shiresincome.co.uk
Shires Income PLC
Annual Report 31 March 2025
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Shires Income PLC 1
“The share price total return for the year was 22.4%.
The Board is pleased to announce an increase of
2.8% in the dividend, to 14.80p per share, providing a
yield of 5.8% based on the year end share price.”
Robin Archibald, Chairman
“The year to the end of March 2025 was a good
one for equity markets globally. The NAV total
return for the year was 9.4%.”
Iain Pyle, Aberdeen
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2 Shires Income PLC
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR
IMMEDIATE ATTENTION. If you are in any doubt about the
action you should take, you are recommended to seek
your own financial advice from your stockbroker, bank
manager, solicitor, accountant or other financial adviser
authorised under the Financial Services and Markets Act
2000 (as amended by the Financial Services Act 2012) if
you are in the United Kingdom or, if not, from another
appropriately authorised financial adviser.
If you have sold or otherwise transferred all your Ordinary
shares in Shires Income PLC, please forward this
document, together with the accompanying documents
immediately to the purchaser or transferee, or to the
stockbroker, bank or agent through whom the sale or
transfer was effected for transmission to the purchaser
or transferee.
Overview
Performance Highlights 3
Financial Calendar and Highlights 4
Strategic Report
Chairman’s Statement 8
Overview of Strategy 11
Promoting the Success of the Company 19
Performance 23
Investment Manager’s Review 27
Investment Case Studies 34
Portfolio
Ten Largest Investments 37
Investment Portfolio - Equities 38
Investment Portfolio - Other Investments 40
Distribution of Assets and Liabilities 41
Sector Analysis 42
Governance
Board of Directors 46
Directors’ Report 48
Directors’ Remuneration Report 56
Audit Committee’s Report 60
Statement of Directors’ Responsibilities 64
Independent Auditor’s Report 65
Financial Statements
Statement of Comprehensive Income 74
Balance Sheet 75
Statement of Changes in Equity 76
Cash Flow Statement 77
Notes to the Financial Statements 78
Corporate Information
Information about the Investment Manager 100
Investment Process 101
Investor Information 106
Glossary of Terms 108
Alternative Performance Measures 111
AIFMD Disclosures (Unaudited) 114
General
Notice of Annual General Meeting 116
Contact Addresses 121
Contents
Shires Income PLC 3
Net asset value per Ordinary share total return
A
Share price total return
A
+9.4% +22.4%
2024
+5.1%
2024
–5.7%
Benchmark index total return Earnings per share (revenue)
+10.5% 14.80
p
2024
+8.4%
2024
14.75p
Dividends per Ordinary share Dividend yield
A
14.80
p
5.8%
2024
14.40p
2024
6.5%
Discount to net asset value per Ordinary share
A
3.7%
2024
13.3%
A
Alternative Performance Measure (see pages 111 to 113).
Net asset value per
Ordinary share*
Ordinary share price*
Dividends per
Ordinary share
At 31 March – pence At 31 March – pence Year ended 31 March – pence
262.4
278.3
257.9
256.0
265.2
21 22 23 24 25
248.0
279.0
250.0
222.0
255.5
21 22 23 24 25
13.20
13.80
14.20
14.40
14.80
21 22 23 24 25
*excludes dividend reinvestment
Performance Hi
g
hli
g
hts
4 Shires Income PLC
Financial Calendar
Online Shareholder Presentation
24 June 2025
Annual General Meeting
8 July 2025
Expected payment dates of quarterly dividends
31 July 2025
31 October 2025
30 January 2026
30 April 2026
Half year end
30 September 2025
Expected announcement of results for the six months
ending 30 September 2025
November 2025
Financial year end
31 March 2026
Expected announcement of results for year ending
31 March 2026
May 2026
Financial Calendar and Hi
g
hli
g
hts
Shires Income PLC 5
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Highlights
31 March 2025 31 March 2024
Total assets (as defined on page 110) £125,686,000 £124,920,000
Shareholders’ funds £106,711,000 £105,957,000
Market capitalisation
A
£102,748,000 £91,840,000
Net asset value per Ordinary share (as defined on page 109)
B
265.23p 256.00p
Share price 255.50p 222.00p
Discount to NAV (cum-income)
C
3.7% 13.3%
Net gearing
C
16.5% 16.4%
Dividend and earnings
Revenue return per share
D
14.80p 14.75p
Dividend per share
E
14.80p 14.40p
Dividend cover
C
1.00 1.02
Revenue reserves
F
£7,538,000 £7,388,000
Dividend yield
C
5.8% 6.5%
Operating costs
Ongoing charges ratio (excluding look-through costs)
C
1.00% 1.09%
Ongoing charges ratio (including look-through costs)
C
1.00% 1.10%
A
Represents the number of Ordinary shares in issue in the Company multiplied by the Company’s share price.
B
Net asset value per Ordinary share is calculated after the repayment of the capital paid up on Cumulative Preference shares (see note 16 on page 90).
C
Considered to be an Alternative Performance Measure, as defined on pages 111 to113.
D
Measures the revenue earnings for the year divided by the weighted average number of Ordinary shares in issue (see Statement of Comprehensive Income).
E
The figures for dividend per share reflect the years in which they were earned (see note 9 on pages 84 and 85).
F
The revenue reserve figure does not take account of payment of the third interim or final dividend amounting to £3,369,000 (2024 – £3,310,000) combined.
6 Shires Income PLC
Strategic
Report
Shires Income PLC 7
The Company’s investment objective
is to provide shareholders with a high
level of income, together with the
potential for growth of both income
and capital, from a diversified
portfolio substantially invested in UK
equities but also in preference
shares, convertibles and other fixed
income securities.
The Company has a largely retail
investor shareholder base.
Regular updates are provided
through the Company’s website at
www.shiresincome.co.uk
8 Shires Income PLC
Highlights
· Increase of 2.8% in the dividend to 14.80p per share,
providing a yield of 5.8% based on the year end share
price.
· NAV total return of 9.4%.
· Share Price total return of 22.4%, reflecting a narrowing
of the Company’s discount to 3.7% at the year end,
helped by an active use of share buy backs.
Performance
In a positive year for global equity markets, the Company’s
net asset value (“NAV”) total return for the year ended 31
March 2025 was 9.4%. The share price total return was an
encouraging 22.4%, reflecting a significant narrowing of
the discount at which the share price trades to the NAV, to
3.7%. These returns compare to a total return of 10.5%
from the FTSE All-Share Index.
While the performance of the equity portfolio lagged the
benchmark return, the Company benefited from its
holding of fixed interest securities which delivered a total
return of 17.5%. These holdings represent around 20% of
the portfolio and are an attractive differentiating factor for
the Company. During the year, the Company continued to
make use of its ability to invest outside the UK, with 4.8% of
the portfolio invested in overseas equities at the financial
year end.
More detailed information on performance for the year
and investment activity within the portfolio, as well as the
investment style adopted for the portfolio, are contained
in the Investment Manager’s Review.
Earnings and Dividends
The Company’s revenue earnings per share for the year
were 14.80p (2024: 14.75p). Income from the Company’s
investments over the year to 31 March 2025 increased by
13.1% from the previous financial year. This was
attributable largely to the increased level of income from
a larger portfolio of assets, following the Company’s
combination with abrdn Smaller Companies Income Trust
plc (“aSCIT”) in December 2023, which resulted in an issue
of some 11.3 million new shares.
The changes in allocation of management fees and
finance costs which have been charged to revenue and
capital in the ratio of 40:60 since 1 April 2024 (previously
50:50) had a positive impact on net revenue earnings. The
Company also benefited from the flexibility of having a
direct allocation to smaller and mid cap companies and
no longer relying on the holding in aSCIT for its exposure to
UK small cap investments.
The Company has paid three interim dividends of 3.20p
per Ordinary share (2024: 3.20p). Taking account of the
revenue outcome for the year and the outlook for the
forthcoming year, the Board is pleased to propose a final
increased dividend of 5.20p per Ordinary share (2024:
4.80p). The final dividend will be paid on 31 July 2025 to
shareholders on the register on 4 July 2025, subject to
shareholder approval at the AGM. The final dividend
brings total dividends for the year to 14.80p per share, an
increase on last year’s dividend of 2.8% and ahead of CPI
of 2.6% for the 12 months to the end of March 2025. Based
on the year end share price of 255.5p, the total dividends
equate to a dividend yield of 5.8%, one of the higher yields
available from the UK Equity Income Sector and one which
the Board believes should be attractive in the current
interest rate environment.
With the total dividends for the year covered by earnings,
revenue reserves will stand at 70% (2024: 69%) of the
current dividend cost, giving a buffer if income were to fall
in future periods. The Board believes that sustaining (and
growing) dividends is an important feature of the
Company and considers not only the annual payout but
what reserves (revenue and realised capital) might be
deployed in the future to give shareholders an attractive
and competitive level of income from a quality portfolio of
investments, without sacrificing the potential for capital
growth or chasing an unnaturally high yield.
The rate of interim dividend was last adjusted in 2021. The
Board is mindful that increases in the overall dividend
means that the final dividend has become an increased
proportion of the total annual payment. In respect of the
year ending 31 March 2026, the Board has therefore
decided to increase the rate of each of the next three
interim dividends from 3.20p to 3.45p per share to create a
more even balance between the rates of the interim and
final dividends. The amount of final dividend will continue
to be determined once the annual results are known and
taking into account the outlook for the next year. In
common with other income funds, we encourage
investors to consider the reinvestment of dividends as the
impact of compounded total return can be significant
over time. Irrespective of reinvestment, we hope that an
increase in dividends and a balance between the
quarterly payments should be well received by those who
use the income from the Company as part of their annual
financial planning.
Chairman’s Statement
Shires Income PLC 9
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Cancellation of Share Premium Account
Following shareholder approval at the Company’s AGM
on 5 July 2024, the Company received court approval, by
way of a court order dated 13 August 2024. for
cancellation of the Share Premium Account. The court
order was registered at Companies House on 16 August
2024 at which point cancellation of the Share Premium
Account became effective. Approximately £50 million
previously standing to the credit of the Share Premium
Account, and undistributable, has been transferred to a
newly created distributable special reserve which is
available to fund the cost of share buy backs and future
dividend payments, if required.
The Board believes that it is in the Company’s interest to
have this flexibility in its reserves, although the Board has
no current intention of using the new reserve for dividend
payments which will continue to be resourced through net
revenue and revenue reserves.
Discount and Share Buy Backs
At the end of the Company’s financial year in 2024, the
discount at which its shares traded to NAV stood at 13.3%.
Some of this widening reflected headwinds across the
investment trust sector in general and some was a result
of dislocation when the Aberdeen share plans moved to
Interactive Investor in 2023. The Board was uncomfortable
with the Company’s rating, which had typically been close
to NAV and, having initiated a buyback programme for the
first time in the Company’s history in 2023, continued
modest buybacks in 2024.
In accordance with the share buy-back authority
provided by shareholders at the Annual General Meeting,
the Company bought back 1.2 million Ordinary shares
during the year (2.8% of the issued share capital) at a cost
of £2.8 million. This provided an enhancement to NAV of
approximately 0.3% for continuing shareholders. All shares
bought back are held in treasury.
With an average discount of 10.1% over the financial year,
we are pleased to report that, by providing liquidity in the
Company’s shares described above, whilst also
purchasing amounts appropriate to the Company’s size,
the Company’s discount to NAV tightened to 3.7% at the
year-end and at the time of writing continues to be
below 5%.
The Board will seek renewal of the share buyback
authority at the AGM and will continue to buy back shares
if it considers it is in the best interests of shareholders to
do so.
Gearing
The Company has a £20 million loan facility of which £19
million was drawn down at the year end. Net of cash, this
represented gearing of 16.5%, compared to 16.4% at the
start of the year. The weighted average borrowing cost at
the year-end was 4.9% (31 March 2024: 5.3%) and the
gearing provided a positive contribution to performance
during the year.
The Board monitors the level of gearing regularly.
Strategically, the view is taken that the borrowings are
notionally invested in the less volatile fixed income part of
the portfolio which generates a higher and more secure
level of income, giving the Investment Manager greater
scope to invest in a range of equity stocks with lower yields
and higher growth prospects. The Board believes that this
combination puts the Company in the best position to
achieve a high and potentially growing level of dividend
and to deliver some capital appreciation for shareholders
- as has been the case in the past.
“We are pleased to report that the
Company’s discount to NAV tightened
to 3.7% at the year-end.”
Board and Governance
As reflected in the governance statements later in the
Annual Report, the Board has functioned well, both in
constructive engagement with the Manager and in
exploring ways to improve shareholder value. There have
been some changes to the ways in which the Board
delegates to Board committees and to the individual
responsibilities of Board members. These are designed to
make this small board as effective as possible, and to
utilise the experience on the Board with regards to specific
areas of governance and oversight.
The Board and the Company continue to be well-
supported by the Manager in terms of portfolio
management and administration. The Board has been
exploring with the Manager how to engage more directly
with private investors, who form a large part of the
Company’s ownership, to understand better what they
want from their investment in the Company, and to
encourage investment in the Company’s shares. The
Board welcomes comments and questions from investors,
or prospective investors, which can be posed through the
Company Secretary at: shires.income@aberdeenplc.com
10 Shires Income PLC
Annual General Meeting (“AGM”) and Online
Shareholder Presentation
The Company’s AGM will take place at 12 noon on
Tuesday 8 July 2025 at Aberdeen’s London office, 18
Bishops Square, London E1 6EG and all shareholders are
warmly invited to attend. As well as the formal business of
the meeting, the Investment Manager will provide a short
presentation on the Company and there will be an
opportunity for shareholders to ask questions of the
Manager and the Board.
Irrespective of whether you can attend, we encourage all
shareholders to complete and return the Proxy Form
enclosed with the Annual Report to ensure that your votes
are represented at the meeting. If you hold your shares via
a platform or through a nominee holding and would like to
attend and / or vote at the AGM, then you will need to
make arrangements with the administrator of your
platform or nominee.
The Notice of the Meeting is contained on pages
116 to 120.
Our Online Shareholder Presentation has been a popular
informal forum for shareholders and we are pleased to
hold another online presentation on Tuesday 24 June 2025
at 11.00am. The event will feature a chat between the
Chairman and Investment Manager and will be followed
by a live question and answer session. Full details on how
to register for the event can be found on the Company’s
website at: shiresincome.co.uk
Should you be unable to attend the online event, it will be
made available on the Company’s website shortly
afterwards. For those wishing to submit questions in
advance, you can do so using the following email address:
shires.income@aberdeenplc.com
Outlook
We are pleased to report a good performance over this
financial year and an increase in the Company’s dividend
(above CPI). The Company’s focus continues to be on
delivering a high level of income and capital growth for
shareholders. We believe that the Investment Manager is
well positioned to achieve this, as has also been the case
during some other turbulent market periods in the last
decade or so, caused often by exogenous events such as
Covid or changing interest rates – or, as now, geopolitical
uncertainty. We will continue to use the buy back authority
when appropriate if the share price rating falters, to
endeavour to offer secondary market liquidity. We would
also like to grow the Company by issuing more shares, as
we have done in the past, if it is practical and there is
demand to do so.
“The Company’s focus continues to be
on delivering a high level of income
and capital growth for shareholders.”
We cannot predict how global markets will fare over the
coming 12 months. However, with the volatility we have
seen, particularly in the US market, the UK may be seen as
a more attractive market to invest in than previously. With
a high level of income compared to other markets, our UK
focus can offer resilient income for investors. This is one of
the attractions of investing in a closed-ended company,
with modest equity gearing, which can provide above
average income for shareholders from a well-diversified
portfolio of quality investments.
Robin Archibald
Chairman
28 May 2025
Chairman’s Statement
Continued
Shires Income PLC 11
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Business Model
The business of the Company is that of an investment
company which qualifies as an investment trust for tax
purposes. The Directors do not envisage any change in
this activity in the foreseeable future.
Benchmark
In assessing its performance, the Company compares
its returns with those of the FTSE All-Share Index
(total return).
Investment Objective
The Company’s investment objective is to provide
shareholders with a high level of income, together with the
potential for growth of both income and capital, from a
diversified portfolio substantially invested in UK equities but
also in preference shares, convertibles and other fixed
income securities.
Investment Policy
The Company’s investment policy is to invest principally in
the ordinary shares of UK quoted companies, and in
preference shares, convertibles and other fixed income
securities with above average yields. The Company
generates income primarily from ordinary shares,
preference shares, convertibles and other fixed income
securities. It may also use derivatives to enhance
income generation.
Gearing
The Directors are responsible for determining the gearing
strategy of the Company. Gearing is used with the
intention of enhancing long-term returns. It is subject
to a maximum equity gearing level of 35% of net assets
at the time of drawdown. Any borrowing except in
relation to short-term liquidity requirements is used for
investment purposes.
Diversification of Risk and Investment Restrictions
In order to ensure adequate diversification, limits are set
within the investment policy which the AIFM and
Investment Manager must operate. All of these limits are
measured at the point of acquisition of investments, unless
otherwise stated, as follows:
General Investment Limits
· a maximum of 20% of total assets may be invested in
the equity securities of overseas companies;
· a maximum of 7.5% of total assets may be invested in
the securities of one company;
· any investment must not represent more than 5% of a
quoted investee company’s ordinary shares; and
· a maximum of 10% of total assets may be invested
directly in AIM holdings.
Limits in Relation to Preference Shares
· a maximum of 7.5% of total assets may be invested in
the preference shares of any one company; and
· the Company may not hold more than 10% of any
investee company’s preference shares.
Limits in Relation to Traded Option Contracts
There are principal guidelines put in place to manage the
risks associated with these contracts, including:
· call options written are to be covered by stock;
· put options written are to be covered by net current
assets/borrowing facilities;
· call options are not to be written on more than 10% of
the equity portfolio; and
· put options are not to be written on more than 10% of
the equity portfolio.
There was no option premium income generated during
the year ended 31 March 2025.
The Board assesses on a regular basis with the Investment
Manager the applicability of these investment limits, the
use of gearing and risk diversification, whilst aiming to
meet the overall investment objectives of the Company.
In accordance with the Listing Rules, the Company will not
make any material change to its published investment
policy without the prior approval of the FCA and the
approval of its shareholders by ordinary resolution.
Investment Process
The investment process and risk controls employed by the
Investment Manager are described on pages 101 to 105.
Overview of Strate
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y Overview of Strate
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12 Shires Income PLC
Promoting the Success of the Company
The Board’s statement on pages 19 to 22 describes how
the Directors have discharged their duties and
responsibilities over the course of the financial year under
section 172 (1) of the Companies Act 2006 and how they
have promoted the success of the Company for the
benefit of the members as a whole.
Key Performance Indicators (“KPIs”)
The Board uses a number of financial performance
measures to assess the Company’s success in achieving
its objective and determining the progress of the
Company in pursuing its investment policy. The main KPIs
identified by the Board in relation to the Company, which
are considered at each Board meeting, are shown in the
table below:
KPI Description
Performance against benchmark index The Board measures performance over the medium to long-term, on a total return basis
against the benchmark index – the FTSE All-Share Index (total return). The figures for this
year and the past three and five years are set out on page 23 and a graph showing
performance against the benchmark index over the past five years is shown on page 24.
Share price performance The Board monitors the performance of the Company’s share price on a total return
basis. The returns for this year and for the past three and five years are set out on page
23 and a graph showing the share price total return performance against the
benchmark index over the past five years is included on page 24.
Premium/discount to NAV The premium/discount relative to the NAV per share represented by the share price is
closely monitored by the Board. A graph showing the history of the premium/discount for
the past five years is included on page 24. The Board also monitors trading activity in the
Company’s shares on a regular basis.
Revenue return per Ordinary share The Board monitors the Company’s net revenue return (earnings per share) as a
measure of growth in revenue and revenue cover against dividends paid. The revenue
returns per Ordinary share for each of the past ten years are set out on page 26.
Dividend per share The Board monitors the Company’s annual dividends per Ordinary share and the extent
to which dividends are covered by current net revenue and revenue reserves. The
dividends per share for each of the past ten years are set out on page 26. The Board
gives active consideration to growth in the Company’s dividend given that this forms part
of the Company’s investment objective.
Ongoing charges The Board monitors the Company’s operating costs carefully. Ongoing charges for the
year and the previous year are disclosed on page 5.
Overview of Strate
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y
Continued
Shires Income PLC 13
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Principal and Emerging Risks and
Uncertainties
The Board carries out a regular review of the risk
environment in which the Company operates, changes to
that environment and to individual risks. The Board also
identifies emerging risks which might impact the
Company. The Board has carried out a robust assessment
of the Company’s principal and emerging risks, which
include those that would threaten its business model,
future performance, solvency, liquidity or reputation and
has endeavoured to find means of mitigating those risks,
wherever practical.
There are a number of other risks which, if realised, could
have a material adverse effect on the Company and its
financial condition, performance and prospects.
The principal risks and uncertainties faced by the
Company are reviewed by the Audit Committee in the
form of a risk matrix. The assessment of risks and their
mitigation continues to be an area of significant focus for
the Audit Committee. The principal risks and uncertainties
facing the Company at the current time, together with a
description of the mitigating actions the Board has taken,
are set out in the table below.
In addition to these risks, the conflicts in Ukraine, the Middle
East and other geo-political tensions continue to present
exogenous risks as does the recent introduction of trade
tariffs and the impact that has on global trade and
financial markets.
The most significant direct issue that the Company faced
during the year was the increasing discounts to net asset
value that have affected the entire investment company
sector, including income funds, resulting from selling
pressure and lack of investor demand, although this has
been partially mitigated by increased use of share buy
backs and other capital mechanisms.
The principal risks associated with an investment in the
Company’s shares are published monthly in the
Company’s factsheet and they can be found in the
pre-investment disclosure document (“PIDD”) published
by the Manager, both of which are available on the
Company’s website.
Description Mitigating Actions
Strategic objectives and investment
policy – a lack of demand for the
Company’s shares due to its
objectives becoming unattractive
to investors, or a negative
perception of investment trusts,
could result in a fall in the value of
its shares and a widening of the
discount of the share price to its
underlying NAV.
The Board formally reviews the Company’s objectives and strategies for achieving them on
an annual basis, or more regularly if appropriate.
The Board is cognisant of the importance of regular communication with shareholders and
knowledge of what encourages investment in the Company. Directors attend meetings with
shareholders where practical, host the Annual General Meeting as a forum for shareholder
contact and regularly discuss shareholder investment behaviour with the Manager, including
trends on investment platforms and shareholder themes. The Board reviews shareholder
feedback through reports provided by the Manager’s Investor Relations team and also
receives feedback from the Company’s Stockbroker.
The Board and Manager keep the level of discount under constant review, as well as
changes to the Company’s shareholder register. There has been regular review in the last
year culminating in the use of share buy backs as appropriate.
14 Shires Income PLC
Overview of Strate
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y
Continued
Description Mitigating Actions
Investment performance –
the appointment or continuing
appointment of an investment
manager with inadequate
resources, skills or experience
could lead to poor performance of
the portfolio when measured
against the benchmark.
The Board meets the Manager on a regular basis and keeps investment performance under
close review. This includes performance attribution by sector and stock, and liquidity analysis,
as well as the degree of diversification in the portfolio and income sustainability through
examination of forward income projections.
Representatives of the Investment Manager attend all Board meetings and a detailed
formal appraisal of the Aberdeen Group is carried out annually by the Management
Engagement Committee.
The Board sets, and monitors, the investment restrictions and guidelines, and receives
regular reports which include performance reporting on the implementation of the
investment policy, the investment process, risk management and application of the
guidelines.
Investment risk within the portfolio is managed in four ways:
· Adherence by the Investment Manager to the investment process in order to minimise
investments in poor quality companies and/or overpaying for investments.
· Diversification of investment - seeking to invest in a wide variety of companies with strong
balance sheets and the earnings power to pay increasing dividends. In addition,
investments are diversified by sector in order to reduce the risk of a single large exposure.
The Company invests mainly in equities and preference shares.
· Adherence by the Investment Manager to the investment limits set by the Board
(see page 11).
· Examination of changes to the portfolio and emerging investment themes, including
relative to benchmark constituents and in order to provide income.
Investment in preference shares
The Company has longstanding holdings in a number of preference shares with no fixed
redemption dates, as detailed on page 40 (representing 19.0% of the Company’s portfolio as
at 31 March 2025). The Directors regularly review these investments, which are held
primarily to enhance the income generation of the Company. By their nature, their price
movements will be subject to a number of factors, including prevailing and changing interest
rates, and, in normal market conditions, will tend to respond less to pricing movements in
equity markets. Issue sizes of these preference shares are normally relatively small and with
associated low secondary market liquidity by comparison with the equity component of the
portfolio. The Board also considers the long-term nature of these investments and the
impact of any potential changes on the duration of the portfolio and its returns, as well as the
sustainability of the dividends paid.
Shires Income PLC 15
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Description Mitigating Actions
Failure to maintain, and grow the
dividend over the longer term –
the level of the Company’s
dividends and future dividend
growth will depend on the
performance of the
underlying portfolio.
The Directors review detailed income forecasts at each Board meeting and discuss the
Investment Manager’s outlook for dividends. The Company has revenue reserves which it
can draw upon should there be a shortfall in revenue returns in a year, and also has the ability
to pay dividends from the special reserve created during the year under review and realised
capital reserves, but would only resort to this in circumstances where there was an
unexpected fall in net income. The Board regularly reviews forward net revenue projections
and takes into account revenue reserves in setting quarterly dividend levels.
Share price and shareholder
relations – the adoption of an
inappropriate marketing strategy,
failure to address shareholder
concerns or other factors, including
the setting of an unattractive
strategic investment proposition,
changing investor sentiment and
investment underperformance,
may lead to a decrease in demand
for the Company’s shares and a
widening of the difference
between the share price and the
NAV per share.
The Board monitors the Company’s Ordinary share price relative to the NAV per share and
keeps the level of premium or discount at which the Company’s shares trade under review.
The Board also keeps the investment objective and policy under review and holds an annual
strategy meeting where it reviews investor relations reports and updates from the Manager
and the Company’s Stockbroker.
The Directors are updated at each Board meeting on the composition of, and any
movements in, the shareholder register, which is retail investor dominated. The Board
annually agrees a marketing and communications programme and budget with the
Manager, and receives updates regularly on both marketing and investor relations.
The Board has a close focus on investor platform activity which has been the dominant
change over recent years in how retail investors choose to acquire and hold their shares. This
includes contact with the platform operators through the Manager. Where it can, the Board
encourages retail investors to vote their shares at general meetings of the Company to
ensure that their views are represented.
Gearing – a fall in the value of the
Company’s investment portfolio
could be exacerbated by the
impact of gearing. It could also
result in a breach of loan
covenants and the forced sale of
investments.
The Board sets the gearing limits within which the Investment Manager can operate. Gearing
levels and compliance with loan covenants are monitored on an ongoing basis by the
Manager and at scheduled Board meetings, or between Board meetings if required. In the
event of a possible impending covenant breach, appropriate action would be taken to
reduce borrowing levels. The financial covenants attached to the Company’s borrowings
currently provide for significant headroom. The maximum equity gearing level is 35% of net
assets at the time of drawdown, which constrains the amount of gearing that can be
invested in equities which are more volatile than the fixed interest part of the portfolio. The
use of gearing has been an important facilitator of the income returns from the portfolio,
particularly in financing the high yield preference share proportion of the portfolio which has
historically provided significant dividend income for the Company.
The Company’s gearing includes a revolving credit facility which can be reduced without
any significant financial penalties for early repayment and at relatively short notice.
Accounting and financial reporting -
inadequate controls over financial
record keeping and forecasting
could result in inaccurate financial
reporting, the Company being
unable to meet its financial
obligations or inability to pay a
dividend, losses to the Company
and impact its ability to continue
trading as a going concern.
At each Board meeting, the Directors review management accounts and receive a report
from the Administrator, detailing any breaches during the period under review. The
Company’s annual financial statements are audited. The Audit Committee receives bi-
annual compliance and internal reports from the Manager and meets a representative from
its Internal Audit team on at least an annual basis and discusses any findings and
recommendations relevant to the Company.
16 Shires Income PLC
Overview of Strate
g
y
Continued
Description Mitigating Actions
Regulatory – failure to comply with
relevant laws and regulations could
result in fines, loss of reputation and
potentially loss of an advantageous
tax regime.
The Board and Manager monitor changes in government policy and legislation which may
have an impact on the Company, and the Audit Committee monitors compliance with
regulations by reviewing internal control reports from the Manager. There is also a regular
review of adherence to governance guidelines that affect investment companies and how
the Company is meeting existing or proposed guidelines.
The Board is kept aware of proposed changes to laws and regulations, considers the
changes and applies them as appropriate, if they are not already being met. The Board
and Manager actively lobby UK regulatory bodies when they believe current regulations
need reforming.
