair value £’000 £’000
Net asset value attributable n/a 339,534
Add: Amortised cost of 6.25% Bonds 2031 n/a 15,730
Less: Market value of 6.25% Bonds 2031 n/a (16,069)
n/a 339,195
Number of Ordinary shares in issue excluding treasury (note 15) 301,265,952 301,265,952
Net asset value per share (p) n/a 112.59
18. Financial instruments
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, other than derivatives, comprise securities
and other investments, cash balances, liquid resources, 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 forward foreign currency contracts, futures and options, subject to
Board approval, for the purpose of enhancing portfolio returns and for hedging purposes in a manner consistent with the
Company’s broader investment policy.
As at 30 September 2024 there were no open positions in derivatives transactions (2023 – 18).
Risk management framework. The directors of abrdn Fund Managers Limited (‘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 abrdn plc (the ‘Group’), which provides a variety of services and support to aFML in the
conduct of its business activities, including the oversight of the risk management framework for the Company. aFML has
delegated the day to day administration of the investment policy to abrdn Investments 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.
Notes to the Financial Statements
Continued
abrdn Diversified Income and Growth plc 81
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The Group’s Internal Audit Department is independent of the Risk Division and reports directly to the Audit Committee of the
Group’s Board of Directors and to the Group’s Chief Executive Officer. The Internal Audit Department is responsible for
providing an independent assessment of the Group’s control environment.
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 Officer 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 corporate governance structure is supported by several committees to assist the board of directors of aFML, 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 in the committees’ terms of reference.
Risk management. The main risks the Company faces from these financial instruments are (i) market risk (comprising interest
rate, foreign currency and other price risk), (ii) liquidity risk and (iii) credit risk.
In order to mitigate risk, the investment strategy is to select investments for their fundamental value. Asset selection is therefore
based on disciplined accounting, market and sector analysis. 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 asset class. The Investment
Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to
consider investment strategy. Further information on the progress made with the Managed Wind-Down of the Company may
be found in the Chairman’s Statement on pages 5 and 6 and in the Investment Manager’s Report on pages 17 to 19.
The Board has agreed the parameters for net cash, which was –11% of net assets as at 30 September 2024 (2023 – net cash of
-1.6%). The Manager’s policies for managing these risks are summarised below and have been applied throughout the current
and previous year. The numerical disclosures in the tables listed below exclude short-term debtors and creditors.
Market risk. The Company’s investment portfolio is exposed to market price fluctuations, which are monitored by the Manager
in pursuance of the revised investment objective and investment objective as set out on page 7. Adherence to investment
guidelines and to investment and borrowing powers set out in the management agreement mitigates the risk of exposure to
any particular security or issuer. Further information on the investment portfolio is set out in the Investment Manager’s Report on
pages 21 to 32.
Market price risk arises mainly from uncertainty about future prices of financial instruments used in the Company’s
operations. It represents the potential loss the Company might suffer through holding market positions as a consequence of
price movements.
Interest rate risk. Interest rate movements may affect:
– the level of income receivable on cash deposits; and
– the fair value of any investments in fixed interest rate securities.
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.
82 abrdn Diversified Income and Growth plc
The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a
regular basis. Interest rate risk is the risk of movements in the value of financial instruments as a result of fluctuations in
interest rates.
Financial assets. The interest rate risk of the portfolio of financial assets at the reporting date was as follows:
2024 2023
Within More than Within More than
1 year 1 year Total 1 year 1 year Total
£’000 £’000 £’000 £’000 £’000 £’000
Exposure to fixed interest rates
Fixed interest investments – – – 3,677 25,942 29,619
Exposure to floating interest rates
Loan investments
A
– – – – 2,279 2,279
Cash and cash equivalents 22,300 – 22,300 21,025 – 21,025
22,300 – 22,300 24,702 28,221 52,923
A
Variable distributions received from investment holdings, which have an underlying portfolio of fixed interest securities.
Financial liabilities. The Company has no borrowings following the early repayment of the 6.25% Bond during the year (2023 –
held at amortised cost of £15,730,000 and a fair value of £16,069,000).
Interest rate sensitivity. A sensitivity analysis demonstrates the sensitivity of the Company’s results for the year to a reasonably
possible change in interest rates, with all other variables held constant.
The sensitivity of the return/(loss) attributable to equity shareholders for the year is the effect of the assumed change in interest
rates on:
– the net interest income for the year, based on the floating rate financial assets held at the Statement of Financial Position date;
and
– changes in fair value of investments for the year, based on revaluing fixed rate financial assets and liabilities at the Statement
of Financial Position date.
If interest rates had been 50 basis points higher or lower and all other variables were held constant, the Company’s net interest
for the year ended 30 September 2024 would increase/decrease by £112,000 (2023 – increase/decrease £105,000). This is
attributable to the Company’s exposure to interest rates on its floating rate cash balances at 30 September 2024.
The capital return would decrease/increase by £nil (2023 – increase/decrease by £2,236,000) using VaR (“Value at Risk”)
analysis based on 100 observations of monthly VaR computations of fixed interest portfolio positions at each year end
(2023 – none).
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 foreign 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.
Notes to the Financial Statements
Continued
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Management of the risk. The revenue account is subject to currency fluctuations arising on dividends receivable in foreign
currencies and, indirectly, due to the impact of foreign exchange rates upon the profits of investee companies. The Company
may enter into derivative transactions, in the form of forward foreign currency contracts, to ensure that exposure to foreign
denominated investments and cashflows is appropriately hedged.
Foreign currency risk exposure by currency of denomination excluding other debtors and receivables and other payables
falling due within one year:
30 September 2024 30 September 2023
Net Total Net Total
monetary currency monetary currency
Investments items exposure Investments items exposure
£’000 £’000 £’000 £’000 £’000 £’000
US Dollar 97,877 898 98,775 117,117 (3,089) 114,028
Euro 40,201 13 40,214 53,472 (459) 53,013
Other 4,369 63 4,432 41,008 (596) 40,412
142,447 974 143,421 211,597 (4,144) 207,453
Foreign currency sensitivity. The following table details the impact on the Company’s net assets to a 20% decrease (in the
context of a 20% increase the figures below should all be read as negative) in sterling against the foreign currencies in which
the Company has exposure. The sensitivity analysis includes foreign currency denominated monetary items and adjusts their
translation at the period end for a 20% change in foreign currency rates. This sensitivity excludes forward foreign currency
contracts entered into for hedging short term cash flows.