From time to time the Board employs external advisers to advise on specific regulatory and
governance matters.
Operational – the Company is
dependent on third parties for the
provision of all systems and
services (in particular, those of the
Aberdeen Group) and any control
failures and gaps in their systems
and services, including in relation to
cyber security, could result in a loss
or damage to the Company.
The Board receives reports from the Manager on its internal controls and risk management
processes and receives assurances from the Manager and all its other significant service
providers on at least an annual basis, including on matters relating to operational resilience
and cyber security. Written agreements are in place with all third party service providers. The
Manager monitors closely the control environments and quality of services provided by third
parties, including those of the Depositary, through service level agreements, regular
meetings and key performance indicators.
The Board – inappropriate Board
composition or committee
structure, conflicts of interest or an
inappropriate remuneration
structure could lead to poor
oversight and governance of the
Company resulting in reputation
damage, regulatory fines or
censures.
A formal induction process is arranged by the Manager for all new Directors, including details
of Board policies and relevant regulations, including procedures for Directors’ dealings in the
Company’s shares. The Board conducts a formal annual review of its performance, and of
the Board committees and individual Directors. The Nomination and Remuneration
Committee conducts an annual review of the level of Directors’ fees and has access
to external consultants if required. All Directors are encouraged to attend relevant
training courses.
The roles and responsibilities of the Board committees are set out on pages 52 and 53.
All Directors stand for annual re-appointment by shareholders at the Annual
General Meeting.
Exogenous risks such as health,
social, financial, economic, climate
and geo-political – the financial
impact of such risks, associated
with the portfolio or the Company
itself, could result in losses to
the Company.
In common with most commercial operations, exogenous risks over which the Company has
no control are always a risk. At any given time, the Company has sufficient cash resources
and a highly liquid equity portfolio to meet its operating requirements. The diversified nature
of the portfolio and a managed level of gearing both serve to provide a degree of protection
in times of market volatility.
The financial and economic risks associated with the Company include market risk, liquidity
risk and credit risk, all of which the Investment Manager seeks to mitigate. Further details of
the steps taken to mitigate the financial risks associated with the portfolio are set out in note
18 to the financial statements.
Shires Income PLC 17
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
External Agencies
In addition to the services provided to the Company by the
Aberdeen Group, the Board has contractually delegated
certain services to external service suppliers, including:
depositary services (which include the safekeeping of the
Company’s assets) (BNP Paribas Trust Corporation UK
Limited) and share registration services (Equiniti Limited).
Each of these services was entered into after full and
proper consideration by the Board of the quality and
cost of services offered. In addition, day-to-day
accounting and administration services are provided,
through delegation by the Manager, by the Administrator,
BNP Paribas Securities Services.
Promotional Activities
The Board recognises the importance of promoting the
Company to prospective investors both for improving
liquidity and enhancing the rating of the Company’s
shares. The Board believes one effective way to achieve
this is through subscription to, and participation in, the
promotional programme run by the Aberdeen Group on
behalf of a number of investment trusts under its
management. The Company’s financial contribution to
the programme is matched by the Aberdeen Group. The
Company also supports the Manager’s investor relations
programme which involves regional roadshows to existing
and potential shareholders, promotional and public
relations campaigns. The Manager’s promotional and
investor relations teams report to the Board on a quarterly
basis giving analysis of the promotional activities as well as
updates on the shareholder register and any changes in
the make up of that register.
The purpose of the promotional and investor relations
programmes is both to communicate effectively with
existing shareholders and to gain new shareholders, with
the aim of improving liquidity and enhancing the value and
rating of the Company’s shares. Communicating the long-
term attractions of the Company is key. The promotional
programme includes commissioning independent paid for
research on the Company, most recently from Kepler
Trust Intelligence. A copy of the latest research note is
available from the Company's website.
The Board continues to explore with the Manager ways to
support retail investment through platforms and improved
communication with the underlying holders, as well as
voting participation in general meetings.
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 or environmental matters.
Modern Slavery Act
Due to the nature of the Company’s business, being a
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. In any event,
the Board considers the Company’s supply chains, dealing
predominantly with professional advisers and service
providers in the financial services industry, to be low risk in
relation to this matter.
Environmental, Social and Governance
(“ESG”) Matters
The Board is supportive of the Investment Manager’s
approach to ESG issues, including climate change, and
welcomes its active engagement with company
management. The Investment Manager’s Approach to
ESG Matters is included on pages 103 to 105.
Sustainability Disclosure Requirements
(“SDR”)
In November 2023, the Financial Conduct Authority
(“FCA”) published its sustainability disclosure requirements
and investment labels regime (“SDR”) to address concerns
about misleading sustainability claims. SDR includes an
opt-in labelling regime for sustainable investment
products, additional disclosure requirements and
restrictions on the use of sustainability terms. It also
establishes anti-greenwashing (“AGW”) rules. Investment
trusts and their managers are in scope of the SDR.
Although investment trusts are not directly in scope of the
AGW requirements, the rules apply indirectly to them,
mostly via obligations imposed on their managers.
Although Environmental, Social and Governance (“ESG”)
factors are taken into consideration by the Investment
Manager as part of its investment analysis, the Company
itself does not have an explicit sustainability objective and
so under SDR is categorised as “Non-labelled” rather than
“Labelled” or “Other”.
18 Shires Income PLC
Global Greenhouse Gas Emissions
The Company has no greenhouse gas emissions to report
from its operations, nor does it have responsibility for any
other emissions producing sources under the Companies
Act 2006 (Strategic Report and Directors’ Reports)
Regulations 2013.
Under Listing Rule 11.4.22(R), the Company, as a
closed ended investment company, is exempt from
complying with the Task Force on Climate-related
Financial Disclosures.
The UK Stewardship Code and Proxy Voting
The Company supports the UK Stewardship Code, and
seeks to play its role in supporting good stewardship of the
companies in which it invests. Responsibility for actively
monitoring the activities of portfolio companies has been
delegated by the Board to the Manager which has sub-
delegated that authority to the Investment Manager.
Aberdeen is a signatory to the UK Stewardship Code
which aims to enhance the quality of engagement by
investors with investee companies in order to improve
their socially responsible performance and the long-term
investment return to shareholders. While delivery of
stewardship activities has been delegated to the
Manager, the Board acknowledges its role in setting the
tone for the effective delivery of stewardship on the
Company’s behalf.
The Board has also given discretionary powers to the
Manager to exercise voting rights on resolutions proposed
by the investee companies within the Company’s portfolio.
The Manager reports on a quarterly basis on stewardship
(including voting) issues.
Board Diversity
The Board’s disclosures in relation to its diversity are
included on page 51.
Viability Statement
The Board considers the Company, with no fixed life, to be
a long-term investment vehicle but, for the purposes of
this viability statement, has decided that three years is an
appropriate period over which to report, irrespective of
any exogenous risks that the Company may face. The
Board considers that this period reflects a balance
between a longer-term investment horizon, the inherent
uncertainties within equity markets and the specifics of a
closed-end investment company where its central
purpose is different from other listed commercial and
industrial companies.
In assessing the viability of the Company over the
review period, the Directors have focused upon the
following factors:
· The principal risks and uncertainties detailed on pages
13 to 16 and the steps taken to mitigate these risks.
· The ongoing relevance of the Company’s investment
objective.
· The liquidity of the Company’s portfolio. The majority of
the portfolio is invested in readily realisable listed
securities.
· The level of ongoing expenses. The Company’s annual
revenue expenses, excluding the cost of the dividend,
are expected to continue to be covered by investment
income.
· The level of gearing. This is closely monitored and stress
testing is carried out by the Manager. The financial
covenants attached to the Company’s borrowings
provide for significant headroom.
· Regulatory or market changes.
· The robustness of the operations of the Company’s third
party service providers.
· The operation of share buy backs undertaken by
the Company.
In making its assessment, the Board has considered that
there are other matters that could have an impact on the
Company’s prospects or viability in the future, including
the current geo-political uncertainty associated with the
imposition of global tariffs and an escalating trade war
between China and the USA, economic shocks, significant
stock market volatility, and changes in regulation or
investor sentiment, including to income levels.
Taking into account the Company’s current position and
the potential impact of its principal risks and uncertainties
and emerging risks, 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 approval of
this Report.
Outlook
The Board’s view on the general outlook for the Company
can be found in the Chairman’s Statement on page 10
whilst the Investment Manager’s views on the outlook for
the portfolio are included on pages 32 to 33.
On behalf of the Board
Robin Archibald
Chairman
28 May 2025
Overview of Strate
g
y
Continued
Shires Income PLC 19
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
How the Board Meets its Obligations Under
Section 172 of the Companies Act
The Board is required to describe to the Company’s
shareholders how the Directors have discharged their
duties and responsibilities over the course of the financial
year under section 172 (1) of the Companies Act 2006
(the “Section 172 Statement”). The Board provides below
an explanation of how the Directors have promoted the
success of the Company for the benefit of its members as
a whole, taking into account, amongst other things, the
likely long-term consequences of decisions, the need to
foster business relationships with all stakeholders and the
impact of the Company’s operations on the environment.
The Purpose of the Company and Role
of the Board
The purpose of the Company is to act as an investment
vehicle to provide, over time, financial returns (both
income and capital) to its shareholders. Investment trusts,
such as the Company, are long-term investment vehicles
and are typically externally managed, have no
employees, and are overseen by an independent non-
executive board of directors.
The Board, which, at the year end, comprised five
independent non-executive Directors with a broad range
of skills and experience across all major functions that
affect the Company, retains responsibility for taking all
decisions relating to the Company’s investment objective
and policy, gearing, corporate governance and strategy,
and for monitoring the performance of the Company’s
service providers.
The Board’s philosophy is that the Company should
operate in a transparent culture where all parties are
treated with respect and provided with the opportunity to
offer practical challenge and participate in positive
debate which is focused on the aim of achieving the
expectations of shareholders and other stakeholders alike.
The Board reviews the culture and manner in which the
Manager and Investment Manager operate at its regular
meetings and receives regular reporting and feedback
from the other key service providers. The Board is very
conscious of the ways it promotes the Company’s culture
and ensures as part of its regular oversight that the
integrity of the Company’s affairs is foremost in mind in
the way that the activities are managed and promoted.
The Board works very closely with the Manager and
Investment Manager in reviewing how stakeholder issues
are handled, ensuring good governance and responsibility
in managing the Company’s affairs, as well as visibility and
openness in how the affairs are conducted.
The Company’s main stakeholders have been identified
as its shareholders, the Manager/Investment Manager,
service providers, investee companies, its debt provider
and, more broadly, the investment community.
How the Board Engages with Stakeholders
The Board considers its stakeholders at Board meetings
and receives feedback on the Manager’s interactions
with them.
The Board and Manager also continue to consider how
best to engage with private investors who invest through
platforms, not least to increase voting participation at
general meetings of the Company and to try and
increase investor demand for diversified income
from retail investors.
Promotin
g
the Success of the Company
20 Shires Income PLC
Stakeholder How We Engage
Shareholders Shareholders are key stakeholders and the Board places great importance on communication
with them. The Board welcomes all shareholders’ views and aims to act fairly between all
shareholders. The Company’s shareholder register is retail dominated. The Manager and
Company’s Stockbroker regularly meet with current and prospective shareholders from the
wealth management community to discuss performance. Shareholder feedback is discussed by
the Directors at each Board meeting. The Company subscribes to the Manager’s investor
relations programme in order to maintain communication channels with shareholders.
The Board is updated on and responds to developments in the wider investment company
sector, which has been instructive in how share buy backs have been applied in the last year or
so by the Company.
Regular updates are provided to shareholders through the Annual Report, Half-Yearly Report,
monthly factsheets, Company announcements, including daily NAV announcements, and
through the Company’s website, which includes up to date information on the Company. The
Company’s Annual General Meeting provides a forum, both formal and informal, for
shareholders to meet and discuss issues with the Directors and Manager. The Board encourages
as many shareholders as possible to attend the Company’s Annual General Meeting and to
provide feedback on the Company. In addition to the Annual General Meeting, there will be an
Online Shareholder Presentation again this year following a favourable response in the past to
this informal on-line event. The Board welcomes contact with shareholders and has various ways
of receiving shareholder questions and responding to them, including through the Company
Secretary. During the year, the Investment Manager held meetings with a number of the
Company’s larger shareholders to update them on the Company and to receive any feedback
or concerns.
The Board is keen to have increased shareholder voting at general meetings of the Company
and reviews ways in which there can be greater communication with the largely retail investor
shareholder base.
Manager/Investment Manager The Investment Manager’s Review on pages 27 to 33 details the key investment decisions taken
during the year. The Investment Manager has continued to manage the Company’s assets in
accordance with the mandate agreed with the Company, with the oversight of the Board.
The Board regularly reviews the Company’s performance against its investment objective and
undertakes an annual strategy review meeting to ensure that the Company is positioned well for
the future delivery of its objective for its shareholders. 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 and Investment Manager at least annually. More details are
provided on page 52.
Service Providers The Board seeks to maintain constructive relationships with the Company’s suppliers either
directly or through the Manager with regular communications and meetings.
The Management Engagement Committee conducts an annual review of the performance,
terms and conditions of the Company’s main service providers to ensure they are performing in
line with Board expectations, undertaking their responsibilities and providing value for money.
Promotin
g
the Success of the Company
Continued
Shires Income PLC 21
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Stakeholder How We Engage
Investee Companies Responsibility for actively monitoring the activities of portfolio companies has been delegated by
the Board to the Manager which has sub-delegated that authority to the Investment Manager.
The Board has also given discretionary powers to the Manager to exercise voting rights on
resolutions proposed by the investee companies within the Company’s portfolio. The Manager
reports to the Board on a quarterly basis on stewardship (including voting) issues. Through
engagement and exercising voting rights, the Investment Manager actively works with
companies to improve corporate standards, transparency and accountability. Aberdeen is a
signatory to the UK Stewardship Code. Further details are provided on page 18.
The Board monitors investments made and divested and questions the rationale for investment
and voting decisions.
Debt Provider On behalf of the Board, the Manager maintains a positive working relationship with the provider
of the Company’s loan facility, and provides regular updates to the Board on business activity and
compliance with its loan covenants. Gearing is an important component of the Company’s
capital structure.
Investment Community The Board and Manager are committed to investing in a responsible manner and the Investment
Manager embeds Environmental, Social and Governance (“ESG”) considerations into its research
and analysis as part of the investment decision-making process. Further details are provided on
pages 101 to 105.
Specific Examples of Stakeholder
Consideration During the Year
While the importance of giving due consideration to the
Company’s stakeholders is not a new requirement, and is
considered during every Board decision, the Directors
were particularly mindful of stakeholder considerations
during the following decisions undertaken during the year
ended 31 March 2025.
Management of the Portfolio
The Investment Manager’s Review on pages 27 to 33
details the key investment decisions taken during the year.
The overall shape and structure of the investment
portfolio is an important factor in delivering the
Company’s stated investment objective.
As explained in more detail on page 52, during the year,
the Board, through the Management Engagement
Committee, decided that the continuing appointment of
the Manager was in the best interests of shareholders.
Dividend
Following the payment of the final dividend for the year, of
5.20p per Ordinary share, total dividends for the year will
amount to 14.80p per Ordinary share, representing a
dividend yield of 5.8% based on the share price of 255.5p
at the end of the financial year. This is in accordance with
the Company’s objective to provide shareholders with a
high level of income.
In deciding on the level of dividend for the year, the Board
took into account the revenue earnings per Ordinary
share for the year, forecast revenues for subsequent
years and the level of revenue reserves as well as the
impact of share buy backs.
Through meetings with shareholders and feedback from
the Manager and the Company’s Stockbroker, the Board
remains conscious of the importance that shareholders
place on the level, and sustainability, of dividends paid by
the Company.
22 Shires Income PLC
Allocation of Costs
As explained in last year’s Annual Report, the Board
decided that, with effect from 1 April 2024, management
fees and finance costs would be charged 40% to Revenue
and 60% to Capital (previously 50% to Revenue and 50%
to Capital). Following the completion of the merger of the
Company with abrdn Smaller Companies Income Trust
PLC in December 2023, the Board considered that this
allocation better reflects the expected long-term view of
the nature of the future investment returns of the enlarged
portfolio and is consistent with the treatment adopted by
other UK Equity Income investment trusts. The Board
therefore considers that this change is in the best interests
of shareholders.
Share Buy Backs
During the year, the Company bought back 1,154,946
Ordinary shares to be held in treasury, providing a small
accretion to the NAV per share and a degree of liquidity to
the market at times when the discount to the NAV per
share had widened in normal market conditions. The
Board liaises closely with the Manager and Stockbroker in
how buy backs might be applied in light of supply and
demand for shares on a retail register such as the
Company has. It is the view of the Board that this policy of
periodically using buy back powers, but not in a
mechanical fashion, is in the interest of all shareholders.
Cancellation of Share Premium Account
Following shareholder approval at the Company’s AGM
on 5 July 2024, the Company received court approval by
way of a court order dated 13 August 2024 for
cancellation of the Share Premium Account. The court
order was registered at Companies House on 16 August
2024 at which point cancellation of the Share Premium
Account became effective. Consequently, the amount of
approximately £50 million previously standing to the credit
of the Share Premium Account was transferred to a newly
created distributable reserve which is available to fund the
cost of share buy backs and dividend payments. The
Board considers that it is in shareholders’ interests for the
Company to have this flexibility, although it has no current
intention of making use of the new reserve for dividend
payments which will continue to be resourced through net
revenue and revenue reserves.
Online Shareholder Presentation
As explained in the Chairman’s Statement, to encourage
and promote interaction and engagement with the
Company’s shareholders, the Board has again decided to
hold an interactive Online Shareholder Presentation which
will be held at 11.00am on 24 June 2025. The event will
feature a chat between the Chairman and Investment
Manager and will be followed by a live question and
answer session. The online presentation is being held
ahead of the Annual General Meeting in order to allow
shareholders to submit their proxy votes prior to
the meeting.
On behalf of the Board
Robin Archibald
Chairman
28 May 2025
Promotin
g
the Success of the Company
Continued
Shires Income PLC 23
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Performance (Total Return)
1 year 3 year 5 year
% return % return % return
Net asset value
A
+9.4 +12.5 +67.8
Share price
A
(based on mid-market) +22.4 +9.1 +69.6
FTSE All-Share Index +10.5 +23.3 +76.6
A
Considered to be an Alternative Performance Measure. See page 113 for further information.
All figures are for total return and assume re-investment of net dividends excluding transaction costs.
Source: Aberdeen plc, Morningstar & Factset
Analysis of Total Return Performance
%
Total NAV return per share 9.4
Total return on FTSE All-Share Index 10.5
Relative performance of NAV compared to FTSE All-Share Index –1.1
Analysis of Performance for the year relative to the FTSE All-Share Index
-2.4
-1.0
-1.4
1.4
-0.2
1.4
-1.4
0.3
-0.1
-0.1
-1.1
%
Lis ted equities
- Stock selection*
- Asset allocation*
Prefs & Fixed Interest Invs
Cash
Loans
Fees & expenses
Share buybacks
Tax charge
Technical differences
Total
The above table shows the composition of the relative performance of the NAV total return compared to the benchmark index. In
particular, it shows the contribution from the Listed Equities Portfolio and from the Preference shares. Within the Listed Equites Portfolio,
the contributions to relative performance come from exposure to individual stocks (Stock Selection) and sectors (Asset Allocation).
* Further analysis of performance attributable to listed equities.
Performance
24 Shires Income PLC
Total Return of NAV and Ordinary Share Price vs FTSE All-Share Index
Five years to 31 March 2025. Figures are total return and have been rebased to 100 at 31 March 2020
100
110
120
130
140
150
160
170
180
190
31/03/20 31/03/21 31/03/22 31/03/23 31/03/24 31/03/25
Source: Morningstar & Aberdeen
NAV
Shar e Pri ce
Benchmark
Ordinary Share Price Premium/(Discount) to NAV (cum-income)
Five years to 31 March 2025
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
31/03/20 31/03/21 31/03/22 31/03/23 31/03/24 31/03/25
Source: Morningstar & Aberdeen
Performance
Continued
Shires Income PLC 25
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Dividends
Rate per share XD date Record date Payment date
First interim dividend 3.20p 3 October 2024 4 October 2024 31 October 2024
Second interim dividend 3.20p 2 January 2025 3 January 2025 31 January 2025
Third interim dividend 3.20p 3 April 2025 4 April 2025 30 April 2025
Proposed final dividend 5.20p 3 July 2025 4 July 2025 31 July 2025
2024/25 14.80p
First interim dividend 3.20p 5 October 2023 6 October 2023 27 October 2023
Second interim dividend 3.20p 4 January 2024 5 January 2024 31 January 2024
Third interim dividend 3.20p 4 April 2024 5 April 2024 30 April 2024
Final dividend 4.80p 4 July 2024 5 July 2024 31 July 2024
2023/24 14.40p
Dividends Per Share
Five years to 31 March 2025
13.20p
13.80p
14.20p
14.40p
14.80p
2021 2022 2023 2024 2025
Dividend Yield
Five years to 31 March 2025
0%
1%
2%
3%
4%
5%
6%
7%
8%
2021 2022 2023 2024 2025
Shires Income PLC
FTSE All-Share Index
26 Shires Income PLC
Ten Year Financial Record
Year to 31 March 2016 2017 2018 2019 2020 2021* 2022* 2023* 2024* 2025*
Revenue available for ordinary
dividends (£’000) 3,617 3,925 4,106 3,920 3,961 3,796 4,379 4,584 5,068 6,097
Per share (p)
Net revenue earnings 12.1 13.1 13.7 13.1 13.0 12.3 14.2 14.8 14.8 14.8
Net dividends paid/proposed 12.25 12.75 13.00 13.20 13.20 13.20 13.80 14.20 14.40 14.80
Net total earnings (17.8) 54.5 9.4 10.3 (45.4) 68.2 29.5 (6.6) (4.3) 23.2
Net asset value 229.4 271.6 268.2 265.5 207.4 262.4 278.3 257.9 256.0 265.2
Share price (mid-market) 202.0 243.3 260.0 267.0 200.5 248.0 279.0 250.0 222.0 255.5
Shareholders’ funds (£m) 68.8 81.5 80.5 80.1 63.9 80.9 85.8 79.9 106.0 106.7
* Net asset value per share is calculated after the repayment of the capital paid up on Cumulative Preference shares (see note 16 on page 90).
Cumulative Performance
Rebased to 100 at 31 March 2015
As at 31 March 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Net asset value 100.0 88.4 104.7 103.4 102.3 79.9 101.1 107.3 99.4 98.7 102.2
Net asset value total return
A
100.0 93.0 115.8 119.6 124.4 102.0 136.6 152.1 148.7 156.4 171.1
Share price performance 100.0 80.2 96.5 103.2 106.0 79.6 98.4 110.7 99.2 88.1 101.4
Share price total return
A
100.0 84.6 107.8 121.0 130.6 102.9 135.0 159.9 151.1 142.6 174.5
Benchmark performance 100.0 92.7 108.9 106.3 108.6 84.8 104.6 114.3 113.5 118.4 126.2
Benchmark total return
A
100.0 96.1 117.2 118.6 126.2 102.9 130.4 147.4 151.7 164.5 181.7
A
Total return figures are based on reinvestment of net income.
Performance
Continued
Shires Income PLC 27
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Highlights
· NAV total return of 9.4% over the year ended 31 March
2025, compared to a total return of 10.5% from the FTSE
All-Share Index.
· The portfolio slightly lagged the benchmark, as we
would expect given the defensive and income focused
nature of the portfolio and the weighting to fixed
income. However, it delivered the target of positive
growth of income and capital in absolute terms.
· Revenue return per share increased to 14.80p per share
(2024: 14.75p).
Portfolio Strategy
We take a long term approach to investing, believing that,
whilst there might be volatility in the short and even
medium term, share prices should ultimately reflect the
fundamental value of a company. Consequently, there
has been no change to our approach to the construction
of the portfolio during the year under review. The
Company’s investment portfolio is invested in equities,
preference shares and other fixed income instruments. At
the year end, 81% of the portfolio was invested in equities
and 19% was invested in fixed income, roughly in line with
the weightings at the end of the prior year.
While the portfolio is primarily focused on UK listed
companies, we have the ability to invest up to 20% of the
assets in overseas companies, with the aim of improving
diversification and finding opportunities not available to
investors in the UK market. The limit was increased from
10% to 20% during the year in order to increase flexibility.
However, we see valuations in the UK as particularly
attractive and it is notable that overseas exposure has
actually reduced compared to the prior year. As at the
year end we held four overseas companies, making up
4.8% of the portfolio, compared to eight positions and 9.4%
at the prior year end.
Equity Market Review
The year to the end of March 2025 was a good one for
equity markets globally. The MSCI World index delivered a
total return of 7.5%, even though it fell by almost 7% from
its highs in the middle of February to the end of March. US
markets continued to perform well, with the S&P 500
returning 8.5% over the period, but equity market
performance was much more consistent across the world
last year than it has been for some time. Europe almost
kept pace with a 7.5% return from the MSCI Europe Index
and the MSCI Emerging Markets Index also did well,
returning 8.6% in US Dollar terms. Notwithstanding the
amount of negative press around UK equities, the UK
market as measured by the FTSE All-Share Index
performed even better, returning 10.5% for the year.
While performance for different equity markets was more
balanced over the 12 months, this reflected different
winners and losers at different points in the year. For much
of the period, the US led the way, with large cap
technology stocks such as Nvidia leading the market
higher. Continued strong earnings and flows into US index
trackers supported share prices, with the election of
Donald Trump as President in November giving the US
market a push into the calendar year end. However, this
reversed in early 2025. Growing concerns over trade
policy in the US, combined with high valuations, led to a
pullback in US equities. At the same time, the removal of
government borrowing restrictions in Germany provided
a potential source of stimulus for the European economy,
boosting European markets and causing a rotation out of
US into European equities. Between January and March,
Europe outperformed the US by around 10%. We had
been hoping for a broadening out of equity returns away
from a concentrated set of companies in the US for some
time and the rotation is a welcome, and healthy,
development for markets.
“The NAV total return for the year was
9.4%, a strong return. This compares
to a total return of 10.5% from the
FTSE All-Share Index.”
Within the UK market, financial stocks were the stand-out
performers, with banks up by 56% and the insurance
sector up by 20%. Over the year, interest rates and bond
yields remained at high levels, boosting bank returns, while
the market has slowly understood the strength of the UK
banks hedge position, which helps protect them from
falling interest rates over the next few years. The
combination of earnings upgrades for the sector and
valuations which remain low compared to history has
been a powerful combination. Another sector that has
performed well has been capital goods, with defence
stocks performing well and also UK construction and
industrial companies as activity levels have remained
robust. The outlook for increased government spending
has supported construction companies.
Investment Mana
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28 Shires Income PLC
The sectors that have lagged the market have been the
more cyclical ones. Shares in consumer goods have been
weak, reflecting concerns about the UK domestic
economy, while materials and energy have also lagged as
global growth has slowed, especially in China which drives
much of the world’s commodity demand. While some
sectors have benefitted from higher interest rates, the
reverse has also been true for sectors that correlate
negatively with yields. Healthcare was up slightly, but
lagged the market, while the real estate sector fell 10%
over the period.
Investment Performance
The net asset value (“NAV”) total return for the year was
9.4%, a strong return. This compares to a total return of
10.5% from the FTSE All-Share Index.
The largest negative impact on performance over the
period was the weighting towards smaller companies.
Over the long term, small and mid-cap companies in the
UK have delivered markedly superior returns to large caps.
They are more likely to grow and, in turn, to deliver
dividend growth. As an active manager, we see more
ability to deliver differentiated returns from small and mid-
cap companies, given they are less well analysed and
understood by market participants. Furthermore, we have
a genuinely size agnostic approach to investing. That
means that the portfolio is more likely to have an
underweight exposure to large companies and an
overweight exposure to small companies compared to
the benchmark. However, this weighting towards smaller
companies did not work well during the year as returns
within the benchmark were heavily skewed towards
larger companies. The FTSE 100 Index returned 11.9%, but
the mid-cap FTSE 250 Index returned only 1.1%, an
unusually wide spread between the two.
Why was this the case? We don’t see compelling
fundamental reasons – earnings revisions from the FTSE
250 have been comparable to the FTSE 100. But we do
see an impact from lower liquidity in the UK market and
there is a clear correlation with negative sentiment on the
UK and investor caution. The FTSE 250 is slightly more
domestically focused and is seen as higher risk by
investors. However, it very rarely trades at a valuation
discount to the FTSE 100, with the most recent
occurrences during the Covid-19 pandemic and
immediately following the Brexit vote in 2016, yet it
currently trades at an approximate 10% discount on a
price to earnings multiple. Smaller companies tend to
underperform when UK bond yields rise, as investors are
more risk averse, and growth is discounted to a greater
extent. Our hope would be that, as interest rates come
down and sentiment towards the UK improves, we will see
a recovery in UK mid cap stocks.
On an individual stock basis, the top performers included
Morgan Sindall, which returned 50% as it continued to
deliver strong earnings upgrades, benefiting from
tightness in the fit-out market and robust construction
demand in the UK. Imperial Brands (+72%) delivered
improved cashflows and was helped by a consistent high
level of share buybacks through the year. Banks in general
were particularly strong, boosted by higher for longer
interest rates and low starting valuations. Within the
portfolio, NatWest (+83%), HSBC (+54%), Standard
Chartered (+74%), and OSB (+30%) all delivered notably
positive returns. Games Workshop (+46%), was another
smaller-cap holding that delivered earnings upgrades and
re-rated over the course of the year.
“The weighting towards smaller
companies did not work well during
the year as returns within the
benchmark were heavily skewed
towards larger companies.”
The greatest detractors from performance this year were
companies where there were unexpected, company
specific events. Wood Group (-79%) fell sharply after
announcing an investigation into internal accounting
procedures. Two potential bids for the company
demonstrated the attractions of the underlying business,
but uncertainty and bad timing meant these did not
complete, leaving the company in a weak position. We
retain a small position in the portfolio and the company
remained in discussions with one potential acquirer as at
the year end. Close Brothers (-33%) also fell as the
company dealt with the fall out of an FCA investigation
into historical motor finance loans. We see the impact of
this as reflected in the price and hope for some relief on an
outcome of a recent Supreme Court hearing. Novo-
Nordisk (-40%) was another detractor, due to increased
competition to its GLP-1 weight loss drugs. We have been
reducing the holding for some time after a period of
strong performance, and the holding has still had a
positive contribution to performance over the last five
years. Conduit (-30%) underperformed due to exposure to
the fires in Los Angeles at the start of 2025, while Melrose
Industrials (-30%) was impacted by concerns over global
trade and the pace at which free cashflow is generated.
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Shires Income PLC 29
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Gearing and Fixed Income Portfolio
Gearing (net of cash) was stable over the year, moving
from 16.4% to 16.5%. The gearing is notionally invested in
the portfolio of preference shares and fixed interest
securities. At the year end these securities had a value of
£23.5 million, materially in excess of net indebtedness
which stood at £17.7 million.
The fixed income portfolio delivered a return of 17.5% over
the period. Values were helped by the stabilisation of bond
yields and by strong underlying performance of the issuing
companies which are primarily in the banking and
insurance sectors. Although this portion of the portfolio has
generally very low turnover, there were some changes
during the year. This was largely driven by the tender offer
for the RSA preference shares in July 2024. A change of
capital rules for insurance companies means that
preference shares are less valuable to issuers, making it
more attractive for insurers such as RSA to retire them.
From our point of view, the tender offer came at attractive
terms, with an implied yield of 6% resulting in an uplift in the
value of around 10% and pricing the preference shares at
a level last seen in a much lower interest rate environment.
We reinvested the proceeds of the RSA tender offer into
Nationwide Building Society perpetual debt at a 7.8% yield,
thereby delivering an increase in income generation for
shareholders alongside the gain in capital value. Overall,
this is a positive development, and it sets an encouraging
precedent for terms on any future tender offers. So far in
2025 we have also seen Aviva tender to redeem
outstanding General Accident preference shares at terms
we see as similarly attractive for holders.
Revenue Account
This year marks the first full year post the merger with
abrdn Smaller Companies Income Trust PLC at the end of
2023 and, as such, the period reflects greater income
generation from a larger portfolio, offset by the higher
share count following the completion of the merger. The
income generation from the portfolio was resilient through
the year, despite an increased use of buybacks by UK
companies and the resultant slowing of dividend growth
and lower special dividends.
The following table details the Company’s main sources of
income over the last five years.
2025 2024 2023 2022 2021
% % % % %
Ordinary dividends 77.0 63.0 62.8 66.5 57.2
Preference dividends 16.8 25.7 29.1 26.9 33.2
abrdn Smaller
Companies Income
Trust
- 9.4 6.6 5.2 5.7
Fixed interest and bank
interest
4.9 1.4 0.2 - -
Traded option
premiums
- 0.5 1.3 1.4 3.9
Other income 1.3 - - - -
Total 100.0 100.0 100.0 100.0 100.0
Total income (£'000s) 7,296 6,429 5,673 5,239 4,529
Portfolio Activity
The year under review was an active period for the
portfolio. Although we invest for the long term, we always
try to remain active, deploying capital to enhance income
and to react to market events and changes in valuation. If
we feel a company is fairly valued, or if the outlook has
deteriorated, we should not be slow to act and to redeploy
capital to more attractive opportunities. The impetus to
make changes has felt particularly strong this year, with
an uncertain and somewhat volatile outlook. With UK
equity valuations low and many companies attractively
valued, it is sensible to be active and take advantage of
opportunities. Looking back to the portfolio at the end of
the prior financial year, 21 positions have been exited
completely, with 17 new holdings replacing them.
The majority of trading during the year was in response to
company specific factors, although the one common
driver of trading decisions was the need to protect and
enhance income generation. The primary aim of Shires
Income is clear: to deliver a high, and over time growing,
level of income to shareholders. At a time when we see
market levels as relatively high and the importance of
income for total return as increasing, many decisions
during the year were made to enhance income. Below,
we briefly discuss the new positions and portfolio exits in
chronological order through the course of the year. While
this is extensive, it is hopefully a useful insight into the
decisions made on your behalf and how the portfolio
is run.
30 Shires Income PLC
In April, we added a new position in construction contractor
Kier Group. The company has delivered significant balance
sheet improvement in recent years and was about to
resume paying dividends. We like the company given
structurally supportive industry trends, high cash generation
and still low valuation, despite a period of outperformance.
The free cash flow yield at close to 20% supports dividend
growth and continued deleveraging. The shares trade on a
6x price to earnings multiple compared to peers on 9-10x.
Another trade was to switch the holding in Mondi into
Smurfit Westrock. This reflected our preference in the paper
and packaging sector, and we see greater upside in the
medium term from Smurfit Westrock as it delivers on a
significant acquisition in the US market, with material self-
help potential.
In May we started a new position in Reckitt Benckiser. The
portfolio has generally had an underweight exposure to the
consumer staples sector in recent years, given unattractive
valuations, low yields and limited genuine growth. A recent
sell-off in the shares offered an opportunity to gain sector
exposure at a material discount to the peer group and with
a yield over 4.5%. The company has struggled operationally
in recent years, but there are signs of a turnaround under
new management and the underlying brands remain high
quality. We also sold out of IT distributor SoftCat in May. This
had been in the portfolio for two years and it grew over that
time. The shares had re-rated and traded in excess of 25x
price to earnings, while the dividend yield had compressed
to just 2% at the point of sale. It remains a well-run company
with growth potential, but there was more obvious
value elsewhere.
We exited one position in June, Greggs. The company had
performed very well since it was added to the portfolio in
November 2023, and we continue to like the business
model and the potential for strong medium-term growth
as it expands its offering and rolls out more stores.
However, with the yield compressed and the shares
trading at over 21x earnings, this was another one we saw
as more fairly valued.
In July we started a new position in UK reinsurance
company Conduit. This is a relatively new reinsurance
business which is set to deliver earnings growth as its book
matures and it benefits from positive market trends. The
company has recently demonstrated strong premium
growth and improved underwriting profitability. The
shares had a 6% dividend yield at the time of purchase
and the position helped to diversify the portfolio. At the
same time, we sold out of AXA. The French insurer had
performed very well since purchase, but had no further
income this financial year.
In August we sold out of the position in Lloyds, again
reflecting the timing of dividends and the need to
generate income through the year. Capital was
reallocated to NatWest. Similarly, we switched the holding
in BHP into Rio Tinto, a company with very similar drivers
but more near-term income. A more meaningful trade in
August was to start a position in Dutch technology
company ASML. When adding overseas companies to the
portfolio, we generally look for something that can’t be
found in the UK market, and ASML is a prime example of
this. The company designs and manufactures the
lithography machines essential in the production of
today's cutting-edge semiconductors. It has extremely
high technical barriers to entry, making products that are
essential for one of the highest growth parts of the market
and is a genuine diversifier in the portfolio. While it screens
as relatively expensive, a recent pullback in its share price
means it has de-rated in the last few months and we
expect growth to make it look much more reasonably
priced a few years from now. We should not forget that
the company’s end markets are cyclical, but it is one to
hold for the long term. The purchase was funded by selling
the position in French utility company Engie. This had been
an excellent performer since its introduction into the
portfolio but we had downgraded it and it had no more
income this year - time to take profit.
At the other end of the market cap spectrum, we started a
new position in ME Group. This UK mid-cap company
operates automated photo booths and laundromats. A
somewhat niche market, but one with high returns on
capital and plenty of room for growth as it rolls out the
self-service, high capacity, laundry model into Europe and
Asia. It is a company that our small-cap team like and is a
great example of Aberdeen teams working together to
find interesting and differentiated income opportunities.
We also started a new position in UK property REIT London
Metric in August. This is a liquid property company with a
high-quality management team and solid performance
through the economic cycle. It has an excellent track
record of delivering dividend growth and the recent 19%
year-on-year increase in dividend takes it to a very
attractive 5.9% yield. The purchase was funded by selling
the holding in Dutch bank ING. Since purchase in April
2023, the holding had delivered a total return of 65%,
outperforming the benchmark by 50%. However, with no
income in the next six months we again chose to prioritise
other ideas. Another overseas exit this month was
Mercedes-Benz. Again, the driver was a lack of income in
the near term but very much combined with some difficult
trends in auto markets which made us less optimistic on
the near-term prospects for the company.
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Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
There was only one meaningful trade in September,
switching UK housebuilder Berkeley Group into peer
Barratt. The move came ahead of Barratt going ex-
dividend, so we captured some additional income, but the
investment primarily reflected the fact that Barratt had
lagged the sector following its deal to buy Redrow.
The remaining holding in GSK was sold in October. This is
our least preferred large-cap pharma company and,
while the recent Zantac litigation progress has been
positive, this has been offset by some uncertainty on
vaccine sales rates.
In November, one new holding was added, French listed
Gaztransport Et Technigaz (“GTT”), with the position
funded by selling TotalEnergies to maintain the weight to
energy. GTT provides the membrane containment
technology to liquefied natural gas (“LNG”) carriers, which
ship cooled gas between international markets. This is a
growing market as LNG import and export capacity
expands. The market will require greater tanker capacity
and GTT dominates this space with high technological
barriers to entry. It has a strong order book, and we expect
that, as the tanker fleet ages in the next few years, we will
see a growing replacement market, supporting long term
cashflows. The company has a strong balance sheet,
provides a high return on capital and pays a high dividend
yield. This switch also reduces commodity price leverage
in the portfolio. Given a mixed outlook for energy demand
in 2025, we don’t think that is a bad thing.
In December the weight in Standard Chartered was
reduced, with the capital used to buy back into ING. ING
was only sold in August, but Standard Chartered
outperformed it by 30% in the four months since, and with
a defensive mix and high yield it looked attractive. The
other notable trade in the month was to exit animal
genetics provider Genus. While Genus remains a high-
quality business with high barriers to entry,
underperformance meant it had fallen below our
minimum position size, forcing the question of “up or out”.
With risks to the timing of its disease resistant genetics and
low yield we chose to move on.
At the start of January, we started a new position in UK
bank Barclays. The position was funded by selling down
some of the holding in NatWest which had performed very
well. The move helped to diversify the exposure to UK
banks and to increase exposure to capital markets where
we saw more potential for positive surprise in 2025. During
January we also switched the position in Aviva preference
shares into the equity. The preference shares deliver a
reliable, high yield, but equities generally have better long-
term growth prospects. In the case of Aviva, the equity
also offered a premium yield to the preference shares and
there is an opportunity for the company to extract
meaningful synergies from the recent acquisition of Direct
Line, resulting in some earnings upgrades. That makes the
equity relatively more attractive. The position in Italian
utility Enel was also sold during the month. The share had
risen by approximately 30% since the addition to the
portfolio in mid-2023 and we had become less attracted
to the company.
During February there were changes to the UK consumer
discretionary exposure, with the holding in Dr. Martens sold
and the proceeds reinvested into Dunelm. Although we see
good long-term potential from Dr. Martens under new
management, the share price had rallied and the shares
do not deliver a meaningful income. By contrast, Dunelm
had de-rated due to concerns around the UK consumer
and remains a high quality, cash generative, retailer. With
a special dividend coming up and a business model that
continues to win market share through the cycle, we saw it
as a better balance of risk and reward in the current
environment. The exposure to UK housebuilders was also
changed in February, switching from Barratt Redrow into
Taylor Wimpey. The change reflected a materially higher
dividend yield from Taylor Wimpey, making it a more
attractive way to gain exposure to market improvement
for the portfolio. Finally, we also switched holdings in
European banks during the month, selling ING and buying
Italian bank Intesa Sanpaolo. Intesa Sanpaolo has a higher
dividend yield and its weighting to investment services
offers stronger long term growth and better protection for
income if interest rates move lower in Europe.
Closing the year, March was an active month for trading.
At the start of the month, we sold out of the remaining
position in 4Imprint, reflecting potential headwinds from
higher tariffs and slower economic activity in the US. We
like the company, but saw it as fairly priced at those levels,
with the dividend yield only marginally above the
benchmark level. We also started a new position in self-
storage provider Safestore. The shares have been very
weak recently and now offer a yield of over 5%. The
shares are trading at a material discount to asset value,
providing downside protection. We also sold out of the
remaining position in Novo-Nordisk. This has been a great
holding over recent years but has moved down our order
of preference in the healthcare sector as competition has
increased and it offers limited yield.
32 Shires Income PLC
At the end of the month, we switched UK bank exposure
back from NatWest to Lloyds. This provided an income
benefit due to dividend timing and there is potential for
some near-term catch-up for Lloyds on clarity over
investigations into historic motor finance deals. We also
bought back into 4Imprint – an unusually quick turnaround!
Since we sold the position, the share price had fallen on US
activity concerns and all the reasons we like the company
for the long term continue to apply. Having sold the shares
30% higher earlier in the month we were happy to buy
them back with concerns more reflected, even if we are
likely to see some more tariff turbulence in the short term.
The purchase was funded by selling Games Workshop.
This is a great company, but we consider that the shares
are now more reasonably priced having more than
doubled since the position was added to the portfolio.
Stewardship
We believe that, as long-term owners of the businesses in
which we are invested, it is not sufficient merely to seek out
assets that we believe to be undervalued. It is also
incumbent upon us to take a proactive approach to our
stewardship of these companies. Therefore, we engage
extensively with investee companies. We have attended a
range of meetings with chairmen, non-executive directors
and other stakeholders. Topics covered have included the
composition of the board, environmental and social issues,
and remuneration. Risk is a very broad subject that is
interpreted in varying manners by different companies.
However, by engaging on this subject, we secure a deeper
understanding of how the boards of investee companies
perceive and seek to manage these issues. Such
interactions also enable us to push for improved disclosure
and better management practices and, on occasion,
different decisions where appropriate. We have had
conversations regarding companies’ financing choices.
We find that it is always worthwhile communicating our
preference for conservatively structured balance sheets
that place a company’s long-term fortunes ahead of
possible short term share price gains. Such activity is by its
nature time consuming, but we regard it as an integral
aspect of our role as long term investors.
Consideration of Environmental, Social and Governance
(“ESG”) factors form an important part of our process.
Whilst the management of the Company’s investments is
not undertaken with any specific instructions to exclude
certain asset types or classes, we take these factors into
account as part of the investment process. ESG
investment is about active engagement with the goal of
improving the performance of assets held by the
Company. We aim to make the best possible investments
for the Company by understanding the whole picture of
the investments – before, during and after an investment is
made. That includes understanding the ESG risks and
opportunities they present, and how these could affect
longer term performance and valuation.
Outlook
The 2025/2026 financial year has certainly started with a
high degree of volatility. A very active new US
administration has turned global trade relations upside
down in recent weeks, causing markets to swing one way
or the other depending on the latest statements. As such,
by the time we reach our AGM in July any outlook
statement may be more redundant than usual!
“UK companies remain cheap on any
objective measure and the high level
of distributions should prove very
attractive to investors at a time when
market directions are uncertain.”
Despite the short term unpredictability of markets, we are
seeing some events happen that have been well flagged.
After an almost unprecedented period of market
leadership, US equities are struggling this year as concerns
build around the strength of the domestic economy and
the consumer in particular. While the potential for
inflationary tariffs have acted as a catalyst for this, it would
be no surprise if we saw a US downturn after such a strong
period of growth. At the same time, international markets
have held up well, helped by government stimulus in
Europe and by much lower starting valuations. Given the
extent of US outperformance in the last decade and the
still extreme weighting of global equity funds to the US, we
consider there is significant runway for this trend to
continue. Diversification for all investors should be at the
top of the agenda. Any holder of a global index tracker has
around 70% of their assets in US large cap companies and
April’s changes should be a trigger to look closely at
that allocation.
Investment Mana
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Shires Income PLC 33
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Any change in equity allocation should favour UK markets
– a small outflow from the US becomes a big inflow if it
crosses the Atlantic. UK companies remain cheap on any
objective measure and the high level of distributions
should prove very attractive to investors at a time when
market directions are uncertain. Our focus today is to lean
into UK domestic markets and continue to find those
companies with resilient cashflows supporting high
distributions through the economic cycle. While the
portfolio is style agnostic, the opportunities in value stocks
remain compelling in our view and we continue to steer in
this direction. Low starting values protect the downside in
the event of a recession while providing the potential for
higher returns in the eventual cyclical upturn - even if
great care is needed to avoid the value traps.
An important part of the portfolio positioning remains
having an overweight exposure to UK small and mid-cap
companies. This has not worked so far in 2025, with rising
bond yields at the start of the year acting as a headwind
to this part of the market. However, we remain convinced
this is the place to be. The fundamentals for UK mid-caps
have been robust and there are bargains to be found, with
quality companies at very reasonable prices. The
expectation is that we will see a faster pace of interest
rate cuts from the Bank of England this year, and that will
help government finances, allow bond yields to move
lower and act as a tailwind. Following the merger with
abrdn Smaller Companies Income Trust in 2023 we are
able to take more small-cap exposure directly, increasing
the allocation to high conviction ideas and maximising
income generation from this segment of the market.
However, we continue to work closely with our small-cap
team to identify opportunities.
A return to international and mid-cap outperformance
would also likely benefit active management. While
benchmarks and passive index trackers think in terms of
market capitalisation, active managers tend to think
about the opportunity set as more equally weighted. This
matters – in the UK, the large cap FTSE 100 Index makes
up over 85% of the FTSE All-Share Index by market-cap,
but only 20% of the constituents. There are plenty of
opportunities out there for the year ahead. Our focus
remains squarely on meeting the income objective and
growing income over time, while also preserving capital
and maintaining the potential for long term growth.
Iain Pyle
Aberdeen
28 May 2025
34 Shires Income PLC
Gaztransport Et Technigaz
Gaztransport Et Technigaz (“GTT”) is a French listed
engineering company. It is a leading provider of the
containment systems for the shipping and storage of
liquefied natural gas (“LNG”), as well as providing
consultancy and technical design services. The company
serves a growing market. Demand for LNG is expected to
grow by 60% to 2040 and this will require increased tanker
capacity. The combination of market growth and the start
of a replacement cycle, as the current fleet ages, creates
a source of long-term demand growth for the company,
while a strong order book supports short term earnings.
The Investment Manager sees GTT as having strong
pricing power and being very cash generative, supporting
an attractive dividend for investors.
Investment Case Studies
Shires Income PLC 35
Dunelm
Dunelm is a leading UK homewares and furniture retailer
selling own-label products. It has 200 stores, while 40% of
sales are online. Over time, it has successfully taken
market share and delivered increased integration
between online and store sales channels, allowing for
growth while protecting margins. The price point, which is
competitive with peers, protects the business in a cyclical
sector and it screens as a notably high quality company in
the UK market, with higher return on capital and a strong
financial position and track record of cash generation.
36 Shires Income PLC
Portfolio
Shires Income PLC 37
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
As at 31 March 2025
AstraZeneca
HSBC Holdings
AstraZeneca researches, develops,
produces and markets pharmaceutical
products. The company has a
significant focus on oncology which
offers significant growth potential over
the medium term.
HSBC Holdings provides a variety of
international banking and financial
services. It operates worldwide but has
particular strength in the Hong Kong
and UK markets.
Shell
Morgan Sindall
Shell is an integrated energy company.
It produces and refines crude oil,
produces chemicals and runs retail
operations globally. It has particular
strength in natural gas markets and
is one of the world’s leading
energy traders.
Morgan Sindall operates a construction
and regeneration group. The group’s
five specialist and complementary
divisions provide office design, fitting
out, refurbishment, building contracting,
property investment, and related
specialist services.
National Grid
Diversified Energy
National Grid is an investor-owned utility
company which owns and operates the
electricity and gas transmission network
in Great Britain and the electricity
transmission networks in the
Northeastern United States. The
company offers resilient earnings and
an attractive dividend yield.
Diversified Energy is an energy
company focused on natural gas and
liquids production, transport, marketing
and well refinement. Its assets are
primarily located within the
Appalachian and Central regions of the
United States.
Rio Tinto
Imperial Brands
Rio Tinto operates as a diversified
mining company. The company focuses
on production of iron ore, predominantly
from Australia.
Imperial Brands is a fast-moving
consumer goods company. The
company operates through two
businesses: Tobacco & NGP
and Distribution.
Energean
Assura
Energean is a gas producer with
operations focused in the Eastern
Mediterranean region. It has developed
the Karish project offshore Israel ,has
assets in Egypt and Italy and is
developing a carbon capture and
storage project offshore Greece.
Assura is a UK-based diversified
healthcare real estate investment trust.
The company develops, invests in and
manages a portfolio of healthcare
buildings across the UK and Ireland.
Ten Lar
g
est Investments
38 Shires Income PLC
Investment Portfolio - Equities
As at 31 March 2025
Valuation Total Valuation
2025 portfolio 2024
Company FTSE All-Share Index Sector £’000 % £’000
AstraZeneca Pharmaceuticals and Biotechnology 4,914 4.0 5,440
HSBC Holdings Banks 4,910 4.0 3,232
Shell Oil, Gas and Coal 4,854 3.9 4,674
Morgan Sindall Construction and Materials 3,660 3.0 3,642
National Grid Gas, Water and Multiutilities 3,184 2.6 2,283
Diversified Energy Oil, Gas and Coal 2,790 2.3 2,292
Rio Tinto Industrial, Metals and Mining 2,741 2.2 2,637
Imperial Brands Tobacco 2,725 2.2 1,362
Energean Oil, Gas and Coal 2,662 2.1 3,333
Assura Real Estate Investment Trusts 2,597 2.1 1,487
Ten largest investments 35,037 28.4
Telecom Plus Telecommunications Service Providers 2,545 2.1 2,161
SSE Electricity 2,517 2.0 2,265
Chesnara Life Insurance 2,494 2.0 2,399
Lloyds Banking Banks 2,460 2.0 1,779
Taylor Wimpey Construction and Materials 2,430 2.0 –
Aviva Non-life Insurance 2,411 2.0 –
Standard Chartered Banks 2,404 1.9 1,771
M&G Investment Banking and Brokerage Services 2,394 1.9 1,723
Intermediate Capital Group Investment Banking and Brokerage Services 2,310 1.9 3,234
Balfour Beatty Construction and Materials 2,212 1.8 1,780
Twenty largest investments 59,214 48.0
Inchcape Industrial Support Services 2,152 1.7 2,931
Reckitt Benckiser Group Personal Care Drug and Grocery Stores 2,097 1.7 –
BP Oil, Gas and Coal 2,036 1.6 3,281
Barclays Banks 1,993 1.6 –
Safestore Real Estate Investment Trusts 1,949 1.6 –
Anglo American Industrial, Metals and Mining 1,940 1.6 2,384
Sirius Real Estate Real Estate Investment Trusts 1,726 1.4 1,991
Melrose Industrials General Industrials 1,710 1.4 1,614
MONY Group Software and Computer Services 1,704 1.4 –
Intesa Sanpaolo Banks 1,675 1.4 –
Thirty largest investments 78,196 63.4
Investment Portfolio - Equities
Shires Income PLC 39
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
As at 31 March 2025
Valuation Total Valuation
2025 portfolio 2024
Company FTSE All-Share Index Sector £’000 % £’000
Kier Construction and Materials 1,673 1.4 –
Drax Electricity 1,505 1.2 809
Gaztransport Et Technigaz Oil, Gas and Coal 1,338 1.1 –
Convatec Health Care Equipment and Services 1,263 1.0 1,563
LondonMetric Real Estate Investment Trusts 1,194 1.0 –
ASML Holdings Technology Hardware and Equipment 1,180 1.0 –
OSB Finance and Credit Services 1,177 1.0 1,035
4Imprint Group Media 1,170 0.9 2,637
Hollywood Bowl Travel and Leisure 1,128 0.9 2,334
Hunting Oil Equipment Services and Distribution 1,125 0.9 1,410
Forty largest investments 90,949 73.8
Bodycote Industrial Metals and Mining 1,108 0.9 627
ME Group Leisure Goods 1,033 0.8 –
Dunelm General Retailers 950 0.8 –
Serica Energy Oil, Gas and Coal 946 0.8 –
Conduit Holdings Non-life Insurance 910 0.7 –
IP Group Investment Banking and Brokerage Services 832 0.7 975
RS Group Industrial Support Services 815 0.7 –
Smurfit Westrock General Industrials 774 0.6 –
Ashmore Investment Banking and Brokerage Services 666 0.5 875
Close Brothers Banks 479 0.4 721
Fifty largest investments 99,462 80.7
Wood Group Oil Equipment Services and Distribution 408 0.3 781
Total equity investments 99,870 81.0
40 Shires Income PLC
As at 31 March 2025
Valuation Total Valuation
2025 portfolio 2024
Company £’000 % £’000
Preference shares and Fixed Interest investments
A
Ecclesiastical Insurance Office 8 5/8% 6,241 5.1 5,837
Nationwide 10.25% 4,966 4.0 –
Santander 10.375% 4,771 3.9 4,244
Standard Chartered 8.25% 3,474 2.8 3,197
General Accident 7.875% 2,028 1.6 4,116
Lloyds Bank 11.75% 990 0.8 960
R.E.A. Holdings 9% 717 0.6 686
Standard Chartered 7.375% 286 0.2 256
Total Preference shares and fixed interest investments 23,473 19.0
Total Investments 123,343 100.0
A
None of the preference shares and fixed interest investments listed above have a fixed redemption date.
Investment Portfolio - Other Investments
Shires Income PLC 41
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Movement during the year
Valuation at Valuation at
31 March 2024 Purchases Sales Gains 31 March 2025
£’000 % £’000 £’000 £’000 £’000 %
Listed investments
Equities 97,974 92.5 53,889 (54,086) 2,093 99,870 93.6
Preference shares and Fixed Interest
investments 24,195 22.8 4,983 (8,084) 2,379 23,473 22.0
Total investments 122,169 115.3 58,872 (62,170) 4,472 123,343 115.6
Current assets 3,242 3.1 2,980 2.8
Current liabilities (491) (0.5) (637) (0.6)
Non-current liabilities (18,963) (17.9) (18,975) (17.8)
Net assets 105,957 100.0 106,711 100.0
Net asset value per Ordinary share 256.0p 265.2p
Distribution of Assets and Liabilities
42 Shires Income PLC
Analysis of Listed Equity Portfolio
0% 5% 10% 15 % 20 % 25% 30% 35%
Basic Materials
Consumer Discretionary
Consumer Staples
En ergy
Financials
Health Care
In dus trials
Real Estate
T ec h no logy
Telecomm unications
Utilities
20 25
20 24
Shires Income PLC relative to the FTSE All-Share Index
-12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8%
Basic Materials
Consumer Discretionary
Consumer Staples
Energy
Financials
Health Care
In dus trials
Real Estate
Technology
Telecommunications
Utilities
20 25
20 24
Sector Analysis
Shires Income PLC 43
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Listed equities sector allocation 2025
Listed equities sector allocation 2024
4.7%
8.5%
3.1%
16.2%
34.6%
6.2%
14.1%
2.9%
2.5%
7.2%
Basic Materials - 4.7%
Consumer Discretionary - 8.5%
Consumer Staples - 3.1%
Energy - 16.2%
Financials - 34.6%
Health Care - 6.2%
Industrials - 14.1%
Technology - 2.9%
Telecommunications - 2.5%
Utilities - 7.2%
5.1%
6.1%
6.5%
18.4%
27.3%
10.5%
12.1%
3.5%
2.2%
8.3%
Basic Materials - 5.1%
Consumer Discretionary - 6.1%
Consumer Staples - 6.5%
Energy - 18.4%
Financials - 27.3%
Health Care - 10.5%
Industrials - 12.1%
Technology - 3.5%
Telecommunications - 2.2%
Utilities - 8.3%
44 Shires Income PLC
Governance
Shires Income PLC 45
The Company is committed to high standards
of corporate governance and applies the
principles and provisions identified in the AIC
Code of Corporate Governance.