2024 2023
£’000 £’000
US Dollar 19,755 22,806
Euro 8,043 10,603
Other 886 8,082
28,684 41,491
84 abrdn Diversified Income and Growth plc
Forward foreign currency contracts. There were no forward foreign currency contracts outstanding at the Statement of
Financial Position date:
Unrealised
gain/(loss)
30 September
Buy Sell Settlement Amount Contracted 2024
Date of contract Currency Currency date ‘000 rate £’000
N/A N/A N/A N/A N/A N/A N/A
Unrealised
gain/(loss)
30 September
Buy Sell Settlement Amount Contracted 2023
Date of contract Currency Currency date ‘000 rate £’000
31 August 2023 JPY GBP 7 December 2023 4,920 180.2114 53
11 September 2023 USD GBP 7 December 2023 837 1.2211 21
15 September 2023 USD GBP 7 December 2023 617 1.2211 12
25 September 2023 GBP CAD 7 December 2023 528 1.6492 1
25 September 2023 GBP EUR 7 December 2023 205 1.1498 –
87
31 August 2023 CHF GBP 7 December 2023 1,895 1.1088 (1)
31 August 2023 GBP AUD 7 December 2023 11,285 1.8876 (383)
31 August 2023 GBP CAD 7 December 2023 8,270 1.6492 (332)
31 August 2023 GBP EUR 7 December 2023 56,882 1.1498 (549)
31 August 2023 GBP NOK 7 December 2023 5,222 12.9686 (193)
31 August 2023 GBP NZD 7 December 2023 5,462 2.0322 (254)
31 August 2023 GBP SEK 7 December 2023 5,463 13.2251 (213)
31 August 2023 GBP USD 7 December 2023 97,334 1.2211 (3,733)
31 August 2023 GBP USD 7 December 2023 284 1.2211 (11)
1 September 2023 GBP USD 7 December 2023 389 1.2211 (15)
13 September 2023 GBP CAD 7 December 2023 180 1.6492 (4)
13 September 2023 GBP EUR 7 December 2023 225 1.1498 (1)
19 September 2023 GBP USD 7 December 2023 945 1.2211 (13)
(5,702)
Other price risk. Other price risks (ie changes in market prices other than those arising from interest rate or currency risk) may
affect the value of investments.
Management of the risk. The Company’s investment objective is to conduct an orderly realisation of its assets in a manner that
seeks to optimise the value of its investments whilst progressively returning cash to shareholders in a timely manner. Full details
of the revised investment policy may be found on page 6.
Notes to the Financial Statements
Continued
abrdn Diversified Income and Growth plc 85
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Other price risk sensitivity. If market prices at the reporting date had been 10% higher or lower on investments held at fair value
while all other variables remained constant, the return attributable to Ordinary shareholders and equity for the year ended 30
September 2024 would have increased/decreased by £18,253,000 (2023 – £30,807,000).
Liquidity risk. This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.
Management of the risk. During the year, the Company repaid the outstanding balance of its 6.25% Bonds 2031 in issue,
however the Company may continue to use gearing, in the form of borrowings (including secured bonds), during the managed
wind-down process.
19. 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 levels:
Level 1: inputs are quoted prices (unadjusted) in active markets 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 for the assets or liabilities, either directly (ie
as prices) or indirectly (ie derived from prices).
Level 3: inputs are unobservable (ie for which market data is unavailable) for the asset or liability.
The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the
basis of the lowest level input that is significant to the fair value measurement. For this purpose, the significance of an input is
assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require
significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement.
Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering
factors specific to the asset or liability.
86 abrdn Diversified Income and Growth plc
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 30 September 2024 £’000 £’000 £’000 £’000
Financial assets at fair value through profit or loss
Equity investments 79 – 182,446 182,525
Net fair value 79 – 182,446 182,525
Level 1 Level 2 Level 3 Total
As at 30 September 2023 £’000 £’000 £’000 £’000
Financial assets/(liabilities) at fair value through profit or loss
Equity investments 90,332 19,292 198,450 308,074
Loan investments – 2,279 – 2,279
Fixed interest instruments – 29,619 – 29,619
Forward currency contracts – financial assets – 87 – 87
Forward currency contracts – financial liabilities – (5,702) – (5,702)
Net fair value 90,332 45,575 198,450 334,357
Year ended Year ended
30 September 2024 30 September 2023
Level 3 Financial assets at fair value through profit or loss £’000 £’000
Opening fair value 198,450 209,065
Purchases including calls (at cost) 11,210 26,083
Disposals and return of capital (9,281) (26,368)
Total gains or losses included in losses on investments in the Statement of
Comprehensive Income:
– assets disposed of during the year 1,233 8,253
– assets held at the end of the year (19,166) (18,583)
Closing balance 182,446 198,450
Notes to the Financial Statements
Continued
abrdn Diversified Income and Growth plc 87
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
The fair value of Level 3 financial assets has been determined by reference to primary valuation techniques described in note
2(e) of these financial statements and included within other price sensitivity within note 18. The Level 3 equity investments
comprise the following:
Year ended Year ended
30 September 2024 30 September 2023
£’000 £’000
Aberdeen European Residential Opportunities Fund 2,556 7,524
Aberdeen Global Infrastructure Partners II (AUD) 2,250 4,541
Aberdeen Property Secondaries Partners II 7,840 9,385
Aberdeen Standard Global Private Markets Fund 20,730 19,934
Andean Social Infrastructure Fund I 15,821 15,016
ASI HARK III 4,109 6,042
BlackRock Renewable Income – UK 6,657 8,199
Bonaccord Capital Partners I-A 18,130 16,091
Burford Opportunity Fund 16,120 17,272
Cheyne Social Property Impact Fund 3,299 3,299
Dover Street VII 4 20
HarbourVest International Private Equity V 5 7
HarbourVest International Private Equity VI 1,240 1,678
HarbourVest VIII Buyout Fund 23 160
HarbourVest VIII Venture Fund 104 123
Healthcare Royalty Partners IV 12,263 16,235
Maj Invest Equity IV 24 1,205
Maj Invest Equity V 2,095 2,432
Markel CATCo Reinsurance Fund Ltd – LDAF 2018 SPI 572 333
Markel CATCo Reinsurance Fund Ltd – LDAF 2019 SPI 242 81
Mesirow Financial Private Equity III 80 117
Mesirow Financial Private Equity IV 400 599
Mount Row Credit Fund II 9,393 10,166
Pan European Infrastructure Fund 768 1,205
Patria Secondaries Opportunities Fund IV 16,057 12,940
PIMCO Private Income Fund Offshore Feeder I LP 6,736 7,662
SL Capital Infrastructure II 27,792 27,419
TrueNoord Co-Investment 7,136 8,765
182,446 198,450
For all other assets and liabilities (i.e. those not included in the hierarchy table) carrying value approximates to fair value.