All Directors are considered by the Board
to be independent of the Company and
the Manager.
46 Shires Income PLC
Robin Archibald
Independent non-executive Chairman
Experience:
Robin Archibald has a wide range of experience in
advising and managing transactions in the UK closed-end
funds sector over his 35 year career as a corporate
financier including with Samuel Montagu, S G Warburg
and Natwest Markets. He retired from Winterflood
Investment Trusts in May 2014, where he was formerly
Head of Corporate Finance and Broking. He is also non-
executive Chairman of AEW UK REIT plc, and has served
on the boards of four other listed investment companies,
including as senior independent director and audit chair,
roles he fulfilled for the Company before being appointed
as Chair in 2024. He is a Chartered Accountant.
Length of service:
8 years, appointed a Director in May 2017 and as
Chairman on 5 July 2024
Last re-appointed to the Board:
5 July 2024
Committee member:
Audit Committee, Management Engagement Committee,
Nomination & Remuneration Committee
Contribution:
The Board has reviewed the contribution of Robin
Archibald in light of his proposed re-appointment at the
AGM and has concluded that he has chaired the
Company expertly, fostering a collaborative spirit
between the Board and Manager whilst ensuring that
meetings remain focused on the key areas of stakeholder
relevance. He continues to provide significant corporate
insight to the Board. In addition, his advisory experience
and the benefits of his roles as a non-executive director of
other investment company boards have contributed to his
specific knowledge of investment companies to the
benefit of the Company.
Jane Pearce
Independent non-executive Director and Chair of the
Audit Committee
Experience:
Jane Pearce had an executive career as an equity analyst
at leading investment banks and latterly was an equity
strategist at Lehman Brothers and Nomura International.
She is a non-executive director of three UK subsidiaries of
Morgan Stanley and is also a non-executive director and
Chair of the Audit Committee of Polar Capital Technology
Trust PLC. She is a Chartered Accountant and was a
Member of the Governing Council of the Institute of
Chartered Accountants of Scotland from 1999-2000.
Length of service:
5 years, appointed a Director in January 2020
Last re-appointed to the Board:
5 July 2024
Committee member:
Audit Committee (Chair), Management Engagement
Committee, Nomination & Remuneration Committee
Contribution:
The Board has reviewed the contribution of Jane Pearce
in light of her proposed re-appointment at the AGM and
has concluded that she has chaired the Audit Committee
expertly and continued to provide significant financial and
investment insight to the Board and knowledge of the
investment management sector.
Board of Directors
Shires Income PLC 47
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Helen Sinclair
Senior Independent non-executive Director and Chair of
the Management Engagement Committee
Experience:
Helen Sinclair began her career in investment banking and
spent nearly eight years at 3i plc focusing on
management buy-outs and growth capital investments.
She later co-founded Matrix Private Equity (which
became Mobeus Equity Partners) in 2000 and
subsequently became Managing Director of the company
before moving to take on a number of non-executive
director roles. She is Chairman of Octopus Future
Generations VCT plc and a non-executive director of
Sherborne Investors (Guernsey) C Limited and BlackRock
Smaller Companies Trust plc.
Length of service:
3 years, appointed a Director in February 2022
Last re-appointed to the Board:
5 July 2024
Committee member:
Audit Committee, Management Engagement Committee
(Chair), Remuneration Committee
Contribution:
The Board has reviewed the contribution of Helen Sinclair
in light of her proposed re-appointment at the AGM and
has concluded that she has continued to provide
significant corporate insight and knowledge of the
investment management sector to the Board.
Simon White
Independent non-executive Director and Chair of the
Nomination & Remuneration Committee
Experience:
Simon White has a background in UK equity fund
management and significant experience in the
investment trust sector. He was, until June 2022, Co-Head
of Investment Trusts at BlackRock where he was
responsible for overseeing the company secretarial, sales
and marketing and third-party administration services. He
was also involved in successful fundraisings and significant
secondary issuance within the investment trust business.
He is currently a Senior Adviser to Cadarn Capital, an
independent distribution and investor relations company
servicing London-listed investment companies.
Length of service:
1 year, appointed a Director on 1 January 2024
Last re-appointed to the Board:
5 July 2024
Committee member:
Audit Committee, Management Engagement Committee,
Nomination & Remuneration Committee (Chair)
Contribution:
The Board has reviewed the contribution of Simon White
in light of his proposed re-appointment at the AGM and
has concluded that he has continued to provide a
significant contribution through his experience of the
investment trust sector and the investment management
sector more generally.
48 Shires Income PLC
The Directors present their report and audited financial
statements for the year ended 31 March 2025.
Results and Dividends
The financial statements for the year ended 31 March
2025 are contained on pages 74 to 98. Dividends paid
and proposed for the year amounted to 14.80p per
Ordinary share.
First, second and third interim dividends for the year, each
of 3.20p per Ordinary share, were paid on 31 October
2024, 31 January 2025 and 30 April 2025 respectively. The
Directors recommend a final dividend of 5.20p per
Ordinary share, payable on 31 July 2025 to shareholders
on the register on 4 July 2025. The ex-dividend date is 3
July 2025. Under UK-adopted international accounting
standards the third interim and final dividends will be
accounted for in the financial year ended 31 March 2026.
A resolution in respect of the final dividend will be
proposed at the forthcoming Annual General Meeting.
Investment Trust Status
The Company is registered as a public limited company
(registered in England and Wales No. 00386561) and is an
investment company within the meaning of Section 833 of
the Companies Act 2006. The Company has been
approved by HM Revenue & Customs as an investment
trust subject to it continuing to meet the relevant eligibility
conditions of Section 1158 of the Corporation Tax Act
2010 and the ongoing requirements of Part 2 Chapter 3
Statutory Instrument 2011/2999. The Directors are of the
opinion that the Company has conducted its affairs for the
year ended 31 March 2025 so as to enable it to comply
with the ongoing requirements for investment trust status.
Individual Savings Accounts
The Company satisfies 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
The issued Ordinary share capital as at 31 March 2025
comprised 40,214,596 Ordinary shares of 50p each and
2,018,478 Ordinary shares held in treasury. The Company
also has 50,000 3.5% Cumulative Preference shares of
£1 each.
During the year the Company bought back 1,154,946
Ordinary shares at a discount to net asset value, to
hold in treasury.
Voting Rights
Each Ordinary and Cumulative Preference share carries
one vote at general meetings of the Company. The
Cumulative Preference shares carry a right to receive a
fixed rate of dividend and, on a winding up of the
Company, to the payment of such fixed cumulative
preferential dividends to the date of such winding up and
to the repayment of the capital paid up on such shares
in priority to any payment to the holders of the
Ordinary shares.
The Ordinary shares, excluding any treasury shares, carry
a right to receive dividends and, on a winding up or other
return of capital, after meeting the liabilities of the
Company, the surplus assets will be paid to Ordinary
shareholders in proportion to their shareholdings.
There are no restrictions on the transfer of Ordinary or
Cumulative Preference shares in the Company other than
certain restrictions which may from time to time be
imposed by law.
Management Agreement
The Company has appointed abrdn Fund Managers
Limited (“aFML”), a wholly owned subsidiary of Aberdeen
Group plc, as its alternative investment fund manager.
aFML has been appointed to provide investment
management, risk management, administration,
company secretarial services and promotional activities
to the Company. The Company’s portfolio is managed by
abrdn Investments Limited by way of a group delegation
agreement in place between aFML and abrdn
Investments Limited. In addition, aFML has sub-delegated
administrative and company secretarial services to abrdn
Holdings Limited and promotional activities to abrdn
Investments Limited. Details of the management fee and
fees payable for promotional activities are shown in notes
4 and 5 to the financial statements.
The management agreement is terminable on not less
than six months’ notice. In the event of termination by the
Company on less than the agreed notice period,
compensation is payable to the Manager in lieu of the
unexpired notice period.
Directors’ Report Directors’ Report
Shires Income PLC 49
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Substantial Interests
Information provided to the Company by major
shareholders pursuant to the FCA’s Disclosure Guidance
and Transparency Rules is published by the Company via
a Regulatory Information Service.
The table below sets out the interests in 3% or more of the
issued share capital of the Company, of which the Board
was aware as at 31 March 2025.
Shareholder
Number of
Ordinary
shares held
% of
Ordinary
shares held
Interactive Investor 12,347,051 30.7
Hargreaves Lansdown 8,423,367 20.9
AJ Bell 2,888,463 7.2
HSDL 2,226,971 5.5
There have been no changes notified to the Company
between the year end and the date of approval of
this Report.
Directors
At the end of the year the Board comprised four
non-executive Directors, each of whom is considered by
the Board to be independent of the Company and
the Manager. Robert Talbut retired as a Director at the
Annual General Meeting on 5 July 2024.
The Directors attended scheduled Board and Committee
meetings during the year ended 31 March 2025 as follows
(relevant meetings in brackets):
Director Board
Audit
Committee
Management
Engagement
Committee
Nomination &
Remuneration
Committee
Robin Archibald 5 (5) 2 (2) 1 (1) 1 (1)
Jane Pearce 5 (5) 2 (2) 1 (1) 1 (1)
Helen Sinclair 5 (5) 2 (2) 1 (1) 1 (1)
Robert Talbut
A
2 (2) 1 (1) - (-) - (-)
Simon White 5 (5) 2 (2) 1 (1) 1 (1)
A
Retired as a Director on 5 July 2024
The Board meets more frequently when business needs
require and has regular dialogue between formal Board
meetings, including with the Manager. During the year,
there were an additional four Board/Board Committee
meetings held, principally in relation to share buy backs,
the approval of the Annual and Half Yearly Reports and
the Company’s positioning in light of sector issues.
Under the terms of the Company’s Articles of Association,
Directors must retire and be subject to appointment at the
first Annual General Meeting after their appointment by
the Board, and be subject to re-appointment every three
years thereafter. However, the Board has decided that all
Directors will seek annual re-appointment after initial
appointment to the Board.
The Board believes that all the Directors seeking re-
appointment remain independent of the Manager and
free from any relationship which could materially interfere
with the exercise of their judgement on issues of strategy,
performance, resources and standards of conduct. The
biographies of each of the Directors are shown on pages
46 to 47, setting out their range of skills and experience as
well as length of service and contribution to the Board
during the year. The Board believes that each Director has
the requisite high level and range of business, investment
and financial experience which enables the Board to
provide clear and effective leadership, oversight and
proper governance of the Company.
Following formal performance evaluations, each
Director’s performance continues to be effective and
demonstrates commitment to the role, and their individual
performances contribute to the long-term sustainable
success of the Company. All of the Directors have
demonstrated that they have sufficient time and
commitment to fulfil their directorial roles with the
Company. The Board therefore recommends the re-
appointment of each of the Directors at the Annual
General Meeting.
Board’s Policy on Tenure
In normal circumstances, it is the Board’s expectation that
Directors will not serve beyond the Annual General
Meeting following the ninth anniversary of their
appointment. However, the Board takes the view that
independence of individual Directors is not necessarily
compromised by length of tenure on the Board and that
continuity and experience can add significantly to the
Board’s strength. The Board believes that
recommendation for re-election should be on an
individual basis following a rigorous review which assesses
the contribution made by the Director concerned, but also
taking into account the need for regular refreshment
and diversity, as well as providing continuity of experience
of the Company.
50 Shires Income PLC
It is the Board’s policy that the Chairman of the Board will
not normally serve as a Director beyond the Annual
General Meeting following the ninth anniversary of his/her
appointment to the Board. However, this may be
extended in certain circumstances including the
facilitation of effective succession planning and the
development of a diverse Board. In such a situation the
reasons for the extension will be fully explained to
shareholders and a timetable for the departure of the
Chairman clearly set out.
The Role of the Chairman and Senior
Independent Director
The Chairman is responsible for providing effective
leadership 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 acts upon the results of the Board
evaluation process by recognising strengths and
addressing any weaknesses and also ensures that the
Board engages with major shareholders and that all
Directors understand shareholder views.
The Senior Independent Director acts as a sounding board
for the Chairman and acts as an intermediary for other
Directors, when necessary. Working closely with the other
Directors, the Senior Independent Director takes
responsibility for an orderly succession process for the
Chairman, and leads the annual appraisal of the
Chairman’s performance. The Senior Independent
Director is also available to shareholders to discuss any
concerns they may have.
Directors’ and Officers’ Liability Insurance
The Company maintains insurance in respect of Directors’
and Officers’ liabilities in relation to their acts on behalf of
the Company. In addition, the Company has entered into
a separate deed of indemnity with each of the Directors
reflecting the scope of the indemnity in the Articles of
Association. Under the Articles of Association, each
Director is entitled to be indemnified out of the assets of
the Company to the extent permitted by law against any
loss or liability incurred by him or her in the proper
execution of his or her duties in relation to the affairs of
the Company.
Management of Conflicts of Interest
The Board has a procedure in place to deal with a
situation where a Director has a conflict of interest. As part
of this process, each Director prepares a list of other
positions held and all other conflict situations that may
need to be authorised either in relation to the Director
concerned or his or her connected persons. The Board
considers each Director’s situation and decides whether
to approve any conflict, taking into consideration what is in
the best interests of the Company and whether the
Director’s ability to act in accordance with his or her wider
duties is affected. Each Director is required to notify the
Company Secretary of any potential, or actual, conflict
situations that will need authorising by the Board.
Authorisations given by the Board are reviewed at each
Board meeting.
No Director has a service contract with the Company
although all Directors are issued with letters of
appointment, which may be amended from time to time
to reflect regulatory and other changes. Other than the
deeds of indemnity referred to above and the Directors’
letters of appointment, there were no contracts during,
or at the end of the year, in which any Director
was interested.
The Company has a policy of conducting its business in an
honest and ethical manner. The Company takes a zero-
tolerance approach to bribery and corruption and has
procedures in place that are proportionate to the
Company’s circumstances to prevent them. The Manager
also adopts a group-wide zero-tolerance approach and
has its own detailed policy and procedures in place to
prevent bribery and corruption. Copies of the Manager’s
anti-bribery and corruption policies are available on
its website.
In relation to the corporate offence of failing to prevent tax
evasion, it is the Company’s policy to conduct all business
in an honest and ethical manner. The Company takes a
zero-tolerance approach to facilitation of tax evasion
whether under UK law or under the law of any foreign
country and is committed to acting professionally,
fairly and with integrity in all its business dealings
and relationships.
Directors’ Report
Continued
Shires Income PLC 51
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Board Diversity
The Board recognises the importance of having a range of skilled and experienced individuals with the right knowledge,
including of the Company, represented on the Board in order to allow it to fulfil its obligations. The Board also recognises
the benefits and is supportive of the principle of diversity in its recruitment of new Board members. The Board will not
display any bias for age, gender, race, sexual orientation, socio-economic background, religion, ethnic or national origins
or disability in considering the appointment of its Directors. In view of its size, the Board will continue to ensure that all
appointments are made on the basis of merit against the specification prepared for each appointment. In doing so, the
Board will take account of the targets set out in the FCA’s Listing Rules, which are set out in the tables below.
The Board has resolved that the Company’s year end date is the most appropriate date for disclosure purposes. The
following information has been provided by each Director through the completion of questionnaires. There have been
no changes since the year end.
Table for reporting on gender as at 31 March 2025
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 2 50%
n/a
(note 3)
n/a
(note 3)
n/a
(note 3)
Women 2 50%
(note 1)
Not specified/prefer not to say - -
Table for reporting on ethnic background as at 31 March 2025
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%
n/a
(note 3)
n/a
(note 3)
n/a
(note 3)
Minority ethnic
-
-
(note 2)
Not specified/prefer not to say - -
Notes:
1. Meets target that at least 40% of Directors are women as set out in LR 6.6.6R (9)(a)(i).
2. Does not meet target that at least one Director is from a minority ethnic background as set out in LR 6.6.6R (9)(a)(iii). The Directors
will take this into account when making future Board appointments.
3. This column is not applicable as the Company is externally managed and does not have any executive staff. Specifically, it does not
have either a CEO or CFO. The Company considers that the roles of Chairman of the Board, Senior Independent Director and Chair
of the Audit Committee are Senior Board Positions and, accordingly, that the Company meets in spirit the requirement that at least
one of the Senior Board Positions is held by a woman as set out in LR 6.6.6R (9)(a)(ii).
52 Shires Income PLC
Corporate Governance
The Company is committed to high standards of
corporate governance and the Board is accountable to
the Company’s shareholders for good governance. The
Board has 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 Corporate
Governance Code as published by the FRC in July 2018
(the “UK Code”), as well as setting out additional
provisions on issues that are of specific relevance to
investment trusts.
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 than if it had adopted the UK Code. The AIC
Code is available on the AIC’s website: theaic.co.uk. It
includes an explanation of how the AIC Code adapts the
principles and provisions set out in the UK Code to make
them relevant for investment trusts.
The Board confirms that, during the year, the Company
complied with the principles and provisions of the
AIC Code.
Further details of the Company’s compliance with the AIC
Code can be found on its website.
The Board is conscious of the FRC’s recent updates to the
UK Corporate Governance Code, and the corresponding
updates to the AIC Code, some of which will apply to the
Company’s financial year beginning on 1 April 2025. It is
the Board’s intention that the Company will comply with all
relevant provisions of the new codes.
The Board and its Committees
Mr Archibald is the Chairman of the Board and Ms Sinclair
is the Senior Independent Director.
The Board has appointed committees with specific
responsibilities as set out below. Copies of the terms of
reference of each committee are available on the
Company’s website, or upon request from the Company.
Audit Committee
The Audit Committee comprises all Directors and, since 5
July 2024, has been chaired by Ms Pearce.
The Audit Committee’s Report is contained on pages
60 to 63.
Management Engagement Committee
The Management Engagement Committee comprises all
Directors and is chaired by Ms Sinclair. The purpose of the
Committee is to review the terms of the agreement with
the Manager including, but not limited to, the
management fee, and also to review the performance of
the Manager in relation to the achievement of the
Company’s objectives. These reviews were conducted
during the year and the outcomes are noted below. In
addition, the Committee conducts an annual review of the
performance, terms and conditions, and fees of the
Company’s other main service providers. The Committee
is satisfied with the quality of service received from the
Company’s main service providers.
The key terms of the management agreement and fees
payable to the Manager are set out on page 48 and in
notes 4 and 5 to the financial statements. The Board
believes the fee arrangements are competitive with
reference to other investment trusts with a similar
investment mandate and are priced appropriately given
the level of service provided by the Aberdeen Group. As
stated above, the Committee reviews the performance of
the Manager annually. The Board is satisfied with the
Company’s performance since the appointment of
Aberdeen as Manager in 2008 and believes that the
Investment Manager has positioned the portfolio well in
order to seek to achieve good medium and long-term
performance and a high level of income in line with the
Company’s investment objective. The Board is also
satisfied with the standard of company secretarial,
administration and promotional support provided by the
Manager. It therefore considers the continuing
appointment of the Manager on the terms agreed to be in
the best interests of shareholders.
Nomination & Remuneration Committee
The Nomination & Remuneration Committee was
established during the year. In prior years, the Company
had a Remuneration Committee and matters relating to a
nominations committee were considered by the Board
of Directors.
The Nomination & Remuneration Committee comprises
all Directors and is chaired by Mr White who has relevant
experience of the sector and the roles fulfilled for the
Company. The Committee reviews the effectiveness of
the Board, succession planning, Board appointments,
appraisals and training, and determines the Directors’
remuneration policy and level of remuneration, including
for the Chairman. Further details of the remuneration
policy are provided in the Directors’ Remuneration Report
on pages 56 to 59.
Directors’ Report
Continued
Shires Income PLC 53
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
During the year, the Committee undertook an annual
appraisal of the Chairman of the Board, individual
Directors and the performance of Committees and the
Board as a whole. This process involved the completion of
questionnaires by each Director and follow-on discussions
between the Chairman and each Director. The appraisal
of the Chairman was undertaken by the Senior
Independent Director. The results of the process were
discussed by the Board following its completion, with
appropriate action points made.
Following this process, the Board considers that it
continues to operate in an efficient and effective manner
with each Director making a significant contribution to
the Board.
The Committee considers succession planning on at least
an annual basis. Potential new Directors are identified
against the requirements of the Company’s business and
the need to have a balance of skills, experience,
independence, diversity and knowledge of the Company
within the Board.
Going Concern
The Company’s assets consist mainly of equity shares in
companies listed on the London Stock Exchange. The
Board has performed stress testing and liquidity analysis
on the portfolio and considers that, in the absence of
unforeseen circumstances, the majority of the Company’s
investments are realisable within a relatively
short timescale.
The Board has set limits for borrowing and regularly
reviews actual exposures, cash flow projections and
compliance with banking covenants, including the
headroom available. At the year end, the Company had a
£20 million loan facility which is due to mature in April 2027.
Having taken these factors into account, the Directors
believe that the Company has adequate resources to
continue in operational existence for the foreseeable
future and has the ability to meet its financial obligations
as they fall due for the period to 30 June 2026, which is at
least twelve months from the date of approval of this
Report. For these reasons, they continue to adopt the
going concern basis of accounting in preparing the
financial statements.
Accountability and Audit
The respective responsibilities of the Directors and the
Auditor in connection with the financial statements
appear on page 64, and pages 65 to 71.
Each Director confirms that, so far as he or she is aware,
there is no relevant audit information of which the
Company’s Auditor is unaware, and they have taken all
the steps that they could reasonably be expected to have
taken as Directors in order to make themselves aware of
any relevant audit information and to establish that the
Company’s Auditor is aware of that information.
Independent Auditor
The Company’s Auditor, Ernst & Young LLP, has indicated
its willingness to remain in office. The Board will place
resolutions before the Annual General Meeting to re-
appoint Ernst & Young LLP as Auditor for the ensuing
year and to authorise the Directors to determine
its remuneration.
Relations with Shareholders
The Directors place a great deal of importance on
communications with shareholders. Shareholders and
investors may obtain up to date information on the
Company through its website.
The Board’s policy is to communicate directly with
shareholders and their representative bodies without the
involvement of the management group (including the
Company Secretary or the Manager) in situations where
direct communication is required, and representatives
from the Manager meet with major shareholders on at
least an annual basis in order to gauge their views. In
addition, the Company Secretary only acts on behalf of
the Board, not the Manager, and there is no filtering of
communication. At each Board meeting the Board
receives full details of any communication from
shareholders to which the Chairman responds personally
as appropriate.
Directors make themselves available to attend meetings
with the Company’s largest shareholders and meet other
shareholders at the Annual General Meeting and, as
explained in the Chairman’s Statement, the Company
will hold an Online Shareholder Presentation in advance
of the Annual General Meeting this year including
the opportunity for an interactive question and
answer session.
54 Shires Income PLC
The notice of the Annual General Meeting is, where
practicable, sent out at least 20 working days in advance
of the meeting. All shareholders have the opportunity to
put questions to the Board and Manager at the meeting.
Further details regarding the arrangements for this year’s
Annual General Meeting and separate Online Shareholder
Presentation are set out in the Chairman’s Statement on
page 10.
Annual General Meeting
The Annual General Meeting will be held at 18 Bishops
Square, London E1 6EG on Tuesday 8 July 2025 at 12 noon.
The Notice of Annual General Meeting is included on
pages 116 to 120.
There are 13 resolutions to consider, including three
resolutions put as special resolutions which require the
approval of 75% of the votes cast. The 10 ordinary
resolutions include adopting the accounts and Auditor’s
report, adopting the Directors’ Remuneration Report,
approving the final dividend, the re-appointment of
Directors, the re-appointment and determining the
remuneration of the Auditor, and a general share
allotment authority. Further details of the ordinary and
special resolutions to be proposed at the meeting are set
out below.
Allotment of Shares
Resolution 10, which is an ordinary resolution, will, if
approved, give the Directors a general authority to allot
new securities up to 10% of the issued Ordinary share
capital of the Company as at the date of the passing of
the resolution (up to a maximum aggregate nominal
amount of £2,004,165 based on the number of Ordinary
shares in issue as at the date of this Report), such authority
to expire on 30 September 2026 or, if earlier, at the
conclusion of the next Annual General Meeting of the
Company (unless previously revoked, varied or extended
by the Company in general meeting).
Disapplication of Pre-emption Provisions
Resolution 11, which is a special resolution, will, if approved,
give the Directors power to allot Ordinary shares
(including Ordinary shares held in treasury) for cash,
otherwise than pro-rata to existing shareholders, up to a
maximum aggregate nominal amount representing 10%
of the Company’s issued Ordinary share capital as at the
date of the passing of the resolution (up to an aggregate
nominal amount of £2,004,165 based on the number of
Ordinary shares in issue as at the date of this Report).
Ordinary shares would only be issued for cash at a
premium to the net asset value per share. This authority
will expire on 30 September 2026 or, if earlier, at the
conclusion of the next Annual General Meeting of the
Company (unless previously revoked, varied or extended
by the Company in general meeting). As noted, this
disapplication of pre-emption rights also applies in respect
of treasury shares which the Company may sell.
Purchase of the Company's own Ordinary Shares
Resolution 12, which is a special resolution, will, if approved,
renew the Company’s authority to make market
purchases of its own shares. The maximum number of
Ordinary shares which may be purchased pursuant to the
authority is 14.99% of the issued share capital of the
Company as at the date of the passing of the resolution
(approximately 6.0 million Ordinary shares as at the date
of this Report). The minimum price which may be paid for
an Ordinary share (exclusive of expenses) is 50p. The
maximum price which may be paid (exclusive of
expenses) is an amount being not more than the higher of
(i) 105% of the average of the middle market quotations
for the Company’s Ordinary shares for the five business
days immediately preceding the date of purchase and (ii)
the higher of the price of the last independent trade and
the highest current independent bid relating to an
Ordinary share on the trading venue where the purchase
is carried out.
This authority, if conferred, will only be exercised if shares
are purchased for cash at a price below the prevailing net
asset value per share and the Directors believe it is in the
best interests of shareholders generally. Shares so
repurchased may be held in treasury or cancelled. Any
purchase of shares will be made within guidelines
established from time to time by the Board. This authority
will expire on 30 September 2026 or, if earlier, at the
conclusion of the next Annual General Meeting of the
Company (unless previously revoked, varied or extended
by the Company in general meeting).
Continued
Directors’ Report
Shires Income PLC 55
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Notice Period for General Meetings
The Company’s Articles of Association enable it to call
general meetings (other than an Annual General Meeting)
on 14 clear days' notice. In order for this to be effective, the
shareholders must also annually approve the calling of
meetings on 14 days' notice by separate resolution.
Resolution 13, which is a special resolution, seeks such
approval. 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 14 days' notice. It is the
Board’s intention to only use this authority where it is
merited by the purpose of the meeting.
Recommendation
The Directors believe 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 totalling 71,283 Ordinary shares,
representing 0.18% of the issued share capital.
By order of the Board
abrdn Holdings Limited
Company Secretary
1 George Street
Edinburgh EH2 2LL
28 May 2025
56 Shires Income PLC
This Directors’ Remuneration Report comprises
three parts:
a) a Remuneration Policy which is subject to a binding
shareholder vote every three years (or sooner if
varied during this interval) - most recently voted on at
the Annual General Meeting on 5 July 2024;
b) an Implementation Report which is subject to an
advisory vote on the level of remuneration paid during
the year; and
c) an Annual Statement.
The law requires the Company’s Auditor to audit certain of
the disclosures provided in the Directors’ Remuneration
Report. Where disclosures have been audited, they are
indicated as such. The Auditor’s opinion is included on
pages 65 to 71.
The Directors’ Remuneration Policy and level of Directors’
remuneration are determined by the Nomination &
Remuneration Committee, which is chaired by Mr White,
and comprises all of the Directors. The Remuneration
Policy is reviewed by the Nomination & Remuneration
Committee on an annual basis.
The Directors’ Remuneration Policy takes into
consideration the principles of the UK Corporate
Governance Code and the AIC’s recommendations
regarding the application of those principles to
investment companies.
No shareholder views have been sought in setting the
Remuneration Policy (approved by shareholders at the
Annual General Meeting in 2024) although any comments
received from shareholders are considered.
Remuneration Policy
The Board’s policy is that the remuneration of non-
executive Directors should 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 investment objectives.