88 abrdn Diversified Income and Growth plc
20. Related party transactions and transactions with the Manager
Related party transactions – Directors’ fees and interests. Fees payable during the year to the Directors and their interests in
shares of the Company are considered to be related party transactions and are disclosed within the Directors’ Remuneration
Report on pages 44 to 47. The balance of fees due to Directors at the year end was £13,000 (2023 – £15,000).
Transactions with the Manager. The Company has an agreement with aFML for the provision of management services. The
investment management fee is levied by aFML at the following tiered levels, payable monthly in arrears:
– 0.50% per annum in respect of the first £300 million of the net asset value (with debt at fair value); and
– 0.45% per annum in respect of the balance of the net asset value (with debt at fair value).
Details of transactions during the year and balances outstanding at the year end are disclosed in note 4 on page 69.
In accordance with the investment management agreement, where applicable, an amount equivalent to the management
fee received by the Manager on the underlying holding which is managed by the Group in the normal course of business, is
either removed from or offset against the management fee payable by the Company to ensure that no double counting
occurs. Any investments made in funds managed by the Group which themselves invest directly into alternative investments
including, but not limited to, infrastructure and property will be charged at the Group’s lowest institutional fee rate. To avoid
double charging, such investments will be excluded from the overall management fee calculation.
The following table details all investments held at 30 September 2024 that were managed by the Group. For the period to 30
September 2024 no fees were levied in respect of these funds.
30 September 2024
£’000
SL Capital Infrastructure II
A
27,792
Aberdeen Standard Global Private Markets Fund
A
20,730
Andean Social Infrastructure Fund I
A
15,821
Aberdeen European Residential Opportunities Fund
A
2,556
Aberdeen Global Infrastructure Partners II (AUD)
A
2,250
Aberdeen Property Secondaries Partners II
B
7,840
76,989
A
The value of this holding is removed from the management fee calculation to ensure that no double counting occurs.
B
An amount equivalent to the management fee received by the Manager on the underlying is offset against the management fee payable by the Company to ensure
that no double counting occurs.
The Company also has an agreement with aFML for the provision of secretarial, accounting and administration services and
promotional activities. Details of transactions during the year and balances outstanding at the year end are disclosed in note 5
on page 70.
Notes to the Financial Statements
Continued
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21. Capital management policies and procedures
The current investment objective of the Company is to conduct an orderly realisation of its assets in a manner that seeks to
optimise the value of its investments whilst progressively returning cash to shareholders in a timely manner.
The capital of the Company consists of equity (comprising issued capital, reserves and retained earnings). The Company
manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders
through the optimisation of the equity balance.
The Board monitors and reviews the broad structure of the Company’s capital on an ongoing basis. This review includes:
– the planned level of gearing which takes into account the Investment Manager’s views on the market (net gearing at the
reporting period end in the Financial Highlights and the calculation basis is set out in the Alternative Performance Measures);
– the level of equity shares in issue; and
– the revenue account, shareholder distributions and the extent to which the balance is either accretive or dilutive of the
revenue reserves.
The Company’s objectives, policies and processes for managing capital are unchanged from the preceding accounting period.
22. Analysis of changes in net debt
At Currency Non-cash At
1 October 2023 differences Cash flows movements 30 September 2024
£’000 £’000 £’000 £’000 £’000
Cash and cash equivalents 21,025 - 1,275 - 22,300
Debt due after one year (15,730) - 18,508 (2,778) -
Total 5,295 - 19,783 (2,778) 22,300
At Currency Non-cash At
1 October 2022 differences Cash flows movements 30 September 2023
£’000 £’000 £’000 £’000 £’000
Cash and cash equivalents 7,179 - 13,846 - 21,025
Debt due after one year (15,694) - - (36) (15,730)
Total (8,515) - 13,846 (36) 5,295
90 abrdn Diversified Income and Growth plc
23. Commitments and contingent liabilities
At 30 September 2024 the Company had commitments of £268,430,000 of which £32,891,000 remained outstanding (2023 –
£43,282,000). Further details are given below. There were no contingent liabilities as at 30 September 2024 (2023 – £nil).
Undrawn commitments
30 September 2024
£’000
Patria Secondaries Opportunities Fund IV 8,190
Aberdeen Global Infrastructure Partners II (AUD) 6,096
Burford Opportunity Fund 4,682
Andean Social Infrastructure Fund I 4,362
Bonaccord Capital Partners I-A 2,911
ASI Hark III 3,730
Aberdeen Property Secondaries Partners II 1,059
Maj Invest Equity IV 321
Healthcare Royalty Partners IV 315
Pan European Infrastructure Fund 267
SL Capital Infrastructure II 219
Dover Street VII 164
Maj Invest Equity V 150
HarbourVest International Private Equity VI 148
Mesirow Financial Private Equity IV 130
HarbourVest VIII Buyout Fund 65
HarbourVest International Private Equity V 27
Mesirow Financial Private Equity III 47
HarbourVest VIII Venture Fund 8
32,891
Notes to the Financial Statements
Continued
abrdn Diversified Income and Growth plc 91
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Undrawn commitments
30 September 2023
£’000
Patria Secondaries Opportunities Fund IV 11,775
Aberdeen Global Infrastructure Partners II (AUD) 6,233
Burford Opportunity Fund 5,445
Andean Social Infrastructure Fund I 4,793
Bonaccord Capital Partners I-A 4,522
SL Capital Infrastructure II 2,798
ASI Hark III 2,517
Healthcare Royalty Partners IV 1,324
Aberdeen European Residential Opportunities Fund 1,201
Aberdeen Property Secondaries Partners II 1,183
Maj Invest Equity IV 364
Pan European Infrastructure Fund 278
Maj Invest Equity V 211
Dover Street VII 181
HarbourVest International Private Equity VI 154
Mesirow Financial Private Equity IV 143
HarbourVest VIII Buyout Fund 71
Mesirow Financial Private Equity III 52
HarbourVest International Private Equity V 29
HarbourVest VIII Venture Fund 8
43,282
24. Subsequent events
On 23 December 2024, shareholders approved proposals to cancel the entire amount standing to the credit of the Company’s
capital redemption reserve and to amend the Company’s articles of association in order to remove the requirement for the
Company to hold a continuation vote at each annual general meeting.
92 abrdn Diversified Income and Growth plc
Corporate
Information
abrdn Diversified Income and Growth plc 93
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Investors may receive information about the
Company via email by selecting ‘Register for
updates’ on the homepage of the website:
abrdndiversified.co.uk
The website also includes current and historic Annual and
Half-Yearly Reports, performance data, the latest monthly
factsheet issued by the Manager together with links to the
Company’s share price and recent London Stock
Exchange announcements.
If you have any general questions about the Company,
the Manager or performance, please send an email to
diversified.income@abrdn.com or write to:
abrdn Diversified Income and Growth plc
1 George Street
Edinburgh EH2 2LL
Information about the Company and other investment
companies managed by the Manager may also be found
on social media, as follows:
Twitter: @abrdnTrusts
LinkedIn: abrdn Investment Trusts
Alternative Investment Fund Managers
Directive (“AIFMD”) and Pre-Investment
Disclosure Document (“PIDD”)
The Company has appointed the Manager as its
alternative investment fund manager and The Bank of
New York Mellon (International) Limited as its depositary
under the AIFMD.
The AIFMD requires the Manager, as the Company’s
alternative investment fund manager, 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 AIFMD are published in the Company’s PIDD
which can be found on its website: abrdndiversified.co.uk
The periodic disclosures required to be made by the
Manager under the AIFMD are set out on page 98.
Investor Warning: Be alert to share fraud
and boiler room scams
The Company has been made aware by abrdn that some
investors have received telephone calls from people
purporting to work for abrdn, or third parties, who have
offered to buy their investment trust shares. These may be
scams which attempt to gain personal information with
which to commit identity fraud or could be ‘boiler room’
scams where a payment from an investor is required to
release the supposed payment for their shares. These
callers do not work for abrdn and any third party making
such offers has no link with abrdn. abrdn never makes
these types of offers and does not ‘cold-call’ investors in
this way. If investors have any doubt over the veracity of a
caller, they should not offer any personal information, end
the call and contact the Company using the details
provided above.
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,
Computershare Investor Services PLC (see page 109 for
contact details). Changes of address must be notified to
the Registrar in writing.
Suitable for Retail/NMPI Status
The Company’s Ordinary shares are intended for
investors, primarily in the UK, including retail investors,
professionally-advised private clients and institutional
investors seeking principally capital appreciation from the
realisation of diversified private market assets over several
years and who understand and are willing to accept the
risks of exposure to investing via a flexible multi-asset
approach. 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, and intends to
continue to do so for the foreseeable future, in order that
its shares can be recommended by a financial adviser to
ordinary retail investors in accordance with the FCA’s rules
in relation to non-mainstream pooled investments.
The Company’s shares are excluded from the FCA’s
restrictions which apply to non-mainstream pooled
investment products because they are shares in an
investment trust.
Investor Information
94 abrdn Diversified Income and Growth plc
Key Information Document (“KID”)
The Packaged Retail and Insurance-based Investment
Products (“PRIIPS”) Regulation requires a PRIIP
‘manufacturer’ to prepare a Key Information Document
(“KID”). This document was designed to provide investors
with key information about the Company prior to
investment. It is not marketing material. The information
was required by law to help an investor understand the
nature, risks, costs, potential gains and losses of investing
and to help to compare with other products.
In September 2024, the FCA granted forbearance to the
investment trust industry meaning that the Manager is no
longer required to produce a KID. However, the Manager
continues to publish a modified KID for the Company
largely because a number of platforms / market
participants still require prospective investors to confirm
that they have read the Company’s KID prior to a buying
the shares of the Company. The modified KID is available
via the Company’s website. In addition to the KID, the
Manager has developed and published a ‘Statement of
Operating Expenses’ which is incorporated into the
Company’s factsheet and which can be found separately
on the Company’s website.
How to Invest in the Company and other
abrdn-managed investment trusts
A range of leading investment platforms and share
dealing services let you buy and sell abrdn-managed
investment trusts including the shares of the Company.
Many of these platforms operate on an ‘execution-only’
basis. This means they can carry out your instruction to
buy or sell a particular investment trust. But they may not
be able to advise on suitable investments for you. If you
require advice, please speak to a qualified financial
adviser (see below).
Flexibility
Many investment platform providers will allow you to buy
and hold abrdn Investment Trust shares within an
Individual Savings Account (ISA), Junior ISA or Self Invested
Personal Pension (SIPP), all of which have potential tax
advantages. Most will also allow you to invest on both a
lump sum and regular savings basis.
Costs and service
It is important to choose the right platform for your needs,
so take time to research what each platform offers before
you make your decision, as well as considering charges.
When it comes to charges, some platforms have flat fee
structures while others levy percentage-based charges.
Typically, you will also pay a fee every time you buy and
sell shares, so you need to bear in mind these transaction
costs if you are trading frequently. There may also be
additional charges for ISA and SIPP investments.
Can I exercise my voting rights if I hold my
shares through an investment platform?
Yes, you should be able to exercise your right to vote by
contacting your platform provider. Procedures differ, but
some platforms will automatically alert you when new
statutory documents are available and then allow you to
vote online. Others will require you to contact them to
vote. Your chosen platform provider will provide
further guidance.
Getting advice
abrdn recommends that you seek financial advice prior to
making an investment decision. If you do not currently
have a financial adviser, details of authorised financial
advisers in your area can be found at pimfa.co.uk or
unbiased.co.uk (see below). You will pay a fee for
advisory services.
Platform providers
Platforms featuring the Company, as well as other abrdn-
managed investment trusts, include:
· AJ Bell:
www.ajbell.co.uk/markets/investment-trusts
· Barclays Smart Investor:
www.barclays.co.uk/smart-investor
· Charles Stanley Direct:
www.charles-stanley-direct.co.uk
· Fidelity: www.fidelity.co.uk
· Halifax: www.halifax.co.uk/investing
· Hargreaves Lansdown:
www.hl.co.uk/shares/investment-trusts
· interactive investor (owned by abrdn):
www.ii.co.uk/investment-trusts
Investor Information
Continued
abrdn Diversified Income and Growth plc 95
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
The companies above are shown for illustrative purposes
only. Other platform providers are available. The links
above direct you to external websites operated by each
platform provider. abrdn is not responsible for the content
and information on these third-party sites, apart from
interactive investor, which is owned by abrdn.