Remuneration should also be sufficient to attract Directors
of the quality and with the skills required to oversee the
Company’s activities successfully.
Appointment Terms
· All the Directors are non-executive and are appointed
under the terms of letters of appointment which are
updated from time to time for updated regulatory
provisions.
· Under the terms of the Company’s Articles of
Association, Directors must retire and be subject to
appointment at the first Annual General Meeting after
their appointment by the Board, and be subject to re-
appointment every three years thereafter. However, the
Board has decided that all Directors will seek annual
re-appointment.
· 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.
· Additional fees may be payable to take account of
specific circumstances that might arise where a
Director is required to perform services (i) outside the
scope of the ordinary duties of a Director; or (ii) outside
the ordinary course of Company business, and in
each case where this is exceptional in terms of
time commitment.
· No incentive or introductory fees will be paid to
encourage a person to become a Director.
· Directors are not eligible for bonuses, pension benefits,
share options, long-term incentive schemes or
other benefits.
· Directors are entitled to re-imbursement of out-of-
pocket expenses incurred in connection with the
performance of their duties, including travel and
accommodation expenses as necessary.
· The Company indemnifies its Directors under deeds of
indemnity for all costs, charges, losses, expenses and
liabilities which may be incurred in the discharge of
duties as a Director of the Company.
· The Directors’ remuneration is not subject to any
performance related fee.
· No Director has a service contract.
· The terms of appointment provide that a Director may
be removed without notice in certain circumstances.
· Compensation will not be due upon leaving office.
· No Director is entitled to any other monetary payment
or any assets of the Company.
· Directors’ & Officers’ liability insurance cover is
maintained by the Company on behalf of the Directors.
Directors’ Remuneration Report
Shires Income PLC 57
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Statement of Voting at General Meeting on the
Remuneration Policy
At the Annual General Meeting held on 5 July 2024,
shareholders approved the Directors’ Remuneration
Policy. 94.7% of proxy votes were in favour of the
resolution and 5.3% were against. There were abstentions
in respect of 123,026 Ordinary shares.
Implementation Report
Limit on Directors’ Fees
Directors’ fees are set within the limits of the Company’s
Articles of Association which limit the aggregate fees per
annum payable to the Board of Directors. The current limit
specified in the Articles of Association, as approved by
shareholders at the Annual General Meeting on 5 July
2024, is £200,000 per annum (or such other amount as
may from time to time be determined by ordinary
resolution of the Company).
Review of Directors’ Fees
The levels of fees for the year and the preceding year are
set out in the table below.
31 March
2025
£
31 March
2024
£
Chairman 43,500 41,000
Chairman of Audit Committee 35,000 33,500
Director 30,500 29,000
An additional fee of £1,000 per annum (2024: £1,000) was
payable to the Senior Independent Director.
For the current and future years, the Nomination &
Remuneration Committee has established a base rate for
serving as a non-executive Director, taking account the
size of the Company and demands for serving on the
Board, balanced with having a small number of Directors
on the Board. Additional amounts will be paid for chairing
committees or serving in other roles such as Senior
Independent Director or Chair of the Board. In future,
should the activities of the Company require substantial
input from the Board or particular Board members, as has
been the case in the past, then additional remuneration
will be considered under the circumstances.
With this in mind, the Committee carried out a review of
the level of Directors’ fees during the year. This included
consideration of fees paid by comparable investment
trusts and the sector as a whole, the responsibilities and
time commitment of the Directors, their skills and
experience, and the level of basic fee required to attract
new Directors of sufficient calibre. Following this review, it
was decided that fees would be increased with effect
from 1 April 2025 to £45,500 per annum for the Chairman,
£36,500 per annum for the Audit Committee Chair and
£31,500 per annum for the other Directors. It was also
decided that separate fees of £1,000 per annum would be
paid to each of the Senior Independent Director and the
Chairs of the Management Engagement Committee and
Nomination & Remuneration Committee.
Company Performance
The graph below shows the share price and NAV total
return (assuming all dividends are reinvested) to Ordinary
shareholders compared to the total return from the FTSE
All-Share Index for the ten year period to 31 March 2025
(rebased to 100 at 31 March 2015). This Index was chosen
for comparison purposes, as it is the benchmark used for
investment performance measurement purposes.
80
100
120
140
160
180
200
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
NAV Share P rice Index
Spend on Pay
As the Company has no employees, the Directors do not
consider it appropriate to present a table comparing
remuneration paid to employees with distributions to
shareholders. The total fees paid to Directors are
shown below.
58 Shires Income PLC
Fees Payable (Audited)
The Directors who served during the year received the
following fees, which exclude employers’ National
Insurance contributions:
Director
2025
£
2024
£
Robin Archibald
A
41,524 34,500
Jane Pearce
B
33,815 29,000
Helen Sinclair 31,237 29,000
Robert Talbut
C
11,460 41,000
Simon White
D
30,500 7,250
Total 148,536 140,750
A
Appointed Chairman on 5 July 2024.
B
Appointed as Chair of the Audit Committee on 5 July 2024.
C
Retired 5 July 2024
D
Appointed 1 January 2024
Fees are pro-rated where a change takes place during a
financial year. There were no payments to third parties
included in the fees referred to in the table above.
Annual Percentage Change in Directors’ Remuneration
The table below sets out the annual percentage change in
Directors’ fees for the past five years.
Year
ended
31
March
2025
Year
ended
31
March
2024
Year
ended
31
March
2023
Year
ended
31
March
2022
Year
ended
31
March
2021
Director % % % % %
Robin Archibald
A
20.4 6.0 6.7 5.2 3.7
Jane Pearce
B
16.6 5.5 3.8 6.0 -
Helen Sinclair
C
7.7 5.5 3.8 n/a n/a
Simon White
D
5.2 n/a n/a n/a n/a
A
Appointed Senior Independent Director on 12 September 2022 and Chairman on 5
July 2024
B
Fee pro-rated from date of appointment on 1 January 2020. Appointed as Chair of
the Audit Committee on 5 July 2024
C
Fee pro-rated from date of appointment on 1 February 2022. Appointed as Senior
Independent Director on 5 July 2024.
D
Fee pro-rated from date of appointment on 1 January 2024
Directors’ Interests in the Company (Audited)
The Directors are not required to have a shareholding in
the Company. The Directors (including their connected
persons) at 31 March 2025 and 31 March 2024 had no
interest in the share capital of the Company other than
those interests, all of which are beneficial, shown in the
table below.
31 March 2025 31 March 2024
Ordinary shares Ordinary shares
Robin Archibald 22,773 22,471
Jane Pearce 7,014 7,014
Helen Sinclair 3,000 3,000
Robert Talbut
A
18,496 18,496
Simon White 20,000 20,000
A
At date of retirement on 5 July 2024
No Director had an interest in the 3.5% Cumulative
Preference shares at any time during the year.
There have been no changes to the Directors’ interests
in the share capital of the Company since the end of
the year.
Statement of Voting at General Meeting on the
Remuneration Report
At the Company’s last Annual General Meeting, held on 5
July 2024, shareholders approved the Directors’
Remuneration Report (excluding the Directors’
Remuneration Policy) in respect of the year ended 31
March 2024. 96.7% of proxy votes were in favour of the
resolution and 3.3% were against. There were abstentions
in respect of 104,225 Ordinary shares.
A resolution will be proposed at the Annual General
Meeting to approve the Directors’ Remuneration Report
(excluding the Directors’ Remuneration Policy) in respect
of the year ended 31 March 2025.
Continued
Directors’ Remuneration Report
Shires Income PLC 59
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Annual Statement
On behalf of the Board and in accordance with Part 2 of
Schedule 8 of the Large and Medium-sized Companies
and Groups (Accounts and Reports) (Amendment)
Regulations 2013, it is confirmed that the above
Remuneration Report summarises, as applicable, for the
year to 31 March 2025:
· the major decisions on Directors’ remuneration;
· any substantial changes relating to Directors’
remuneration made during the year; and
· the context in which the changes occurred and
decisions have been taken.
On behalf of the Board
Simon White
Director
28 May 2025
60 Shires Income PLC
The Audit Committee presents its Report for the year
ended 31 March 2025.
Committee Composition
The Audit Committee comprises all of the Directors of the
Company. Ms Pearce was appointed Chair following the
AGM on 5 July 2024. Ms Pearce is a Chartered
Accountant and has served as chair on the audit
committees of other companies. The Board is satisfied
that she has recent and relevant financial experience and
knowledge of the investment company sector, and that
the Committee as a whole has competence relevant to
the sector.
The Board considers that, given its size and the nature of
the Company’s activities, it is appropriate for the
Chairman of the Board to be a member of the
Committee. Mr Archibald was independent upon his
appointment to the Board in May 2017.
Functions of the Audit Committee
The principal role of the Audit Committee is to assist the
Board in relation to the reporting of financial information,
the review of financial controls and the management of
risk. The Committee has defined terms of reference which
are reviewed and re-assessed for their adequacy on at
least an annual basis. Copies of the terms of reference are
published on the Company’s website and are available
from the Company on request.
The Committee’s main functions are listed below:
· to review and monitor the internal control systems and
risk management systems (including review of non-
financial risks) on which the Company is reliant (the
Directors’ statement on the Company’s internal controls
and risk management is set out below);
· to consider whether there is a need for the Company to
have its own internal audit function;
· to monitor the integrity of the half-yearly and annual
financial statements of the Company by reviewing, and
challenging where necessary, the actions and
judgements of the Manager and how the financial
statements are presented;
· 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
annual and half-yearly financial statements,
announcements and related formal statements and to
test the validity of these judgements on a regular basis;
· 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 review the proposed audit programme and planning
with the Auditor;
· to meet with the Auditor to review the audit results
report;
· to develop and implement policy on the engagement of
the Auditor to supply non-audit services. There were no
fees for non-audit services paid to the Auditor during the
year (2024: £nil). All non-audit services must be
approved in advance by the Audit Committee and will
be reviewed in the light of statutory requirements and
the need to maintain the Auditor’s independence;
· to make recommendations to the Board in relation to
the re-appointment of the Auditor or the appointment
of a new Auditor and to approve the remuneration and
terms of engagement of the Auditor;
· to monitor and review the Auditor’s independence,
objectivity, effectiveness, resources and qualification;
and
· to review a statement from the Aberdeen Group
detailing the arrangements in place within the group
whereby staff may, in confidence, escalate concerns
about possible improprieties in matters of financial
reporting or other matters.
Activities During the Year
The Audit Committee met twice during the year when,
amongst other things, it considered the Annual Report and
the Half-Yearly Financial Report. Representatives of the
Aberdeen Group’s internal audit, risk and compliance
departments reported to the Committee at these
meetings on matters such as internal control systems, risk
and the conduct of the business in the context of its
regulatory environment. The Audit Committee also meets
privately with the Auditor to discuss issues arising from the
audit. Members of the Audit Committee had regular
meetings and communications with the Manager
between these formal Committee meetings.
The Audit Committee reviews annually the split of
management expenses and finance costs between
income and capital, which had been applied as to 50:50
for some time, and concluded that, with effect from the
commencement of the financial year on 1 April 2024, this
would be applied as to 40:60 between income and capital
respectively. This change did not give rise to any prior
year adjustment.
Audit Committee’s Report
Shires Income PLC 61
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Internal Control
The Board confirms that there is an ongoing process for
identifying, evaluating and managing the Company’s
significant business and operational risks, that it has been
in place for the year ended 31 March 2025 and up to the
date of approval of the Annual Report, that it is regularly
reviewed by the Board and accords with the FRC’s
guidance on internal controls.
The Board has overall responsibility for ensuring that there
is a system of internal controls in place and a process for
reviewing its effectiveness. Any system of internal control
is designed to manage rather than eliminate the risk of
failure to achieve business objectives and can only provide
reasonable and not absolute assurance against material
misstatement or loss.
The design, implementation and maintenance of controls
and procedures to safeguard the assets of the Company
and to manage its affairs properly extends to operational
and compliance controls and risk management. The
Board, through the Audit Committee, has prepared its
own risk register which identifies potential risks and it
considers the potential cause and possible impact of
these risks and changes to the individual risks as well as
reviewing the controls in place to mitigate them. A risk is
rated by having a likelihood and an impact rating and is
plotted on a “heat map”. There is also regular discussion
and identification of emerging risks, including those of an
exogenous nature.
Clear lines of accountability have been established
between the Board and the Manager. The Board receives
regular reports covering key performance and risk
indicators and considers control and compliance issues
brought to its attention. In carrying out its review, the
Board has had regard to the activities of the Aberdeen
Group, its internal audit and compliance functions
and the Auditor.
The Audit Committee has reviewed the effectiveness of
the Aberdeen Group’s system of internal control including
its annual internal controls report prepared in accordance
with the International Auditing and Assurance Standards
Board’s International Standard on Assurance
Engagements (“ISAE”) 3402, “Assurance Reports on
Controls at a Service Organization”. The Committee has
also reviewed the Aberdeen Group’s process for
identifying and evaluating the significant risks faced by the
Company and the policies and procedures by which these
risks are managed.
The Depositary, BNP Paribas Trust Corporation UK Limited,
reports annually to the Board. Its services are monitored
on an ongoing basis on behalf of the Company by the
Manager, and the Manager meets with the Depositary on
a regular basis and reviews internal control reports
produced by the Depositary.
Risks are identified and documented through a risk
management framework by each function within the
Aberdeen Group’s activities. Risk is considered in the
context of the FRC’s guidance on internal controls and
includes financial, regulatory, market, operational and
reputational risk. This helps the internal audit risk
assessment model identify those functions for review. Any
weaknesses identified are reported to the Board and
timetables are agreed for implementing improvements to
systems. The implementation of any remedial action
required is monitored and feedback provided to
the Board.
The key components designed to provide effective
internal control are outlined below:
· the Board and Manager have agreed clearly defined
investment criteria, specified levels of authority and
exposure limits. Reports on these issues, including
performance statistics and investment valuations, are
regularly submitted to the Board;
· written agreements are in place which specifically
define the roles and responsibilities of the Manager and
other third party service providers;
· 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 Aberdeen Group’s
compliance department continually reviews its
operations; and
· at its meeting in May 2025, the Audit Committee carried
out an annual assessment of internal controls for the
year ended 31 March 2025 by considering
documentation from the Aberdeen Group including the
internal audit and compliance functions and taking
account of events since 31 March 2025.
62 Shires Income PLC
The Board has considered the need for an internal audit
function but, given that the Audit Committee receives
reports from the Company’s key service providers on their
internal controls and, because of the compliance and
internal control systems in place within the Aberdeen
Group, has decided to place reliance on those systems
and internal audit procedures and concluded that it is not
necessary for the Company to have its own internal
audit function.
Financial Statements and Significant Issues
During its review of the Company’s financial statements
for the year ended 31 March 2025, the Audit Committee
considered the following significant issues, in particular
those communicated by the Auditor during its planning
and reporting of the year end audit:
Valuation and Existence of Investments
How the issue was addressed - the Company’s
investments have been valued in accordance with the
accounting policies as disclosed in note 2 (b) to the
financial statements. All investments are in quoted
securities in active markets, are considered to be liquid
and have been categorised as Level 1 within the IFRS 13
fair value hierarchy. The portfolio holdings and their pricing
are reviewed and verified by the Manager on a regular
basis and management accounts, including a full portfolio
listing, are prepared for each Board meeting. The
Company uses the services of an independent depositary
(BNP Paribas Trust Corporation UK Limited) to hold the
assets of the Company. The Depositary checks the
consistency of its records with those of the Manager on a
monthly basis and reports to the Board on an annual basis.
Recognition of Investment Income
How the issue was addressed - the recognition of
investment income is undertaken in accordance with the
stated accounting policies. In addition, the Directors
review the Company’s income, including income received,
revenue forecasts and dividend comparisons at each
Board meeting. The Board also examines any unusual
items of income or receipts (including special dividends)
which could be categorised as capital or income and how
they should be treated for accounting purposes. The
Committee notes that there was no significant accounting
judgement required in relation to the classification of
special dividends received during the period.
Maintenance of Investment Trust Status
How the issue was addressed - Approval of the Company
as an investment trust under Sections 1158 and 1159 of
the Corporation Tax Act 2010 for financial years
commencing on or after 1 April 2012 has been obtained
and ongoing compliance with the eligibility criteria is
monitored on a regular basis by the Manager and
reported at each Board meeting.
Review of Auditor
The Audit Committee has reviewed the effectiveness of
the Auditor, Ernst & Young LLP (“EY”), including:
· Independence - the Auditor discusses with the Audit
Committee, at least annually, the steps it takes to ensure
its independence and objectivity and makes the
Committee aware of any potential issues, explaining all
relevant safeguards.
· Quality of audit work - including the ability to resolve
issues in a timely manner, its communications and
presentation of outputs, and its working relationship
with management.
· Quality of people and service - including continuity and
succession plans.
· Fees – including current and proposed fees for
future years.
The Committee has also reviewed developments in the
audit of listed companies and in governance and how this
impacts the audit function.
In common with all UK listed companies, including
investment companies, there has been upward pressure
on audit fees. The Audit Committee continues to monitor
the fees paid and payable by the Company and has been
satisfied that the continuity, experience and service levels
have been important in approving increased fees paid to
the Auditor in the past few years.
Tenure of the Auditor
EY was appointed as Auditor at the Annual General
Meeting on 6 July 2016 and the year ended 31 March 2025
is the ninth year that EY has acted as Auditor. Public limited
companies are required to put their audits out to tender
every ten years and to rotate auditor every twenty years.
The Audit Committee will therefore conduct an audit
tender process during the current financial year in respect
of the year ended 31 March 2027.
Audit Committee’s Report
Continued
Shires Income PLC 63
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In accordance with present professional guidelines the
audit partner is rotated after no more than five years and
the year ended 31 March 2025 is the fourth year for which
the present partner, James Beszant, has served.
The Audit Committee is satisfied that EY is independent
and therefore supports the recommendation to the Board
that the re-appointment of EY be put to shareholders for
approval at the Annual General Meeting.
Jane Pearce
Chair of the Audit Committee
28 May 2025
64 Shires Income PLC
The Directors are responsible for preparing the Annual
Report and the financial statements, in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year, and under that law
they have chosen to prepare the financial statements
in accordance with UK-adopted international
accounting standards.
The financial statements are required by law to 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 in accordance with
IAS 8 ‘Accounting Policies, Changes in Accounting
Estimates and Errors’ and then apply them consistently;
· make judgments and estimates that are reasonable
and prudent;
· present information, including accounting policies, in a
manner that provides relevant, reliable, comparable
and understandable information;
· provide additional disclosures when compliance with
the specific requirements in UK-adopted international
accounting standards is insufficient to enable users to
understand the impact of particular transactions, other
events and conditions on the Company’s financial
position and financial performance;
· state whether the financial statements have been
prepared in accordance with UK-adopted international
accounting standards subject to any material
departures disclosed and explained in the notes to the
financial statements; and
· prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping proper
accounting records that disclose with reasonable
accuracy at any time the financial position of the
Company and enable them to ensure that the financial
statements comply with the Companies Act 2006. They
have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the
Company and to prevent and detect fraud and
other irregularities.
Under applicable law and regulations, the Directors are
also responsible for preparing a Strategic Report,
Directors’ Report, Directors’ Remuneration Report and
Statement of Corporate Governance that comply with
that law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information
included on the Company’s website, but not for the
content of any information included on the website that
has been prepared or issued by third parties. Legislation in
the UK governing the preparation and dissemination of
financial statements may differ from legislation in
other jurisdictions.
The Board confirms that to the best of its knowledge:
· the financial statements have been prepared in
accordance with applicable accounting standards and
give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company;
· 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
Robin Archibald
Chairman
28 May 2025
Statement of Directors’ Responsibilities
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Opinion
We have audited the financial statements of Shires Income PLC (the “Company”) for the year ended 31 March 2025
which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow
Statement including the related notes 1 to 23 to the financial statements, including material accounting policy
information. The financial reporting framework that has been applied in their preparation is applicable law and UK-
adopted International Accounting Standards.
In our opinion, the financial statements:
· give a true and fair view of the Company’s affairs as at 31 March 2025 and of its profit for the year then ended;
· have been properly prepared in accordance with UK-adopted International Accounting Standards; and
· have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Company and we remain
independent of the Company in conducting the audit.
Conclusions Relating to Going Concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the
Company’s ability to continue to adopt the going concern basis of accounting included:
· Confirmation of our understanding of the Company’s going concern assessment process. We engaged with the
Directors and the Company Secretary to determine if the key factors that we have become aware of during our audit
were considered in their assessment.
· Inspection of the Directors’ assessment of going concern, including the liquidity assessment of the investment portfolio
and the revenue forecast, for the period to 30 June 2026 which is at least 12 months from the date the financial
statements were authorised for issue. In preparing the revenue forecast and liquidity assessment, the Company has
concluded that it is able to continue to meet its ongoing costs as they fall due.
· Review of the factors and assumptions, including the impact of the current economic environment, as applied to the
revenue forecast and the liquidity assessment of the investment portfolio. We considered the appropriateness of the
methods used to calculate the revenue forecast and the liquidity assessment and determined, through testing of the
methodology and calculations, that the methods, inputs and assumptions utilised were appropriate to be able to make
an assessment for the Company.
· Assessment of the risk of breaching the debt covenants as a result of a reduction in the value of the Company’s
portfolio. We recalculated the Company’s compliance with debt covenants and performed reverse stress testing in
order to identify what factors would lead to the Company breaching the financial covenants.
· Consideration of the mitigating factors included in the revenue forecasts and covenant calculations that are within the
control of the Company in relation to their stress testing. We reviewed the Company’s assessment of the liquidity of
investments held and evaluated the Company’s ability to sell those investments in order to cover the working capital
requirements should revenue decline significantly.
Independent Auditor’s Report to the Members
of Shires Income PLC
66 Shires Income PLC
Independent Auditor’s Report to the Members
of Shires Income PLC
Continued
· Review of the Company’s going concern disclosures included in the Annual Report in order to assess whether the
disclosures were appropriate and in conformity with the reporting standards.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a
period assessed by the Directors, being the period to 30 June 2026.
In relation to the Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the
Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report. However, because not all future events or conditions can be predicted, this statement is not a
guarantee as to the Company’s ability to continue as a going concern.
Overview of Our Audit Approach
Key audit matters · Risk of incomplete or inaccurate revenue recognition, including the classification of special dividends
as revenue or capital items in the Statement of Comprehensive Income
· Risk of incorrect valuation or ownership of the investment portfolio
Materiality · Overall materiality of £1.07 million (2024: £1.06 million) which represents 1% (2024: 1%) of
shareholder’s funds
An Overview of the Scope of our Audit
Tailoring the Scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our
audit scope for the Company. This enables us to form an opinion on the financial statements. We take into account size,
risk profile, the organisation of the Company and effectiveness of controls, the potential impact of climate change and
changes in the business environment when assessing the level of work to be performed.
Climate Change
The Company has determined that the most significant future impacts from climate change on its operations will be
from how climate change could affect the Company’s investments. This is explained on page 13 in the principal and
emerging risks and uncertainties section. This disclosure forms part of the “Other Information,” rather than the audited
financial statements. Our procedures on these unaudited disclosures therefore consisted solely of considering whether
they are materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or
otherwise appear to be materially misstated, in line with our responsibilities on “Other Information”.
Our audit effort in considering climate change was focused on the adequacy of the Company’s disclosures in the
financial statements as set out in note 2 (a) and conclusion that there was no further impact of climate change to be
taken into account as the investments are valued based on market pricing as required by UK-adopted International
Accounting Standards. We also challenged the Directors’ considerations of climate change in their assessment of
viability and associated disclosures.
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Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial statements as a whole, and in our opinion thereon,
and we do not provide a separate opinion on these matters.
Risk Our response to the risk
Key observations
communicated to the
Audit Committee
Incomplete or inaccurate revenue
recognition, including the classification of
special dividends as revenue or capital items
in the Statement of Comprehensive Income
(as described on page 62 in the Audit
Committee’s Report and as per the
accounting policy set out on page 79).
The total revenue for the year to 31 March
2025 was £7.30 million (2024: £6.43 million),
consisting of dividend income from listed
investments.
The Company received seven (2024: four)
special dividends amounting to £0.27 million
(2024: £0.50 million), of which six of them
were classified as revenue.
There is a risk of incomplete or inaccurate
revenue recognition through the failure to
recognise proper income entitlements or to
apply an appropriate accounting treatment.
In addition to the above, the Directors are
required to exercise judgement in
determining whether income receivable in
the form of special dividends should be
classified as ‘revenue’ or ‘capital’ in the
Statement of Comprehensive Income.
We have performed the following procedures:
We obtained an understanding of the Administrator’s
processes and controls surrounding revenue recognition
and classification of special dividends by performing
walkthrough procedures.
For all dividends received, including dividends on
preference shares, we recalculated the dividend income
by multiplying the investment holdings at the ex-dividend
date, traced from the accounting records, by the dividend
per share, which was agreed to an independent data
vendor. For all of the dividends received, we agreed
amounts to bank statements and agreed the exchange
rates used to an external source.
For all accrued dividends, we reviewed the investee
company announcements to assess whether the
dividend entitlements arose prior to 31 March 2025. We
agreed the dividend rate to corresponding
announcements made by the investee company,
recalculated the dividend amount receivable and agreed
the subsequent cash receipts to the post year end bank
statements where the dividend had
been received.
To test completeness of recorded income, we verified
that expected dividends for each investee company held
during the year had been recorded as income with
reference to investee company announcements
obtained from an independent data vendor.
For all investments held during the year, we reviewed the
type of dividends paid with reference to an external data
source to identify those which were ‘special’. We
identified seven special dividends, amounting to £0.27
million, were received during the year. We have tested a
sample of one special dividend, assessing the
appropriateness of classification as capital by reviewing
the underlying rationale of the distribution with reference
to publicly available information.
The results of our
procedures identified
no material
misstatement in relation
to incomplete or
inaccurate revenue
recognition, including
incorrect classification
of special dividends as
revenue or capital items
in the Statement of
Comprehensive
Income.
68 Shires Income PLC
Independent Auditor’s Report to the Members
of Shires Income PLC
Continued
Risk Our response to the risk
Key observations
communicated to the
Audit Committee
Incorrect valuation or ownership of the
investment portfolio (as described on page
62 in the Audit Committee’s Report and as
per the accounting policy set out on
page 79).
The valuation of the portfolio at 31 March
2025 was £123.34 million (2024: £122.17
million) consisting of listed investments.
The valuation of the assets held in the
investment portfolio is the key driver of the
Company’s net asset value and total return.
Incorrect investment pricing, or failure to
maintain proper legal title of the investments
held by the Company, could have a
significant impact on the net asset value and
the return generated for shareholders.
The fair value of listed investments is
determined using quoted market bid prices
at close of business on the reporting date.
We performed the following procedures:
We obtained an understanding of the Administrator’s
processes surrounding investment pricing and legal title
of listed investments by performing walkthrough
procedures.
For all listed investments in the portfolio, we compared
the market prices and exchange rates applied to an
independent pricing vendor and recalculated the
investment valuations as at the year end.
We confirmed with the Administrator that there were no
investments with stale prices as at the year-end and
therefore no stale pricing report produced. We
challenged this assertion by reviewing the daily valuation
of each investment for five business days before and
after 31 March 2025 to identify any stale prices. Our
testing did not identify any stale prices.
We compared the Company’s investment holdings at 31
March 2025 to the independent confirmation received
directly from the Company’s Depositary.
The results of our
procedures identified
no material
misstatement in relation
to the risk of incorrect
valuation or ownership
of the investment
portfolio
In the prior year, our Auditor’s report included a key audit matter ‘in relation to Incorrect accounting of the transaction
between the Company and abrdn Smaller Companies Income Trust plc’. In the current year, this has not been included
as a key audit matter as the transaction does not impact upon the current year financial statements.
Our Application of Materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified
misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to
influence the economic decisions of the users of the financial statements. Materiality provides a basis for determining the
nature and extent of our audit procedures.
We determined materiality for the Company to be £1.07 million (2024: £1.06 million), which is 1% (2024: 1%) of
shareholders’ funds. We believe that shareholders’ funds provides us with materiality aligned to the key measures of the
Company’s performance.
Performance Materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an
appropriately low level the probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality.
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On the basis of our risk assessments, together with our assessment of the Company’s overall control environment, our
judgement was that performance materiality was 75% (2024: 75%) of our planning materiality, namely £0.80 million
(2024: £0.79 million). We have set performance materiality at this percentage due to our past experience of the audit
that indicates a lower risk of misstatements, both corrected and uncorrected.
Given the importance of the distinction between revenue and capital for investment trusts, we have also applied a
separate testing threshold for the revenue column of the Statement of Comprehensive Income of £0.31 million
(2024: £0.26 million) being 5% (2024: 5%) of revenue profit before tax.
Reporting Threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of £0.05
million (2024: £0.05 million), which is set at 5% of planning materiality, as well as differences below that threshold that, in
our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above
and in light of other relevant qualitative considerations in forming our opinion.
Other Information
The other information comprises the information included in the Annual Report, other than the financial statements and
our Auditor’s report thereon. The Directors are responsible for the other information contained within the Annual Report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to
be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based
on the work we have performed, we conclude that there is a material misstatement of the other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on Other Matters Prescribed by the Companies Act 2006
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
· the Strategic Report and Directors’ Report have been prepared in accordance with applicable legal requirements.
Matters on Which We Are Required to Report by Exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit,
we have not identified material misstatements in the Strategic Report or Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
· adequate accounting records have not been kept, or returns adequate for our audit have not been received from
branches not visited by us; or
70 Shires Income PLC
Independent Auditor’s Report to the Members
of Shires Income PLC
Continued
· the financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with
the accounting records and returns; or
· certain disclosures of Directors’ remuneration specified by law are not made; or
· we have not received all the information and explanations we require for our audit.
Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review by the UK Listing Rules.
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 or our knowledge obtained
during the audit:
· Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identified set out on page 53;
· Directors’ explanation as to their assessment of the Company’s prospects, the period this assessment covers and why
the period is appropriate set out on page 18;
· Directors’ statement on whether they have a reasonable expectation that the Company will be able to continue in
operation and meets its liabilities set out on page 53;
· Directors’ statement on fair, balanced and understandable set out on page 64;
· Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 13;
· The section of the Annual Report that describes the review of effectiveness of risk management and internal control
systems set out on pages 61 and 62; and;
· The section describing the work of the Audit Committee set out on pages 60 to 63.
Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 64, the Directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
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Explanation as to What Extent the Audit Was Considered Capable of Detecting
Irregularities, Including Fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect irregularities, including fraud. 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. The extent to
which our procedures are capable of detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with
governance of the Company and management.
· We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and
determined that the most significant are UK-adopted International Accounting Standards, the Companies Act 2006,
the UK Listing Rules, the UK Corporate Governance Code, the Statement of Recommended Practice for the Financial
Statements of Investment Trust Companies as issued by the Association of Investment Companies, Section 1158 of the
Corporation Tax Act 2010, and The Companies (Miscellaneous Reporting) Regulations 2018.
· We understood how the Company is complying with those frameworks through discussions with the Audit
Committee and Company Secretary, review of the Board minutes and review of papers provided to the Audit
Committee.
· We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud
might occur by considering the key risks impacting the financial statements. We identified a fraud risk with respect to
the incomplete or inaccurate revenue recognition through incorrect classification of special dividends as revenue or
capital in the Statement of Comprehensive Income. Further discussion of our approach is set out in the section on key
audit matters above.
· Based on this understanding we designed our audit procedures to identify non-compliance with such laws and
regulations. Our procedures involved review of the reporting to the Directors with respect to the application of the
documented policies and procedures and review of the financial statements to ensure compliance with the reporting
requirements of the Company.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor’s report.
Other Matters we are Required to Address
· Following the recommendation from the Audit Committee, we were appointed by the Company on 6 July 2016 to
audit the financial statements for the year ending 31 March 2017 and subsequent financial periods.
· The period of total uninterrupted engagement including previous renewals and reappointments is nine years, covering
the years ending 31 March 2017 to 31 March 2025.
· The audit opinion is consistent with the additional report to the Audit Committee.
Use of Our Report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as
a body, for our audit work, for this report, or for the opinions we have formed.
James Beszant (Senior Statutory Auditor)
For and on behalf of Ernst & Young LLP, Statutory Auditor
London
28 May 2025
72 Shires Income PLC
Financial
Statements
Shires Income PLC 73
74 Shires Income PLC
Year ended Year ended
31 March 2025 31 March 2024
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Gains/(losses) on investments at fair value 11 - 4,472 4,472 - (5,748) (5,748)
Currency losses - (5) (5) - (56) (56)
Income 3
Income from investments 7,196 - 7,196 6,361 - 6,361
Other income from investment activity 100 - 100 68 - 68
7,296 4,467 11,763 6,429 (5,804) 625
Expenses
Management fee 4 (261) (392) (653) (210) (210) (420)
Administrative expenses 5 (428) (19) (447) (505) (24) (529)
Finance costs 7 (402) (603) (1,005) (502) (502) (1,004)
(1,091) (1,014) (2,105) (1,217) (736) (1,953)
Profit/(loss) before taxation 6,205 3,453 9,658 5,212 (6,540) (1,328)
Taxation 8 (108) - (108) (144) - (144)
Profit/(loss) attributable to equity holders of the
Company
6,097 3,453 9,550 5,068 (6,540) (1,472)
Earnings per Ordinary share (pence) 10 14.80 8.38 23.18 14.75 (19.03) (4.28)
The Company does not have any income or expense that is not included in profit for the year, and therefore the “Profit for the year” is
also the “Total comprehensive income for the year”, as defined in IAS 1 (revised).
The total column of this statement represents the Statement of Comprehensive Income of the Company, prepared in accordance
with UK adopted International Accounting Standards. The revenue and capital columns are supplementary to this and are prepared
under guidance published by the Association of Investment Companies.
All items in the above statement derive from continuing operations.
The accompanying notes are an integral part of these financial statements.
Statement of Comprehensive Income
Shires Income PLC 75
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
As at As at
31 March 2025 31 March 2024
Notes £’000 £’000
Non-current assets
Ordinary shares 99,870 97,974
Preference shares and Fixed Interest investments 23,473 24,195
Securities at fair value 11 123,343 122,169
Current assets
Other receivables 12 1,658 1,567
Cash at bank 1,322 1,675
2,980 3,242
Creditors: amounts falling due within one year
Other payables (637) (491)
Net current assets/(liabilities) 2,243 2,751
Total assets less current liabilities 125,686 124,920
Non-current liabilities
Revolving credit facility
A
13 (9,000) (9,000)
Loan due in more than one year 13 (9,975) (9,963)
Net assets 106,711 105,957
Share capital and reserves
Called-up share capital 14 21,166 21,166
Share premium account 2 – 49,952
Special reserve 2 49,952 –
Capital reserve 15 28,055 27,451
Revenue reserve 7,538 7,388
Equity shareholders’ funds 106,711 105,957
Net asset value per Ordinary share (pence) 16 265.23 256.00
A
The prior year balance for the revolving credit facility has been reclassified from current to non-current liabilities. See note 2 (a).
The financial statements were approved by the Board of Directors and authorised for issue on 28 May 2025 and were signed on its
behalf by:
Robin Archibald
Chairman
The accompanying notes are an integral part of these financial statements.
Balance Sheet
76 Shires Income PLC
Year ended 31 March 2025
Share
Share premium Special Capital Revenue
capital account reserve reserve reserve Total
Note £’000 £’000 £’000 £’000 £’000 £’000
As at 31 March 2024 21,166 49,952 – 27,451 7,388 105,957
Repurchase of Ordinary shares for treasury – – – (2,849) – (2,849)
Cancellation of share premium account 2 – (49,952) 49,952 – – –
Profit for the year – – – 3,453 6,097 9,550
Equity dividends 9 – – – – (5,947) (5,947)
As at 31 March 2025 21,166 – 49,952 28,055 7,538 106,711
Year ended 31 March 2024
Share
Share premium Special Capital Revenue
capital account reserve reserve reserve Total
Note £’000 £’000 £’000 £’000 £’000 £’000
As at 31 March 2023 15,532 21,411 – 35,930 7,040 79,913
Issue of shares on the aSCIT transaction 22 5,634 29,594 – – – 35,228
Cost of shares issued in respect of the aSCIT
transaction
22 – (1,053) – – – (1,053)
Repurchase of Ordinary shares for treasury – – – (1,939) – (1,939)
(Loss)/profit for the year – – – (6,540) 5,068 (1,472)
Equity dividends 9 – – – – (4,720) (4,720)
As at 31 March 2024 21,166 49,952 – 27,451 7,388 105,957
The Company has aggregate realised and distributable reserves of £81,873,000 as at 31 March 2025 (2024 – £32,219,000), comprising
a special reserve of £49,952,000, the realised gains element of the capital reserve of £24,383,000 (2024 – £24,831,000) and a revenue
reserve of £7,538,000 (2024 – £7,388,000).
The accompanying notes are an integral part of these financial statements.
Statement of Chan
g
es in Equity
Shires Income PLC 77
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Year ended Year ended
31 March 2025 31 March 2024
£’000 £’000
Net cash inflow from operating activities
Dividend income received 7,183 6,171
Interest income received 8 31
Options premium received – 35
Interest received from money market funds 31 31
Management fee paid (439) (397)
Other cash expenses (483) (539)
Cash generated from operations 6,300 5,332
Interest paid (1,008) (991)
Overseas tax paid (119) (140)
Net cash inflows from operating activities 5,173 4,201
Cash flows from investing activities
Purchases of investments (58,872) (43,873)
Sales of investments 62,170 44,372
Net cash inflow from investing activities 3,298 499
Cash flows from financing activities
Equity dividends paid (5,947) (4,720)
Repurchase of Ordinary shares to Treasury (2,872) (1,838)
Net cash acquired and received following the aSCIT transaction – 3,444
Cost of shares issued in respect of the aSCIT transaction – (1,031)
Net cash outflow from financing activities (8,819) (4,145)
(Decrease)/increase in cash and cash equivalents (348) 555
Reconciliation of net cash flow to movements in cash and cash equivalents
(Decrease)/increase in cash and cash equivalents as above (348) 555
Net cash and cash equivalents at start of year 1,675 1,176
Effect of foreign exchange rate changes (5) (56)
Net cash and cash equivalents at end of year 1,322 1,675
Cash Flow Statement
78 Shires Income PLC
1. Principal activity.
The Company is a closed-end investment company, registered in England and Wales No. 00386561, with its Ordinary shares
listed on the London Stock Exchange.
2. Accounting policies
(a) Basis of accounting. The financial statements of the Company have been prepared in accordance with UK adopted
International Accounting Standards (“IAS”) .
In preparing these financial statements the Directors have considered the impact of climate change risk as an emerging
risk as set out on page 13, and have concluded that it does not have a material impact on the Company’s investments. In
line with IAS, investments are valued at fair value, which for the Company are quoted bid prices for investments in active
markets at the Balance Sheet date and therefore reflect market participants view of climate change risk.
The Company’s financial statements are presented in sterling, which is also the functional currency as it is the currency in
which shares are issued and expenses are generally paid. All values are rounded to the nearest thousand pounds (£’000)
except when otherwise indicated.
Where presentational guidance set out in the Statement of Recommended Practice (“SORP”): ‘Financial Statements of
Investment Trust Companies and Venture Capital Trusts’ issued by the Association of Investment Companies (“AIC”), is
consistent with the requirements of IAS, the Directors have sought to prepare the financial statements on a basis
compliant with the recommendations of the SORP issued in July 2022.
Going concern. The Company’s assets consist mainly of equity shares in companies listed on the London Stock Exchange.
The Board has performed stress testing and liquidity analysis on the portfolio and considers that, in most foreseeable
circumstances, the majority of the Company’s investments are realisable within a relatively short timescale. The Board
has set limits for borrowing and regularly reviews actual exposures, cash flow projections and compliance with banking
covenants, including the headroom available. At the year end, the Company had a £20 million loan facility which is due to
mature in May 2027. Having taken these factors into account, the Directors believe that the Company has adequate
resources to continue in operational existence for the foreseeable future and has the ability to meet its financial
obligations as they fall due for the period to 30 June 2026, which is at least twelve months from the date of approval
of this Report. For these reasons, they continue to adopt the going concern basis of accounting in preparing the
financial statements.
Significant accounting judgements, estimates and assumptions. The preparation of financial statements requires the use
of certain significant accounting judgements, estimates and assumptions which requires management to exercise its
judgement in the process of applying the accounting policies and are continually evaluated. The Directors do not
consider there to be any significant judgements and estimates within the financial statements for the year ended
31 March 2025. Special dividends are assessed and credited to capital or revenue according to their circumstances.
New and amended accounting standards and interpretations. At the date of authorisation of these financial statements,
the following amendments to Standards and Interpretations were assessed to be relevant and are all effective for
annual periods beginning on or after 1 January 2024:
– IAS 1 Amendments (Classification of Liabilities as Current or Non-Current) (effective from 1 January 2024) This has led
to classifying the Company’s revolving credit facility as non-current. Accordingly, the prior year balance of £9,000,000
has been reclassified from current to non-current.
– IAS 1 Amendments (Non-Current Liabilities with Covenants) (effective from 1 January 2024)
Notes to the Financial Statements
For the year ended 31 March 2025
Shires Income PLC 79
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Future new standards and amendments to standards and interpretations. At the date of authorisation of these financial
statements, the following amendments to Standards and Interpretations were assessed to be relevant and are all
effective for annual periods beginning on or after 1 January 2025;
– Annual Improvements 2023-24 (Minor amendments to IFRS 1, 7, 9, 10 and IAS 7) (effective from 1 January 2026)
– IFRS 7 and 9 Amendments (Classification and Measurement of Financial Instruments) (effective from 1 January 2026)
– IFRS 18 (Presentation and Disclosure in Financial Statements) (effective from 1 January 2027)
The Company intends to adopt the Standards and Interpretations in the reporting period when they become effective
and the Board does not anticipate that the adoption of these Standards and Interpretations in future periods will
materially impact the Company’s financial results in the period of initial application although there may be revised
presentations to the Financial Statements and additional disclosures.
(b) Investments. All investments are evaluated and managed on a fair value basis and are therefore classified as FVTPL (“Fair
Value Through Profit or Loss”).
Investments are recognised and de-recognised at the 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 at fair value. For
listed investments, this is deemed to be bid market closing prices for SETS (London Stock Exchange’s electronic trading
service) stocks sourced from the London Stock Exchange.
Gains and losses arising from the changes in fair value are included in net profit or loss for the period as a capital item.
Transaction costs are treated as a capital cost.
(c) Income. Dividend income from equity investments, which have a discretionary dividend, is recognised when the
shareholders’ rights to receive payment have been established, normally the ex-dividend date. Special dividends are
allocated to revenue or capital based on their individual merits.
If a scrip dividend is taken in lieu of a cash dividend, the net amount of the cash dividend declared is credited to the
revenue account. Any excess in the value of the shares received over the amount of the cash dividend foregone is
recognised as capital.
Interest from deposits and interest from debt securities which do not have a discretionary dividend are accounted for on
an accruals basis.
The premium received from traded options and other income, including fees receivable, is recognised in the revenue
column of the Statement of Comprehensive Income.
(d) Expenses. All expenses are accounted for on an accruals basis. In respect of the analysis between revenue and capital
items presented within the Statement of Comprehensive Income, all expenses have been presented as revenue items
except those where a connection with the maintenance or enhancement of the value of the investments held can be
demonstrated. With effect from 1 April 2024, the management fee and finance costs have been allocated 40% to
revenue and 60% to capital, previously 50% to revenue and 50% to capital, in order to reflect the Directors’ expected
long-term view of the nature of the future investment returns of the Company following the merger with abrdn Smaller
Companies Investment Trust plc.
80 Shires Income PLC
(e) Borrowings. Both short-term and long-term borrowings, which comprise interest bearing bank loans are initially
recognised at cost, being the fair value of the consideration received, net of any issue expenses and subsequently
measured at amortised cost using the effective interest method. The finance costs, being the difference between the net
proceeds of borrowings and the total amount of payments that require to be made in respect of those borrowings, are
amortised over the life of the borrowings.
(f) Taxation. The 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 expenditure that are taxable or
deductible in other years and it further excludes items that are never taxable or deductible. The Company has no liability
for current tax.
Deferred tax is recognised in respect of all temporary differences at the Balance Sheet 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
Balance Sheet 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 temporary differences can be deducted. Deferred tax
assets and liabilities are measured at the rates applicable to the legal jurisdictions in which they arise, using tax rates that
are expected to apply at the date the deferred tax position is unwound.
Owing to the Company’s status as an investment trust, and the intention to continue meeting the conditions required to
obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses
arising on the revaluation or disposal of investments.
(g) Foreign currencies. Monetary assets and liabilities, comprising current assets, current liabilities and non-current liabilities
and non-monetary assets comprising non-current assets held at fair value which are denominated in foreign currencies
are converted into sterling at the rate of exchange ruling at the reporting date. Transactions during the year in foreign
currencies are converted at the rate of exchange ruling at the transaction date. Gains or losses on monetary assets and
liabilities 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 column of the Statement of Comprehensive Income, depending on whether the gain or
loss is of a revenue or capital nature. Non-monetary assets that are measured at fair value and gains or losses arising
from a change in exchange rates subsequent to the date of a transaction are included as a gain or loss on investments in
the capital column of the Statement of Comprehensive Income.
(h) Derivatives. The Company may enter into certain derivatives (e.g. traded options). Traded option contracts are restricted
to writing out-of-the-money options with a view to generating income. Premiums received on traded option contracts
are recognised as income evenly over the period from the date they are written to the date when they expire or are
exercised or assigned. Losses on any movement in the fair value of open contracts at the year end and on the exercise of
the contracts are recorded in the capital column of the Statement of Comprehensive Income as they arise.
(i) Cash and cash equivalents. Cash and cash equivalents comprise cash in hand and at banks and short-term deposits with
an original maturity of less than 90 days.
(j) Other receivables. Financial assets classified as loans and receivables are held to collect contractual cash flows and give
rise to cash flows representing solely payments of principal and interest. As such they are measured at amortised cost.
Other receivables do not carry any interest, they have been assessed for any expected credit losses over their lifetime
due to their short-term nature.
(k) Other payables. Payables are non-interest bearing and are stated at their undiscounted cash flows.
(l) Dividends payable. Final dividends are recognised from the date on which they are approved by shareholders. Interim
dividends are recognised when paid.
Notes to the Financial Statements
Continued
Shires Income PLC 81
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(m) Nature and purpose of reserves
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.
Special reserve. During the year, the Court approved the creation of a special reserve by way of cancelling the balance in
the share premium account of £49,952,000. This reserve is available for the Company to distribute to shareholders,
including by way of share buybacks and dividends.
Capital reserve. This reserve reflects any realised gains or losses in the period together with any unrealised increases and
decreases 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 (d) above.
The capital reserve, to the extent that the gains are deemed realised, is distributable, including by way of share buybacks
and dividends.
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 is distributable, including by way of dividend.
(n) 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.
3. Income
2025 2024
£’000 £’000
Income from listed investments
UK dividend income 5,670 5,254
Overseas dividend income 1,172 1,048
Interest from investment in money market funds 31 31
UK fixed interest investment income 323 28
7,196 6,361
Other income from investment activity
Deposit interest 8 34
Traded option premiums – 34
Other income 92 –
Total income 7,296 6,429
82 Shires Income PLC
4. Management fees
2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Management fees 261 392 653 210 210 420
The management fee is based on 0.45% per annum up to £100 million and 0.40% over £100 million, by reference to the net
assets of the Company and including any borrowings up to a maximum of £30 million, and excluding commonly managed
funds, calculated monthly and paid quarterly. In addition, with effect from 1 December 2023, a further fee of £120,000 per
annum is charged for other services provided under the terms of the management agreement. The fee is allocated 40% to
revenue and 60% to capital (31 March 2024 – 50% to revenue and 50% to capital). The management agreement is terminable
on not less than six months’ notice. For the period 1 December 2023 to 30 May 2024, there was a management fee waiver in
place as a result of the transaction with abrdn Smaller Companies Income Trust plc (“aSCIT”). For this period the fee was
calculated at 0.29% per annum of net assets up to £100 million and 0.26% per annum of net assets over this threshold. After
this waiver period ended the fee returned to the existing fee rates. Should the Company terminate the management
agreement within three years of the date of the transaction with aSCIT (ie before 1 December 2026), then the Company
undertakes to repay all of the management fees waived by the Manager. For the period to 31 March 2025 the value of the
management fee waiver was calculated to be £33,000 (2024 – £65,000). The total of the fees paid and payable during the
year to 31 March 2025 was £653,000 (2024 – £420,000) and the balance due to abrdn Fund Managers Limited (“aFML”) at the
year end was £341,000 (2024 – £127,000).
5. Administrative expenses
2025 2024
£’000 £’000
Directors’ remuneration 149 141
Auditor’s remuneration: fees payable to the Company’s Auditor for the audit
of the Company’s annual accounts 57 60
Promotional activities 55 50
Professional fees 2 25
Directors’ & Officers’ liability insurance 11 11
Trade subscriptions 32 29
Share plan costs – 30
Registrar’s fees 47 39
Printing, postage and stationery 12 28
Custody fees 12 11
Other administrative expenses 51 81
428 505
Capital administrative expenses – professional fees 19 24
447 529
Notes to the Financial Statements
Continued
Shires Income PLC 83
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
The management agreement with aFML also provides for the provision of promotional activities, which aFML has delegated to
abrdn Investments Limited. The total fees payable under the management agreement in relation to promotional activities
were £55,000 (2024 – £50,000) with a balance due to aFML at the year end of £15,000 (2024 – £19,000). The Company’s
management agreement with aFML also provides for the provision of company secretarial and administration services to the
Company. No separate fee is charged to the Company in respect of these services, which have been delegated to abrdn
Holdings Limited. Share plan costs for the year decreased to £nil following the cessation of the Aberdeen share plan during the
year ended 31 March 2024.
6. Directors’ remuneration
The Company had no employees during the year (2024 - none). No pension contributions were paid for Directors (2024 - £nil).
Further details on Directors’ Remuneration can be found in the Directors’ Remuneration Report on pages 56 to 59.
7. Finance costs
2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
On bank loans 402 603 1,005 502 502 1,004
8. Taxation
2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
(a) Analysis of the charge for the year
Overseas tax 108 - 108 144 - 144
Total tax charge 108 - 108 144 - 144
84 Shires Income PLC
(b) Factors affecting the tax charge for the year. The tax assessed for the year is lower than the effective rate of corporation
tax in the UK. The differences are explained in the reconciliation below:
2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Profit/(loss) before taxation 6,205 3,453 9,658 5,212 (6,540) (1,328)
Corporation tax at an effective rate of 25%
(2024 - 25%)
1,551 864 2,415 1,303 (1,635) (332)
Effects of:
Non-taxable UK dividend income (1,448) - (1,448) (1,329) - (1,329)
Excess management expenses not utilised 146 248 394 251 184 435
Expenses not deductible for tax purposes 2 4 6 3 - 3
Overseas withholding tax 108 - 108 144 - 144
Non-taxable overseas dividends (251) - (251) (228) - (228)
(Gains)/losses on investments not taxable - (1,118) (1,118) - 1,437 1,437
Losses on currency movements - 2 2 - 14 14
Total tax charge 108 - 108 144 - 144
At 31 March 2025 the Company had surplus management expenses and loan relationship debits with a tax value of
£8,402,000 based on a corporation tax rate of 25% (2024 - £8,008,000 based on a corporation tax rate of 25%) in respect
of which a deferred tax asset has not been recognised. This is because the Company is not expected to generate
taxable income in a future period in excess of the deductible expenses of that future period and, accordingly, it is unlikely
that the Company will be able to reduce future tax liabilities through the use of existing surplus expenses.
9. Dividends
2025 2024
£’000 £’000
Amounts recognised as distributions to equity holders in the period:
Third interim dividend for 2024 of 3.20p (2023 – 3.20p) per share 1,324 991
Final dividend for 2024 of 4.80p (2023 – 4.60p) per share 1,986 1,425
First two interim dividends for 2025 totalling 6.40p (2024 – 6.40p) per share 2,641 2,308
Refund of unclaimed dividends from previous periods (6) (6)
5,945 4,718
3.5% Cumulative Preference shares 2 2
Total 5,947 4,720
Notes to the Financial Statements
Continued
Shires Income PLC 85
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
The third interim dividend of 3.20p for the year to 31 March 2025, which was paid on 30 April 2025, and the proposed final
dividend of 5.20p for the year to 31 March 2025, payable on 31 July 2025, have not been included as liabilities in these
financial statements.
Set out below are the total Ordinary dividends payable in respect of the financial year, which is the basis on which the
requirements of Sections 1158-1159 of the Corporation Tax Act 2010 are considered:
2025 2024
£’000 £’000
Three interim dividends for 2025 totalling 9.60p (2024 – 9.60p) per share 3,926 3,632
Proposed final dividend for 2025 of 5.20p (2024 – 4.80p) per share 2,084 1,986
6,010 5,618
The amount reflected above for the cost of the proposed final dividend for 2025 is based on 40,083,317 Ordinary shares, being
the number of Ordinary shares in issue at the date of this Report.
10. Earnings per Ordinary share
2025 2024
£’000 £’000
Earnings per Ordinary share are based on the following figures:
Revenue return 6,097 5,068
Capital return 3,453 (6,540)
Total return 9,550 (1,472)
Weighted average number of Ordinary shares 41,196,795 34,363,846
During the year and preceding years there were no potentially dilutive shares in issue.
86 Shires Income PLC
11. Non–current assets – Securities at fair value
2025 2024
Listed Listed
investments investments
£’000 £’000
Opening book cost 119,549 89,610
Opening investment holdings gains 2,620 7,045
Opening valuation 122,169 96,655
Assets acquired in relation to the aSCIT transaction – 31,761
Purchases 58,872 43,873
Sales – proceeds (62,170) (44,372)
Gains/(losses) on investments 4,472 (5,748)
Total investments held at fair value through profit or loss 123,343 122,169
2025 2024
Listed Listed
investments investments
£’000 £’000
Closing book cost 119,671 119,549
Closing investment holdings gains 3,672 2,620
Total investments held at fair value through profit or loss 123,343 122,169
2025 2024
Gains/(losses) on investments £’000 £’000
Net realised gains/(losses) on sales of investments
A
3,420 (1,202)
Cost of call options exercised – (121)
Net realised gains/(losses) on sales 3,420 (1,323)
Movement in fair value of investments 1,052 (4,413)
Cost of put options assigned – (12)
4,472 (5,748)
A
Includes losses realised on the exercise of traded options of £nil (2024 – £133,000) which are reflected in the capital column of the Statement of Comprehensive
Income. There were no call or put options written during the year ended 31 March 2025.
Notes to the Financial Statements
Continued
Shires Income PLC 87
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The cost of exercising of call options and assigning put options is the difference between the market price of the underlying
shares and the strike price of the options. The premiums earned on options expired, exercised or assigned of £nil (2024 –
£34,000) have been dealt with in the revenue account.
The movement in the fair value of traded option contracts has been calculated in accordance with the accounting policy
stated in note 2(h) and has been charged to the capital reserve.
The Company received £62,170,000 (2024 – £44,372,000) from investments sold in the period. The book cost of these
investments when they were purchased was £58,750,000 (2024 – £45,695,000). These investments have been revalued over
time and until they were sold any unrealised gains/losses were included in the fair value of the investments.
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 on purchases of investments in the year was £246,000 (2024 – £182,000). The total costs on sales of
investments in the year was £25,000 (2024 – £15,000). The above transaction costs are calculated in line with the AIC SORP.
At 31 March 2025 the Company held the following investments comprising more than 3% of the class of share capital held:
Class
Country of Number of Class of held
Company Incorporation shares held shares held %
Ecclesiastical Insurance Office England 4,490,000 8 5/8% Cum Pref 4.2
12. Other receivables
2025 2024
£’000 £’000
Accrued income and prepayments 1,658 1,567
1,658 1,567
None of the above amounts are overdue.
88 Shires Income PLC
13. Liabilities
2025 2024
£’000 £’000
Amounts due to brokers relating to buyback of Ordinary shares for Treasury 78 101
Other creditors 559 390
637 491
Included above are the following amounts owed to aFML for management and savings scheme services and for the
promotion of the Company.
2025 2024
£’000 £’000
Other creditors 356 160
2025 2024
Non-current liabilities £’000 £’000
Revolving credit facility 9,000 9,000
Long-term bank loan 10,000 10,000
Loan arrangement fees (25) (37)
18,975 18,963
On 3 May 2022, the Company entered into a five year £20 million loan facility with The Royal Bank of Scotland International
Limited, London Branch. £10 million of the loan facility has been drawn down and fixed at an all-in interest rate of 3.903% until
30 April 2027. £9 million of the facility has been drawn down on a short-term basis at an all-in interest rate of 6.12%, maturing 14
April 2025. At the date this Report was approved £9 million of the facility had been drawn down on a short-term basis at a rate
of 6.122%, maturing on 16 June 2025.