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 & Financial
Advice Association at: pimfa.co.uk.
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:
Tel: 0800 111 6768 or at
at https://register.fca.org.uk
Email: consumerqueries@fca.org.uk
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
trusts purchased will immediately be reduced by the
difference between the buying and selling prices of the
shares, 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 92 to 95 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.
96 abrdn Diversified Income and Growth plc
abrdn or the Group
A company listed on the London Stock Exchange as
abrdn plc.
AIC
The Association of Investment Companies.
AIFMD
The Alternative Investment Fund Managers Directive - the
AIFMD is European legislation which created a European-
wide framework for regulating managers of ‘alternative
investment funds’. It is designed to regulate any fund
which is not a UCITS fund and which is managed and/or
marketed in the EU. The Company has been designated
as an AIF.
Alternative Performance Measure or APM
An alternative performance measure is a financial
measure of historical or future financial performance,
financial position, or cash flows, other than a financial
measure defined or specified in the applicable financial
reporting framework.
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.
Dividend Cover
Earnings per share divided by dividends per share
expressed as a ratio.
Dividend Yield
The annual dividend expressed as a percentage of the
share price.
FCA
Financial Conduct Authority.
Gearing
Net gearing is calculated by dividing total borrowings less
cash or cash equivalents, by shareholders’ funds
expressed as a percentage.
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.
Leverage
For the purposes of the Alternative Investment Fund
Managers Directive, 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 or AIFM
abrdn Fund Managers Limited is a wholly owned
subsidiary of abrdn plc and acts as the alternative
investment fund manager (“AIFM”) for the Company. 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 share.
Glossary of Terms
abrdn Diversified Income and Growth plc 97
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Ongoing Charges
Ratio of expenses as a percentage of average daily
shareholders’ funds calculated as per the AIC’s industry
standard method. This includes the Company’s share of
costs of holdings in investment companies on a look-
through basis.
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
The ratio 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.
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 and the income shares of split capital trusts,
irrespective of the time until repayment.
Total Assets
Total Assets as per the balance sheet less current liabilities
(before deducting Prior Charges as defined above).
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 the dividend
was earned.
98 abrdn Diversified Income and Growth plc
The Manager 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 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
January 2025.
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 18 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 the Manager; and
· all authorised Alternative Investment Fund Managers are required to comply with the AIFMD Remuneration Code. In
accordance with the AIFMD Remuneration Code, the AIFM’s remuneration policy in respect of its reporting period
ended 31 December 2023 is available on the website of abrdn plc at www.abrdn.com/en-gb/corporate/about-us/our-
leadership-team/remuneration-disclosure or on request from the Company Secretary, abrdn Holdings Limited (see
page 109 for contact details).
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 3.50:1 2.50:1
Actual level at 30 September 2024 0.90:1 1.01:1
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
)
abrdn Diversified Income and Growth plc 99
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Alternative Performance Measures (“APMs”) 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.
Net asset value per Ordinary share – debt at fair value
The net asset value per Ordinary share with debt at fair value is calculated as follows:
As at As at
30 September 2024 30 September 2023
£’000 £’000
Net asset value attributable n/a 339,534
Add: Amortised cost of 6.25% Bonds 2031 n/a 15,730
Less: Market value of 6.25% Bonds 2031 n/a (16,069)
n/a 339,195
Number of Ordinary shares in issue excluding treasury shares n/a 301,265,952
Net asset value per share (p) n/a 112.59
2024 n/a due to the 6.25% Bonds 2031 being repaid during the year.
Discount to net asset value per Ordinary share – debt at par value
The discount is the amount by which the Ordinary share price is lower than the net asset value per Ordinary share – debt at fair value,
expressed as a percentage of the net asset value – debt at fair value. The Board considers this to be the most appropriate measure of
the Company’s discount.
30 September 2024 30 September 2023
Net asset value per Ordinary share (p) a 67.48 112.70
Share price (p) b 44.50 83.60
Discount (a-b)/a 34.1% 25.8%
Alternative Performance Measures
100 abrdn Diversified Income and Growth plc
Net (cash)/gearing – debt at par value
Net (cash)/gearing with debt at par value measures the 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, in addition to cash and short term deposits.
30 September 2024 30 September 2023
Borrowings (£’000) a – 15,730
Cash (£’000) b 22,300 21,025
Amounts due to brokers (£’000) c – –
Amounts due from brokers (£’000) d – 62
Shareholders’ funds (£’000) e 203,306 339,534
Net cash (a-b+c-d)/e (11.0)% (1.6)%
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 and expressed as a percentage of the average daily net asset values with debt at fair
value published throughout the year.
2024 2023
£ £
Investment management fees 948,000 1,126,000
Administrative expenses 1,509,000 1,184,000
Less: non-recurring charges
A
(525,000) (31,000)
Ongoing charges 1,932,000 2,279,000
Average net assets with debt at fair value 298,853,000 351,878,000
Ongoing charges ratio (excluding look-through costs) 0.65% 0.65%
Look-through costs
B
1.71% 1.09%
Ongoing charges ratio (including look-through costs) 2.36% 1.74%
A
Comprises legal and professional fees unlikely to recur including those associated with the reduction in issued share capital and subsequent issue and redemption of B shares.
B
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
includes financing and transaction costs. This can be found within the literature library section of the Company’s website:
abrdndiversified.co.uk.
Alternative Performance Measures
Continued
abrdn Diversified Income and Growth plc 101
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
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. NAV and share price total returns are monitored against open-
ended and closed-ended competitors, and the Reference Index, respectively.
NAV NAV Share
Year ended 30 September 2024 (debt at par) (debt at fair value)
A
Price
Opening at 1 October 2023 a 112.7p n/a 83.6p
Closing at 30 September 2024 b 67.5p n/a 44.5p
Price movements c=(b/a)-1 –40.1% n/a –46.8%
Dividend reinvestment
AB
d 37.8% n/a 54.9%
Total return c+d –2.3% n/a +8.1%
A
2024 n/a due to the 6.25% Bonds 2031 being repaid during the year.
B
Includes the 38.10p per Ordinary share return of capital made during the year.