The terms of The Royal Bank of Scotland International Limited facility contain covenants that consolidated gross borrowings do
not exceed 33% of the adjusted portfolio value (“Securities at fair value” per the Balance Sheet adjusted for any ineligible
investments) at any time, the number of eligible investments shall not be less than 30 at any time and the portfolio value shall at
all times be equal to or more than £40 million. The Company met these covenants during the year and following the year end.
The arrangement expenses incurred on the drawdown of the loan are amortised over the term of the loan.
Notes to the Financial Statements
Continued
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14. Called up share capital
2025 2024
Number £’000 Number £’000
Allotted, called up and fully paid Ordinary shares of 50 pence each:
Balance brought forward 41,369,542 20,684 30,964,580 15,482
Ordinary shares issued – – 11,268,494 5,634
Ordinary shares bought back to Treasury in the year (1,154,946) (577) (863,532) (432)
Balance carried forward 40,214,596 20,107 41,369,542 20,684
Allotted, called up and fully paid 3.5% Cumulative Preference
shares of £1 each:
Balance brought forward and carried forward 50,000 50 50,000 50
20,157 20,734
Treasury shares:
Balance brought forward 863,532 432 – –
Ordinary shares bought back to Treasury in the year 1,154,946 577 863,532 432
Balance carried forward 2,018,478 1,009 863,532 432
The Company acquired £35,228,000 of net assets from abrdn Smaller Companies Income Trust plc (“aSCIT”) following
approval by aSCIT shareholders on 1 December 2023. The transaction resulted in the issue of 11,268,494 new Ordinary shares
to aSCIT shareholders.
During the year 1,154,946 (2024 – 863,532) Ordinary shares were bought back into Treasury representing 2.8% (2024 – 2.1%) of
the Company’s total issued share capital at a total cost of £2,849,000 (2024 – £1,939,000).
Each Ordinary and Cumulative Preference share carries one vote at general meetings of the Company. The Cumulative
Preference shares are considered to be equity. They have no fixed redemption date, carry a right to receive a fixed rate of
dividend and, on a winding up of the Company, to the payment of such fixed cumulative preferential dividends to the date of
such winding up and to the repayment of the capital paid up on such shares in priority to any payment to the holders of the
Ordinary shares.
The Ordinary shares, excluding any treasury shares, carry a right to receive dividends and, on a winding up or other return of
capital, after meeting the liabilities of the Company, the surplus assets will be paid to Ordinary shareholders in proportion to
their shareholdings.
There are no restrictions on the transfer of Ordinary or Cumulative Preference shares in the Company other than certain
restrictions which may from time to time be imposed by law.
90 Shires Income PLC
15. Capital reserve
2025 2024
£’000 £’000
At 31 March 2024 27,451 35,930
Net gains/(losses) on sales of investments during year 3,420 (1,323)
Movement in fair value decreases of investments 1,052 (4,425)
Buyback of Ordinary shares for treasury (2,849) (1,939)
Management fees (392) (210)
Administrative expenses (19) (24)
Interest on bank loans (603) (502)
Currency losses (5) (56)
At 31 March 2025 28,055 27,451
The capital reserve includes gains of £3,672,000 (31 March 2024 – gains of £2,620,000), which relate to the revaluation of
investments held at the reporting date.
16. Net asset value per Ordinary share
The net asset value per share and the net assets attributable to the Ordinary shareholders at the year end were as follows:
2025 2024
Net assets per Balance Sheet £106,711,000 £105,957,000
3.5% Cumulative Preference shares of £1 each £50,000 £50,000
Attributable net assets £106,661,000 £105,907,000
Number of Ordinary shares in issue 40,214,596 41,369,542
Net asset value per share 265.23p 256.00p
Notes to the Financial Statements
Continued
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17. Analysis of changes in financial liabilities during the year
At At
31 March Cash Other 31 March
2024 flows movements
A
2025
Financing activities £’000 £’000 £’000 £’000
Debt due after more than one year (18,963) – (12) (18,975)
(18,963) – (12) (18,975)
At At
31 March Cash Other 31 March
2023 flows movements
A
2024
A
Financing activities £’000 £’000 £’000 £’000
Debt due after more than one year (18,951) – (12) (18,963)
(18,951) – (12) (18,963)
A
The other movements column represents the amortisation of the loan arrangement fees.
B
The prior year balance for the revolving credit facility has been reclassified from current to non-current liabilities. See note 2 (a).
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 comprise securities and other investments,
cash balances, loans and debtors and creditors that arise directly from its operations; for example, in respect of sales and
purchases awaiting settlement, and debtors for accrued income.
The Company may also, subject to Board approval, enter into derivative transactions, in the form of traded options, for the
purpose of enhancing income returns and portfolio management. The risks associated with these option contracts are
detailed on page 11. During the previous year, the Company entered into certain derivative contracts but not in the year ended
31 March 2025. As disclosed in note 3, the premium received and fair value changes in respect of options written in the previous
year were £34,000. Positions closed during the previous year realised a loss of £133,000. The largest position in derivative
contracts held during the previous year at any given time was £35,000. The Company had no open positions in derivative
contracts at 31 March 2025 (2024 – nil).
The Board has delegated the risk management function in relation to financial instruments to abrdn Fund Managers Limited
(“aFML”) under the terms of its management agreement with aFML (further details of which are included under note 4). The
Board regularly reviews and agrees policies for managing each of the key financial risks identified with the Manager. The types
of risk and the Manager’s approach to the management of each type of risk, are summarised below. Such approach has been
applied throughout the year and has not changed since the previous accounting period. The numerical disclosures exclude
short-term debtors and creditors given their relatively low value.
Risk management framework. The directors of aFML collectively assume responsibility for aFML’s obligations under the AIFMD
including reviewing investment performance and monitoring the Company’s risk profile during the year.
92 Shires Income PLC
aFML is a fully integrated member of the Aberdeen Group (the “Group”), which provides a variety of services and support to
aFML in the conduct of its business activities, including in the oversight of the risk management framework for the Company.
The AIFM 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). The AIFM has retained
responsibility for monitoring and oversight of investment performance, product risk and regulatory and operational risk for
the Company.
The Group’s Internal Audit Department is independent of the Risk Division and reports directly to the Group’s CEO and to the
Audit Committee of the Group’s Board of Directors. The Internal Audit Department is responsible for providing an independent
assessment of the Group’s control environment.
The 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 Group’s CEO. 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 Aberdeen,
its subsidiaries and the Company to fulfil their roles and responsibilities. The Group’s Risk Division is represented on all
committees, with the exception of those committees that deal with investment recommendations. The specific goals and
guidelines on the functioning of those committees are described on the committees’ terms of reference.
Risk management. The main risks the Company faces from its financial instruments are (i) market risk (comprising interest rate
risk, currency risk and price risk), (ii) liquidity risk and (iii) credit risk.
(i) Market risk. The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of
changes in market prices. This market risk comprises three elements – interest rate risk, currency risk and other price risk.
Interest rate risk. Interest rate movements may affect:
– the fair value of the investments in convertibles and preference shares;
– the level of income receivable on cash deposits; and
– interest payable on the Company’s variable rate borrowings.
Management of the risk. The possible effects on fair value and cash flows that could arise as a result of changes in interest
rates are taken into account when making investment and borrowing decisions.
The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a
regular basis. Borrowings comprise fixed rate, revolving, and uncommitted facilities. The fixed rate facilities are used to
finance opportunities at low rates and, the revolving and uncommitted facilities to provide flexibility in the short-term.
Current bank covenants state that the gross borrowings will not exceed one-third of adjusted portfolio value.
The Board reviews the value of investments in preference shares on a regular basis.
Notes to the Financial Statements
Continued
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Interest rate profile. The interest rate risk profile of the portfolio of financial assets and liabilities (excluding ordinary shares)
at the Balance Sheet date was as follows:
Weighted
average
period Weighted
for which average
rate is interest Fixed Floating
fixed rate rate rate
As at 31 March 2025 Years % £’000 £’000
Assets
UK preference shares – 7.16 23,473 –
Cash and cash equivalents – 4.06 – 1,322
Total assets 23,473 1,322
Liabilities
Revolving credit facility 0.04 6.12 (9,000) –
Long-term bank loan 2.08 3.90 (9,975) –
Total liabilities (18,975) –
Weighted
average
period Weighted
for which average
rate is interest Fixed Floating
fixed rate rate rate
As at 31 March 2024 Years % £’000 £’000
Assets
UK preference shares – 8.62 24,195 –
Cash and cash equivalents – 5.35 – 1,675
Total assets 24,195 1,675
Liabilities
Revolving credit facility 0.01 6.84 (9,000) –
Long-term bank loan 3.09 3.90 (9,963) –
Total liabilities (18,963) –
94 Shires Income PLC
The weighted average interest rate is based on the current yield of each asset, weighted by its market value. The
weighted average interest rate on bank loans is based on the interest rate payable, weighted by the total value of
the loans.
The cash assets consist of cash deposits on call earning interest at prevailing market rates.
The UK preference shares assets have no maturity date.
Short-term debtors and creditors (with the exception of bank loans) have been excluded from the above tables.
Interest rate sensitivity. The sensitivity analyses below have been determined based on the exposure to interest rates for
non-derivative instruments at the Balance Sheet date and the stipulated change taking place at the beginning of the
financial year and held constant throughout the reporting period in the case of instruments that have floating rates.
If interest rates had been 200 basis points higher or lower and all other variables were held constant, the Company’s:
- profit before tax for the year ended 31 March 2025 would increase/decrease by £26,000 (2024 - £34,000). This is mainly
attributable to the Company’s exposure to interest rates on its floating rate cash balances. These figures have been
calculated based on cash positions at each year end.
- the capital return would decrease/increase by £3,369,000 (2024 - increase/decrease by £3,300,000) using VaR
(“Value at Risk”) analysis based on 100 observations of monthly VaR computations of fixed interest portfolio positions at
each year end.
Currency risk. A small proportion of the Company’s investment portfolio is invested in overseas securities whose values are
subject to fluctuation due to changes in exchange rates.
Management of the risk. The revenue account is subject to currency fluctuations arising on dividends received in foreign
currencies and, indirectly, due to the impact of foreign exchange rates upon the profits of investee companies. The
Company does not hedge this currency risk. The Company does not have any exposure to foreign currency liabilities.
No currency sensitivity analysis has been prepared as the Company considers any impact to be immaterial to the
financial statements.
Price risk. Price risks (ie changes in market prices other than those arising from interest rate or currency risk) may affect
the value of the quoted investments.
Management of the risk. It is the Board’s policy to hold an appropriate spread of investments in the portfolio in order to
reduce the risk arising from factors specific to a particular sector. The allocation of assets to specific sectors and the stock
selection process both act to reduce market risk. The Manager actively monitors market prices throughout the year and
reports to the Board, which meets regularly in order to review investment strategy. The investments held by the Company
are listed on recognised stock exchanges.
Price sensitivity. If market prices at the Balance Sheet date had been 20% higher or lower while all other variables
remained constant, the profit before tax attributable to Ordinary shareholders for the year ended 31 March 2025 would
have increased/decreased by £19,974,000 (2024 - increase/decrease of £19,595,000). This is based on the Company’s
portfolio of Ordinary shares held at each year end.
(ii) Liquidity risk. This is the risk that the Company will encounter difficulty in meeting obligations associated with
financial liabilities.
Notes to the Financial Statements
Continued
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Management of the risk. Liquidity risk is not considered to be significant as the Company’s assets comprise mainly readily
realisable securities, which can be sold to meet funding commitments if necessary.
Short-term flexibility is achieved through the use of loan facilities, details of which can be found in note 13. Under the terms
of the loan facility, the Manager provides the lender with loan covenant reports on a monthly basis, to provide the lender
with assurance that the terms of the facility are not being breached. The Manager will also review the credit rating of a
lender on a regular basis.
The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a
regular basis. Borrowings comprise a revolving loan facility and a fixed term loan facility. The Board has imposed a
maximum equity gearing level of 35% which constrains the amount of gearing that can be invested in equities which, in
normal market conditions, are more volatile than the preference shares within the portfolio. Details of borrowings at 31
March 2025 are shown in note 13.
Maturity profile. The maturity profile of the Company’s financial liabilities at the Balance Sheet date, with amounts
undiscounted and order by contractual maturity, was as follows:
Within Within More than
1 year 1-5 years 5 years
At 31 March 2025 £’000 £’000 £’000
Trade and other payables (637) – –
Revolving credit facility
(48) (9,000) –
Long-term bank loan (391) (10,482) –
(1,076) (19,482) –
Within Within More than
1 year 1-5 years 5 years
At 31 March 2024 £’000 £’000 £’000
Trade and other payables (491) – –
Revolving credit facility
A
(52) (9,000) –
Long-term bank loan (389) (10,873) –
(932) (19,873) –
A
The prior year balance for the revolving credit facility has been reclassified from current to non-current liabilities. See note 2 (a).
(iii) Credit risk. This is the risk of failure of the counterparty to a transaction to discharge its obligations under that transaction
that could result in the Company suffering a loss.
Management of the risk. The risk is managed as follows:
- where the Investment Manager makes an investment in a bond, corporate or otherwise, the credit rating of the issuer is
taken into account so as to minimise the risk to the Company of default;
- transactions involving derivatives are entered into only with investment banks, the credit rating of which is taken into
account so as to minimise the risk to the Company of default;
96 Shires Income PLC
- investment transactions are carried out with a large number of brokers, whose credit-standing is reviewed periodically
by the investment manager, and limits are set on the amount that may be due from any one broker;
- the risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the review of failed
trade reports on a daily basis. In addition, both stock and cash reconciliations to the Custodian’s records are performed on
a daily basis to ensure discrepancies are investigated on a timely basis. The Group’s Compliance carries out periodic
reviews of the Custodian’s operations and reports its findings to the Aberdeen Group’s Risk Management Committee and
to the Board of the Company. This review will also include checks on the maintenance and security of investments held;
- transactions involving derivatives and other arrangements wherein the creditworthiness of the entity acting as broker or
counterparty to the transaction is likely to be of sustained interest are subject to rigorous assessment by the Investment
Manager of the credit worthiness of that counterparty. The Company’s aggregate exposure to each such counterparty is
monitored regularly by the Board; and
- cash is held only with reputable banks with high quality external credit enhancements.
It is the Investment Manager’s policy to trade only with A- and above (Long Term rated) and A-1/P-1 (Short Term rated)
counterparties.
None of the Company’s financial assets are secured by collateral or other guarantees or assurances.
Credit risk exposure. In summary, compared to the amounts in the Balance Sheet, the maximum exposure to credit risk at
31 March 2025 and 31 March 2024 was as follows:
2025 2024
Balance Maximum Balance Maximum
Sheet exposure Sheet exposure
£’000 £’000 £’000 £’000
Non-current assets
Quoted preference shares at fair value through profit or loss 23,473 23,473 24,195 24,195
Current assets
Accrued income 1,658 1,658 1,567 1,567
Cash and cash equivalents 1,322 1,322 1,675 1,675
26,453 26,453 27,437 27,437
None of the Company’s financial assets is past its due date.
Fair value of financial assets and liabilities. The fair value of the long-term loan has been calculated at £9,747,000 as at 31
March 2025 (2024 - £9,619,000) compared to an accounts value in the financial statements of £9,975,000 (2024 -
£9,963,000) (note 13). The fair value of each loan is determined by aggregating the expected future cash flows for that
loan discounted at a rate comprising the borrower’s margin plus an average of market rates applicable to loans of a
similar period of time and currency. The loan is considered to be classed as a Level 2 liability under IFRS 13. The carrying
values of fixed asset investments are stated at their fair values, which have been determined with reference to quoted
market prices. Traded options contracts are valued at fair value which have been determined with reference to quoted
market values of the contracts. The contracts are tradeable on a recognised exchange. For all other short-term debtors
and creditors, their book values approximate to fair values because of their short-term maturity.
Notes to the Financial Statements
Continued
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19. Fair value hierarchy
IFRS 13 ‘Financial Value Measurement’ 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: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The financial assets and liabilities measured at fair value in the Balance Sheet are grouped into the fair value hierarchy at
31 March 2025 as follows:
Level 1 Level 2 Level 3 Total
As at 31 March 2025 Note £’000 £’000 £’000 £’000
Financial assets at fair value through profit or loss
Quoted investments a) 123,343 - - 123,343
Net fair value 123,343 - - 123,343
Level 1 Level 2 Level 3 Total
As at 31 March 2024 Note £’000 £’000 £’000 £’000
Financial assets at fair value through profit or loss
Quoted investments a) 122,169 - - 122,169
Net fair value 122,169 - - 122,169
a) Quoted investments. The fair value of the Company’s quoted investments has been determined by reference to their
quoted bid prices at the reporting date. Quoted investments included in Fair Value Level 1 are actively traded on
recognised stock exchanges.
20. Capital management policies and procedures
The Company’s capital management objectives are:
- to ensure that the Company will be able to continue as a going concern; and
- to maximise the return to its equity shareholders through an appropriate balance of equity capital and debt.
The capital of the Company consists of equity, comprising issued capital, reserves and retained earnings.
The Board monitors and reviews the broad structure of the Company’s capital. This review includes the nature and planned
level of gearing, which takes account of the Investment Manager’s views on the market and the extent to which revenue in
excess of that which is required to be distributed should be retained. The Company is not subject to any externally imposed
capital requirements.
98 Shires Income PLC
21. Related party transactions
Directors’ fees and interests. Fees payable during the year to the Directors and their interests in shares of the Company are
disclosed within the Directors’ Remuneration Report on pages 56 to 59.
Transactions with the Manager. The Company has an agreement with the Aberdeen Group for the provision of management,
secretarial, accounting and administration services and for the carrying out of promotional activities in relation to the
Company. Details of transactions during the year and balances outstanding at the year end are disclosed in notes 4 and 5.
22. Transaction with abrdn Smaller Companies Investment Trust plc (“aSCIT”)
On 1 December 2023, the Company announced that it had acquired £35,228,000 of net assets from aSCIT in consideration for
the issue of 11,268,494 new Ordinary shares as part of a recommended s110 Scheme under the Insolvency Act. The scheme,
inter alia, involved the cancellation of the Company’s existing holding in the issued capital of aSCIT, and a formula asset value
(“FAV”) calculation to take account the costs of the transaction in computing the number and value of shares to be issued by
the Company and assets transferred under the Scheme, as well as the value of cash exit for aSCIT shareholders which was at a
discount to the FAV.
Net assets acquired £’000
Investments 31,779
Cash 3,444
Debtors 5
Net assets 35,228
Satisfied by the value of new Ordinary shares issued 35,228
23. Subsequent events
Subsequent to the year end the Company has bought back a further 131,279 Ordinary shares into Treasury at a cost
of £333,000.
Notes to the Financial Statements
Continued
Shires Income PLC 99
Corporate
Information
The Company’s Investment Manager
is a wholly-owned subsidiary of
Aberdeen. The Aberdeen Group’s
assets under management and
administration were £500.1 billion
as at 31 March 2025.
100 Shires Income PLC
Aberdeen Group
The Company’s Investment Manager is abrdn
Investments Limited which is a wholly-owned subsidiary of
Aberdeen Group plc. The Aberdeen Group’s assets under
management and administration were £500.1 billion as at
31 March 2025, managed for a range of clients including
12 UK-listed closed-end investment companies.
The Investment Team Senior Managers
Iain Pyle
Senior Investment Director, UK Equities
Iain is a Senior Investment Director in the UK Equities team,
having joined Aberdeen in 2015. Prior to joining, he was an
analyst on the top-ranked Oil & Gas research team at
Sanford Bernstein. Iain graduated with a MEng degree
in Chemical Engineering from Imperial College and an
MSc (Hons) in Operational Research from Warwick
Business School. He is a Chartered Accountant and a
CFA Charterholder.
Charles Luke
Senior Investment Director, UK Equities
Charles is a Senior Investment Director in the UK Equities
team. He joined Aberdeen’s Pan European Equities team
in 2000 and previously worked at Framlington Investment
Management. He has a BA in Economics and Japanese
Studies from Leeds University and an MSc in Business and
Economic History from the London School of Economics.
Information about the Investment Mana
g
er
Shires Income PLC 101
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Investment Philosophy and Style
The Investment Manager believes that company
fundamentals ultimately drive share prices but are often
priced inefficiently. It believes that in-depth company
research delivers insights that can be used to exploit these
market inefficiencies. The Investment Manager focuses on
investing in high-quality companies, with the market often
underestimating the sustainability of their returns. Quality
companies tend to produce more resilient earnings
streams with fewer tail risks, allowing them to better
navigate challenging market conditions whilst also
capitalising on opportunities to create value. This makes
the approach well suited to identifying companies with
sustainable and growing income generation. Investment
insights are generated by the extensive equity research
platform at Aberdeen. Ideas are generated through
frequent direct company contact, deep fundamental
analysis and integrated ESG analysis with rigorous team
debate strengthening analytical conclusions. The
Investment Manager has a long-term approach, aiming to
buy and hold companies for a multi-year time horizon
although it has the ability to react quickly if necessary. The
Investment Manager is willing to take sizeable deviations
to the benchmark based on the companies where it finds
the highest quality and most attractive valuations.
Investment Process
The investment process has three stages:
1. Idea Generation and Research. Comprehensive
coverage of the UK equity market with a team of
analysts generating investment ideas from company
meetings, combined with corroborating evidence
from competitors, suppliers and customers.
External secondary research is also generated to
gain insight on the consensus view and supplement
proprietary research.
2. Stock Selection. Buy ideas are peer reviewed by the
whole UK Equity team, evaluating the level of
conviction and the materiality, corroboration and
correlation of those investment opportunities. For the
Company specifically, the Investment Manager aims
to select high-quality companies. Quality is defined by
reference to management, business focus, balance
sheet and corporate governance.
3. Portfolio Construction and Risk Management. Portfolio
construction is undertaken in a disciplined way,
prioritising the taking of company specific risk with a
rigorous sell discipline. Non-proprietary and
proprietary quantitative tools are used to identify and
control risk factor exposures, including sector and
geographic weights.
The Investment Manager believes that good investment
decision-making requires clarity of responsibility for those
decisions. Every holding has a named analyst responsible
for its coverage, and every portfolio has a named fund
manager responsible for its management. They make
those decisions supported and challenged by the team,
but accountability for the final decision is clear.
The investment process also leverages a wealth of
knowledge, insight and expertise across asset classes and
regions within Aberdeen. This allows the fund manager to
take advantage of equity colleagues across the globe who
are meeting companies and conducting research and
sharing their insights using one common global research
platform. This is invaluable when investing in the UK equity
market, which is one of the most global markets in the
world. Corporate level insights are shared with the credit
team which enriches the equity view through an
understanding of the full capital structure of the businesses
invested in. Members of the Investment Manager’s multi-
asset and economics teams regularly attend the equity
team’s daily meeting to share macro level insights.
Approach to Income
The primary aim of the Company is to deliver a high level of
income with the capacity for growth of both income and
capital over time. Consideration of income therefore plays
an important part in the Investment Manager’s process.
Research analysts are required to consider the prospects
for dividend affordability and growth for each company
under coverage within the research process. For stock
selection, the Investment Manager pays particular attention
to measures relevant for income such as: cash flow outlook,
balance sheet strength and intention to pay dividends. The
Investment Manager looks for investment cases that deliver
returns from income in a number of ways: high yielding
companies with potential for yield compression; stable high
yield companies to deliver resilient income; and growing
companies with the potential for capital and dividend
growth over time. Portfolio construction considers the
required level of income to fund and, over time, grow the
Company’s dividend and the overall risk profile required to
achieve this. Investment ideas and portfolio construction
are reviewed by a group of income portfolio managers with
significant experience in UK equity income.
Investment Process
102 Shires Income PLC
Preference Shares
Given the importance of the Preference Share portfolio to
the Company, there is an additional process in place to
monitor these holdings. Regular meetings are held,
comprising analysts from the fixed income and equity
teams responsible for coverage of issuing companies,
along with the portfolio managers. The process ensures
that the holdings are monitored closely and that there is
timely visibility on any changes at issuing companies
which could potentially impact their ability or intention to
pay the dividends associated with the preference shares.
Risk Management
The Investment Manager utilises a number of quantitative
risk tools to ensure it is fully aware of, and understands, all
the risks prevalent in portfolios it manages. These risk
management systems monitor and analyse active risk, the
composition of portfolio positions, as well as contribution
to risk and marginal contribution to risk of the portfolio’s
holdings. The systems break down the risk within the
portfolio by industry and country factors, and highlight the
holdings with the highest marginal contribution to risk and
the largest diversification benefit. Sector, thematic and
geographical positions are a residual of stock selection
decisions, but are monitored to ensure excessive risk is not
taken in any one area. The Investment Manager also
makes use of pre-trade analytics to assess the impact of
any trades on the portfolio risk metrics.
The Investment Process – Accountability and Performance Evaluated at Each Stage of the Process
Continued
Investment Process
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The Investment Manager’s Approach to ESG
The Board relies on the Investment Manager to apply
appropriate Environment, Social and Governance (“ESG”)
principles to how the portfolio is constructed and
managed within the confines of the Company’s
investment objective and policy. Having an income
objective means that the Company needs to acquire
investments which typically provide a higher than average
yield which in some cases means more exposure to older
industries such as energy and consumables but, even
here, ESG principles are applied in deciding on a specific
investment within these more mature industries as it is
evident that the possibility of engagement by the
Investment Manager can lead to changes to their
business models to account for social
and environmental responsibilities, irrespective of
government interventions.
Core beliefs: Assessing Risk, Enhancing Value
Whilst the management of the Company’s investments is
not undertaken with any specific instructions to exclude
certain asset types or classes, the consideration of ESG
factors is part of the Investment Manager’s process and
has been so for over 30 years. It is one of the key criteria on
which the Investment Manager assesses the investment
case for any company in which it invests for three key
reasons as set out in the table below.
Financial Returns ESG factors can be financially material – the level of consideration they are given in a company will
ultimately have an impact on corporate performance, either positively or negatively. Those
companies that take these factors seriously tend to outperform those that do not.
Fuller Insight Systematically assessing a company’s risks and opportunities alongside other financial metrics
allows the Investment Manager to make better investment decisions.
Corporate Advancement Informed and constructive engagement helps foster better companies, protecting and enhancing
the value of the Company’s investments.
Although the Investment Manager considers ESG factors as part of the investment process, the Company does not have
any binding ESG commitments and does not promote any ESG characteristics as part of its investment objective.
104 Shires Income PLC
Researching Companies: Deeper Company Insights for Better Investor Outcomes
The Investment Manager conducts extensive and high-quality fundamental and first-hand research to fully understand
the investment case for every company in its global universe. A key part of the Investment Manager’s research involves
focusing its extensive resources on analysis of ESG issues. As set out in more detail in the table below, the Investment
Manager’s portfolio managers, ESG equity analysts and central ESG Investment Team collaborate to generate a deep
understanding of the ESG risks and opportunities associated with each company. Stewardship and active engagement
with companies are also fundamental to the investment process, helping to produce positive outcomes that lead to
better risk-adjusted returns.
Portfolio Managers All of the Investment Manager’s equity portfolio managers seek to engage actively with
companies to gain insight into their specific risks and provide a positive ongoing influence on their
corporate strategy for governance, environmental and social impact.
Equity Analysts The Investment Manager has dedicated and highly experienced equity analysts located across
the UK, US and Asia. Working as part of individual investment teams, rather than as a separate
department, these specialists are integral to pre-investment due diligence and post-investment
ongoing company engagement. They are also responsible for reviewing thematic research
produced by the central ESG Investment Team (see below), interpreting
and translating it into actionable insights and engagement programmes for its regional
investment strategies.
ESG Investment Team This central team of more than 20 experienced specialists based in Edinburgh and London
provides consultancy and insight for all asset classes. Taking a global approach both identifies
regions, industries and sectors that are most vulnerable to risks and identifies those that can take
advantage of the opportunities presented. Working with portfolio managers, the team is key to
the Investment Manager’s active stewardship approach of using shareholder voting and
corporate engagement to drive positive change.
Continued
Investment Process
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Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Working with Companies: Staying Engaged, Driving Change
Once the Investment Manager invests in a company, it is committed to helping that company maintain or raise its
standards further, using its position as a shareholder to press for action as needed. The Investment Manager actively
engages with the companies in which it invests to encourage improvement.
The Investment Manager views this programme of regular engagement as a necessary fulfilment of its duty as a
responsible steward of clients’ assets. It is also an opportunity to share examples of best practice seen in other
companies and to use its influence to effect positive change. The Investment Manager’s engagement is not limited to the
company’s management team. It can include many other stakeholders such as non-government agencies, industry and
regulatory bodies, as well as activists and the company’s clients. What gets measured gets managed, so the Investment
Manager strongly encourages companies to set clear targets or key performance indicators on all material ESG risks.
The investment process consists of four interconnected and equally important stages.