NAV NAV Share
Year ended 30 September 2023 (debt at par) (debt at fair value) Price
Opening at 1 October 2022 a 117.8p 117.6p 89.8p
Closing at 30 September 2023 b 112.7p 112.6p 83.6p
Price movements c=(b/a)-1 –4.3% –4.3% –6.9%
Dividend reinvestment
A
d 4.7% 4.7% 6.2%
Total return c+d +0.4% +0.4% –0.7%
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.
102 abrdn Diversified Income and Growth plc
General
abrdn Diversified Income and Growth plc 103
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
NOTICE IS HEREBY GIVEN that the Annual General Meeting of abrdn Diversified Income and Growth plc (the "Company")
will be held at 10.00 am on 26 February 2025 at 18 Bishops Square, E1 6EG, for the following purposes:
To consider and, if thought fit, pass the following resolutions as ordinary resolutions:
1. To receive the Directors' Report, the Auditors’ Report and the audited financial statements for the year ended
30 September 2024.
2. To receive and adopt the Directors' Remuneration Report (other than the Directors' Remuneration Policy) for the
year ended 30 September 2024.
3. To approve the Company’s dividend policy to continue to pay interim dividends.
4. To re-elect Alistair Mackintosh as a Director of the Company.*
5. To re-elect Trevor Bradley as a Director of the Company.*
6. To re-elect Tom Challenor as a Director of the Company.*
7. To re-elect Davina Walter as a Director of the Company.*
8. To re-appoint PricewaterhouseCoopers LLP as auditors of the Company to hold office from the conclusion of the
Annual General Meeting of the Company until the conclusion of the next annual general meeting at which financial
statements and reports are laid before the Company.
9. To authorise the Directors to fix the remuneration of the auditors.
To consider and, if thought fit, pass the following resolutions as special resolutions:
Authority to Make Market Purchases of Shares
10. That the Company be generally and, subject as hereinafter appears, unconditionally authorised in accordance with
section 701 of the Act to make market purchases (within the meaning of section 693(4) of the Act) of fully paid
Ordinary shares on such terms and in such manner as the Directors from time to time determine, and to cancel or
hold in treasury such shares, provided always that:
a) the maximum number of shares hereby authorised to be purchased shall be an aggregate of 45,159,766
Ordinary shares or, if less, the number representing 14.99% of the Ordinary shares in issue (excluding shares
already held in treasury) as at the date of the passing of this resolution;
b) the minimum price which may be paid for a share shall be 1 pence;
c) the maximum price (exclusive of expenses) which may be paid for a share shall be the higher of (a) an amount
equal to 105% of the average of the middle market quotations for a share taken from, and calculated by
reference to, the Daily Official List of the London Stock Exchange for the five business days immediately
preceding the day on which the share is purchased; and (b) the higher of the price of the last independent trade
and the highest current independent bid at the time the purchase is carried out;
d) the authority hereby conferred shall expire at the conclusion of the next annual general meeting of the
Company or on 31 March 2026, whichever is earlier, unless such authority is previously revoked, varied or
renewed prior to such time; and
e) the Company may make a contract or contracts to purchase shares under the authority hereby conferred prior
to the expiry of such authority and may make a purchase of shares pursuant to any such contract or contracts
notwithstanding such expiry above.
Notice of Annual General Meetin
g
104 abrdn Diversified Income and Growth plc
Authority to Call General Meetings on not less than 14 Clear Days’ Notice
11. That a general meeting, other than an annual general meeting, may be called on not less than 14 clear days’ notice.
*The biographies of the Directors offering themselves for re-election may be found on pages 34 and 35.
By order of the Board
abrdn Holdings Limited
Company Secretary
20 January 2025
Registered Office
1 George Street
Edinburgh EH2 2LL
Notes
(1) Only those Shareholders registered in the Register at close of business on 24 February 2025 shall be entitled to attend and/or vote
at the Annual General Meeting in respect of the number of shares registered in their name at that time (the "specified time"). If the
Annual General Meeting is adjourned to a time not more than 48 hours after the specified time applicable to the original Meeting,
that time will also apply for the purpose of determining the entitlement of shareholders to attend and/or vote at the adjourned
meeting. If the Annual General Meeting is adjourned for a longer period, the time by which a person must be entered on the
Register in order to have the right to attend and/or vote at the adjourned meeting is close of business two days (excluding non-
working days) prior to the time of the adjourned meeting. Changes to entries on the Register after the relevant deadline shall be
disregarded in determining the rights of any person to attend and/or vote at the Annual General Meeting.
(2) Holders of Ordinary shares are entitled to attend and vote at the Annual General Meeting or any adjournment thereof. If you wish
to attend, there will be a members’ register to sign on arrival.
(3) As at 20 January 2025 (being the latest practicable day prior to the date of approval of this Report) the Company's issued share
capital consisted of 301,265,952 Ordinary shares with voting rights and 22,485,854 Ordinary shares in treasury. Each Ordinary
share carries the right to one vote at general meetings. Therefore the total voting rights in the Company at 20 January 2025 were
301,265,952.
(4) A Shareholder entitled to attend and vote at the Annual General Meeting is entitled to appoint one or more proxies to attend,
speak and vote instead of him or her, provided that if two or more proxies are appointed, each proxy must be appointed to
exercise the rights attaching to different shares. A Form of Proxy is enclosed with this Notice. A proxy need not be a Shareholder of
the Company. Completion and return of the Form of Proxy will not preclude Shareholders from attending or voting at the Annual
General Meeting, if they so wish. Details of how to appoint the Chairman of the Annual General Meeting or another person as your
proxy using the Form of Proxy are set out in the notes to the Form of Proxy. If you wish your proxy to speak on your behalf at the
Annual General Meeting you will need to appoint your own choice of proxy (not the Chairman) and give your instructions directly
to the proxy. In the event that a Form of Proxy is returned without an indication as to how the proxy shall vote on the resolutions, the
proxy will exercise his or her discretion as to whether, and if so how, he or she votes.
(5) To be valid, the Form of Proxy, together with the power of attorney or other authority, if any, under which it is executed (or a
notarially certified copy of such power or authority) must be deposited with the Company's Registrar, for this purpose being
Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, as soon as possible, but in any event not
later than 48 hours (excluding non-working days) before the time fixed for the Annual General Meeting. If you have any queries
relating to the completion of the Form of Proxy, please contact Computershare Investor Services on 0330 303 1184 (lines are open
8.30am to 5.30 p.m. Monday to Friday, excluding public holidays). Computershare Investor Services PLC cannot provide advice on
the merits of the business to be considered nor give any financial, legal or tax advice. Alternatively, if the Shareholder hold
s his or
her shares in uncertificated form (i.e. in CREST) they may vote using the CREST System (see note (10) below).