Monitor Contact Engage Act
Ongoing due diligence
· Business performance
· Company financials
· Corporate governance
· Company’s key risks and
opportunities
Frequent dialogue
· Senior executives
· Board members
· Heads of departments and
specialists
· Site visits
Exercise rights
· Attend AGM/GMs
· Always vote
· Explain voting decisions
· Maximise influence to drive
positive outcomes
Consider all options
· Increase or decrease
shareholding
· Collaborate with other
investors
· Take legal action if
necessary
During the year ended 31 March 2025, the Investment Manager held 92 separate meetings with companies in Shires
Income PLC’s portfolio where ESG topics were raised. By topic, corporate behaviour was the most discussed area, but
there was significant engagement on corporate governance, labour management and climate issues. The pie chart
below shows the overlapping topics covered at the meetings held during the year.
31
32
51
41
42
45
Human Rights & Stakeholders
Environment
Corporate Behaviour
Climate
Labour Management
Corporate Governance
106 Shires Income PLC
Alternative Investment Fund Managers
Directive (“AIFMD”) and Pre-Investment
Disclosure Document (“PIDD”)
The Company has appointed abrdn Fund Managers
Limited as its Alternative Investment Fund Manager and
BNP Paribas Trust Corporation UK Limited as its depositary
under the AIFMD.
The AIFMD requires the Company’s AIFM, to make
available to investors certain information prior to such
investors’ investment in the Company. Details of the
leverage and risk policies which the Company is required
to have in place under the AIFMD are published in the
Company’s PIDD which can be found on its website:
shiresincome.co.uk. The periodic disclosures required
to be made by the AIFM under the AIFMD are set out on
page 114.
Investor Warning: Be alert to share fraud and
scams
Aberdeen has been contacted by investors informing it
that it has received telephone calls and emails from
people who have offered to buy their investment
company shares, purporting to work for Aberdeen or for
third party firms. Aberdeen has also been notified of
emails claiming that certain investment companies under
its management have issued claims in the courts against
individuals. These may be scams which attempt to gain
your personal information with which to commit identity
fraud or could be ‘boiler room’ scams where a payment
from you is required to release the supposed payment for
your shares. These callers/senders do not work for
Aberdeen and any third party making such offers/claims
has no link with Aberdeen.
Aberdeen does not ‘cold-call’ investors in this way. If you
have any doubt over the veracity of a caller, do not offer
any personal information and end the call.
The Financial Conduct Authority provides advice with
respect to share fraud and boiler room scams at:
fca.org.uk/consumers/scams
Shareholder Enquiries
For queries regarding shareholdings, lost certificates,
dividend payments, registered details and related
matters, shareholders holding their shares directly in the
Company are advised to contact the Registrar
(see Contact Addresses). Changes of address
must be notified to the Registrar in writing.
Any general queries about the Company should be
directed to the Company Secretary in writing
(see Contact Addresses) or by email to:
shires.income@aberdeenplc.com
How to Invest
Investors can buy and sell shares in the Company directly
through a stockbroker or indirectly through a lawyer,
accountant or other professional adviser. Alternatively, for
private investors, there are a number of online dealing
platforms that offer share dealing, ISAs and other means
to invest in the Company. Real-time execution-only
stockbroking services allow you to trade online, manage
your portfolio and buy UK listed shares. These sites do not
give advice. Some comparison websites also look at
dealing rates and terms.
Investors can, using certain platforms, arrange to have
dividends reinvested or establish regular savings to invest
in the shares of the Company. This can also be done under
the auspices of an ISA which (under current tax rules and
depending on individual circumstances) provide tax
efficiencies for private investors in the treatment of
income and capital gains.
Discretionary Private Client Stockbrokers
If you have a large sum to invest, you may wish to contact
a discretionary private client stockbroker. They can
manage your entire portfolio of shares and will advise you
on your investments. To find a private client stockbroker
visit The Personal Investment Management and Financial
Advice Association at: pimfa.co.uk
Financial Advisers
To find an adviser who recommends on investment trusts,
visit: unbiased.co.uk
Regulation of Stockbrokers
Before approaching a stockbroker, always check that
they are regulated by the Financial Conduct Authority at:
fca.org.uk/firms/financial-services-register
Investor Information
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How to Attend and Vote at Company
Meetings
Investors who hold their shares through a platform or
share plan provider (for example Hargreaves Lansdown,
Interactive Investor or AJ Bell) and would like to attend and
vote at Company meetings (including AGMs) should
contact their platform or share plan provider directly to
make arrangements.
Investors who hold their shares through platforms and
have their shares held through platform nominees, may
not necessarily receive notification of general meetings
and are advised to keep themselves informed of
Company business by referring to the Company’s
website. Where voting is required, and the Board
encourages shareholders to vote at all general meetings
of the Company, shareholders with their holdings in
nominees will need to instruct the nominee to vote on their
behalf and should do so in good time before the meetings.
For investors who hold their shares on a platform via a
nominee, the Association of Investment Companies has
provided helpful information on how to attend an AGM
and how to vote investment company shares held on
some of the major platforms. This information can be
found at: theaic.co.uk/how-to-vote-your-shares
Keeping You Informed
Information about the Company can be found on its
website: shiresincome.co.uk, including share price and
performance data as well as London Stock Exchange
announcements, current and historic Annual and Half-
Yearly Reports, and the latest monthly factsheet on the
Company issued by the Manager. Investors can receive
updates via email by registering on the home page of the
Company’s website.
Details are also available at: invtrusts.co.uk
LinkedIn: aberdeen Investment Trusts
X: @aberdeenTrusts
Facebook: aberdeen Investment Trusts
YouTube: @aberdeenInvestmentTrusts
Key Information Document (“KID”)
The KID relating to the Company and published by the
Manager can be found on the Company’s website.
Suitable for Retail/NMPI Status
The Company’s shares are intended for investors,
primarily in the UK, including retail investors, professionally-
advised private clients and institutional investors who are
seeking a high level of income, together with the potential
for growth of both income and capital, from a diversified
portfolio substantially invested in UK equities but also in
preference shares, convertibles and other fixed income
securities, and who understand and are willing to accept
the risks of exposure to equities.
Investors should consider consulting a financial adviser
who specialises in advising on the acquisition of shares
and other securities before acquiring shares. Investors
should be capable of evaluating the risks and merits of
such an investment and should have sufficient resources
to bear any loss that may result.
The Company currently conducts its affairs so that its
securities can be recommended by a financial adviser to
ordinary retail investors in accordance with the Financial
Conduct Authority’s rules in relation to non-mainstream
pooled investments (“NMPIs”) and intends to continue to
do so for the foreseeable future. The Company’s securities
are excluded from the Financial Conduct Authority’s
restrictions which apply to NMPIs because they are
securities issued by an investment trust.
108 Shires Income PLC
Aberdeen or Aberdeen Group
Aberdeen Group plc and its group of companies.
Administrator
BNP Paribas Securities Services.
AIC
The Association of Investment Companies.
AIFMD
The UK version of the Alternative Investment Fund
Managers Directive and all implementing and delegating
legislation thereunder, as it forms part of UK law following
the UK’s departure from the EU. The AIFMD was originally
European legislation which created a European-wide
framework for regulating managers of ‘alternative
investment funds’ (“AIFs”). It is designed to regulate any
fund which is not a UCITS fund and which is managed
and/or marketed in the EU (and, now separately, the UK).
The Company has been designated as an AIF.
Alternative Performance Measure or APM
A financial measure of historic or future financial
performance, financial position, or cash flows, other than a
financial measure defined or specified in the applicable
financial reporting framework.
Benchmark
This is a measure against which an Investment Trust’s
performance is compared. The Company’s benchmark is
the FTSE All-Share Index. The index averages the
performance of a defined selection of listed companies
over specific time periods.
Call Option
An option contract which gives the buyer the right, but not
the obligation, to purchase a specified amount of an asset
at an agreed price by a future specified date.
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.
Convertibles
Fixed income securities, which can be converted into
equity shares at a future date.
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 the dividend per share,
expressed as a ratio.
Dividend Yield
The annual dividend expressed as a percentage of the
share price.
ESG
Environmental, Social and Governance.
FCA
Financial Conduct Authority.
Gearing and Equity Gearing
Net gearing is calculated by dividing total borrowings, less
cash or cash equivalents, by shareholders’ funds
expressed as a percentage. Equity gearing is the sum of
the investments in ordinary shares, both listed and unlisted,
and convertibles, expressed as a proportion of
shareholders’ funds.
Investment Manager
abrdn Investments Limited is a wholly owned subsidiary of
Aberdeen Group 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.
Glossary of Terms
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Key Information Document or KID
UK regulation previously required the Manager to make a
KID available to retail investors prior to them making any
investment decision. On 22 November 2024, new
legislation came into force in the UK which meant that
manufacturers, advisors and sellers of shares in a closed-
ended investment company that is UK-listed are no longer
required to produce the KID.
However, the Manager continues to publish a modified KID
for the Company because a number of platforms/market
participants still require prospective investors to confirm
that they have read the KID prior to a buy order being
placed. The modified KID is available via the Company’s
website. In addition to the KID, the Manager has developed
a Statement of Operating Expenses which is incorporated
into the Company’s factsheet and can also be found on
the Company’s website.
Leverage
For the purposes of the AIFMD, leverage is any method
which increases the Company’s exposure, including the
borrowing of cash and the use of derivatives. It is
expressed as a ratio between the Company’s exposure
and its Net Asset Value and can be calculated on a gross
and a commitment method. Under the gross method,
exposure represents the sum of the Company’s positions
after the deduction of sterling cash balances, without
taking into account any hedging and netting
arrangements. Under the commitment method, exposure
is calculated without the deduction of sterling cash
balances and after certain hedging and netting positions
are offset against each other.
Manager, AIFM or aFML
abrdn Fund Managers Limited is a wholly owned
subsidiary of Aberdeen Group plc and acts as the
Alternative Investment Fund Manager 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.
Ongoing Charges
Ratio of expenses of an Investment Trust expressed as a
percentage of average daily shareholders’ funds
calculated annually per the AIC’s industry standard
method. More specifically, it is the annual percentage
reduction in shareholder returns as a result of recurring
operational expenses, assuming markets remain static
and the portfolio is not traded. Although the Ongoing
Charges figure is based on historical information, it
provides shareholders with an indication of the likely level
of costs that will be incurred in managing the Company in
the future. The Board uses the Ongoing Charges Ratio as a
Key Performance Indicator for the Company.
Preference Shares
These entitle the holder to a fixed rate of dividend out of
the profits of a company, to be paid in priority to other
classes of shareholder.
Pre-Investment Disclosure Document
(“PIDD”)
The AIFM and the Company are required to make certain
disclosures available to investors in accordance with the
AIFMD. Those disclosures that are required to be made
pre-investment are included within a PIDD, which can be
found on the Company’s website.
Premium
The amount by which the market price per share of an
Investment Trust exceeds the Net Asset Value per share.
The premium is normally expressed as a percentage of
the Net Asset Value per share.
Price/Earnings Ratio
This is calculated by dividing the market price per share by
the earnings per share. The calculation assumes no
change in earnings but in practice the multiple reflects the
stock market’s view of a company’s prospects and profit
growth potential.
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.
110 Shires Income PLC
Put Option
An option contract which gives the buyer the right, but not
the obligation, to sell a specified amount of an asset at an
agreed price by a future specified date.
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 on which that dividend
was earned.
Glossary of Terms
Continued
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Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Alternative performance measures are numerical measures of the Company’s current, historical or future performance, financial
position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company’s
applicable financial framework includes IAS 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.
Discount to net asset value per Ordinary share
The difference between the share price and the net asset value per Ordinary share expressed as a percentage of the net asset value
per Ordinary share.
2025 2024
NAV per Ordinary share (p) a 265.23 256.00
Share price (p) b 255.50 222.00
Discount (a-b)/a 3.7% 13.3%
Dividend Cover
Dividend cover measures the revenue return per share divided by total dividends per share, expressed as a ratio.
2025 2024
Revenue return per share a 14.80p 14.75p
Dividends per share b 14.80p 14.40p
Dividend cover a/b 1.00x 1.02x
Dividend Yield
The annual dividend divided by the share price, expressed as a percentage.
2025 2024
Annual dividend per Ordinary share (p) a 14.80p 14.40p
Share price (p) b 255.50p 256.00p
Dividend yield a/b 5.8% 5.6%
Alternative Performance Measures
112 Shires Income PLC
Net Gearing
Net gearing measures total borrowings less cash and cash equivalents divided by shareholders’ funds, expressed as a percentage.
Under AIC reporting guidance, cash and cash equivalents includes net amounts due to and from brokers at the period end as well as
cash and short-term deposits.
2025 2024
Borrowings (£’000) a 18,975 18,963
Cash (£’000) b 1,322 1,675
Amounts due to brokers (£’000) c – 101
Amounts due from brokers (£’000) d – –
Shareholders’ funds (£’000) e 106,711 105,957
Net gearing (a-b+c-d)/e 16.5% 16.4%
Ongoing Charges Ratio
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 net asset values throughout the year.
2025 2024
Investment management fees (£’000) 653 420
Administrative expenses (£’000) 447 529
Less: non-recurring charges
A
(£’000) (6) (24)
Ongoing charges (£’000) 1,094 925
Average net assets (£’000) 109,660 85,134
Ongoing charges ratio (excluding look-through costs) 1.00% 1.09%
Look-through costs
B
– 0.01%
Ongoing charges ratio (including look-through costs) 1.00% 1.10%
A
Comprises promotional activities fees not expected to recur.
B
2024 is 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.
Alternative Performance Measures
Continued
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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. Share price and NAV total returns are monitored against
open-ended and closed-ended competitors, and the Reference Index, respectively.
Share
Year ended 31 March 2025 NAV Price
Opening at 1 April 2024 a 256.00p 222.00p
Closing at 31 March 2025 b 265.23p 255.50p
Price movements c=(b/a)-1 3.6% 15.1%
Dividend reinvestment
A
d 5.8% 7.3%
Total return c+d +9.4% +22.4%
Share
Year ended 31 March 2024 NAV Price
Opening at 1 April 2023 a 257.92p 250.00p
Closing at 31 March 2024 b 256.00p 222.00p
Price movements c=(b/a)-1 –0.7% –11.2%
Dividend reinvestment
A
d 5.5% 5.8%
Total return c+d +4.8% –5.4%
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.
114 Shires Income PLC
abrdn Fund Managers Limited (“aFML”) and the Company are required to make certain disclosures available to investors
in accordance with the Alternative Investment Fund Managers Directive (“AIFMD”). Those disclosures that are required to
be made pre-investment are included within a pre-investment disclosure document (“PIDD”) which can be found on the
Company’s website.
There have been no material changes to the disclosures contained within the PIDD since its most recent update in
July 2024.
The periodic disclosures as required under the AIFMD to investors are made below:
· information on the investment strategy 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 aFML; and
· all authorised Alternative Investment Fund Managers are required to comply with the AIFMD Remuneration Code. In
accordance with the Remuneration Code, the AIFM’s remuneration policy is available from the Company Secretary,
abrdn Holdings Limited, on request and the remuneration disclosures in respect of the AIFM’s reporting period for the
year ended 31 December 2024 are available on the Company’s website.
Leverage
The table below sets out the current maximum permitted limit and actual level of leverage for the Company:
Gross Method Commitment Method
Maximum level of leverage 2.50:1 2.00:1
Actual level at 31 March 2025 1.34 1.35
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
)
Shires Income PLC 115
General
The Annual General Meeting will be held at 18 Bishops
Square, London E1 6EG on Tuesday 8 July 2025 at 12 noon.
The Company will also be hosting an online shareholder
presentation, which will be held at 11.00am on Tuesday 24
June 2025. Full details on how to register for the online
event can be found at: shiresincome.co.uk
116 Shires Income PLC
NOTICE IS HEREBY GIVEN that the ninety seventh Annual General Meeting of Shires Income PLC (the “Company”) will be
held at 18 Bishops Square, London E1 6EG on Tuesday 8 July 2025 at 12 noon to transact the following business:
To consider and, if thought fit, pass the following as Ordinary Resolutions:
1. To receive and adopt the Directors’ Report and audited financial statements of the Company for the year ended 31
March 2025 together with the Auditor’s Report thereon.
2. To receive and adopt the Directors’ Remuneration Report (excluding the Directors’ Remuneration Policy) for the
year ended 31 March 2025.
3. To approve a final dividend of 5.20p per Ordinary share in respect of the year ended 31 March 2025.
4. To re-appoint Mr Simon White as a Director of the Company.
5. To re-appoint Ms Helen Sinclair as a Director of the Company.
6. To re-appoint Ms Jane Pearce as a Director of the Company.
7. To re-appoint Mr Robin Archibald as a Director of the Company.
8. To re-appoint Ernst & Young LLP as Auditor of the Company.
9. To authorise the Directors to determine the remuneration of the Auditor for the year to 31 March 2026.
10. That, in substitution for any pre-existing power to allot or grant rights to subscribe for or to convert any security into
shares in the Company, but without prejudice to the exercise of any such authority prior to the date of this
resolution, the Directors be and are hereby generally and unconditionally authorised in accordance with Section
551 of the Companies Act 2006 to exercise all the powers of the Company to allot shares in the Company
(“relevant securities”) up to an aggregate nominal amount of £2,004,165 or, if less, the number representing 10% of
the issued Ordinary share capital of the Company as at the date of the passing of this resolution provided that such
authorisation expires on 30 September 2026 or, if earlier, at the conclusion of the next Annual General Meeting of
the Company to be held after the passing of this resolution, unless previously revoked, varied or extended by the
Company in general meeting, save that the Company may, at any time prior to the expiry of such authority, make
an offer or enter into an agreement which would or might require relevant securities to be allotted after the expiry
of such authority, and the Directors may allot relevant securities in pursuance of such an offer or agreement as if
such authority had not expired.
To consider and, if thought fit, pass the following as Special Resolutions:
11. That, subject to the passing of Resolution 10 in the notice convening the meeting at which this resolution is to be
proposed (the “Notice of Meeting”) and in substitution for all existing powers, the Directors be and are hereby
generally empowered pursuant to Section 570 of the Companies Act 2006 (the “Act”) to allot equity securities (as
defined in Section 560 (1) of the Act) for cash pursuant to the authority under Section 551 of the Act conferred by
Resolution 10 in the Notice of Meeting as if Section 561 of the Act did not apply to any such allotment, provided that
this power:
i. expires on 30 September 2026 or, if earlier, at the conclusion of the next Annual General Meeting of the
Company to be held after the passing of this resolution, but the Company may make an offer or agreement
which would or might require equity securities to be allotted after expiry of this power and the Directors may
allot equity securities in pursuance of that offer or agreement as if that power had not expired; and
ii. shall be limited to the allotment of equity securities for cash up to an aggregate nominal amount of £2,004,165
or, if less, the number representing 10% of the issued Ordinary share capital of the Company as at the date of
the passing of this resolution.
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Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
This power applies in relation to the sale of shares which is an allotment of equity securities that immediately before
the allotment are held by the Company as treasury shares as if in the opening paragraph of this resolution the words
“subject to the passing of Resolution 10 in the notice convening the meeting at which this resolution is to be proposed
(the “Notice of Meeting”) and” and “pursuant to the authority under Section 551 of the Act conferred by Resolution 10
in the Notice of Meeting” were omitted.
12. That, in substitution for any existing authority but without prejudice to the exercise of any such authority prior to the
date hereof, the Company be generally and unconditionally authorised, in accordance with Section 701 of the
Companies Act 2006 (the “Act”), to make market purchases (within the meaning of Section 693(4) of the Act) of fully
paid Ordinary shares of 50p each in the capital of the Company (“shares”), and to cancel or hold in treasury such
shares, provided that:
i. the maximum aggregate nominal value of the Ordinary shares hereby authorised to be purchased shall be
limited to £3,004,244 or, if less, the number representing 14.99% of the issued Ordinary share capital of the
Company as at the date of the passing of this resolution;
ii. the minimum price which may be paid for a share shall be 50p (exclusive of expenses);
iii. the maximum price (exclusive of expenses) which may be paid for a share shall be an amount being not more
than the higher of:
a) 105% of the average of the middle market quotations (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; or
b) the higher of the price of the last independent trade and the highest current independent bid relating to a
share on the trading venue where the purchase is carried out; and
iv. unless previously varied, revoked or renewed, the authority hereby conferred shall expire on 30 September 2026
or, if earlier, at the conclusion of the next Annual General Meeting of the Company to be held after the passing
of this resolution, save that the Company may, at any time prior to such expiry, enter into a contract or contracts
to purchase shares under such authority which would or might be completed or executed wholly or partly after
the expiration of such authority and may make a purchase of shares pursuant to any such contract or contracts
as if the authority conferred hereby had not expired.
13. That a general meeting of the Company other than an Annual General Meeting may be called on not less than 14
clear days’ notice provided that this authority shall expire at the conclusion of the next Annual General Meeting of
the Company to be held after the passing of this resolution.
By order of the Board Registered Office:
abrdn Holdings Limited 280 Bishopsgate
Company Secretary London EC2M 4AG
1 George Street
Edinburgh EH2 2LL
28 May 2025
118 Shires Income PLC
Notes
i. A member is entitled to appoint a proxy or proxies to exercise all or any of their rights to attend, speak and vote on
their behalf. A proxy need not be a member of the Company. A member may appoint more than one proxy
provided each proxy is appointed to exercise rights attached to different shares. A member may not appoint
more than one proxy to exercise rights attached to any one share. If a member wishes to appoint more than one
proxy, they should contact the Company’s Registrars, Equiniti Limited, on +44 (0)371 384 2508 (charges for calling
this number are determined by the caller’s service provider. Lines open 8.30 a.m. to 5.30 p.m., Monday to Friday
excluding bank holidays in England and Wales). If calling from outside the UK, please ensure the country code
is used.
ii. A form of proxy for use by members is enclosed with the Annual Report. Completion and return of the form of
proxy will not prevent any member from attending the meeting and voting in person. To be valid, the form of proxy
should be lodged, together with any power of attorney or other authority (if any) under which it is signed or a
notarially certified copy of such power or authority, at the address stated thereon, so as to be received not less
than 48 hours (excluding non-working days) before the time of the meeting.
iii. In accordance with Regulation 41 of the Uncertificated Securities Regulations 2001, to have the right to attend and
vote at the meeting a member must first have his or her name entered in the Company’s register of members at
6.30 p.m. on 4 July 2025 (or, in the event that the meeting is adjourned, at 6.30 p.m. on the day which is two
business days before the time of the adjourned meeting). Changes to entries on that register after that time shall
be disregarded in determining the rights of any member to attend and vote at the meeting.
iv. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service
may do so by using the procedures described in the CREST Manual and by logging on to the website:
euroclear.com. CREST personal members or other CREST sponsored members, and those CREST members who
have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who
will be able to take the appropriate action on their behalf.
v. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST
message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland
Limited’s specifications, and must contain the information required for such instruction, as described in the CREST
Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the
instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by
the Company’s Registrar (ID RA19) not less than 48 hours (excluding non-working days) before the time of the
meeting or any adjournment. For this purpose, the time of receipt will be taken to be the time (as determined by
the timestamp applied to the message by the CREST Application Host) from which the Company’s Registrar is
able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change
of instructions to proxies appointed through CREST should be communicated to the appointee through other
means.
vi. CREST members and, where applicable, their CREST sponsors, or voting service providers should note that
Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular message.
Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is
the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal
member, or sponsored member, or has appointed a voting service provider(s), to procure that his CREST sponsor
or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by
means of the CREST system by any particular time. In this connection, CREST members and, where applicable,
their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual
concerning practical limitations of the CREST system and timings.
Continued
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Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
vii. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a)
of the Uncertificated Securities Regulations 2001.
viii. If you are an institutional investor you may be able to appoint a proxy electronically via the Proxymity platform, a
process which has been agreed by the Company and approved by the Registrar. For further information
regarding Proxymity, please go to www.proxymity.io. Your proxy must be lodged by 12 noon on 4 July 2025 in
order to be considered valid. Before you can appoint a proxy via this process you will need to have agreed to
Proxymity’s associated terms and conditions. It is important that you read these carefully as you will be bound by
them and they will govern the electronic appointment of your proxy.
ix. The right to appoint a proxy does not apply to persons whose shares are held on their behalf by another person
and who have been nominated to receive communications from the Company in accordance with Section 146 of
the Companies Act 2006 (“Nominated Persons”). Nominated Persons may have a right under an agreement with
the member who holds the shares on their behalf to be appointed (or to have someone else appointed) as a
proxy. Alternatively, if nominated persons do not have such a right, or do not wish to exercise it, they may have a
right under such an agreement to give instructions to the person holding the shares as to the exercise of
voting rights.
The statement of the rights of members in relation to the appointment of proxies in notes (i) and (ii) above does
not apply to Nominated Persons. The rights described in these notes can only be exercised by members of
the Company.
x. No Director has a service contract with the Company but copies of Directors’ letters of appointment will be
available for inspection at the registered office of the Company during normal business hours on any weekday
(Saturdays, Sundays and public holidays excepted) from the date of this notice and for at least 15 minutes prior to
the meeting and during the meeting.
xi. As at close of business on 28 May 2025 (being the latest practicable date prior to publication of this document),
the Company’s issued share capital comprised 40,083,317 Ordinary shares of 50p each and 50,000 Cumulative
Preference shares of £1 each. Accordingly, the total number of voting rights in the Company as at 28 May 2025
is 40,133,317.
xii. Any person holding 3% of the total voting rights in the Company who appoints a person other than the Chairman
as his proxy will need to ensure that both he and such third party complies with their respective disclosure
obligations under the UK Disclosure Guidance and Transparency Rules.
xiii. Any corporation which is a shareholder can appoint one or more corporate representatives who may exercise on
its behalf all of its powers as a shareholder provided that they do not do so in relation to the same shares.
xiv. The members of the Company may require the Company to publish, on its website, a statement setting out any
matter relating to the audit of the Company’s accounts, including the Auditor’s Report and the conduct of the
audit, which they intend to raise at the next meeting of the Company. The Company will be required to do so once
it has received such requests from either (i) members representing at least 5% of the total voting rights of the
Company or (ii) at least 100 members who have a relevant right to vote and hold shares in the Company on
which there has been paid up an average sum per member of at least £100. Such requests must be made in
writing and must state your full name and address, and be sent to: the Company Secretary, Shires Income PLC, 1
George Street, Edinburgh EH2 2LL.
xv. Information regarding the meeting, including information required by Section 311A of the Companies Act 2006, is
available from the Company’s website: www.shiresincome.co.uk.
120 Shires Income PLC
xvi. Under Section 319A of the Companies Act 2006, the Company must answer any question relating to the business
being dealt with at the meeting put by a member attending the meeting unless:
(a) answering the question would interfere unduly with the preparation for the meeting or involve the disclosure
of confidential information;
(b) the answer has already been given on a website in the form of an answer to a question; or
(c) it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.
xvii. Shareholders are advised that, unless otherwise stated, any telephone number, website or e-mail address which
may be set out in this notice of Annual General Meeting or in any related documents (including the proxy form) is
not to be used for the purposes of serving information or documents on, or otherwise communicating with, the
Company for any purposes other than those expressly stated.
Notice of Annual General Meetin
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Continued
Shires Income PLC 121
Directors
Robin Archibald (Chairman)
Jane Pearce
Helen Sinclair
Simon White
Registered Office
280 Bishopsgate
London EC2M 4AG
Company Secretary
abrdn Holdings Limited
1 George Street
Edinburgh EH2 2LL
Email: shires.income@aberdeenplc.com
Alternative Investment Fund Manager
abrdn Fund Managers Limited
280 Bishopsgate
London EC2M 4AG
Investment Manager
abrdn Investments Limited
1 George Street
Edinburgh EH2 2LL
Company Registration Number
00386561 (England & Wales)
Legal Entity Identifier (“LEI”)
549300HVCIHNQNZAYA89
Website
shiresincome.co.uk
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Shareholder help can be found at shareview.co.uk.
Alternatively, you can contact the Shareholder Helpline:
+44 (0)371 384 2508*
(*Lines open 8.30 a.m. to 5.30 p.m., Monday to Friday
excluding public holidays in England and Wales. Charges
for calling telephone numbers starting with ‘03’ are
determined by the caller’s service provider.)
If calling from outside the UK, please ensure the country
code is used.
Depositary
BNP Paribas Trust Corporation UK Limited
10 Harewood Avenue
London NW1 6AA
Stockbroker
JPMorgan Cazenove
25 Bank Street
London E14 5JP
Auditor
Ernst & Young LLP
Atria One
144 Morrison Street
Edinburgh EH3 8EX
Solicitors
Dentons UK and Middle East LLP
One Fleet Place
London EC4M 7WS
Contact Addresses
For more information visit shiresincome.co.uk
aberdeeninvestments.com