Notice of Annual General Meetin
g
Continued
abrdn Diversified Income and Growth plc 105
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
(6) A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of
the principal or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the share in
respect of which the proxy is given, provided that no intimation in writing of such death, insanity, revocation or transfer as aforesaid
shall have been received by the Company at its registered office or the address specified in note (5) above before the
commencement of the Annual General Meeting or adjourned meeting at which the proxy is used. Where there are joint holders of
any share, any one of such persons may vote at any Meeting, and if more than one of such persons is present at any meeting
personally or by proxy, the vote of the senior holder who tenders the vote shall be accepted to the exclusion of the votes of other
joint holders and, for this purpose, seniority will be determined by the order in which the names stand in the Register.
(7) Any 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 Annual General 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. Nominated Persons should also remember
that their main point of contact in terms of their investment in the Company remains the Shareholder who nominated the
Nominated Person to enjoy information rights (or, perhaps the custodian or broker who administers the investment on their
behalf). Nominated Persons should continue to contact that Shareholder, custodian or broker (and not the Company) regarding
any changes or queries relating to the Nominated Person's personal details and interests in the Company (including any
administrative matter). The statement of the rights of Shareholders in relation to the appointment of proxies in notes (4) to (7)
does not apply to Nominated Persons. The rights described in these notes can only be exercised by Shareholders of the Company.
(8) Any corporation which is a Shareholder may authorise such person as it thinks fit to act as its representative at the Annual General
Meeting. Any person so authorised shall be entitled to exercise on behalf of the corporation which he represents the same powers
(other than to appoint a proxy) as that corporation could exercise if it were an individual Shareholder (provided, in the case of
multiple corporate representatives of the same corporate Shareholder, they are appointed in respect of different shares owned
by the corporate Shareholder or, if they are appointed in respect of the same shares, they vote the shares in the same way). To be
able to attend and vote at the Annual General Meeting, corporate representatives will be required to produce prior to their entry to
the Annual General Meeting evidence satisfactory to the Company of their appointment.
(9) To allow effective constitution of the Annual General Meeting, if it is apparent to the Chairman that no Shareholders will be present
in person or by proxy, other than by proxy in the Chairman's favour, then the Chairman may appoint a substitute to act as proxy in
his stead for any Shareholder, provided that such substitute proxy shall vote on the same basis as the Chairman.
(10) Notes on CREST Voting. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy
appointment service may do so by utilising the procedures described in the CREST Manual, which is available to download from
the Euroclear UK & Ireland (“Euroclear”) website (euroclear.com/CREST). CREST personal members or other CREST sponsored
members, and those CREST members who have appointed voting service provider(s) should contact their CREST sponsor or
voting service provider(s) who will be able to take the appropriate action on their behalf.
a. In order for a proxy appointment or instruction made using the CREST system to be valid, the appropriate CREST message (a
"CREST proxy instruction") must be properly authenticated in accordance with Euroclear's specifications and must contain
the information required for such instructions, as described in the CREST Manual. To appoint a proxy or to give or amend an
instruction to a previously appointed proxy via the CREST system, the CREST message must be received by the issuer's agent
3RA50 by 10.00 am on 24 February 2025. 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 applications Host) from which the issuer's agent is able to retrieve
the message.
b. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not
make available special procedures in CREST for any particular messages. 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 CREST sponsored member or has appointed a voting service provider(s),
to procure that his CREST sponsor or voting service provider(s) takes(s)) such action as shall be necessary to ensure that a
message is transmitted by means of the CREST system by a particular time. For further information on CREST procedures,
limitations and system timings please refer to the CREST Manual.
c. The Company may treat as invalid a proxy appointment sent by CREST in the circumstances set out in Regulation 35(5)(a) of
the Uncertificated Securities Regulations 2001. In any case, a proxy form must be received by the Company's Registrar no
later than 10.00 am on 24 February 2025.
106 abrdn Diversified Income and Growth plc
(11) The attendance at the Annual General Meeting of Shareholders and their proxies and representatives is understood by the
Company to confirm their agreement to receive any communications made at the Annual General Meeting.
(12) Shareholders are advised that unless otherwise provided, the telephone numbers and website addresses which may be set out in
this Notice or the Form of Proxy/Form of Direction are not to be used for the purpose of serving information or documents on the
Company including the service of information or documents relating to proceedings at the Annual General Meeting. If the
Chairman, as a result of any proxy appointments, is given discretion as to how the votes the subject of those proxies are cast and
the voting rights in respect of those discretionary proxies, when added to the interests in the Company’s shares already held by the
Chairman, result in the Chairman holding such number of voting rights that he has a notifiable obligation under the Disclosure
Guidance and Transparency Rules, the Chairman will make the necessary notifications to the Company and the Financial
Conduct Authority. As a result any person holding 3% or more of the voting rights in the Company who grants the Chairman a
discretionary proxy in respect of some or all of those voting rights and so would otherwise have a notification obligation under the
Disclosure Guidance and Transparency Rules, need not make a separate notification to the Company and the Financial
Conduct Authority.
(13) In accordance with Section 311A of the Companies Act 2006, the contents of this notice of Meeting, details of the total number of
shares in respect of which members are entitled to exercise voting rights at the Annual General Meeting and, if applicable, any
members' statements, members' resolutions or members' matters of business received by the Company after the date of this
notice will be available on the Company's website, abrdndiversified.co.uk.
(14) Pursuant to Section 319A of the Companies Act 2006, the Company must cause to be answered at the Annual General Meeting
any question relating to the business being dealt with at the Annual General Meeting which is put by a Shareholder attending the
Annual General Meeting, except in certain circumstances, including if it is undesirable in the interests of the Company or the
good order of the Annual General Meeting that the question be answered or if to do so would involve the disclosure of
confidential information.
(15) Shareholders should note that it is possible that, pursuant to requests made by Shareholders 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: (a)
the audit of the Company's financial statements (including the auditors’ report and the conduct of the audit) that are to be laid out
before the Annual General Meeting; or (b) any circumstance connected with auditors 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,
that the shareholders propose to raise at the Annual General Meeting. The Company may not require the Shareholders 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 auditors not later that the time when it makes the statement available on the website. The business
which may be dealt with at the Annual General Meeting includes any statement that the Company has been required under
section 527 of the Companies Act 2006 to publish on the website.
(16) The "Vote Withheld" option on the Form of Proxy 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.
(17) Physical attendance at the Annual General Meeting may not be possible. If the law, Government guidance or terms and conditions
stipulated by the venue for the Annual General Meeting so requires at the time of the meeting, the Chairman will limit, in his or her
sole discretion, the number of individuals in physical attendance at the meeting. Notwithstanding this, the Company may still
impose entry restrictions on certain persons wishing to attend the meeting in order to ensure the health and safety of those
attending. In such circumstances, physical attendance may be limited to two persons as the minimum number required to form
a quorum.
The Company strongly encourages Shareholders to appoint the Chairman as their proxy to ensure their votes are registered.
Instructions for submitting a proxy are contained in Notes (4) to (7) above.
Shareholders are also encouraged to submit any questions in advance of the Annual General Meeting by email to:
diversified.income@abrdn.com
Notice of Annual General Meetin
g
Continued
abrdn Diversified Income and Growth plc 107
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Further to Part 5 of the Circular to shareholders published on 17 June 2024 (the “Circular”), the following sets out the
apportionment ratio in relation to the B shares, further to the capital distribution to shareholders on 10 July 2024. The
Circular may be found on the Company’s website.
For the purposes of United Kingdom taxation of capital gains and corporation tax on chargeable gains (“Capital Gains
Tax”), the issue of B Shares constitutes a reorganisation of the share capital of the Company. Accordingly, the B Shares
are treated as the same asset as a shareholder’s holding of existing Ordinary shares, and as having been acquired at the
same time as a shareholder’s holding of existing Ordinary shares was acquired. A shareholder’s combined holding of
Ordinary shares and B shares has the same aggregate base cost as the shareholder’s holding of Ordinary shares
immediately before the issue of B shares. The aggregate base cost should be apportioned between B shares and the
Ordinary shares held by a shareholder by reference to the market values of the Ordinary shares and the B shares on the
first day of trading after the issue of B shares.
Due to the terms on which the B Shares were issued and subsequently redeemed, and as they were unlisted and non-
transferable, their market value has been assessed, below, as equal to their nominal value of one pence on 5 July 2024.
The market value of the Ordinary shares is calculated with reference to their market value on the first day of trading
after the issue of the B shares, which is considered to be 5 July 2024.
Accordingly, the aggregate base cost of the Ordinary shares which should be apportioned against the B Shares
redemption proceeds, received by shareholders on 10 July 2024, is 45.79%, calculated as follows:
Class of share
Market value on first
day of trading
(pence per share)
Relevant ratio used for
the issue of B Shares
Relevant value
(pence per share) Relevant percentage
Ordinary share* 45.1 21 947.1 54.21%
B Share 1 800 800 45.79%
* The lower of the two prices for an Ordinary share shown in the London Stock Exchange Daily Official List for 5 July 2024 as the closing price for an Ordinary share on that day
plus one-half of the difference between those two figures in accordance with SI 2015/616.
United Kingdom taxation
The information above does not constitute tax advice and is intended only as a guide to United Kingdom law and HMRC
published practice (which are both subject to change at any time, possibly with retrospective effect) in June 2024. It
relates only to certain limited aspects of the United Kingdom taxation treatment of shareholders and is intended to apply
only to shareholders who are resident in the United Kingdom for United Kingdom tax purposes and who are, and were
the absolute beneficial owners of their Ordinary shares and B Shares and who hold, or held, them as investments (and
not as securities to be realised in the course of a trade) other than under an ISA. The information above may not apply to
certain shareholders, such as, but not limited to, dealers in securities, insurance companies, collective investment
schemes and shareholders who are exempt from taxation. The position may be different for future transactions.
Shareholders who are in any doubt as to their tax position or who are subject to tax in a jurisdiction other than the United
Kingdom should consult an appropriate professional adviser.
Apportionment Ratio for B shares
108 abrdn Diversified Income and Growth plc
abrdn Diversified Income and Growth plc 109
Directors
Davina Walter (Chairman)
Tom Challenor (Senior Independent Director and Audit
Committee Chairman)
Trevor Bradley
Alistair Mackintosh
Company Secretary
abrdn Holdings Limited
Registered Office
1 George Street
Edinburgh EH2 2LL
Registered in Scotland under Company Number
SC003721
Website
abrdndiversified.co.uk
Points of Contact
The Chairman or Company Secretary at the
Registered Office of the Company
Email: diversified.income@abrdn.com
Twitter: @abrdnTrusts
LinkedIn: abrdn Investment Trusts
abrdn Social Media accounts
X (formerly Twitter) @abrdnTrusts
LinkedIn: abrdn Investment Trusts
United States Internal Revenue Service
FATCA Registration Number (“GIIN”)
E3M4K6.99999.SL.826
Legal Entity Identifier Number (“LEI”)
2138003QINEGCHYGW702
Alternative Investment Fund Manager
abrdn Fund Managers Limited
280 Bishopsgate
London EC2M 4AG
Authorised and regulated by the Financial
Conduct Authority
Investment Manager
abrdn Investments Limited
1 George Street
Edinburgh EH2 2LL
Authorised and regulated by the Financial
Conduct Authority
Registrar (for direct shareholders)
Computershare Investor Services PLC operates a secure
online website where shareholdings can be managed
quickly and easily, including changing address or
arranging to pay dividends directly into a bank account or
receive electronic communications:
investorcentre.co.uk
Alternatively, please contact the registrar:
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
E-mail is available via the above website
Telephone: 0330 303 1184
(UK calls cost 10p per minute plus network extras)
Lines are open 8.30 a.m. to 5.30 p.m. Monday to Friday,
excluding public holidays
Depositary
The Bank of New York Mellon (International) Limited
1 Canada Square
London E14 5AL
Independent Auditors
PricewaterhouseCoopers LLP
144 Morrison Street
Edinburgh EH3 8EB
Solicitors
Dickson Minto W.S.
Stockbrokers
Stifel Nicolaus Europe Limited
Contact Addresses
abrdndiversified.co.uk
abrdn Diversified Income
and Growth plc
Annual Report 30 September 2024
For more information visit abrdndiversified.co.uk
abrdn.com